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Buy low, sell high

The main reason everyone dismissed the whole “UFC is for sale” news probably has to do with the fact that the UFC is ‘doing great’ and Zuffa would be ‘insane’ to sell it. But I just wanted to take a second and play devil’s advocate here. Obviously I’m not much of an insider and all I have are my opinions and my butterknife-sharp intuition, so keep that in mind as you read this and feel free to play along in the comments

If you ask me, there has never been a better time to sell the UFC. While Dana White’s statement of “MMA not being even close to as big as it can be” is very true, I’m also seeing a lot of signs that point towards a major shift in the way the sport runs which will make it a lot harder to make the big bags of moneys the UFC is right now.

1. Competition
You can’t paint the competition with the same brush you did in the past. In the past it was any sleazeball with a couple grand and a decent lawyer. Now you’ve got guys like Mark Cuban and Gary Shaw stepping into the ring, along with corporate big boys like LiveNation and possibly Golden Boy. These are people with established entertainment credentials and easy routes to TV deals with big networks. That completely changes their ability to compete with the UFC.

2. Basic Fighter Salaries
It’s only been in the past year or two that fighters have become malcontents regarding the scraps the UFC throws from the dinner table. If you ask me, the fact that they throw around retarded bonuses worth 10 times the base pay of many fighters probably pisses them off even more. The UFC’s been getting flack for shitty fighter pay for a while, and guys like Jon Fitch have worked second jobs bartending while keeping quiet on the situation. I don’t see that lasting much longer. Between regular tarring from people like the LA Times and other fighters who feel secure enough to finally speak out, the UFC simply won’t be able to get away with paying their lower level fighters so little for much longer.

3. Star Fighter Salaries (and contracts)
Now we’re into big boy contracts. These are shrouded in secrecy, with guys like Matt Hughes implying he makes way more under the table than is declared to athletic commissions. But tell that to guys like Andrei Arlovski and he’ll probably say something different. My bet is the UFC gives bonuses to it’s loyal subjects, and anything from discussing pay with reporters, refusing to sign a restrictive contract, or turning down a fight can lead to being kicked out of the secret money club. Regardless, with the rise of competition you’re already starting to see a number of UFC fighters jumping ship or preparing to jump ship. Up until 2007 Dana White could say he “never lost a major star to another promotion” (which is kinda not true to begin with but whaddevah). I think 2008 is going to be the year of that, and it’s only going to get worse as the competition develops and their exposure matches their paychecks.

4. The rising cost of doing business
It’s not just salaries that are set to go through the roof in the next few years. Lots of people dismiss the cost of expansion but it’s a fucking expensive process with lots of hit or miss scenarios costing the UFC millions of dollars. Plus as salaries go up, so must sales. This means more dollars spent on marketing and advertising.

5. Dana White’s reputation
Okay, this one is a bit of a stretch but roll with me here. Lots of people say Dana White’s the greatest and worst thing that ever happened to the UFC. While there’s no denying he’s been a driving force in keeping it on the tracks thus far, we’ve hit a point where his style of doing things has burned a lot of major bridges. He was unwilling to lock in a deal with HBO. Word is one network specifically dismissed the UFC because they were unwilling to work with Dana White. Dana’s tactics managed to keep him on top of the pile for years but there are increasing signs that his style of doing things won’t fly any more.

So there you have it. At the moment things seem great but when you look at the wave coming in the distance (serious competition, fighter pay exploding, cost of business going way up), you have to wonder if the UFC would rather gamble it’s fortune or cash out while it’s ahead. Smart business owners don’t wait till the writing is on the wall to sell. They sell while things are still looking up. Before the shit hits the fan, if you will.

  • Fightlinker Jackal

    Dana also said that everything is for sale for the right price, “even the shoes I’m wearing”. So for the right price he will sell the UFC and goes to revive the Pride brand in Japan :)

  • fightfan

    The easiest way to sum things up…..

    You cant believe a fucking word that spews from Dana White’s piehole. Everything from saying its a “done deal” to lying about the status of fighters in the UFC. LIES LIES LIES

    And he has the balls to say that all “these internet sites” are so full of shit and twist things all around.

  • Captain

    Anything is possible and I’m sure for the right price the Fertittas would sell. A look into how Station Casinos is doing and whether they are in any financial trouble could give some insight into whether the Fertittas have a need for some cash and, thus, would be more apt to entertain offers for the UFC. Last I remember they took Stations private with some investors backing them and providing some credit so that may not be an issue.

    I wonder if Dana would try to stay with the UFC if it was sold. If I was him I would. He’ll get a fat check for ownership in Zuffa (somewhere around 10% I’ve heard) and he could negotiate a good employment agreement under the new ownership. If he didn’t stay on, he would for sure be subject to a non-compete for at least a year after the closing. He may have little say in it though because it would be up to new ownership and the Fetrtittas (as the controlling shareholders) to negotiate the terms on who stays and who goes from the company.

  • Big D D

    Sell it to someone who will whatever it takes to get the fights we want to see.

  • jaydog

    FL: I tried my level best to contribute meaningful speculation about a UFC sale over at 5oz, but some wannabe UFC employees jumped all over me. I’m not going to rehash the many possible motivations, because I already outlined them elsewhere. But, it would be nice if the debate would continue.