Tuesday, March 27, 2007

UFC scores TKO on its business rival

By Dave Doyle

Fans of the world's two biggest mixed martial arts promotions, the Nevada-based Ultimate Fighting Championship and Japan's Pride Fighting Championship, have argued long and loud over which group boasts the best fighters.

That question remains unresolved. But on a business level, there's no doubt about the result: UFC owner Zuffa LLC just scored a TKO with the purchase of its business rival.

The UFC now oversees a staggering collection of talent, including eight fighters in FOXSports.com's world pound-for-pound Top 10 ratings. And their vision for the rules of the sport on a worldwide basis — or at least the Unified rules accepted by American state athletic commissions, with five-minute rounds and the round-by-round 10-point must system — will be implemented in both groups effective immediately.

What the transaction does not do, despite what you may read elsewhere, is give the UFC anything close to a monopoly over the business.

This deal went down in large part because several other well-heeled players have gotten into the American mixed martial arts game, from Gareb Shamus' International Fight League to the Showtime-backed Elite Xtreme Combat to offshore gambling magnate Calvin Ayre's Bodog Fight promotion. It was likely no coincidence the announcement of the purchase was held just hours before a press conference in Los Angeles announcing an ambitious Showtime-backed show in June at the Los Angeles Memorial Coliseum featuring MMA legend Royce Gracie.

Ayre's group has thrown around big money signing the likes of Pride star Fedor Emelianenko and American middleweight standout Matt Lindland. EXC reportedly offered UFC heavyweight Brandon Vera, who has one fight left on his deal, a $1.5 million signing bonus. Shoring up Pride's stable of fighters will slow down the contractual bedlam.

When the MMA business in the United States went into the tank in the late 1990s and early part of this decade due to a lack of television presence and legal hurdles, Pride took the lead and kept the sport alive on a major-league basis.

PRIDE's major shows featured lineups with an unparalleled roster depth and a rock-concert-type light-and-stage-show atmosphere rivaled by few sports or entertainment companies. Top fighters from around the world, like Brazil's Wanderlei Silva, Croatia's Mirko "Cro Cop" Filipovic, and Americans Dan Henderson and Josh Barnett filled stadiums befitting NFL games for Pride's biggest events.

But former Pride parent company Dream Stage Entertainment lost its primary revenue source, a television contract with the Fuji television network, last summer, amid rumors of a company underworld connection. The trouble couldn't come at a worse time for the group, as their misfortune came just as Zuffa's stateside business was catching fire.

Pride's first course of action was to attempt to shift business to the American market, and did so by trying to publicly bait UFC's top draw, Chuck Liddell, into a match with Silva. While it was the talk of the MMA world last fall, that action looks like desperation in hindsight. In the process, however, they demonstrated the Pride name has a legitimate following in the U.S., as two shows in Las Vegas drew gates of more than $2 million, and are the only non-Zuffa shows to land in the state of Nevada's all-time MMA Top 10 money list.

But when fighters from headliners like Filipovic to undercard competitors like Dokjonsuke Mishima began jumping en masse to the UFC in recent months, it became a clear sign that Pride was having serious financial woes.

UFC has acted as aggressively as a business as the fighters themselves compete in the octagon. Zuffa (Italian for "fight") purchased the remnants of the all-but-dead World Fighting Alliance, the key asset being the contract of headliner Quinton "Rampage" Jackson, last November. They also purchased a smaller group, the California-based World Extreme Cagefighting,

Zuffa's handling of the WEC brand name should provide clues about how Pride will function from here. Zuffa has run the WEC as its own entity, emphasizing bantamweight and featherweight fighters, and has its own television contract on the Versus network. WEC fighters have not appeared on UFC programming and vice versa.

In the short term, not much will change for the average viewer aside from rules changes, which means the foot stomps and kicks to the heads of downed opponents that distinguished Pride from the UFC are no more. Zuffa, will continue to run the Japanese company as a separate entity, with its separate roster of fighters separate champions, and separate office staff. Pride will continue to air in America on FOX Sports Net, and Zuffa officials indicated they are working on getting the brand back on Japanese TV.

UFC president Dana White is promising "Super Bowl of MMA"-style shows eventually, featuring matchups between the top stars of the two promotions. But the company's patience in growing their business — they endured several years and seven figures worth of losses building the brand before hitting paydirt last year — indicates they're not going to burn through the potential biggest-money matches in their history anytime soon.


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