The business of MMA in 2008

The business of MMA in 2008
By Dave Meltzer, Yahoo Sports
January 7, 2008

Dave Meltzer
Yahoo Sports
In 2007, the sport of mixed martial arts garnered unprecedented mainstream sports acceptance, gracing the covers of ESPN The Magazine and Sports Illustrated . Media outlets that one year ago wouldn't have touched MMA were suddenly proclaiming it as the fastest growing sport in the country, and even the replacement for traditional boxing.

But the reality is a little different. As this past year showed, the respective ups and downs of the UFC and pro boxing aren't related. Boxing had its biggest year ever on pay-per-view television, and while UFC didn't have the two incredible draws which turned 2006 into its biggest year – Tito Ortiz's matches with Ken Shamrock and Chuck Liddell – business solidified. Of the 15 biggest PPV events of 2007 in North America, UFC had eight, to four for boxing and three for World Wrestling Entertainment (numbers are not yet available for UFC 78 and November and UFC 79 in December, both of which are expected to crack the top 15). In 2006, those numbers were six each for boxing and UFC and three for WWE. Boxing's record year really consisted of two gigantic fights: Oscar De La Hoya-Floyd Mayweather and Mayweather-Ricky Hatton. UFC did the most consistent business, and WWE, with the exception of a stellar Wrestlemania and strong SummerSlam, has faded in comparison.

• 1. Boxing: Oscar De La Hoya vs. Floyd Mayweather, May 5: 2,400,000
• 2. Boxing: Mayweather vs. Ricky Hatton, Dec. 8: 850,000
• 3. WWE: Wrestlemania, April 1: 760,000
• 4. UFC: Chuck Liddell vs. Quinton Jackson, May 26: 675,000
• 5. UFC: Tim Sylvia vs. Randy Couture, March 3: 540,000
• 6. UFC: Couture vs. Gabriel Gonzaga, Aug. 24: 520,000
• 7. UFC: Liddell vs. Keith Jardine, Sept. 22: 475,000
• 8. UFC: Tito Ortiz vs. Rashad Evans, July 7: 425,000
• 9. UFC: Anderson Silva vs. Travis Lutter, Feb. 2: 400,000
• 10. UFC: Georges St. Pierre vs. Matt Serra, April 7: 400,000
• 11. Boxing: Manny Pacquiao vs. Marco Antonio Barrera, Oct. 6: 350,000
• 12. WWE: SummerSlam, Aug. 26: 344,000
• 13. Boxing: Miguel Cotto vs. Shane Mosley, Nov. 10: 340,000
• 14. UFC: Anderson Silva vs. Rich Franklin, Oct. 20: 325,000
• 15. WWE: Royal Rumble, Jan. 28: 314,000
*Numbers not yet available for UFC 78 and 79, which are expected to crack the top 15. Source: Wrestling Observer.

The UFC vs. boxing news story proved to be overblown. UFC doesn't have a De La Hoya, and as long as he's active and the masses consider him a superstar worth paying to see, boxing has the potential to have the biggest single events.

Boxing also has the media edge in the sense that even though several UFC fights did business in the same ballpark as Mayweather-Hatton in North America, the company still is not established enough to get the media acceptance of being as big on a regular basis.

In the long run, both will thrive, survive, or die based on their own merits. The crossover audience really isn't there.

If you attend a live boxing, UFC and WWE event in the same market, you hardly see the same type of audience. Boxing draws a far older and more ethnic-based audience. Aside from the few times a year when a fight takes on a life of its own in the public consciousness, the sport doesn't have nearly the base of the other two. UFC draws largely white males and females, usually in the 18-40 range. You see very few teenagers, virtually no children, and no sign of the older crowd seen at most boxing matches.

WWE has strong across-the-board television viewership, but there has been a major change over the past year at its live shows. The adult male audience is rather rapidly being replaced by a growing teenage and younger children's audience, with the adults in attendance mainly being parents. That probably also explains WWE's declining base of PPV viewers.

If there is true competition, it's for the PPV dollars of the 18-40 crowd. The migration to UFC of an audience that grew up on WWE is the untold story. Will it continue? Can it reverse? UFC proved some staying power this year, but two years hardly indicates proven long-term success.

There is a business lesson from pro wrestling over the past few years that UFC should heed. WWE increased from 12 to 16 pay-per-view events, and the results of the overexposure were such that they are cutting back to 14 this year. UFC's current schedule (running major events Dec. 29, Jan. 19 and Feb. 2) is the type of schedule that caused the WWE base audience to begin to pick and choose between events. It's a slippery slope that becomes a difficult rebound. This is not as much a factor to boxing, because few boxing fans buy every show, with most picking and choosing only the big-name fights. UFC, like WWE, sells almost as much on the brand name as the main events, drawing a regular monthly crowd.

But with all the talk of MMA being the next NASCAR, or the replacement for boxing, the only true success story of the MMA industry on a national basis has been UFC. The IFL started out with strong television on MyNetworkTV, but its ratings faded most of the year and only a weak FOX Sports Net is a partner for 2008. Bodog Fight spent millions in promotion and came out with little, losing its television after poor ratings on the Ion Network, and hasn't had any television outlet for months. Elite XC purchased one smaller organization after another, but was a huge money loser and has not established itself as the Avis of the genre. It has specials on Showtime, but no clearance to hit the true national market. WEC is really just a UFC subsidiary, and while their ratings on Versus have grown, they are far from being a nationally known secondary brand. If they become one, it really only furthers the UFC domination of the market.

All three UFC rivals start 2008 needing to turn around their business fortunes or face a bleak long-term future. Also in the North American mix is M-1 Global, which held a big press conference announcing the signing of Fedor Emelianenko and talking about more big signings and a possible television deal. But they have been largely quiet ever since, with no date even announced for a first show.

The wild card is Mark Cuban's HDNet. The network committed to 24 live events in 2008, working with a number of different promotions. Just this past week HDNet aired both the IFL finals and the Japanese New Year's Eve Yarennoka show live. Today, the station doesn't have enough clearance (being in less than 6 percent of the country's homes) to be a significant factor. If HDNet becomes this decade’s version of the first wave of major cable stations in the ‘80s, that will greatly change the makeup of the sport. But that won't be happening in 2008.

Both NBC and CBS have had recent talks about airing MMA, but no deals have been announced. The CBS negotiations will have the same issues as the failed UFC/HBO negotiations of 2007: Both sides will want to control the production and the announcing.

UFC has achieved a successful formula for presenting a sport, but from a control standpoint the television product is far closer to pro wrestling. The announcers never talk about serious issues on the broadcast. You'll never hear about drug suspensions or contract disputes like you would while watching a major sports broadcast. It's a great gimmick, but if the NFL on network television can't have full control over what the announcers say, it's doubtful HBO, let alone a major network, will accept those coverage limitations. That's the major hurdle.

What to expect in 2008? More media coverage is probable. More shows, both good and bad, are likely. More small groups losing lots of money is almost a guarantee. Only a stiff decline in UFC business will prevent all this from happening. And with the base having solidified at a higher level than last year, there are no signs of that happening.

As long as UFC has success, there will be wealthy people trying to get in on the game. Most will fail spectacularly. But it only takes one group that garners the right television deal, and can sign a few UFC stars, and understands how to market the sport that the entire dynamic of the industry will change. That is also far easier said than done. Several tried this past year, and none came close to making it work.

More fighters will have an opportunity to earn full-time livings, so the quality of potential stars will increase. That, like in 2007, will probably lead to more surprises. Whether it's going to be the MMA's great lure or its great curse in the long term, the reality is that when top fighters are matched, anything can happen.

At the same time, the original cast of stars made by television in 2005, Chuck Liddell, Randy Couture, Matt Hughes and Rich Franklin, are not going to be able to carry the UFC brand this next year. UFC's key for 2008 is whether people such as Quinton Jackson, Georges St. Pierre, B.J. Penn or whoever ends up as the dominant fighters can be viewed by the current and new fan base as being as big as the stars who made the sport a force.

Dave Meltzer covers mixed martial arts for Yahoo! Sports. Send Dave a question or comment for potential use in a future column or webcast.

Updated on Monday, Jan 7, 2008 2:59 pm, EST

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