Growth, Sports Marketing | Jun 16, 2014
The franchise with a big punch

The rise of the Ultimate Fighting Championship (UFC), featuring multi-martial arts contestants, has been nothing short of phenomenal. What was once – just eight years ago – a defunct ‘cage-fighting’ franchise that was worth a few million dollars is now a global-reach TV property worth a few billion.

At Leaders, we were treated to a firsthand account of that journey by Lorenzo Fertitta, owner and Chairman of UFC. The numbers are pretty staggering. This comparatively new sport is about to overtake the Premier League in global reach, watched by around 850 million people in nearly 150 countries, and broadcast in 30 different languages. In partnership with Fox Sports, UFC is now the largest pay-per-view content provider in the world.

As Fertitta explained, UFC owns all its own content: 100%. They produce the whole show which includes a free-to-air reality TV series running regularly in the US where a dozen would-be fighters live together in a ‘big brother-style house’ format, and each week there’s a fight between two contestants with the loser departing the house. The last man standing, as it were, gets to compete in UFC ‘fight nights’(also free-to-air) and, with success, into the Ultimate Fighting Championship which goes out on pay TV only.

In addition, UFC is developing an ‘aspirational fitness brand’, rolling out fitness centres across the States (already over 100 of them), and Fertitta and his colleagues plan to roll the entire format out across the world; in UK there is already a weekly round-up of the action featuring on BT Sport.

It’s a very interesting business model and Fertitta was fascinating to listen to. He suggests that the UFC has moved into a space once occupied by big-time boxing, back in the day when world titles were unified and just about everyone in the world knew the names of Ali, Frazier, Leonard etc. It is clearly no coincidence that Fertitta, who grew up in Las Vegas where so many of those great fights took place, has seen the vacant space left by boxing’s decline, and occupied it.

But he’s also commercially improved the space too. With boxing, as Fertitta explained, the money was big but the events were few and intermittent. The UFC model (which he described as a ‘Trojan horse’ system) smuggles the concept into millions of homes by developing fighters through reality shows with big TV audiences who pay nothing to watch; it then provides taster ‘fight nights’ for free too; and finally hooks the viewers into a league structure of big fights which eventually produce a ‘world champion’ – that’s where the big monetisation takes place via pay TV.

The audience demographic is very ‘sexy’ for commercial partners’ too. It’s largely those hard-to-reach, young males, 18 – 34yrs old who don’t watch much TV. And the digital footprint that UFC is developing amongst this largely media-savvy generation is growing considerably.

In UK, the BT deal was set up by Garry Cook, the MD in EMEA for UFC, who joined Fertitta on stage for the Leaders session. Cook is also setting up events in UK – with the first fight night in Manchester in late October – illustrating how eminently ‘localisable’ this sports product can be. It probably won’t be too long before a UK based UFC reality-show appears on television, helping to create the local ‘personalities’ who will eventually fight.

Fertitta did admit there are some difficulties in truly popularising multi martial arts style fighting (known as MMA). It can be a fairly brutal business (but then so can boxing) and has associations in some folks’ minds with anything-goes cage fighting.

Fertitta was keen to point out that MMA effectively combines four highly regulated, Olympic sports, including boxing (where one can punch to head and upper body); wrestling (where one can throw opponents ) and judo (where one can kick), and UFC has borrowed much of its own regulations from those Olympic sports. It certainly isn’t a free-for-all.

UFC has risen so quickly and dramatically that some suspect it may simply prove to be a ‘fad’ which burns ferociously and dies quickly. Fertitta doesn’t think so. He brought the session to close by suggesting that fighting – far from being a fad – is the oldest ‘event’ on earth, existing long before all the modern sports were founded.

Maybe hundreds of thousands of years ago, Fertitta said, “somebody hit somebody….and someone else turned round to watch”.

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