The Atlantic Sits Down with Lorenzo Fertitta

December 2, 2008

The Atlantic has multiple pieces featuring the various personalities of the UFC, but the most intriguing from my perspective is the sit down interview they had with Lorenzo Fertitta. Lorenzo goes in depth on the various facets of his business.

Lorenzo is straight forward in his comparison of the boxing model vs what he has molded with the UFC:

LF: If you look at the business model of a boxing promoter, there’s really not a lot to the business model. Most operations are like four or five people. You have the promoter, a secretary, maybe a PR guy, and a fax machine. I mean, what do they really do at the end of the day for an event? They don’t risk any capital. They don’t put up any capital. They don’t do the production. They don’t do any of the creative, any of the production. They don’t do the marketing. Literally what a boxing promoter has to do is schedule the press conference and buy plane tickets, make sure the fighters arrive on time.

DS: And your business model here is what?

LF: We call it the wheel. The UFC wheel. You’ve got your core— the pay per view. That’s essentially your product, right? And then, you know, you have spinoff things. You can sell it on DVD. Then after you sell it on DVD, you repurpose it and sell it too, put it in syndication on UFC Wired, or on Spike TV. Then you have products that you then put on the internet through VOD and other VOD platforms. Then you have other licensing opportunities like apparel and merchandise and video games, and all the way down. So it’s a complex business.

The discussion of HBO and the boxing model makes for an argument that the only viable threat to the UFC would come from HBO, a threat that isn’t coming based on the pay channel’s history of keeping the sport of MMA at arm’s length.

The interview touches on why Fertitta hotels don’t take bets on UFC action, the UFC’s relationship with Spike, and why fighters getting such a small portion of profits is permissible from Lorenzo’s viewpoint. Also kind of amusing is his detailing his relationship with UFC President Dana White, even going so far as to defend him to a skeptical reporter:

DS: (Dana White) does a good job at what he does, but you’re the guy who’s put together a world-class business before, and when I look at this organization, I’m clear in my head about who’s probably thinking about this stuff and making these larger strategic decisions. When I talk to people in the organization, they all say ‘Lorenzo does that.’

LF: It’s just a different thing. But I will say that me and Dana make decisions together.

Comments are closed.