ben10dough
11/14/2008 3:08am,
http://www.chron.com/disp/story.mpl/headline/sports/6109579.html
With the breakout success of the Ultimate Fighting Championship’s reality show The Ultimate Fighter in 2005, mixed martial arts was declared the next big thing. Everyone wanted a piece of the action.
But the recent rise and fall of high-profile MMA organizations such as the International Fight League and EliteXC prove it takes more than a TV deal to make it in the business.
“Back when we were hurting, when we were bleeding millions of dollars, it would have been pretty easy to put a freak show on and go out and get a TV deal; it would have been pretty easy to do,” UFC President Dana White said. “Just having a TV deal isn’t going to make you a success in this business.
“Companies like the IFL and EliteXC learned that.”
In January 2001, brothers Frank and Lorenzo Fertitta bought the UFC for $2 million, created Zuffa LLC as the parent entity controlling the UFC and put White in charge.
With ties to the Nevada State Athletic Commission, Zuffa secured sanctioning in Nevada in 2001. Soon , the UFC returned to pay-per-view television.
Bleeding money
Despite the increased visibility that PPV provided, the UFC lost more than $40 million in its first five years under Zuffa ownership and was about to go bankrupt before The Ultimate Fighter gave MMA the kind of exposure it needed to catch on with a mainstream audience.
Before The Ultimate Fighter, the UFC set its pay-per-view record at UFC 40 — an event featuring Tito Ortiz and Ken Shamrock — with 150,000 buys.
Though the number was respectable, after production costs and fighter purses, it was not high enough to garner a profit for the organization .
After featuring Ortiz and Shamrock as coaches on the third season of The Ultimate Fighter, UFC 61 featured their rematch and garnered 1,050,000 PPV buys.
Attributing the UFC’s success to The Ultimate Fighter , both the IFL and EliteXC secured television deals to try to emulate the success of the UFC.
A hit that fizzled
In 2007, the IFL made a television deal with Fox Sports Net and MyNetworkTV. Though IFL Battleground set MyNetworkTV ratings records among key male demographics, it wasn’t enough to keep the company afloat.
The IFL intended to surpass the industry-leading UFC.
But after heavy spending — the company burned through more than $30 million in two years — and an inability to break into the PPV market, the IFL collapsed and its stock value dipped to 2 cents a share (from a high of about $15) and went out of business.
EliteXC became the first MMA organization to secure a deal with a premium cable channel when it reached a deal with Showtime in July 2006.
Fifteen months later, EliteXC signed a contract with CBS and became the first MMA organization to be shown on prime-time network television.
Though EliteXC’s show EliteXC: Primetime on CBS produced the highest ratings in MMA history, mismanagement, rampant spending and controversy led to the demise of EliteXC in less than two years of business.
Before the EliteXC: Heat show, Pro Elite, the parent company of EliteXC, announced in its 10Q SEC report that the company lost an estimated $55 million in 18 months.
Funny business
After it was revealed that EliteXC organizers paid fighter Seth Petruzelli a bonus to not take the organization’s star Kevin “Kimbo Slice” Ferguson to the ground, where he was most susceptible to be beaten, the Florida Department of Business and Professional Regulations launched an investigation into the legality of the situation.
Pro Elite announced it was going out of business days later.
Despite creating more mainstream media buzz than any other MMA organization , EliteXC was unable to make money in the business.
According to Lorenzo Fertitta, the UFC had an advantage over other MMA promoters because it was there first and established a strong brand.
But he attributes its success to a combination of factors.
“You can’t point to one thing that (differentiates) us,” he said . “We’ve created a fast-paced, edgy show.”
The gold standard
“Zuffa is the gold standard, the NFL of MMA,” said Bill Bergofin, senior vice president of marketing for Versus. “They understand what they have as entertainment and recognize the value of the whole experience from top to bottom, from the time they come on the air till they go off.”
It’s uncertain whether MMA can have more than one profitable organization at a time. But the IFL and EliteXC proved that having a TV deal isn’t enough if you don’t know what you’re doing.
It’s a tough business,” White said. “You want to learn how to do this business? Spend 44 million dollars to figure it out like I did.
“Maybe you’ll make it, maybe you won’t.
“Good luck.”
With the breakout success of the Ultimate Fighting Championship’s reality show The Ultimate Fighter in 2005, mixed martial arts was declared the next big thing. Everyone wanted a piece of the action.
But the recent rise and fall of high-profile MMA organizations such as the International Fight League and EliteXC prove it takes more than a TV deal to make it in the business.
“Back when we were hurting, when we were bleeding millions of dollars, it would have been pretty easy to put a freak show on and go out and get a TV deal; it would have been pretty easy to do,” UFC President Dana White said. “Just having a TV deal isn’t going to make you a success in this business.
“Companies like the IFL and EliteXC learned that.”
In January 2001, brothers Frank and Lorenzo Fertitta bought the UFC for $2 million, created Zuffa LLC as the parent entity controlling the UFC and put White in charge.
With ties to the Nevada State Athletic Commission, Zuffa secured sanctioning in Nevada in 2001. Soon , the UFC returned to pay-per-view television.
Bleeding money
Despite the increased visibility that PPV provided, the UFC lost more than $40 million in its first five years under Zuffa ownership and was about to go bankrupt before The Ultimate Fighter gave MMA the kind of exposure it needed to catch on with a mainstream audience.
Before The Ultimate Fighter, the UFC set its pay-per-view record at UFC 40 — an event featuring Tito Ortiz and Ken Shamrock — with 150,000 buys.
Though the number was respectable, after production costs and fighter purses, it was not high enough to garner a profit for the organization .
After featuring Ortiz and Shamrock as coaches on the third season of The Ultimate Fighter, UFC 61 featured their rematch and garnered 1,050,000 PPV buys.
Attributing the UFC’s success to The Ultimate Fighter , both the IFL and EliteXC secured television deals to try to emulate the success of the UFC.
A hit that fizzled
In 2007, the IFL made a television deal with Fox Sports Net and MyNetworkTV. Though IFL Battleground set MyNetworkTV ratings records among key male demographics, it wasn’t enough to keep the company afloat.
The IFL intended to surpass the industry-leading UFC.
But after heavy spending — the company burned through more than $30 million in two years — and an inability to break into the PPV market, the IFL collapsed and its stock value dipped to 2 cents a share (from a high of about $15) and went out of business.
EliteXC became the first MMA organization to secure a deal with a premium cable channel when it reached a deal with Showtime in July 2006.
Fifteen months later, EliteXC signed a contract with CBS and became the first MMA organization to be shown on prime-time network television.
Though EliteXC’s show EliteXC: Primetime on CBS produced the highest ratings in MMA history, mismanagement, rampant spending and controversy led to the demise of EliteXC in less than two years of business.
Before the EliteXC: Heat show, Pro Elite, the parent company of EliteXC, announced in its 10Q SEC report that the company lost an estimated $55 million in 18 months.
Funny business
After it was revealed that EliteXC organizers paid fighter Seth Petruzelli a bonus to not take the organization’s star Kevin “Kimbo Slice” Ferguson to the ground, where he was most susceptible to be beaten, the Florida Department of Business and Professional Regulations launched an investigation into the legality of the situation.
Pro Elite announced it was going out of business days later.
Despite creating more mainstream media buzz than any other MMA organization , EliteXC was unable to make money in the business.
According to Lorenzo Fertitta, the UFC had an advantage over other MMA promoters because it was there first and established a strong brand.
But he attributes its success to a combination of factors.
“You can’t point to one thing that (differentiates) us,” he said . “We’ve created a fast-paced, edgy show.”
The gold standard
“Zuffa is the gold standard, the NFL of MMA,” said Bill Bergofin, senior vice president of marketing for Versus. “They understand what they have as entertainment and recognize the value of the whole experience from top to bottom, from the time they come on the air till they go off.”
It’s uncertain whether MMA can have more than one profitable organization at a time. But the IFL and EliteXC proved that having a TV deal isn’t enough if you don’t know what you’re doing.
It’s a tough business,” White said. “You want to learn how to do this business? Spend 44 million dollars to figure it out like I did.
“Maybe you’ll make it, maybe you won’t.
“Good luck.”