Bitcoin News Australia

Enter the Octagon

In 1976, sports fans experienced a monumental happening in the world of combat exhibitions. Boxing legend Muhammad Ali and pro-wrestling megastar Antonio Inoki duked it out in Tokyo to determine the dominant discipline.

Fans flooded the sold-out Nippon Budokan arena in Japan, and WWE’s Vince McMahon sold 33,000 tickets for people to watch the broadcast at Shea Stadium in New York.

Billed as “The War of the Worlds,” the bout felt like anything but that.

For 15 rounds, Ali, who still wore boxing gloves, hopped around the ring while Inoki sprawled out on the canvas kicking him in the legs, which resulted in two major blood clots for the People’s Champion. The fight ended in a draw, and those in attendance booed and wanted their money back. Sports journalist Dave Meltzer would later say, “they were expecting something like a cross between a boxing match and a pro wrestling match and got nothing resembling either.” Suffice it to say, it wasn’t the greatest moment for The Greatest or Inoki, whose nickname translates as “Fighting Spirit That Burns.”

Despite the lackluster showing from two titans, that event sparked the world’s growing interest in mixed martial arts. Nearly half a century later, the Ultimate Fighting Championship, the Las Vegas-based mixed martial arts promotion company, has monetized combat sports in a way rarely attempted in boxing, focusing on the sport as a whole rather than individuals. And its president – the often abrasive, profanity-prone Dana White – has developed the company into a brand beyond just its major stars.

So put on your gloves and pop in a mouth guard as we take a look at how the UFC went from a disgusting spectacle boycotted in more than half of the US to one of the fastest growing sports leagues ever. As veteran voice of the octagon Bruce Buffer says “IT’S TIME!!!”

No-Holds-Barred
The UFC was the brainchild of businessman Art Davie and Brazilian jiu jitsu master Rorian Gracie with the goal of identifying the most effective fighting style. Their company WOW Promotions partnered with the Semaphore Entertainment Group to produce the events. Gracie was determined to prove that BBJ and his particular dojo was the best in the world, so he entered his scrawny 176lb son Royce in the tournament. He went on to win the whole thing.

The early days of MMA were riddled with steroid use, fixed fights, and even behind-the-scenes Yakuza activity. Plus, the no-holds-barred nature of many promotions proved much more chaotic and brutal compared to today’s bouts.

In its early ‘90s infancy, UFC events orchestrated by Semaphore Entertainment Group resembled a carnival freak show more than a legitimate sport, lacking any rules beyond no eye gouging, biting, or groin shots. Want to pull hair? Sure. Headbutts? Be our guest. Looking to kick a downed opponent in the face? Tee off, brother. Gracie said they even floated the idea of the ring being surrounded by a moat full of alligators before settling on the iconic octagon design.

The fights were so violent, in fact, they provoked major legal setbacks for the burgeoning sport:

• Upon seeing UFC 1, the late Arizona Sen. John McCain described the show as “human cockfighting” and wrote letters to all 50 states, asking governors to ban the sport, and 36 actually did.
• Most major cities didn’t want these fights anywhere near their borders, so SEG was forced to host events in smaller markets like Dothan, Alabama, Casper, Wyoming, and Lake Charles, Louisiana, to crowds of only a few thousand.
• In 2000, state athletic commissions began recognizing unified rules that did away with dirty and unsafe fight tactics and in turn made MMA much more palatable and professional.

In another blow to their image and profits, SEG was unable to secure home video releases for seven of its UFC PPVs. The fledgling promotion was running out of options and money and was on the brink of bankruptcy. The next year, casino executives Frank and Lorenzo Fertitta purchased the on-the-ropes UFC for just $2 million, formed a new parent company, Zuffa, and placed White at the helm.

This is Why We Fight
The UFC, and the broader MMA movement, gradually evolved from an ugly, bloody mess to a popular and financial success…with still plenty of blood.

These days, the average UFC event reaches a viewership anywhere between 300,000 and 2 million. The fights tap into the primal and universal nature of humans. Whether it’s the submission-centric Jiu Jitsu of Brazil, the aggressive knee and elbow strikes of Thailand’s Muay Thai, or the slams developed by ancient Greece, every culture has its own discipline and combat style.

“While not fighting to the death, MMA has the parallels of the old gladiator days,” Gregory Chase of Bleacher Report wrote. “It is taking two people, putting them at the center of a surrounding crowd, and having them use all their mental and physical fortitude to come out the victor.”

Beyond the UFC, there are major promotions throughout the world: ONE in Singapore, Rizin in Japan, and KSW in Poland. Plus, putting on a fight doesn’t require a specific stadium, just a venue big enough to house a 30-foot in diameter octagon — meaning events can be held anywhere. The UFC has already hosted fights in nearly 30 countries. MMA is also one of the few sports that showcases both male and female athletes on the same cards. Fighters like Ronda Rousey, Amanda Nunez, and Weili Zhang, who have all headlined events, are responsible for attracting whole new crowds of female and international viewers.

The overall appeal has translated into a lucrative business, especially for the UFC, which generated roughly $1 billion in revenue last year:

• No longer restricted to just pay-per-views and home video sales, the UFC finally landed on mainstream television. In the early 2000s, it first lived on Spike TV – the defunct basic cable dudebro home of Blue Mountain State and 1,000 Ways to Die – before partnering with Fox for seven years. In 2019, the promotion signed its biggest broadcast deal yet when ESPN bought exclusive rights in a five year, $1.5 billion deal.
• Global entertainment company Endeavor paid just over $4 billion to buy a majority stake in Zuffa in 2016, and five years later, raised another $1.75 billion to purchase the rest of the business shortly before going public.
• Governments also came around to the bloodsport once they saw money could be made hosting UFC fights. New York was the last fight-free zone until 2016. That year Conor McGregor squared off with Eddie Alvarez for the lightweight title at Madison Square Garden in an event that generated $1.5 million in tax revenue for the state.

Business partners are stepping into the ring, too. The UFC has a video game deal with Electronic Arts that ends in 2030, an exclusive clothing partnership with Venum, and the company recently inked a $100 million agreement with crypto company VeChain. Additionally, the promotion launched its own NFT in January, and the first pack sold out in just four hours.

Fighting to Survive
Despite all that growth and enthusiasm, UFC has yet to overtake boxing as the marquee combat sport — at least, as far as the athletes are concerned. Pound-for-pound boxer Canelo Alvarez and UFC fighter Alexander Volkonavski are some of the best athletes in combat sports. One made $45 million in his last fight and the other earned just $500,000. Can you guess who made what?

Low fighter pay relative to boxers is a very sore subject for White, who just this summer declared raises are, “never gonna happen while I’m here.”

The UFC’s roughly 700 fighters have seen their salaries increase about 15% annually over the past five years – faster growth than athletes in other sports leagues – but they are also technically still independent contractors and receive minimal health benefits.

Former UFC champion Tyrone Woodly earned roughly $5 million over the course of his 12-year professional MMA career. In August 2021, he made $2 million in just one night, losing a boxing match via decision against YouTuber Jake Paul. Four months later, they ran it back, and this time Woodly got KO’d, but he still walked away with more than $1 million.

Succeeding in the MMA business and beyond is not just about racking up wins. If that were the case, athletes like Gegard Mousassi, Zabit Magomedshapirov, and Leon Edwards, the current world champ, would be international household names.

Conor McGregor knew his mouth and personality could take him to heights that even his left hook couldn’t. So he built a brand beyond the octagon and adopted a Rick Flair-style persona.

• McGregor rocked the MMA world with relentless trash talk, fancy suits, and highly profitable side hustles like Proper 12 whiskey, which he sold a majority stake in for $600 million in 2021. On top of fighting in eight of the 10 most-purchased UFC PPVs, he’s also provided his likeness to a Call of Duty installment and will appear in a supporting role in the upcoming remake of cheesy ‘80s classic Road House.
• Other fighters have expanded to and occasionally depended on side hustles too. Dustin Pioier has his own hot sauce brand. Jorge Masvidal launched the bare knuckle Gamebred Fighting Championship while still signed to the UFC. And Demetrious Johnson, possibly the greatest flyweight ever, worked as a forklift operator well into his fighting career.

The UFC is now worth roughly $10 billion, according to White, and has seen its topline grow at a compound annual growth rate of 21% a year since 2005. That’s a lot of growth in a short amount of time, but the company still has a way to go. Ten billion dollars – the MLB made more than that in revenue alone this past season. But the UFC still has plenty of gas in the tank, and the organization understands better than anyone that, as Ali said, “the will must be stronger than the skill.”

*****

And now a word from our sponsor:

How Can You Capitalize On The Booming Vacation Rental Market?

You could become a full-fledged property manager. (hint: not fun)

Or you could let Wander cross the T’s, dot the I’s, and handle those high-maintenance guests. Their Atlas REIT offers accredited investors a stake in:

• Some of Wander’s most picturesque, hand-picked properties
• A top-tier guest experience
• Their cutting-edge technology platform

From coastal retreats in South Carolina to luxury mountain escapes in Lake Tahoe, Wander is moving the goalposts for the “best vacation ever.”

Invest in Atlas today to earn high-yield passive income and diversify your portfolio for a changing economic landscape — or experience a world of new amenities on your next vacation and use code DAILYUPSIDE250 for $250 off your first Wander booking.