(Do women in the UFC represent a new path to the future, or business as usual? Photo via Esther Lin/MMAFighting)
There have been many landmark events in MMA history — the inception of the UFC in 1993, the debut of The Ultimate Fighter in 2005, the fall of PRIDE in 2007, and the acquisition of Strikeforce in 2011. As 2013 gets underway, it’s already becoming apparent that the sport is undergoing a series of events that will change it forever.
THE DISSOLUTION OF STRIKEFORCE
On March 12, 2011, Zuffa acquired Strikeforce. Although the San Jose-based promotion was subsequently stripped of many of its best fighters, television network Showtime opted to renew their broadcast deal with the promotion — until now. The January 13, 2013 show headlined by Nate Marquardt vs. Tarec Saffiedine will be the promotion’s death knell, as the name “Strikeforce” takes its final resting place in the cemetery next to Affliction, WEC, PRIDE, Elite XC, BodogFight, and the IFL.
There were obvious benefits in Zuffa stringing Showtime along as a broadcast partner of the increasingly-diluted Strikeforce brand: It kept Showtime from seeking a new promoter, independent of Zuffa, to partner with. Currently, promotions like Shark Fights, Legacy Fighting Championship, Invicta FC, and Xtreme Fighting Championships are in the running as potential broadcast partners for Showtime. For the winning promotion(s), mainstream television exposure on CBS might also be possible, just as CBS aired Strikeforce events in the past.
However, no matter which promotion Showtime airs, the most significant component of the deal comes down to what brand-name fighters can be acquired to get better ratings and more subscribers for Showtime.
THE RISE OF BELLATOR
Free of any contractual obligations to Zuffa, Spike TV is now free to air Bellator on the network, which they’ll begin doing next week. With its tournament-style format, a planned reality show, recruitment of new talent, and investment from media conglomerate Viacom, it seems that fortunes may change for Bellator in 2013.
Most importantly of all, Spike TV used to be the home of the UFC. Since Spike has been airing the back-library of the UFC for the last year, Bellator can take advantage of brand confusion and piggy-back off of the UFC’s former audience.
THE VALUE OF FREE AGENTS IN MMA
Former Bellator fighter Hector Lombard was bought by the UFC with a rumored price-tag that included a $400,000 signing bonus, a $300,000 purse per fight, and per-per-view participation points. Bellator fighter Eddie Alvarez is reputed to have been offered a UFC contract with a $250,000 signing bonus, $70,000 to show and $70,000 to win, as well as pay-per-view points and a vague promise thrown in about an intended title shot.
How does this compare to the typical pay scale in the UFC? UFC lightweight champion Benson Henderson earned just $39,000 to fight and $39,000 to win against Nate Diaz for the UFC on Fox 5 show in December 2012. Bendo has to be fuming at the thought of Alvarez being granted the option of making multiple times the money Bendo currently earns as champion of the biggest organization in the world.
The Zuffa fighters who are signed into long-term contracts for low money and tiny increments in pay with each win don’t really have any options. But the fighters signed to short-term deals or with just 1-3 fights left on their contracts can tempt fate by seeing what the new Showtime MMA promotion or Bellator would be willing to offer them. Zuffa usually has to pay only slightly more than their competitors in order to maintain control over the fighters. Thanks to increased competition, some fighters might actually be able to get more money than before.
THE PAY-PER-VIEW MARKET
Zuffa faced hard times in 2012 due to the retirement of many prominent UFC stars. Add injury woes to the equation, and 2012 was yet another year of disappointing pay-per-view receipts for Zuffa. 2011 had already marked the first year that PPV revenue declined.
It’s easy to point fingers like Zuffa has done at Jon Jones over the cancellation of UFC 151. Jon Jones, originally slated to meet Dan Henderson in the main event of UFC 151, refused to face Chael Sonnen on short notice. Zuffa knew that without at least one major star on the card, the pay-per-view would tank, and pulled the plug on the event.
In truth, whether you like him or hate him, Jon Jones is one of the few new stars who can carry the UFC forward through the next decade. The light-heavyweight belt has been held by a variety of revolving-door champions since Chuck Liddell, the last dominant champion, lost the strap to Quinton “Rampage” Jackson in 2007. Jones has drawn good numbers, like an estimated 700,000 for his rivalry with Rashad Evans at UFC 145. Like Calvin Candie from Django Unchained, Zuffa doesn’t really have to respect their fighters in order to profit greatly from them — and there seems to be no love lost between Dana White and Jon Jones.
The pay-per-view market is so important to Zuffa that Dan Henderson was passed over for the title shot he had already earned in favor of Chael Sonnen, coming off a loss to Anderson Silva, being gifted with a title shot against Jon Jones.
With no official rankings or mandatory contenders in mixed martial arts, fighters like Dan Henderson and Johny Hendricks will just have to wait their turn to fight for the title — assuming they ever get one.
WOMEN IN THE UFC
Next up is the highly-touted UFC arrival of Strikeforce 135-pound champion Ronda Rousey, who will square off with Liz Carmouche at UFC 157 in February. While this fight is certainly a watershed moment for gender equality in the sport, the UFC’s underlying motivations are nothing new. Rousey is like Gina Carano before her — a valuable asset who can headline shows, sell pay-per-views and tickets (although perhaps not as many as other major UFC stars, at least at this stage).
Zuffa is smart not to leave a 6-0 champion who has finished every fight via armbar for another promotion to use. That would be like leaving money on the table, something Zuffa is not exactly known for doing. If female fighters begin to connect with MMA fans on a larger scale — which they’re already doing, if Invicta FC’s growing audience is any indication — the UFC could find itself with a brand-new revenue stream.
Next up on the equality platform, watching Dana White scream, “Do you wanna be a fucking fighter”? at the next batch of female UFC hopefuls when they question why their “exhibition” matches on The Ultimate Fighter don’t pay anything.
THE RETURN OF THE FEDERAL TRADE COMMISSION?
The FTC’s investigation into Zuffa was closed in February 2012. That doesn’t mean that the case won’t be reopened at a future date. Until Showtime or Bellator make a successful bid for the pay-per-view market in MMA, the UFC is the dominant monopoly in the sport, period.
It’s not unheard of for the government to attempt to investigate combat sports in the US: The International Boxing Club (IBC) had a stranglehold over boxing in the ’50s, until the United States Department of Justice declared the organization a monopoly and ordered the IBC’s dissolution in 1959.
There are many UFC fighters who might welcome an FTC investigation with open arms, especially if new laws were enacted to improve their bargaining position with the organization. Many fighters just want to see some transparency, as they are curious about the promotion’s revenue from television licensing, merchandise and other streams that Zuffa earns off their backs.
CONCLUSION
2013 could be the biggest year yet for changes in mixed martial arts. As the sport continues to grow, profits continue to rise. Only a select few have been able to capitalize on the upward trends for the sport, but this could be the year that shifts the balance of power between different stakeholders.
The promotions, television networks and fighters who are keenly following business forces and who understand how to create value will be the big winners at the end of the day. A lot is at stake, and there isn’t any room for failure in this sport.
MMA is on the verge of many developments that can transform the nature of the sport forever.
***
Brian J. D’Souza is the author of the recently published book Pound for Pound: The Modern Gladiators of Mixed Martial Arts. You can check out an excerpt right here.
