Business

How UFC Rolled With the Punches and Rose Above Near Bankruptcy

UFC Fight Night

The UFC Octagon Cage

A Right Business Starts with A Great Idea

The Beginning – November 12 1993, Denver Colorado
The Ultimate Fighting Championship, or globally known as UFC is an American fighting promotion company. The initial idea behind it was to solve the eternal equation of which martial art can beat all the others, while ranking top fighters in the sport. November 12 1993 witnessed lightweight Brazilian Jiu-Jitsu expert, Royce Gracie effortlessly defeat in one night 3 opponents in a row who were much bigger. This first showcase garnered 86’592 pay-per-view purchases worldwide, marking the event as a huge success. Mixed Martial Arts was born and introduced to the world.

Despite its notable high ratings and huge viewership on a global scale, the beginning of UFC was not all smooth sailing as it had experienced various challenges before making its way to the top where it was recently sold for USD $ 4.2 billion by a group led by WWE-IMG. How did Zuffa LLC make it possible when they only paid USD $2m when it was first bought? 

 

Bad Implementation

1993 – 1997: The Outlaws

The first rule of UFC is.. OH, there were no rules at all! With this ‘no-rules’ strategy, UFC aired its series of bloody bare-knuckle, no weight division fights that scaled viewership instantaneously. However so, the inability to attain a sanction from the US’s athletic’s commission resulted in difficulties in getting sponsored.

Bad Market Forecast

Late 90’s

In 1997, Senator John McCain dubbed UFC as “human cockfighting” and the show was banned in every state during the late 90’s and early 2000s. Being the biggest adversary of the franchise, his concern was in the head trauma that the sport could bring to the fighters. Due to this, UFC was nearly shut down.

Improved Product-Market fit

1997 to 2001: Stricter Rules

Reacting to McCain’s concerns, UFC adopted the Unified Rules of MMA in 2001 by introducing strict rules and regulations such as the usage of gloves, applying rounds in each fight, showing score cards, allowing referee stoppage as well as introducing weight divisions.

Improved Product Distribution

2001: Zuffa LLC Bought UFC for USD $2 Million

After being sanctioned by the Nevada State Athletic Commision, UFC had its 1st fight held in the Sin City. Huge investments in advertising were made that enabled UFC to be introduced in multiple states in the country. Despite its steady traction and exposure, the UFC brand name still failed to generate profit and by 2004, Zuffa had reported suffering a USD $34 million loss.

The Right Content Marketing Strategy

2005 : The Turning Point – The Ultimate Fighter

Realising their struggles in promoting fights, UFC made a foray in television by ‘humanizing’ their fighters through a reality TV show called ‘The Ultimate Fighter’. The show portrayed the lives of the fighters through daily life sentiments and conceptualized them as disciplined and hardworking individuals with dreams to achieve.

Unfortunately, UFC was unable to pitch the show to any TV networks. However, by being faithful to their vision and product, they self-initiated the broadcasting of the show by investing USD$ 10 Million to the previous broadcaster, Spike TV, and before they knew it, ‘The Ultimate Fighter’ was an instant success.

2014 : “Embedded” Fighters on Youtube

UFC continued to reign their multimedia territory by introducing ‘Embedded: Vlog Series’ on Youtube that profiled the fighters’ daily lives, preparation, strategy and lifestyle. With this, UFC brought the fighters closer to the viewers, showing an ‘exclusive’ look into the fighters’ daily lives while subsequently making viewers feel like they are a part of their stars’ journey.

Assessment of Competition

Throughout the years, UFC has acquired many of its competitors and absorbed them into its brand:

  • World fighting alliance WFA – 2006
  • Pride Fighting Championship – 2007
  • International Fight League IFL – 2008
  • World Extreme Cagefighting WEC – 2010
  • Strikeforce – 2013

 

Deals-Making Skills

It is undeniable that UFC, through its promotional strategy has great skills in matchmaking, rigged talented fighters into stardom and expanded their franchise all over the world.

11 July 2009: UFC 100 Brock Lesnar vs Frank Mir

The record breaking 1.7 million pay-per-view buys outselling every pay-per-view event of the year became the fourth highest selling event in history.

15 November 2015: UFC 193 Ronda Rousey vs Holly Holmes

The most attended UFC event in the history of the company, with 56’214 people filling the Etihad Stadium in Melbourne, Australia

June 2016 : Superstar Irish Fighter Conor McGregor 85th on Forbes top paid athletes list

Conor “The Notorious” McGregor, 17 time featherweight champion made history by becoming the first MMA fighter to be featured on Forbes’ list of top 100 highest-paid athletes for 2016 with an estimated networth of USD $22 million.

UFC Fighter Conor McGregor

UFC Fighters Conor McGregor vs Chad Mendes at UFC189

11 July 2016 : UFC 200 Miesha Tates vs Amanda Nunes

This night fight broke the record for any mixed martial arts event in the United States with a total collection of USD $10.7 million gate. The total disclosed payout for the event was nearly USD $7 million and is marked as the highest combined disclosed payday in the UFC history.

Product Redesign and Investment in Technology

From the brief history above, UFC’s impressive track record in branding itself as the premiere MMA promoter is absolutely astonishing. While Dana White remains as the President, the brand name is now owned by a renown Hollywood talent agency WWE-IMG at a price of USD $ 4.2 billion, standing as the most expensive transaction in sports history. The brand name shows no signs of stopping and is expected to maintain its viewers’ allegiance not only through fight broadcasts but by their product’s redesign efforts like UFC.tv, UFC Fight Pass, and multi-device live streaming PPV.

 

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