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Nov 10, 2016

The ultimate sale of a sport, Adrian Hill reports

The Rio 2016 Olympics proved once again that the sporting landscape is an exhilarating and ultracompetitive place.

Yet it wasn’t just the athletes who were involved in a frantic battle for recognition.

Activities both ancient and relatively modern jostled for attention, fighting for valuable airtime to sell their wares to a global audience.

With visibility comes increased interest and, so the theory goes, an uplift in participation – a cocktail to turn the heads of broadcasters and potential sponsors alike.

But, you have to look away from the Olympics for the current runaway success story. Mixed Martial Arts (MMA), a frenetic combination of boxing, kick-boxing, wrestling and jiu-jitsu played out in a caged octagon arena, has gone from a barely-known activity 20 years ago to become one of the most instantly recognisable sports of the 21st century.

If proof was needed of its impact, the sale in July of its most famous brand – the Ultimate Fighting Championship (UFC) - is all that you require. The UFC was created in 1993, originally promoted as battles between competitors from different combat sports in a loose, edgy setting with few rules.

The regulations were tightened up, fighters began to develop styles with aspects from across the spectrum and the MMA moniker was born.

It has the glitz and glamour of professional wrestling but the proper competitive action of boxing – it has become a serious threat to both.

When American duo Lorenzo Fertitta and Dana White bought UFC in 2001 it was worth $2 million…15 years later they sold it to sports and entertainment powerhouse WME IMG, reportedly for an eye-watering $4.2 billion (£3.25bn). UFC will not confirm or deny this figure but there is no doubt that MMA is now big, big business.

Investment
WME IMG is a serious player in the sports industry, each year producing more than 52,000 hours of sports programming and distributing an additional 32,000 hours on behalf of more than 200 clients, including Wimbledon, the NFL, the FA Premier League, Major League Soccer and Euroleague basketball.

It represents a host of sporting stars as an agency and is also renowned for its marketing, event production and management. WME IMG brings with them a clutch of investment houses into this UFC venture - Silver Lake Partners, KKR and MSC Capital.

These billion dollar businesses simply don’t back companies that are going nowhere.

It all puts UFC in a powerful position as it looks to build on the ground-breaking seven-year $700 million TV deal signed with Fox Broadcasting Company in 2011, which helped propel it to the forefront of the minds of fight fans across the world. UFC has overtaken the likes of WWE to become the largest Pay-Per-View (PPV) event provider, regularly attracting over one million “buys” for each of its events in the US market, and is broadcast in over 150 countries to a billion households.

“The UFC has been progressing and developing, successfully building an incredible sport for a number of years,” says James Elliott, Vice-President & General Manager of UFC Europe, Middle East & Africa.

“The past couple of years have seen a tipping point where the brand has seeped into the public consciousness and is truly on the brink of being accepted as mainstream globally.

“The brand is slick and strong, our demographic age ranges from 15 to over 40, the athletes are grabbing headlines, the events are getting bigger and better with the best sports production in the game, the crowds are educated, the fans are engaged, the fights are, as always, unpredictable.”

UFC now produces more than 40 live events annually and reached the landmark of 200 shows since its inception in 1993 in Las Vegas in July.

White was there from the beginning, and will continue as President. “No other sport compares to UFC,” says White. “Our goal has always been to put on the biggest and the best fights for our fans, and to make this (MMA) the biggest sport in the world.”

Heavyweights
It’s a mighty ambition but the progress made in such a short time indicates that MMA can, if not reach that exalted level, at least stand toe-to-toe with the traditional heavyweights.

It still has a long way to go to challenge football, American football, baseball, golf, tennis and basketball for financial clout; cricket, hockey, table tennis and volleyball have bigger fan bases thanks to the vast audiences they attract in Asia, but every year MMA is creeping up on a key competitor - boxing.

UFC star Conor McGregor. Picture: BRANDON MAGNUS / ZUFFA, LLC

The names of UFC superstars Conor McGregor and Ronda Rousey have become almost as famous as boxing greats Floyd Mayweather and Manny Pacquiao in such a short time.

“The UFC has brought the sport of MMA to the masses and it’s true to say that the UFC helped to define the sport,” Elliott adds. “Does it have the chance to be the biggest sport in the world? Yes, absolutely, it is current, dynamic and 100% consumer focused.”

UFC is the biggest but by no means the only MMA success story.

California-based Bellator announced in August new broadcast deals for key markets including Australia, Japan, Russia and China.

“Bellator continues to enjoy explosive growth overseas where we are now in over 140 countries and have entered into numerous foreign event partnerships,” says Eddie Dalva, Bellator’s executive vice president.

Whereas, in the UK, UFC is broadcast on subscription channel BT Sport, Bellator is shown on terrestrial network Channel 5.

Asia’s One Championship has, in just five years, grown to a level where it is broadcast into one billion homes. No formal bid has been lodged as yet but could it become an Olympic sport?

According to Elliott, this is very much on the agenda.

“Lorenzo Ferttita said in February that he could envisage that (Olympic recognition) as a next step for the sport in the future. We share in that ambition and would fully support the governing body’s work to reach that goal,” Elliott states

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Mac in a Sac

Mac in a Sac

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