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How the Economic Meltdown Affects MMA

Today Luke spoke about the issue of the economic meltdown and the ways in which it will affect mixed martial arts on MMA Nation.  He addressed consumer spending at length, and while that is a concern, I do not think it is the main concern.  The main concern for the future of MMA is that it will dry up investment opportunities.

The fact that EliteXC could not get $3.5 million in loans to last the year says a lot.  A few months ago they were reasonably confident they could get it.  As credit lines freeze up for all but sure things, there will be no investors or venture capital firms pouring money into new MMA promotions.  If EliteXC and Affliction go under as fight promoters, it will be a significant amount of time before we see a new competitor emerge.  In this way, the credit crisis may actually be a boon to the UFC.

I have many friends that work in Silicon Valley, and I will likely be working there very soon.  Talking to people involved with venture capital and investment, things are not pretty right now.  Funding is drying up all over, and people are worried.  Given the staggering amount that EliteXC, IFL, and Bodog all lost, it's inconceivable that an investment firm will pour money into an MMA promotion any time soon.