The Case for Legalization: Quantifying Economic Windfalls

June 19, 2009

By Kelsey Philpott

While I may have argued for a fundamental shift in MMA’s approach to seeking legalization, I’m not naive enough to believe that the economics of the sport do not have a role in the legalization process.

The fact of the matter is it’s simply not enough to preach the virtues of MMA as a sport and expound its comparable safety record to all the public naysayers and fence-sitters. It’s now time to broach the topic of economic windfalls – MMA’s veritable ace in the hole.

We’ve all heard it countless times, “UFC events mean millions for their host communities, governments, and regulatory bodies.” But what does that really mean in layman’s terms and what about non-UFC events?

In order to understand the true economic potential of MMA, you’ve first got to understand the root of MMA’s commercial success: its appeal to the male 18-34 demographic.

It’s a demographic characterized by young people that are just coming into significant quantities of disposable cash. They don’t yet have the types of cash burdens (mortgages, children, retirement plans) that will accompany them later on in life and thus, as a group, their purchasing power is literally unmatched.

And on the strength of this demographic and its purchasing power, MMA has become much more than a sport; it’s become a lifestyle complete with its own vernacular and way of dress. MMA has been able to branch out well beyond its fighting roots and into various other industries – clothing, collectibles, entertainment, and nutrition – to form what is collectively referred to as the MMA industry.

While the UFC may be the only promotion raking in hundreds of millions in yearly revenue, but it’s not the only company within the industry to do so. Tapout, for example, earned nearly $120 million in revenue last year and hopes to make it $250 million this year.

But how do you quantify what all of that means to MMA’s host communities?

You first have to acknowledge that the size of the economic windfall to any host community isn’t just going to depend on the size and calibre of the event, but also the size of the community itself. In other words, a UFC event in Toronto is going to create a much greater windfall than a regional show in London, Ontario.

In regards to windfalls, the greatest strength of the UFC is that its shows have the ability to increase tourism for a certain community: anywhere between 40% and 70% of the patrons at UFC events are from out of town. If you consider that the UFC could easily sell-out either of the 20,000 seat arenas in Toronto or New York City, for example, that means anywhere from 8,000 to 14,000 in attendance would be using local public transportation, local restaurants, local hotels, local shopping malls, and local nightclubs for an average of two days during that UFC event.

If the average amount that each individual spends during that weekend is $500, the economic windfall from that one UFC event is likely to be in between $4 million and $7 million. If you bump that average up to $1,000 over two days – which is certainly possible given the natural inflation seen in bigger markets like T.O. and NYC or the sheer number of things to do in both cities – the economic spinoff fits into the range of $8 to $14 million.

Further consider the percentage of  the crowd (30%-60%) that consists of local fans – all of whom are also spending money on public transport, restaurants, and bars – and the economic windfall to surrounding business and local governments becomes even larger.

However, MMA is much greater than its flagship promotion and there are countless other organizations out there just chomping at the bit to get into areas like Ontario or New York – all of whom would also make significant contributions to local economies.

I know that Canada’s largest promotion, the Maximum Fighting Championship, is already in talks with several Ontario-based casinos – in cities like Windsor, Hamilton, and London – about the prospects of hosting MMA events in the province should the sport be legalized. Mark Pavelich runs a tight ship in Edmonton and has a great deal of experience that he could quite easily parlay into a successful Ontario venture if given the opportunity. I’d also expect a slew of start-ups in Ontario the minute they open for business.

The same can also be said for any number of promotions in the US that would all take a hard look at the state of New York – cities like Buffalo, Albany, Rochester, and Syracuse, in addition to the Big Apple – as locations for their shows.

In cases such as these, the windfalls to local communities are smaller but not insignificant. Some of the venues at these proposed sites could hold anywhere from 5,000 to 10,000 people and that’s a legitimate amount of money (even if each person only spends $50 that evening).

(I encourage anyone interested in further exploring the economic potential of MMA events to check out this detailed impact study.)

The Argument from Community Development

MMA events, big and small, also do their part to help stir up the demand for infrastructure necessary to revitalize local communities.

It’s simply a numbers issue whereby venue managers have an additional booking option at their disposal in order to increase patronage. Those booking options can then create further demand and community support for re-investment in infrastructure that can go a long way towards propping up local businesses. I’ve seen this type of development in many places, including my hometown of Winnipeg, Manitoba.

In Winnipeg, the demand for a new entertainment facility was so great that the Province of Manitoba and City of Winnipeg combined to build the new MTS Centre downtown. It’s a state of the art facility that’s now host to several world class events on a monthly basis – Coldplay and The Offspring this week alone.

And the effect the MTS Centre has had on the surrounding restaurants, bars, and shopping malls has been tremendous. It’s helped to pick up a previously forgotten and very much downtrodden area of Winnipeg, while also fighting back against a bit of the urban sprawl that has plagued the city for years.

The Argument from Competition

And it’s not just that Ontario and New York are currently going without these economic windfalls and development stimulants, but also that they’re passing them onto their competitors.

Toronto and New York consider themselves legitimate players on the international stage, yet they’re ceding these tremendous opportunities to other world-class cities like Los Angeles, London, Dublin, and Tokyo that have all legalized the sport.

Knowing the international stage as the very cut throat and competitive environment that it is, neither city can afford to fall behind the rest of the world. The same argument could also easily be made from a national perspective.

Conclusion on the Case for Legalization

It’s very important for the MMA community to establish the sport’s legitimacy and safety record before further arguing its case with economic incentives.

I say this because no one likes to feel as though they’ve been bought or forced to sacrifice their morality. Feelings of this nature are certainly a breeding ground for the resentment, negativity, and the perpetuation of falsehoods that MMA fights on a daily basis.

Moreover, why should MMA have to buy its way into any state, province, or country? The integrity of the sport should demand acceptance, not a purchased tolerance.  

However, as I’ve illustrated, there is a definite place for arguments based upon the economic windfalls in the case for MMA’s legalization. These are arguments that need to be better explained and quantified before they can be exploited to their full use.

The Case for Legalization: Debunking MMA's Safety Myths

June 10, 2009

By Kelsey Philpott

The issue of safety is often raised when people start to discuss the merits of mixed martial arts and probably rightfully so. After all the sport can appear, to the uninitiated, quite dangerous if it’s given only a cursory glance.

It’s also hard to fault those individuals: the speed and ferocity of the sport is pretty startling when you add in the perception of the 4 oz. gloves and bevy of elbows, knees, and head kicks. Moreover, consider that most of those that have never seen an MMA fight before have still almost certainly heard something negative about the sport from a biased news report – their opinion and judgement of MMA is almost predetermined.

Needless to say, changing public opinion about the safety and legitimacy of MMA is going to require a much greater effort than simply plunking down all the naysayers and fence-sitters in front of a UFC PPV for an evening.

When I talk about MMA and its safety record, I often cite a 2006 research article published in the Journal of Sports Science and Medicine on the incidence of injury in professional mixed martial arts competitions. The conclusion of the study, performed by the prestigious John Hopkins University School of Medicine, was as follows:

Mixed Martial Arts competitions have changed dramatically since the first Ultimate Fighting Championship in 1993. The overall injury rate in MMA competitions is now similar to other combat sports, including boxing. Knockout rates are lower in MMA competitions than in boxing. This suggestsa reduced risk of TBI in MMA competitions when compared to other events involving striking.”

The study is nearly three years old, but I’ve elected to bring it up for two reasons: 1.) the study is MMA’s biggest ally in fighting the safety stereotypes that plague legalization discussions, and 2.) I believe that some people within the industry have grossly misinterpreted the results of the study and therefore MMA proponents must be cautious as to what they claim the study proves.

So, what does this study really tell us about MMA and its safety record?

It tells us that with respect to TBI – traumatic brain injury – MMA is probably safer than boxing and other combat sports.

The result of the study is also quite timely in the sense that TBI is a hot-button issue in all contact sports right now; head shots, concussions, and concerns for an athletes’ post-career quality of life are very much at the forefront of league meetings in the NFL and NHL. It would be quite interesting to see a study comparing the rates of TBI between MMA and football, because I have a hunch that MMA compares quite favourably to America’s most popular and accepted sport.

At any rate, the fact that MMA compares favourably to other combat sports is a real positive for the sport because it at least helps to debunk the myth that the 4 oz. gloves and interdisciplinary nature of the competition push MMA beyond the boundary of acceptability when it comes to safety.

The results make sense, too.

A boxer only has two striking options available to him: the body or the head – and the repeated blunt-force trauma caused by the average 200-400 head shots in any given match is very hard on brain tissue.

A mixed martial artist, on the other hand, throws considerably less head shots in any given bout (of which the maximum length is 25 minutes compared to 36 or 45 in some cases with boxing). An MMA fighter need not even throw a punch to earn a victory, so long as he chooses to pursue a wrestling or submission strategy to the match. Further, the rule set of MMA is also designed to protected fighters from brain injury by eliminating standing eight counts – if you’re out, you’re out.

What the study does not tell us, however, is that MMA is absolutely safer than boxing or other combat sports. It could very well be that, in regards to lacerations and fractures, MMA is more dangerous than other combat sports.

 Who’s to say?

That is the limitation of the John Hopkins study, and MMA needs to be careful when utilizing the study because it only provides a certain level of support for the sport’s safety record. The MMA community also needs to be mindful of the fact that there really aren’t any long term studies that exist to determine the effect of MMA competition on post-career quality of living. The sport simply hasn’t been around long enough to determine the effects and, at this point, the medical community can only hypothesize as to what might be the result of an MMA fighters post-fight career.

Conclusion:

 The John Hopkins study should be seen for what it is: a study that supports the legitimacy of the sport through establishing comparable safety records to that of other American past times. It’s also another resource in the education tool box that the MMA community can use to gain public support and help sway legislation towards legalization.

The Case for Legalization: MMA is a Sport

June 7, 2009

By Kelsey Philpott

I’ve established how and why a fundamental shift in MMA’s approach to seeking legalization is necessary for MMA to progress further. It’s essentially a renewed approach to educating the naysayers and fence-sitters about MMA to correct the misconceptions about the sport. Once MMA is able to clear up any false pretences about its sport and its safety record, it can then move on to preaching the economic spinoff benefits that accompany its events.

The first step in educating the masses about mixed martial arts is to actually teach them how and why MMA is a legitimate, bona fide sport.

It’s certainly strange to write something like this, but it’s necessary because MMA can no longer afford to let assumptions rule the minds of those making decisions. MMA has to state its position outright.

What is a sport? To most it means some sort of activity which requires both skill and physical prowess to compete.

I’d argue that not only does MMA combine several different interdisciplinary fighting styles such as boxing, wrestling, jiu-jitsu, and muay thai – all of which require a tremendous amount of skill and physical prowess – but the requisite level of mastery of these techniques easily parallels that of the mastery required at the highest levels of any other sport.

The sport of MMA and its many different disciplines are also highly regulated under a universal set of rules, procedures, and guidelines – including over 30 different in-cage rules and a strict drug testing policy – that have been designed to protect the health, well-being, and integrity of MMA and its athletes.

It’s foolish to assume that the naysayers or fence-sitters know about the rules and regulations that MMA abides by, because, quite frankly, it seems as though they often don’t. And for as much as the MMA community complains of the ignorance of others, it ought to look in the mirror to realize that not everyone cares to find the right information themselves!

That’s why it needs to be said: an MMA fighter cannot scratch, eye gouge, hair pull, groin kick, hit an opponent to the back of the head, or use steroids, amongst other things.

The diversity of technique and strict regulation of the sport also demand that its athletes be of the highest standard. It’s simply not enough to be a one-dimensional fighter anymore; and, as a result, MMA features some of the most physically-gifted, skilled, hard working, and disciplined athletes on the planet. Further, the professionalism and benevolence that is by-and-large displayed by the entire MMA community only adds to the reputation of its athletes.

Georges St. Pierre is the type of person and athlete that exemplifies what mixed martial arts is all about and the community should take greater strides to use him an ambassadorial role.

Answering MMA’s Critics

MMA is essentially bargaining with mass opinion and in order to win that battle, the sport must meet the interests (i.e., answer the concerns) of the public.

The most common complaint or criticism of MMA that I often hear opponents use is that technique, rules, and athleticism are irrelevant when the objective of MMA is to hurt the person standing across the cage. But is that really the true objective of the sport?

I would argue the true objective of any MMA fighter is to be victorious over his opponent, not to bring real harm to his opponent. More importantly, MMA is the ultimate physical and spiritual test that pits a fighter not just against another person, but against himself.

Is the anguish two fighters put themselves through any different than the strife two competing marathon runners experience when pushing each other towards the finish line in the dying minutes of a race? The sport of MMA is as much about conquering oneself as it is conquering others. And that explains why the sport exhibits the level of class and sportsmanship that it does.

MMA is further criticized for perpetuating violence, particularly amongst youth, in our society. I suppose this isn’t really a huge surprise considering that just about everything associated with Generation Y is certain to be responsible for the world going to hell – television, videogames, cell phones, facebook, etc.

It might surprise critics to know, however, that the fact of the matter is quite the opposite. I’ve seen far more evidence of MMA pulling troubled teens off the street and giving them a healthy and controlled way to channel their aggression. Furthermore, I think you’ll find that if you surveyed the incidence of illegal, underground fighting – something that occured well before MMA began – in areas where MMA is sanctioned to areas where MMA is not, you’d find even more correlating evidence to support this position.

Lastly, and this is probably my favourite, there exists this notion out there that MMA somehow compromises the morality of our society; in other words, it’s simply wrong. It’s certainly closely related to the earlier criticisms and misconceptions of the sport and is something I feel will disappear if MMA can manage to do a better job of educating people about the sport.

There will, however, undoubtedly remain some people that still disagree with the idea of MMA and in this regard, I’m not sure there is much MMA can do. Therefore, why worry about it? 

The issue of morality itself opens a whole other can of worms: it’s not only highly subjective but also greatly influenced by one’s surrounding environment (again we broach the subject of cultural relativism). I’m not about to tell anyone what’s right or wrong – apart from the obvious – and MMA certainly doesn’t encroaches upon that obvious line. The sport does not infringe upon any fundamental human rights; it features willing, competent combatants duelling in a controlled setting; and it does not further perpetuate that combat outside of the proper channels.

What more is there to say? Difference exist, I respect those of others, but I’m not about to force MMA on anyone that doesn’t like it. Nor am I about to let them tell me what I should or should not be doing.

Payout Conclusion

The bottom line, here, is the public perception that MMA is a violent, bloodlust akin to human cockfighting could not be further from the truth. Everyone in MMA understands this, and it’s about time the public did too.

MMA is a legitimate sport and deserves to be legalized.

The Case for Legalization: A Fundamental Shift

June 5, 2009

By Kelsey Philpott

The recent developments in New York and Ontario would seem to bring about the proper timing for yet another discussion about legalizing mixed martial arts.

In lieu of my recent debut television appearance for Rogers Sportsnet’s MMA: Connected, speaking on this very subject (in addition to a host of other business-related MMA issues), I’ve also decided to comment in print.

I’ll say this much: the legalization scale seems to be slowly tipping in MMA’s favour. The ball is now rolling so to speak – despite the enormous amount of work still left to be done – but, in order for MMA to move any further, I believe that a fundamental shift in the sport’s approach to seeking legislation needs to occur.

In the past few years I’ve observed a bit of an unnerving trend in the way in which the sport has gone about trying to get itself sanctioned. For a time, educating the naysayers and the unfamiliar about the sport was very much at the forefront of MMA’s agenda. But as MMA began to grow and experience some degree of success, education was put on the back burner in favour of arguments based upon the economic contributions that MMA events make to their host communities.

It truly seemed as though the sport had been waging a media campaign for the legalization and sanctioning of mixed martial arts based almost solely upon financial posturing. Any debate about the legalization or sanctioning of MMA was quickly dominated by revenue figures and profit potentials.

Did it work? To an extent, but I also feel it’s been the cause of some the heel digging we’re now seeing in areas like Ontario and New York (although I’m not about to ignore some of the unique issues in either area that have played a role in shaping their respective landscapes – we’ll save those intricacies for another day).

The argument based upon economic spinoffs is a bit misguided in the sense that although money does make the world go-round, but people also want to know that MMA is an activity which isn’t morally reprehensible or a negative influence within their community.

What’s more is that we live in a society of cultural relativism; where the definition of good and bad is often influenced by the powerful and motivated. It’s not about right or wrong in absolute form, but who can shout the loudest and appeal to the ignorant or indifferent masses sitting on the fence.

And who can blame the fence-sitters? Being anything other than ignorant or indifferent, these days, is truly an effort. Individuals are inundated with thousands of pieces of information on a weekly basis – a great deal of which are biased by government or corporations – and they need some way to process everything. Hence, they stereotype.

That’s why education is so important. MMA has a very important message that isn’t going to be distributed or explained on its own. It’s up to the MMA community as a whole to distribute and explain that message – to cure the ignorant or indifferent of their false stereotypes.

Let me give you an example: I’m Canadian and I know NOTHING about basketball. Take me to a basketball game and give me floor seats and I’ll still know next to NOTHING about basketball. But, if you give me floor seats and put me next to Stan Van Gundy for a game, chances are I’m going to pick up a few things about the sport – at least the basics.

It’s just not enough to call these people ignorant and demand that they go “watch some MMA;” or, worse, throw money at them in hoping they’ll give in or give up. The MMA community has no choice but to take these ignorant or indifferent individuals by the hand and show them how and why MMA is one of the greatest sports in the world.

And what if some, like Bob Reilly, don’t want to listen? There are 20 other members of the Tourism Committee in New York that might. In other words, “coalition build” with the majority and give the minority little choice.

To accomplish this, the MMA community has to return to an approach based upon educating those ignorant naysayers about the true nature of mixed martial arts:

Only afterwards is it time to broach the subject of economic spinoffs because, again, quite simply, no one likes to feel as though they’ve been bought – like they’ve sacrificed their morality for a few bucks and a t-shirt.

The greatest minds in negotiation will tell you that you’re best served in finding the common interests between all parties at the table and working to meet them equitably. If MMA wants global acceptance, it must realize that the interests of the world are far greater than simply money.

Therefore, MMA needs more Marc Ratners preaching the virtues of the sport to congress or parliament, more Ken Hayashi’s visiting UFC events, more websites like MMAfacts.com, and more people within the community, other than the UFC, stepping up to truly inform the misinformed.