Sports franchises are bought and sold all the time. It’s a regular occurrence. It’s not often, though, that entire sports change hands. But that’s, in effect, what happened in July.
The UFC isn’t the only MMA promotion in the world. However, it is the most known by a good margin. More people know “UFC” than “MMA,” especially in the United States. So it was gigantic when it was announced in July that UFC majority owners Lorenzo and Frank Fertitta sold their share of the promotion to talent agency WME-IMG (and investors) for just a shade more than $4 billion.
The Fertitta brothers — and UFC president Dana White, who would stay on after the sale — were all UFC fans knew. When those three men bought the UFC in 2001 for just $2 million, the promotion was nothing. Its popularity had sunken. The UFC was no longer allowed on pay-per-view. It was illegal in many states.
White and the Fertittas had a vision of MMA one day being one of the biggest sports in the world, despite all the tangible evidence to the contrary. It took four years and more than $40 million of the Fertittas’ money, but finally the UFC got out of the red around 2006 due to the success of The Ultimate Fighter. White has called the program the UFC’s Trojan horse — a way to get fighting on cable television (Spike TV at the time) under the guise of a reality show.
It worked and the UFC’s popularity grew, gradually at first and then exponentially. The MMA promotion now airs on Fox and its family of networks. It has held shows in dozens of countries and sold millions and millions of pay per views over the years. Finally, this year, New York legalized the sport after tons of lobbying by the UFC. Ronda Rousey and Conor McGregor are among the biggest names in athletics — and pop culture.
The Fertittas stuck with MMA through the dark times while sinking a bunch of money into it . In July, they cashed out at a great time. The $4.025 billion sale was the biggest sale of a sports franchise at the time, more money than both the Los Angeles Clippers and Los Angeles Dodgers.
The men who helped build the sport with their wallets and their hard work had suddenly split with White remaining the face of the company, as he has been since 2001. White has admitted to being emotional about it all. Lorenzo Fertitta is his best friend; he didn’t imagine he and the UFC would be moving on without him. But White also made more than $300 million in the deal as a part owner, so there’s that.
There is a great amount of uncertainty regarding what’s next. WME-IMG execs Ari Emanuel and Patrick Whitesell, arguably the two biggest movers and shakers in Hollywood, have not commented publicly about their vision for the UFC. White has spoken about WME-IMG’s plans only sparingly, saying the company wants to make the promotion bigger and better.
Since July, dozens of UFC employees have been laid off, including chief global brand officer Garry Cook and chief content officer Marshall Zelaznik. The international offices have also been cut back dramatically.
Lead matchmaker Joe Silva, who shares a great deal in the credit for the UFC’s growth, will be retiring at the end of 2016 after making millions in the sale. Dave Sholler, longtime public-relations czar, has departed for the NBA’s Philadelphia 76ers. This week, it was confirmed that UFC 207 will be the final event for Mike Goldberg as play-by-play man.
Silva had been working with the UFC in some capacity since 1995; Goldberg had been around since 1997. Times are changing before the fans’ eyes.
The sale has also led to some fighter unrest, also one of the big stories of 2016. Many athletes have publicly wondered about their share of that $4 billion. That number was jarring to some, because as a private company no one really knows for sure how much the UFC was really making.
Since July, two organizations hoping to represent fighters to get equal pay have emerged, the Professional Fighters Association (PFA) and the MMA Athletes Association (MMAAA). The PFA is hoping to unionize fighters, while the MMAAA prefers to keep it a trade association.
Estimates are that fighters only receive anywhere from 8 to 15 percent of the UFC’s revenue. Both bodies are interested in one day also getting athletes retirement benefits and full-scale healthcare. Big names like Georges St-Pierre, Cain Velasquez and Donald Cerrone have been public about the need for a union or association.
It’s only been five months since the sale and already the affects are reverberating throughout the MMA world. It remains unclear what WME-IMG’s strategy is moving forward, though more layoffs are expected. The Federal Reserve has deemed WME-IMG’s loan on the deal substandard, per Bloomberg.
There has only been speculation about what’s next, about what the future will bring for the UFC and the entire sport of MMA. The UFC’s television deal with Fox is up at the end of 2018 and WME-IMG will expect a windfall from potential broadcast partners.
Does that mean a reduction in pay-per-views soon? Will the UFC be able to build up stars alongside McGregor and Rousey, who might retire soon, to offset WME-IMG’s massive loan?
We know White and the Fertittas and what they have done for the sport (for better and sometimes for worse). There’s no predicting, at this point, what direction WME-IMG will take it. Will they continue to grow MMA with long-term goals in mind or try to cash in on short-term opportunities?
This is a storyline that will continue on throughout 2017 and beyond.