“I’m going to make an announcement next week that is going to blow people’s minds,” he’s quoted as saying in the magazine article. “That deal is done, but my employees don’t even know yet. I’m renting out a place next Thursday and I’m going to tell them. Then we’ll make the announcement later that day. It’s an indicator of where this business is going over the next five years.”
I made several phone calls yesterday to try and see if they had any insight as to what might be coming around the bend. None of them had any idea what was going on. The only thing left for me to do, was to speculate on the possibilities.
Apparently Takanori Gomi is training in Las Vegas right now and that has generated a lot of speculation that he might end up signing with the UFC. While that would be a big announcement, it’s not something that is going to serve as an indicator of where the business is going over the next five years. White’s announcement is something that has to do with a future trend that will affect the business as a whole.
I decided to come up with what I believe are future trends that I feel the MMA business is going to experience:
1) Consolidation - MMA is a growing sport, but there are simply too many promotions. As much as I’d love for them all to succeed, MMA’s fanbase isn’t big enough to support them all. Could White be referring to the acquisition of a mid-major promotion such as Strikeforce or the IFL? Not likely. When the UFC acquired PRIDE, White said they had acquired the only company left worth acquiring. And I just don’t see the UFC doing anything to offer the IFL any sort of bailout. They might like some of their fighters, but chances are they’d either wait for the company to old or simply purchase a few fighter contracts, similar to what they did with the WFA. But the operative phrase here is “next five years.” Consolidation is a trend we will see in the next 12 months and not something we’re going to see over the span of the next five years.
2) Weekly Live Fights - With the way the schedule for MMA events has been lately, we’re already getting live fights on a weekly basis. But I do believe there will come a time when we see the MMA equivalent to the old USA “Tuesday Night Fights” or ESPN II’s current “Friday Night Fights.” In fact, as a part of the UFC’s new contract with Spike, plans are already in place to bring a live weekly fight series to broadcast cable. The thing is, plans are already in motion for “The Ultimate Fighter” season eight, meaning the earliest we’d see such a series in 2009. Such an announcement is hardly worth renting a place out for.
3) The Boxing Model - Maybe Dana White just signed Randy Couture vs. Fedor Emelianenko? Sure, Fedor is under contract to Affliction, but it’s a non-exclusive. And I strongly believe we’re going to see a migration in MMA to the boxing model, where fighters sign short-term agreements with fight promotions and we have fighters competing under promotional banners on a fight-by-fight basis. For example, one day you might see Kimbo Slice fighting Brett Rogers under the EliteXC banner, and then three months later he’s fighting Roy Nelson under the IFL banner. I’m not saying those are the exact fighters we’re going to see, but I think you catch my drift. But while I believe the boxing model is the wave of the future, the UFC doesn’t play well with others and such situation is something you’ll see over the UFC’s dead body.
4) Madison Avenue Sponsorship – We’ve already seen the dam burst and higher-end sponsors are throwing their support behind MMA, whether it be Bud Light, Harley Davidson, Buger King, and I believe the UFC may have just landed Edge Shavers as a sponsor as well. The demographics are too strong for Madison Avenue to ignore; their clients want to reach males 18-34 and the major ad firms cannot afford to thumb their noses at MMA. We’re only going to see more and more blue chip companies get behind MMA. But if the UFC didn’t rent out a facility to announce Bud Light, possibly the biggest sponsor for sports that you can land, I doubt he’s renting out a facility to break the news about a new sponsor.
5) Network Television and Corporate Partnerships - I will cut the expense, I believe next Thursday’s announcement will have to do with the UFC forming a partnership with a major network partner such as FOX television. I feel this way because as much as White claims the debut of Saturday Night Fights was a debacle, the ratings success cannot be ignored. Too many people were exposed to the fighters of EliteXC. Not to mention, the event received so much media attention the week after that it practically buried UFC 85 to a point where I think it will affect its buyrate. The UFC cannot afford to allow EliteXC to do a second show on network TV unanswered. If they do another show before the UFC does, EliteXC will be in a prime position to program casual MMA viewers that they are the number one MMA organization out there.
EliteXC’s ratings were just too strong. FOX and ABC are going to feel a greater sense of urgency to do something. ESPN and HBO are going to re-visit the idea of having MMA on their respective networks. But for reasons that I just stated, nobody is probably feeling the pressure more than Dana White. The UFC has to announce a deal with network TV before EliteXC holds a second show on CBS. I mean, it has to! This is a fight and the UFC is taking unanswered shots right now. It’s time to answer back.
One other thing I would not rule out is FOX possibly becoming an equity partner in the UFC. It was no secret that the UFC was looking to sell the company at one point, because according to industry insiders, the feeling at Zuffa is that the sport is hotter than it will ever be. Now could also be the best strategic time to sell, as the UFC is currently the industry leader but with so many competitors crawling out of the woodwork, who knows how long they can maintain their market share? White was quoted recently as saying he doesn’t know how much more he can take. He sounds like a man who is beginning to feel like he’s being out-gunned for the first time since taking ownership of the promotion. The Ferittas are shrewd businessmen and now is the optimum time to sell a portion of the company or possibly even a significant stake.
Right now, they are going up against CBS, Mark Cuban, and now Donald Trump. More people with big-time money could also jump into the fray. The cost of doing business in all likelihood is going to go up. Zuffa was the biggest company in this sport for so long, but they now find themselves in a situation where companies with more resources than they have are jumping on the bandwagon. As such, it wouldn’t surprise me if the UFC took on a major corporate investor to help level the playing field so that they had even more resources to draw from.
Another reason why I believe it’s option number for is because it would be good news. In my experience working in corporate environments, you don’t rent out a facility and gather all of your personal together to tell them something that isn’t major. If you want to share good news with your company’s employees, you have your executive assistant draft a letter and send a bulk e-mail to the company. You rent out a facility when you have an epic announcement and you want to celebrate it with your employees.
White said the announcement has to do with where the business is going over the next five years, and after Saturday’s ratings success, it’s clear to me that MMA is going to become a fixture on all of the major networks.
My prediction for Thursday is this: White will announce next that the UFC has signed a long-term agreement with FOX to televise fights on a quarterly basis on network primetime television along with a option to buy a portion of the company over time. I’m betting that the first show will be this September at UFC 88 in Atlanta and will be headlined by either Chuck Liddell vs. Wanderlei Silva or Liddell vs. Rashad Evans.
The other possibility is that the deal could be with ABC/ESPN. White has done a lot of press with ESPN’s properties recently and the UFC had a role in getting ESPN’s new “ESPN Live” show on the air by allowing the Worldwide Leader to use its footage. Not to mention, Kenny Florian is a contracted UFC fighter and the show’s other co-host, Franklin McNeil of the Newark Star-Ledger, is someone that has had a good rapport with White. The fact that Dana made it a point to say he was disappointed by the Kimbo coverage on ESPN is also an intriguing statement.