Dana, Lorenzo, Frank Getting Rich(er) Off UFC Undisputed

"We've got a lot of what it takes to get along!"

The Las Vegas Sun was kind enough to provide a transcript of a Q&A Session with UFC owner Lorenzo Fertitta from the Fan Expo. He had some interesting things to say about UFC Undisputed: 2009:

Fertitta: "There is no such thing as banned, but this is something that does get under my skin and Dana's skin because when we had the opportunity to go out and build a video game who do you think the first people we called was? EA Sports… We sat in the room with them and I would have cut a worse deal just to be with EA Sports. I wanted them so bad. They looked at them and they told us they didn't think MMA was a sport. This was three years ago. They said the UFC was irrelevant and that we were wasting their time. So we went down the street and did a deal with THQ and they thought MMA was a sport. So we stick with the guys who stick with us. Now the UFC video game has been a massive success with three million copies sold. And guess what EA wants to do? They want to do an MMA game now… If you are young fighter coming up, it just makes sense to stay under the umbrella of UFC companies, sponsors and marketing to ensure yourself a cut of the action for the rest of your life."

So Lorenzo basically leaked out information that UFC Undisputed has sold a whopping three million copies sold, an amazing number. If you recall, Wall Street analysts predicted the game would move two million units in THQ's fiscal year, which ends next March. But the UFC and THQ have beaten that number by 50% in just a couple of months!

It's also notable that like Dana, Lorenzo is stressing loyalty over all else - this means that when the current UFC/THQ licensing deal ends in 2011, it will almost certainly stay with THQ. This lends credence to my view that EA should acquire THQ for the runaway success of the UFC Undisputed (it certainly doesn't hurt that THQ has some other very solid licenses and properties). EA's not going to get the license and not having a major brand name like UFC will hurt them big time in MMA.

As for my title, Zuffa is making a TON of money from UFC Undisputed. This game has already crossed the $100 million mark for THQ, and as with any video-game licensing deal, Zuffa is entitled to a piece of the action. One industry analyst pegs Zuffa's cut as 17%.

But even if its share is lower than that - Zuffa's going to make tens of millions, if not hundreds of millions of dollars from the video-game license over the long term.

Licensing dollars tend to be extremely profitable. Lending out trademarks, copyrights, and patents for money does not require much work or effort on Zuffa's part. That means the majority of that licensing revenue flows right down to Zuffa's bottom line.

Zuffa is a private company whose three owners keep what's left in the register each day. That means a huge chunk of the coming hundreds of millions of dollars in video-game licensing revenue will go right into the pockets of Dana, Lorenzo, and Frank.

So if you were wondering Frank is going to afford his new pad, the mystery is now gone!