Fast Company features the UFC in latest issue

November 25, 2012

Business trade magazine Fast Company featured the UFC in its November issue.  The issue is part case study as it introduces the main players but also looks at the UFC business.

The article authored by scribe Luke O’Brien, notably of Deadspin fame, details the company execs and gives a general rundown of what it is like on fight night for Dana White.  For those not following White, et al., the snapshot of Team Zuffa gives followers of the magazine a look at how White saw promise in a fledgling “fight to the death” sport and repackaged it into what it has become.

In addition to the UFC backstory, it identifies the major challenge the company faces:

Now the UFC is at a critical juncture. It could join the country’s major sports leagues–an ascension fueled by big profits, network TV acceptance, and aggressive international expansion. Or, the UFC could mismanage its growth–by fatiguing fans with too many events, failing to resolve labor tensions with fighters, or simply overreaching. And, of course, there’s an inherent question the UFC is finally large enough to confront: Is this sport too violent to thrive in mainstream America?

Despite the mantra that the UFC and the WWE are not the same and never the twain shall meet, the article points to the Fertittas and White looking over WWE SEC filing to examine how it did its business.  And what it ended up with is the current model of using television to promote its PPV business.

The article offers several takeaways from the UFC case study:

  1. It was willing to invest in itself to tell its story.  When no one would fund the very first The Ultimate Fighter, Zuffa spent $10 million to produce it.
  2. In expansion it is changing its U.S. model to cater to the international markets.
  3. The UFC is using its content to allure fringe fans by airing fights for free on Fox, Fuel and FX.
  4. It has built relationships with celebrities in hopes that their influence will be relayed back (via twitter) to their following.

Payout Perspective:

The feature portion of the article is something that many have read before.  The business aspects of the article are interesting especially the challenges it faces in attempting to penetrate an international market and the way it executes this.  Another interesting takeaway is the issue of a fighter union which we just wrote about.  The article identifies the backlash Jon Jones received when he refused to fight Chael Sonnen Labor Day Weekend.  While there is a good discussion about how the stars are gaining footholds in controlling their own careers, most do not think a union is a good idea.

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