Media giants slug it out over profitable mixed martial arts
Atlantic City, N.J. - Beyond the pinging slot machines and the felt-topped card tables at the Caesars casino here, inside a steel cage built for maximum pain, Darrell Horcher is slipping a triangle choke hold on Chris Liguori.
Fists land - left jabs, right crosses, quick combinations to jaws and abdomens. Knees sock solar plexuses. Hands claw faces. Bodies smack and thud. From the crowd, the refrain goes up: "That's got to hurt!" After three rounds, Liguori is bleeding from his right eye. On this chilly December night, the decision is unanimous: Horcher is the winner.
So it goes in the Ramboesque world of cage fighting, known as mixed martial arts. In this hugely popular - not to mention lucrative - sport, fighters employ agonizing moves like the "modified guillotine" and the "bicep slicer" as they punch, kick, knee and choke each other into submission.
But it's got nothing on Hollywood: two media heavyweights are locked in a smackdown of their own over the future of this sport, which Sen. John McCain has likened to human cockfighting.
In one corner is Ari Emanuel, the Hollywood superagent who represents the Ultimate Fighting Championship, the premiere cage-fighting league. In the other corner is Philippe P. Dauman, the urbane chief executive of the media conglomerate Viacom.
From 2005 to 2011, the UFC was shown on Spike, a Viacom channel, where it became a ratings powerhouse. Then, in 2011, in renegotiating the UFC's deal, Emanuel asked for a 50 percent fee increase and made other demands. When Viacom balked, the UFC struck a $700 million, seven-year deal with Fox Sports to show its fights on Fox, FX and Fuel, all owned by News Corp.
But Dauman counterpunched, and Viacom decided to enter the fight business itself. In fall 2011, the company paid around $50 million for a majority stake in Bellator Fighting Championships, according to people with knowledge of the deal who did not want to be identified discussing internal company business.
That Viacom, home of Paramount Pictures, MTV and SpongeBob SquarePants, now owns a gritty league of muscled gladiators who travel the country fighting in a 710-square-foot circular cage speaks to the fierce battle for live sports rights. In the DVR age, networks desperately want to hang on to live viewership.
But it also demonstrates the evolution of cage fighting, which has grown in the past decade from a fringe spectacle banned in many states to one of the fastest-growing sports properties on TV.
The current sport allows fighters to use a hybrid of disciplines including Brazilian jujitsu, kickboxing, karate, taekwondo, judo and Greco-Roman wrestling. It is fought in a cage "because a fighter may find himself pressed up against the fence, but he won't fall out," according to the UFC.
Once almost a free-form bloodfest, MMA, as the sport is known, now comes with a strict set of rules enforced on a state-by-state basis (no hair-pulling, kicks "to the kidney with a heel" or "twisting the flesh") and a standard of three rounds of five minutes each, or five rounds of five minutes each for championship title fights.
Last May, New York lawmakers maintained the state's ban on mixed martial arts, leaving it one of the few states that do not sanction the sport. Adherents say that MMA is safer than boxing because fighters aren't allowed to get up after a knockout, and that the freer form means combatants don't endure as many blows to the head.
In Atlantic City on Dec. 7, Bellator workers spent 19 hours transforming the Caesar's ballroom, with its gaudy carpet and a cash bar, into a place that feels like a secret, exclusive fight club. "I think they had a bar mitzvah here last night," joked Bjorn Rebney, a 6-foot-3 former college football player who is founder and chief executive of Bellator.
Most of the fans had received $52 to $165 tickets free, a casino perk offered to high rollers along with a Polynesian-themed circus and all-you-can-eat buffet coupons.
Sitting at cageside, Kevin Kay, the president of Spike, who estimates that he has attended more than 400 fights, is talking over loud rock music to Rebney about getting Bellator ready for prime time. They agree, for one thing, that Bellator has to discover its own fighters. "We don't want to be picking up rejects from the UFC, because there's a reason they're leaving," Kay says later. "Either they weren't a fan favorite or they weren't making money. You have to build your own talent up."
A surprise TV hit
Founded in 1993, the UFC is widely credited with bringing sanctioned mixed martial arts to the United States. The league, owned by Zuffa LLC, based in Las Vegas, struggled for years to broker a television deal. Finally, in 2005, the UFC paid $10 million to produce "The Ultimate Fighter," a reality series that follows mixed martial arts fighters living and training together in Las Vegas, and gave the show to Spike, a Viacom channel aimed at men. The Season 1 finale featured the first UFC fight broadcast on Spike.
There, the UFC became a surprise hit and led to other shows based on mixed martial arts, including "UFC Unleashed.
Today, the UFC is shown in 145 countries and territories in 28 languages and by Zuffa LLC's estimate is worth around $2 billion, roughly the same price a group of investors recently paid for the Los Angeles Dodgers.
Part of what draws media companies to mixed martial arts is the sport's allure to what marketers call "superconsumers," or men ages 18 to 34 who watch sports but are otherwise tough for advertisers to reach.
"It's one of the few sports that still has amazing growth in the really core, young demo," says Eric Shanks, co-president and executive producer of the Fox Sports Media Group. "It really is a cliche, but it's one of those sports that crosses over into being a lifestyle."
A publicist for Spike says the audience for mixed martial arts is more heavily college-educated and female than stereotypes suggest, making it especially appealing for all types of advertisers.
Despite the statistics, the fans at Caesars that night were almost all men, and did not particularly ooze affluence: there were lots of cutoff T-shirts, acid-washed jeans and high fives.
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