UFC Fighting for Mainstream Acceptance

But big media and the general public are not coming around so quickly.

Last Updated: July 31, 2009 @ 4:48 PM

Held inside a cage at the Mandalay Bay, the Ultimate Fighting Championship 100 was poised to be a high water mark for the burgeoning boxing and wrestling league.

The July 11 event drew 1.5 million subscribers on pay-per-view, the most ever for a non-boxing spectacle. It pulled in a huge $5 million gate, an international TV audience spread across 75 countries and unprecedented U.S. media coverage that included top-of-the-hour billing on ESPN’s "SportsCenter."

It was milestone for the UFC, which was once a collection of bloody free-for-all fighting events that were famously labeled as “human cockfighting” by Arizona Senator John McCain.

Then things went haywire.

The star of the show, former wrestler Brock Lesnar, flipped off the sellout crowd, made lewd sexual comments about his own wife, then publicly declared to event sponsor Anheuser-Busch that he would soon be enjoying a pilsner made by rival Coors.

“Straight WWE,” conceded Dana White, the president of the UFC, speaking to reporters after the event. “Brock went so far over the top tonight I can’t even describe it. I don’t think in the history of the UFC we’ve ever done anything like that.”

It was a giant misstep in a timeline that had once promised mainstream acceptance for the UFC.

Up until that point, the league seemed to have mainstream sports media on the mat and ready to submit to its wild profitability.

But the question was, could the fast-growing, mixed-martial-arts league take that next big step — expand from a niche cable and pay-per-view draw to become a broader media force that commands billions of dollars worldwide?

Certainly, in the weeks leading up to the big Las Vegas event, it looked like such success was inevitable.

Its road to the top had been paved in 2001, when the league was bought for $2 million by brothers Lorenzo and Frank Fertitta, Las Vegas hotel execs with inroads into the Nevada Athletic Commission.

It has grown exponentially since then.

Still bloody but now regulated, the UFC has a market capitalization of more than $1 billion and regularly takes in more than $200 million annually in pay-per-view revenue, exceeding both boxing and the WWE, a niche media property that reports yearly revenue of around $400 million.

It enjoys a $100 million TV deal with Spike TV, providing the male-skewing MTV Networks niche cable channel 700 hours of programming a year, which includes everything from live events to the league’s own reality series, “The Ultimate Fighter.”

And the ratings are great. On Spike, UFC-produced reality show “The Ultimate Fighter” ranks among the channel’s biggest draws, routinely outperforming rivals in the key 18-34 male demo.

The series’ season 9 finale on June 20 brought in 663,000 men 18-34, more than Fox’s Major League Baseball coverage (184,000) and NBC’s presentation of the U.S. Open (384,000).

“When we first got involved (with the UFC in 2005), we’d get sponsorship from energy-drink makers and a few videogame companies,” said a Spike official. “Now you have blue-chip advertisers like Bud Lite, Burger King and automotive brands.”

Meanwhile, the UFC garners several hundred million dollars a year more through ticket sales, international events and pay-per-view in international territories including the U.K., as well as merchandising, DVD and online content.

So how does the UFC maneuver itself into a franchise as big as, say, the NBA, which takes in $930 million a year just on a combination of broadcast (ABC) and cable (ESPN and TNT) platforms alone?

It’s going to be a tough road.

The UFC needs to negotiate a lucrative contract with either a broadcast network or major, broad-skewing cable outlet like ESPN to make those aspirations happen.

Two years ago, UFC officials were close to a deal with HBO, the premier television partner for pro boxing. Ultimately, the talks broke down because the UFC — which produces all of the content it provides to Spike — couldn’t get the control it wanted.

More recently, UFC officials have been flirting with ESPN, whose copious coverage of UFC 100, said the TV exec, was likely no coincidence. He added that actual fruition of a TV deal with the Disney-owned cable channel still seems like a longshot. “To be honest, I don’t know that Disney is comfortable corporately with the UFC brand,” he told TheWrap.

As for last week’s profanity-laced spectacle, it remains to be seen of that will ultimately hurt or help the UFC with advertisers, sponsors and, more importantly, TV suits.

But not everyone in the TV and marketing business think what happened is necessarily a bad thing.

“Like all ‘sports,’ the UFC is personality-driven, and (Lesnar) has become one,” said Brad Adgate, a program analyst for ad-buying agency Horizon Media.

But if not on HBO or ESPN, what platform will step up to take UFC to the next level?

For its part, CBS has already unsuccessfully experimented with mixed martial arts, signing a deal last year with the lesser-profile Elite XC that produced poor prime-time ratings.

Broadcasting a live Elite XC event at the Newark, New Jersey, Prudential Center in May of last year, CBS garnered the biggest audience ever for mixed martial arts, but averaging 4.9 million viewers in broadcast TV prime-time is not a sustainable business.

UFC president White has been an outspoken critic of that network deal, and seems hesitant to enter the UFC into a similar pact given the results.

“Network deals are what’s helping put these other companies out of business,” he said. “Just because you get a network deal doesn’t mean it’s a good deal. When we get a good network deal, we’ll be on network television. "The networks are so strong, they pretty much tell you the deal that they’re going to give you whether you like it or not,” he continued.