Zuffa Takes Mixed Martial Arts, UFC Lobbying to Melbourne, Australia

From the Sydney Morning Herald:

THE Ultimate Fighting Championship will use Geelong star George Sotiropoulos and the lure of a $15 million tourist injection to convince the Victorian government to allow cage-fighting into Melbourne, after the sport was again rejected by the state.

 

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The UFC's billionaire co-owner, Lorenzo Fertitta, told the Herald it would not be asking its target audience of 18-40-year-old males to vote against politicians who oppose them. ''Certainly it disappoints me, but we look at it as another challenge and we think it's a fantastic market, I think it's just a matter of time and educating the right people,'' Fertitta said.

 

''We don't really want to go in anywhere and be confrontational, we just want to go in and educate the regulators and politicians, let them know about our health and safety and track record, let them about the event and the economic benefit it brings, and if they choose to allow it in their state that's great.''

It is likely the UFC's second show will again be in Sydney, but officials have not lost all hope of taking their fight card to Melbourne - the city nevertheless remains an integral part of the UFC's plans to expand in Australia. Marshall Zelaznik, the UFC's director of international operations, added: ''Well, 47 per cent of the people who attended the event in February were from Melbourne, so if they were to hold that event you could expect they would get 47 per cent come from another part of the country for them.

''And that is important for governments in this economy. We did an economic impact study off of the Sydney show and we generated close to $15 million of revenue for Sydney, based on the independent group we hired to analyse hotel stay, people buying food - we alone take 600 rooms a night - that just goes to the bottom line of the local economy. That is what Melbourne is missing, they'll understand that."

As someone who has spent time lobbying as part of their career, let me guarantee you something: it's the only practice that's likely to affect the right pressure points on lawmakers to get favorable legislation passed. Period. Whatever moral qualms you may have, the record of success and comparative advantage in operational efficiency makes lobbying the more than correct path.

My only quibble is the high-level message point about economic impact. I'm not suggesting that the argument the UFC could add millions to local businesses and government coffers is either incorrect or bad. However, it is somewhat flaccid and not likely to make their case the top priority on any legislator's docket.

Much like New York City or Barcelona, a big chunk of Melbourne's economy is tourism. It's also Australia's financial capital. The city and local businesses have taken steps to construct a city experience that's appealing to outsiders. One would think the UFC would be seen as trying to contribute to that economic reality. Yet, with the UFC likely only holding at most one event in the country each year, are one-off events that generate a relatively modest amount of money (relative to the tourism-centric industries and infrastructure that keep the guests circulating year-round) really going to force legislators to make Zuffa's interests a legislative priority? Maybe, but that's hardly a weighty anchor, particularly when there is still baggage associated with the sport's image. They aren't really telling the government they are going to be adding to the economy in any meaningful way. $15 million is nothing to sneeze at, but it's also not that much more expensive than your typical national short-term advertising budget for any kind of campaign. It's not a ton of cash.

The efforts to get MMA legalized in New York are not too dissimilar. The UFC isn't likely to hold an event there more than twice a year and it's essentially offering the same value proposition: tax dollars, business dollars. But the sanctioning is worth more to Zuffa than the ability to host an event in a new venue. The ROI is higher and the levers of political machinery easier to pull. The New York effort, should it succeed, would also be coming on the heels of the domino chain of other states who have decided to sanction and regulate the sport in the past few years. There's momentum there. In Australia, the UFC has one show to launch a legislative project. That's necessary, but not sufficient.

Eventually I suspect the UFC will have the ability to influence Melbourne's lawmakers to sanction the sport. I just don't think it's going to happen very fast.