Zuffa has been on an anti-piracy jag for a long time now, and their support of the SOPA legislation has led to many problems for them. Today, the United States government took some steps that will undoubtedly please Dana White and company - they shut down a gaggle of streaming websites that broadcast UFC pay-per-views. Yahoo News has the info:

Three days before Super Bowl XLVI, U.S. prosecutors said they seized 16 websites that illegally streamed live sports and pay-per-view events over the Internet, and charged a Michigan man with running nine of those websites.

According to the government, the 16 websites provided links to give viewers easy access to other sites that hosted pirated telecasts from the National Football League, National Basketball Association, National Hockey League, World Wrestling Entertainment Inc ("WWE") and TNA Impact Wrestling. The latter is also broadcast on Viacom Inc's Spike TV.

While the UFC isn't mentioned in the article by name, it is clearly one of the benefactors of these sites being shut down. The list of sites includes many that regularly stream UFC events illegally, and a couple of them are very popular. In the long run, people that are determined to stream events will find alternatives but at least for this weekend, it could affect many people hoping to catch UFC 143 for free.

The U.S. Federal Trade Commission has posted notice on its web site today stating that its Bureau of Competition has closed its investigation of the UFC's acquisition of Strikeforce.

Technically the FTC was investigating the purchase of Explosion Entertainment, LLC for $34 million by the UFC's parent company Zuffa LLC in March, 2011. They were looking to see if the purchase violated Section 7 of the Clayton Act or Section 5 of the Federal Trade Commission Act. The purchase was first reported by MMA Fighting's Ariel Helwani.

In the PDF posted on the FTC site, Donald S. Clark, FTC Secretary wrote, "Upon further review of this matter, it now appears that no further action is warranted by the Commission at this time. Accordingly, the investigation has been closed."

Strikeforce was put on the market when its major financial partner, Silicon Valley Sports & Entertainment elected to get out of the MMA business. SVSE owns the San Jose Sharks of the NHL and are seeking to bring another major sports franchise to San Jose.

On Thursday January 12, 2012, ESPN released an article authored by Josh Gross about the economics of the UFC in conjunction with an upcoming episode of Outside the Lines. Gross has been a harsh critic of the UFC for several years. Now he's got a big platform from which to address the very controversial issue of fighter pay in the UFC and whether or not its comparable to rates in other major sports.

To sum up the article for those that have not taken the time to read it, Gross spoke with several fighters who chose to remain anonymous when addressing the issue of fighter pay. Not because they had nothing to say but because they fear backlash from the UFC if they spoke "on the record" about such a hotbed issue. The one person that did speak on the record with Gross is Rob Masey, the founder of the MMA Fighters Association whose website has not been updated in months.

The first point of contention is that MMA fighters are not paid the same as other major sport athletes. It's a valid point and on the surface one that is pretty much impossible to argue against. A deeper look at the UFC's value and structure though will reveals that Zuffa is worth roughly the same as the average NFL team ($1billion). The $350 million in gross PPV sales cited in Gross' article fails to take into account for the 50% split the UFC shares with the cable provider. So the $350 million PPV is actually closer to $175 million. This $175 million accounts for roughly 75% of the UFC's net yearly revenue. The other 25% is comprised of TV licenses, site fees, gate revenue and merchandise meaning the UFC makes roughly $218 million in net revenue each year.

So looking at the initial numbers, Zuffa has more in common financially with an NFL team than the NFL which brings in $9 billion in revenue annually. However, Zuffa has 300 fighters under contract instead of the 46 players that are on the active roster of an NFL team. Even the comparisons to an individual team don't quite hold up given revenue sharing from all teams across the league, athletes who are unionized, set salary guidelines..etc. So the comparison to the big five sports (football, basketball, baseball, hockey, soccer) is not quite apples to apples almost any way you choose to look at it.

However, that isn't the case when Rob Masey gives an unverified number stating that the median pay of UFC fighters is between $17,000 and $23,000 a year.

More after the jump...

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The UFC had a remarkable 2011 in the face of a painful bad luck streak of injuries, illnesses and suspensions that cost them 11 out of 14 planned main events according to CEO Lorenzo Fertitta talking to the LA Times. There were at most only three UFC cards that sold more than 500,000 pay-per-view buys (UFC 126, 129 and maybe 141) compared with 11 500K + PPVs in 2010.

But it was more than just the injuries and the loss of the mega-events that hurt the UFC in 2011. Dave Meltzer in the Wrestling Observer (subscription required) has put together a comparison of what he calls "baseline shows" from 2009, 2010 and 2011. Once you eliminate the Brock Lesnar, Georges St. Pierre and Rashad Evans vs. Rampage Jackson cards a clear picture emerges, the UFC brand is selling fewer PPVs:

We all know the prime reason UFC was down the level it was down is because of all the injuries this year. There were more baseline shows which took down the average. The only positive to come out of the year was the light heavyweight title, the historically best title when it comes to drawing, had three defenses, plus Jon Jones appears to be a slightly bigger draw as champion than Shogun Rua was. But just the name UFC on PPV seems to mean 14% less than two years ago and 9% less than last year.

Part of the downslide is the weakness of the lighter divisions as PPV attractions. With the loss of superstar champion B.J. Penn, the lightweight title is now one of the weakest headliners possible for a UFC card. The new featherweight and bantamweight divisions are even weaker. It's possible that Urijah Faber and Dominick Cruz coaching the first FX season of The Ultimate Fighter will turn things around, but if Faber loses to Cruz again, don't hold your breath waiting for another bantamweight title fight on top of a PPV card.

The next factor hindering growth has been the failure of new stars to emerge as bonafide PPV draws. The generation of UFC stars that the 2005-2010 explosion was built on -- Chuck Liddell, Tito Ortiz, Randy Couture, Matt Hughes -- has faded from the scene. The only two true stars to emerge since then, Georges St. Pierre and Brock Lesnar, were largely unavailable in 2011 and GSP won't return until late this year. Lesnar is now retired.

Light heavyweight champion Jon Jones may yet emerge as a superstar, he's certainly got the talent, but so far he's failed to put up huge PPV numbers. Middleweight champ Anderson Silva finally showed signs of emerging as a draw in 2010/2011 but its clear that he's only a draw when facing a perceived threat to his title. He'll be out with injuries until mid-2012 regardless.

MMA Payout identifies the other big factor hurting the UFC's PPV business:

Of course another factor in addressing the PPV buys is PPV fatigue. There will be 16 PPVs this year with a PPV almost a bimonthly happening. Its hard for a fan to pay over $100 bucks a month in PPVs in addition to their normal cable/satellite bill.

BE alumni nottheface expands on this point at Headkick Legend and even takes the speculation another step:

The common wisom is that the FOX deal will play big dividends for the UFC, and I don't disagree. I just don't think it will stop the decline in payperview sales. For starters they can expect no more than one fight from GSP and none from Brock Lesnar, by far the two biggest draws they've had the last few years. In addition they face the reality that half of all households in the U.S. have no disposable income so none of these new Fox fans are going to buy into a payperview market they've already oversaturated and bled dry (intentionally in my opinion -they knew the fad wouldn't last). The repercussions are going to big, with a lot of disgruntled stars now making a smaller cut of the revenue and large debt payment eating up all the owners profits.

Zuffa will sell the UFC

OK, a couple of caveats wth this one. One, I'm going to give myself an extra 6-months for this to happen. July 1st, 2013. Secondly, I don't mean Zuffa will sell the whole company, although that is a possibility, but they will sell at least 20% of the UFC to an outside party. By doing so Zuffa can eliminate a lot of their debt payments and not have to worry about tightening their belts and eliminating the dividend payments the owners have grown so accustomed to.

I'm a bit more sanguine about the UFC's chances over the short term than NTF. I think that the emergence of Nick Diaz and Alistair Overeem as stars is a very real possibility in 2012, especially with the PR muscle of Fox Sports pushing them.

What do you think? Will the UFC turn things around in 2012 or not?

Nutritional supplement company MusclePharm has firmed up ties with the UFC, signing a two-year deal to become the official nutritional supplement of the promotion in the USA and Canada. The UFC released the news via press release. MP was already a primary sponsor of many UFC fighters, and also has sponsorship deals with Major League Baseball's Cincinnati Reds and Philadelphia Eagles superstar quarterback Michael Vick.

BE's own Matt Roth has written in the past about MusclePharm's financials, and it remains to be seen whether this will turn out to be a good deal for the UFC. It seems like a great move for MP, considering the UFC's impending move to Fox.

MusclePharm recently built a huge gym in Denver that MMA fighters that sponsored fighters can train at, and Quinton "Rampage" Jackson decided to move in and train there in preparation for his UFC 135 light heavyweight title fight with champion Jon Jones. Yesterday's UFC 135 open workouts took place in the facility.

A little bit of news that got lost during the Ultimate Fighter Season 14 conference call the other day was Dana White announcing the season would air for the first time on the FX network in the UK. The show will air on Thursday evenings less than 24 hours after the show airs on Spike TV in America which is significant for a couple of reasons: the previous TV deal for airing The Ultimate Fighter on FIVE USA (part of the Channel 5 network) meant UK fans had to wait until the following Tuesday to see the most recent episode, and the move to FX sees The Ultimate Fighter broadcast for the first time in High Definition. FX in the UK also benefits from being within the first 30 channels structured on the Sky Digitial Satellite platform (channel number 124, where 101 is the first channel available) making it relatively easy to find compared to FIVE USA (channel number 174) in the Entertainment section.

With such a quick turnaround in getting a new deal for TUF to air in the UK that works out better for the fans, the Fox-UFC partnership continues to pay dividends early on. But what does this have to do with UFC coverage possibly moving from ESPN UK to Sky Sports in the future? For that we need only look at the career of David Hill, Chairman of Fox Sports.

Working for Rupert Murdoch's News Corporation in the 1980's, Hill helped launch Sky Television and Eurosport in the UK in 1988. In 1990 when Sky Television and British Sky Broadcasting merged, Hill became the head of sports programming and development and formed Sky Sports. For a sports network to succeed especially one on a premium subscription service Hill quickly realised the importance of securing broadcast rights to Premier League Football (Soccer), the most watched sport in the UK. Similarly Fox Sports success on the big Fox network and FX more than a decade later hinged on securing broadcast rights for the NFL. In other words the success and lessons learned with Sky Sports then has helped with the success of the Fox Sports division now.

The Sky platform is still part owned by Rupert Murdoch - his son James Murdoch is the current Chairman of Sky - who recently tried to acquire full control of Sky in a buyout because of the millions of pounds profit it had been generating. As of April 2011 Sky's operating profit for the business year had risen 24% to £790 million - about $1.23 Billion.

Owning a respectable 39.1% slice Murdoch's attempted takeover was thwarted when his public and business image took a pounding from the Phone Hacking and News of the World scandal with repercussions and consequences still emerging now.

David Hill is still one of Murdoch's right hand men in the Television Media world and with UFC's desire to work with Fox globally a move to Sky Sports would make sense. Dana White also hasn't been shy about feeling slighted by ESPN America at times when it comes to minimal news coverage of the UFC even if the two entities seem to kiss and make up soon after a public falling out.

While the deal with ESPN UK in 2009 included full coverage of events that included The Ultimate Fighter, ESPN has since been scaling back its coverage by dropping future seasons of TUF and opting out of airing Versus cards - including the most recent one headlined by the UK's Dan Hardy in what many thought could be his last fight with the promotion in a do or die battle with Chris Lytle. Worse still due to a technology issue with the digital 'freeview' platform live UFC events watched on ESPN outside of Sky, Virgin Media and BT Vision would be cut short when the service shut down at 5am local time - just 2 hours after a UFC event would typically start until the most recent decision to start UFC events an hour earlier stateside.

Sky Sports has had 20 years to establish itself as the dominant sports destination in the UK with ESPN trying to play catch up but combined with the entertainment channels Sky offers including it's flagship channel Sky One in addition to FX, Sky has more resources to help the UFC grow in the UK. If we're already seeing cross-promotion of the UFC via segments during NFL and MLB games on Fox it stands to reason Sky Sports is capable of offering similar cross-promotion with its Soccer, Rugby, Cricket and Tennis coverage.

UFC has attempted to work with Sky in the past though, having some old programming air on Sky Sports in the run up to UFC 38: The Brawl At The Albert Hall in 2002 that aired on the Sky Box Office Pay Per View platform. A disappointing buy rate combined with a Zuffa run UFC that was still three years away from its break through first season of The Ultimate Fighter lead to UFC coverage being dropped and bounced around other PPV outlets or as a tape delayed option on second tier entertainment channels such as the now defunct Bravo (the UK Bravo having no relation to the US Bravo) before finally landing with the ill-fated Setanta Sports and then on to upstart ESPN UK. While Sky Sports had been in negotiations for UFC coverage when Setanta Sports went into receivership it was speculated that the WWE's presence on Sky Sports as well as Sky Box Office PPV acted as a barrier for the UFC getting a deal done. But now UFC have a long term partnership with Fox we may see a deal get done with Sky when ESPN's broadcast rights are up next year.

Editorial Update: The Ultimate Fighter season 12 Team GSP vs Team Koscheck did air on Sky Sports 2 the following Tuesday, but the next season with Team Lesnar vs Team Dos Santos was not picked up by Sky Sports. A last minute deal was reached with ESPN UK to air the season.

UFC middleweight champion Anderson Silva signed a slew of endorsement deals in Brazil recently, and the stuff he's promoting has already started to pop up. He was wearing a Corinthians jersey yesterday during his open workout, which is a Brazilian soccer team that sponsors him. Another one of his big deals was with Burger King in Brazil, and the first BK commercial featuring Silva is out. Even though it's a Brazilian commercial, you're not exactly going to need to know Portuguese to get the gist of things here. Watch and enjoy, courtesy of BK Brazil's Youtube page.

Obviously the timing of this is not coincidental, as it dropped just in time for Silva's title defense at UFC 134 this Saturday. He will be taking on Yushin Okami in the main event at the HSBC arena in Rio de Janeiro, Brazil. Anderson will be entering the cage with a Corinthians jersey on as well, and I wouldn't be surprised if we see a little singing in the cage in his post-fight speech if he manages to be victorious.

There is actually a second commercial featuring Anderson on that page as well, which you can view here. Unless you speak Portuguese though, you probably won't get it.

The UFC has held onto one of their most notable sponsors for the near future. Harley Davidson, which was prominently featured at Sunday's UFC on Versus 5 event in Milwaukee, has renewed their sponsorship agreement with the UFC. Here's a snippet of the press release:

Las Vegas, Nevada (USA) – The Ultimate Fighting Championship® announced today that it has reached a multi-year sponsorship renewal agreement with Harley-Davidson. The world’s most famous motorcycle maker, which first became a core sponsor of the UFC® in 2008, will continue to be featured across multiple platforms including Pay-Per-View and television broadcasts, online, and in the UFC’s famed Octagon®.

They are also pairing up for a promotion called the Hometown Throwdown, where fans can vote to bring a UFC event to their city. Chris Lytle walked away with a new Harley motorcycle for winning his main event fight against Dan Hardy at UFC on Versus 5, and the weigh-ins for the event took place in the Harley Davidson Museum. This is good news for the UFC, who continues to forge long-term relationships with very well-known sponsors.