More from Shanks and Fertitta at the World Congress of Sport

March 21, 2012

The Sports Business Daily/Journal had another short report from Fox Exec Eric Shanks and UFC head Lorenzo Fertitta at the 2012 World Congress of Sports.  The two spoke today at the conference during a panel discussion entitled, “How the UFC/Fox deal could be a game changer.”

For those wondering, here’s the synopsis of the talk from the brochure:

In 2011, Ultimate Fighting Championship expanded into South America and Asia, and continued its surge in popularity, particularly among the 18-34 year-old male demo. But it was the mixed martial arts organization’s seven-year agreement with Fox — to show UFC programming on the Fox broadcast network and cable TV channels FX and FUEL TV — that made the biggest splash. As part of the deal, dozens of live fights will be airing on Fox networks and, this spring, “The Ultimate Fighter” reality show will feature a new format that includes live fights, rather than prerecorded events. This session will take an inside look at the UFC/Fox agreement and its role in the growth of mixed martial arts. You will hear from Lorenzo Fertitta, Chairman & CEO, Zuffa (Ultimate Fighting Championship); and Eric Shanks, President & COO, Fox Sports.

Shanks and Fertitta spoke about the UFC-Fox deal and the issue of control being a huge factor in Zuffa’s decision to go with Fox.

Here are some additional highlights:

–  Shanks said that the 64 second JDS KO of Cain at UFC on Fox 1 wasn’t ideal but “it was exciting,” he added, “It was a knockout. It was a style of a knockout people were used to seeing. It could have gone a lot of other different directions.” As a result, it learned that fans want more action and less fluff (i.e., talking and promoting).

–  As indicated at the end of last year, the UFC and Fox are concentrating on expanding its advertising partners. In addition to sponsors RYU and MetroPCS signing on recently it has secured Dr. Pepper.  Its had success with the auto category but is still looking for sponsors in the financial services, insurance and other areas.

–  Shanks stated that there is still room to grow to procure blue chip advertisers but emphasized its strong 18-34 male demo.

–  Fertitta believes that more advertisers will sign on citing, as Shanks did, that it will take time for advertisers to understand the UFC audience.  He also cited the fact that the UFC has an “affluent fanbase” as the average income for fans is $80,000 a year and the average UFC ticket is the highest in sports at $275.

–  Fertitta also touched on the New York legalization issue stating that the brand will be elevated if (and when) MMA is legalized in the state.

Payout Perspective:

Nothing earth shattering from Shanks and Fertitta so don’t feel bad you weren’t in Dana Point, CA (the site of the World Congress of Sport) this morning unless you are a leader in sports business – in that case where were you?  Nonetheless, I find the average income of the UFC fan really high.  Of course, it’s not clear if Fertitta is referring to household income or that of an individual. Also, $275 for an average ticket is really steep and it’s ironic since we hear so much of the tons of comps that are given out at various UFC Vegas events.

It will be interesting to see what sponsors get onboard with the UFC this year.  It was expected for there to be some time for advertisers to get comfortable with the UFC product which Shanks and Fertitta acknowledge.  But, how long will it take?

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