LAS VEGAS – Lorenzo Fertitta, the president of one of the most successful casino chains in Las Vegas, resigned his position with Station Casinos on Wednesday to work full-time with the Ultimate Fighting Championship.
Fertitta, his older brother, Frank III and Dana White purchased the UFC in 2001 for $2 million when it was struggling and on the verge of folding. But in the seven-and-a-half years since, they've turned it into one of the great success stories in sports.
White, the UFC's colorful and outspoken president, earlier this month had promised a bombshell announcement that he vowed would rock the mixed martial arts world. His long-awaited announcement, which had many in the industry in a lather speculating about what it might be, may turn out to be ho-hum news to the sport's hard-core fans.
But White insists that Fertitta's decision to resign as president of Station Casinos to work full-time for the UFC is a seminal moment in the company's history.
Fertitta and his older brother, Frank III, are the primary owners of the UFC. But until now Lorenzo Fertitta has devoted more than three-quarters of his time to running the family business as president of the burgeoning casino company.
But Fertitta, who according to In Business Las Vegas magazine was the second-highest paid casino executive in Las Vegas in 2007 with a salary of $113.8 million, said the growth of the UFC demanded a more significant involvement.
Fertitta insisted the move was no indictment of White, his long-time friend and next-door neighbor, but rather one which is desperately needed because of the significant growth the company is undergoing.
"The problem, if there is a problem, is that the business has gotten so successful, it's requiring more time, focus and attention," Fertitta said. "Station Casinos is a business my family and I have built and now it's a multi-billion dollar company. But the reality is, the UFC has gone through so much growth in the last eight years, my brother and I felt we'd be better in divide and conquer mode. He'll stay at Station Casinos and take care of that and I'll come over here and work on the issues involving the UFC."
Frank Fertitta III will remain as chief executive officer of Station Casinos, though he'll retain his ownership stake in the UFC. Lorenzo Fertitta, meanwhile, will work to develop the international business for an organization which once struggled to gain a foothold in the U.S.
When the Ferittas purchased the company from Semaphore Entertainment Group in 2001 for $2 million, it had four employees and staged its bouts in small hotel ballrooms to save costs. Now, the company has expanded to over 100 employees with offices in both the U.S. and Europe and promotes fight cards in state-of-the-art arenas around the world.
White said that when he and the Fertitta brothers bought the UFC, they believed this kind of success was possible, though few others did. Influential members of Congress were against the sport, and, for a time, it was banned from cable pay-per-view television in the United States.
Now the UFC is thriving domestically and has expanded internationally, having in the last 14 months staged five cards in the U.K., including two in London and one apiece in Manchester, Newcastle and Belfast, Northern Ireland. White has already said the UFC plans to put a show in The Philippines and a UFC event is expected to be among the early acts to play at the ritzy new O2 World Arena being built in Berlin.
Fertitta says the UFC plans to expand outside of the U.S. and U.K. and into mainland Europe, with plans to go to Italy, France and Spain, in addition to Germany. He said he foresees expansion into the Baltic countries, including Russia, and was recently in Dubai working on establishing a foothold for the UFC there.
Asia also is in the plans, he said, citing China, South Korea, Japan and India as prime markets for the company.
"Think about this for a second: India has 350 million men between the ages of 18 and 34, and that's our key demographic," Fertitta said. "The magnitude of these markets is staggering. Dana has been doing a phenomenal job with this company, and I've been doing what I could given my responsibilities (at Station Casinos).
"The UFC is going to have a global footprint in the not-too-distant future. We're already working on furthering our position in Brazil. This is getting so big that it demanded I spend more time with it."
Speculation was rampant among MMA fans and media after White said earlier this month that he was going to make an announcement that would change the face of the industry. Guesses ranged from the UFC landing a network television deal to a purchase of the struggling International Fight League to a settlement with its estranged heavyweight champion, Randy Couture.
White said he understands that some may see Fertitta's move as a sign of the owners' unhappiness with him or as an indication that the company is in peril.
He laughed at the thought and said he believes the UFC is about to explode.
"If they think that, beautiful, because it's better for us," White said. "There just isn't enough time in the day for me to do everything that needs to be done. Lorenzo's wife said to me the other day, 'The two of you together is scary.' I think what we're going to be able to do now is amazing.
"I think the potential for the UFC within the next five years globally is that it is going to be bigger than the NFL, bigger than Major League Baseball. As huge as the NFL is here, they don't give a (expletive) about the NFL in Europe. But fighting transcends continents. Everybody on every continent understands a fight."
Fertitta also plans to work on landing more big-name sponsors, particularly in countries other than the U.S. The UFC signed two blue-chip sponsors, Bud Light and Harley Davidson, earlier this year.
He said he's excited about the merchandising deal the UFC signed last week with Jakks Pacific, which will produce action figures of UFC fighters. White said the Jakks deal is critical, because it will help fighters make significant amounts of money.
"Our top guys now are making millions. Others are making hundreds of thousands," White said. "But when we get this thing globally where I know we can, with the merchandising and all the ancillary stuff, the fighters are going to be paid when they're sitting on their couch.
"It's going to be a great situation for them. They'll still be paid when they fight, but now, when they're sitting at home doing nothing and checks are rolling in and they're making money, that's when they'll know they've hit it."
Fertitta and White made the announcement to their employees in a meeting on Wednesday at Palace Station, one of the Station Casinos' properties.
White said Fertitta's presence in the office on a daily basis would have a significant impact upon his staff.
"These people who are working for us, maybe some of them wonder if they did the right thing coming to a company that promotes mixed martial arts fights," White said.
"Everyone has doubts, right? Well, when you see Lorenzo Fertitta, a guy who was the No. 2-highest paid casino executive in Las Vegas, quit that job to come to work full-time for the UFC, that will be pretty strong evidence that they've made the correct move. "The Internet may not consider this huge news, but what the people on the Internet think is huge and what I think is huge are two different things. But you know what? I think I have a pretty good track record. I think this is maybe the biggest day in UFC history. I'm so excited, I can't begin to explain it to you. This is an historic day for me and this company."