UFC CEO Lorenzo Fertitta usually lets company president Dana White have the microphone and the spotlight, but when he talks about the UFC's business, it's always worth listening. Last week, while in the UK for UFC Fight Night: Gustafsson vs. Manuwa, Fertitta participated in a video taped Q&A for the Leaders Sports Summit.
MMA Mania transcribed some of the hits:
On what they learned from the WWE:
"It wasn't about their product, it was about their business model, they had become very astute at selling their product and getting people to buy pay-per-views (PPV) by using free television. When we started, we had no traditional free press. Nobody was covering us, no one took us seriously as a sport. Therefore we had to turn to the WWE model which was, they have Monday Night Raw, Thursday Night Smackdown, which were television shows that told a story, and the story was trying to convince you to transact on Sunday night on PPV. So we said look, it's going to take awhile for the free press to cover us, we don't have that long to wait, therefore we must buy our way on TV, get on that free-to-air format, tell our story, let the fans know who these fighters are and convince the fans to buy the PPV on Saturday night. So looking at their business plan was the key."
On how they counter-marketed themselves as a mature alternative to the WWE:
"The other key for us early on is we needed to position ourselves against WWE, because at the time back in 2001, they were big in the United States, big around the world, we were very small, so our tagline was 'as real as it gets,' because WWE is fake, so we wanted to position ourselves away from them and I think that worked to our advantage. Of course, real combat, real fighting is obviously more attractive to the adult."
On the UFC pay scale compared to boxing's:
"What we are doing is providing an opportunity for the masses, the fighters that want to have a career, to make millions of dollars and I would say that our pay structure is actually better [than boxing] because there's not just one person getting the revenues. We stack these cards and spread the money over the entire card. That's why you'll see at the O2 [Arena], people will show up at four or five in the afternoon to watch the entire card. If you go to a [Floyd] Mayweather fight the arena's empty until Mayweather steps in the arena to fight. At the end of the day, we are providing a platform where we've got fighters that range from guys that we're giving an opportunity on the under card making 20-30-40 thousand dollars a night, to guys that are superstars, like Georges St. Pierre, Anderson Silva, making 4-5 million a night. Then you have an incredible athlete like Ronda Rousey -- the highest paid female athlete in the history of combat sports -- who is literally making millions of dollars per fight."
On the promotion's evolution away from the pay-per-view model:
"PPV is important because it's one of the big revenue drivers for us in North America, but as time has gone on it has become a smaller percentage of the overall revenue. We are not as dependent on PPV. We are very focused on generating rights fees. It's not just about PPV anymore, it's about extending the company into becoming a media company as opposed to a fight promoter."