Fight Club
As the sun dips on April 5, tens of thousands of young men will settle in sports bars and living rooms to watch on pay-per-view an Ultimate Fighting Championship (UFC) bout.
The tattooed “Rush,” measuring 5′ 10″, 170 pounds, will face off with “The Terror” who’s 5′ 6″ and 170 pounds. Neither has lost a fight.
Behind the scenes, another battle is taking place: The one for corporate sponsorship dollars. The sport? Mixed martial arts, which combines elements of wrestling, boxing, judo, Jiu-Jitsu, karate and kickboxing.
Despite being one of this country’s fastest growing sports, the bloody man-on-man battles staged in octagon-shaped cages can make sponsors queasy. Arizona Sen. John McCain once said the sport was on the level of “human cockfighting.”
But that is changing. Mixed martial arts, once banned in every state, are now sanctioned in 22. As happened with boxing over a century ago, rules have been instituted and promoters are catering to marketers eager to reach the young male audience.
“Until a couple of years ago, the sport was thought by many to be borderline offensive, too dangerous, too barbaric and not regulated enough,” says David M. Carter, executive director of the University of Southern California Sports Business Institute. “But we’re seeing a change in the way it is presented. It is being cleaned up such that it is really able to focus on the athleticism.”
Making it more palatable
And some firms have taken note. Mickey’s, a malt liquor brand owned by SABMiller, signed on last summer as the exclusive beer, joining three other sponsors: Xyience, amp’d mobile and Toyo Tires. And movie studios Paramount and Lionsgate sponsor bouts on an event-by-event basis.
The sport’s top promoter is the UFC, a privately held company. Founded in 1993, the firm was purchased by new owners in 2001 with an initial $2 million investment. And they recently came up with another $44 million and landed a cable deal with Spike TV.
A competitor to the UFC emerged about a year ago: the International Fight League (IFL), financed with $24 million. Seeking to be more palatable to both consumers and sponsors, the IFL has eliminated elbow strikes to the head and face.
The IFL has also introduced the teams, with matches scored like high school wrestling meets, and shortened the length of the three rounds from five minutes to four.
“By getting rid of the blood and the cage and putting it into an oversized ring, we can focus more on the sport and the athleticism of these guys and bring the sport more mainstream,” says Gareb Shamus, the CEO and co-founder of the IFL.
The IFL has signed five sponsors so far, and has a TV deal with Fox Sports Network through which it is reaching 100 million homes every Monday night. Sponsorship deals range in price from $500,000 to $1.7 million per year, and future ones could go as high as $8 million, says Joel Ehrlich, the IFL’s chief marketing officer and president of sales.
“Right now it’s a buyer’s market,” Erhlich says.
The UFC declined to comment on sponsorship fees. But one top UFC fighter brings in six figures a year in endorsements and has also signed deals for cell phone ringtones, according to a report on CNBC.
How can mixed martial arts command that kind of money? The allure is the audience demographic.
Where the boys are
The vast majority of fans are 18- to 34-year-old males. Even better, these young men are increasingly involving females in the sport.
That is why an unlikely brand like Sandals Resorts, known for its romantic, couples-oriented ads, recently signed with the IFL after testing the waters last year.
“More and more of these male attendees are bringing their girlfriends and wives, who are the number-one decision makers in planning vacations,” says Debbie White, who is responsible for marketing at Sandals Resorts.
Sandals gets in-ring signage. And an announcer pumps the crowd for a vacation giveaway. He randomly chooses two people from the crowd to sit ringside. The two are then awarded — by sexy ring girls — a $2,000, three-night trip for two to any Sandals resort. Two fighters win the trip as well.
Sandals reps distribute brochures at every venue. It plans this year to involve local travel agencies, which will set up booths at events to offer information and collect consumer data for future marketing.
Another IFL sponsor, Xbox, runs a similar promotion, giving away game consoles to two fans and to the fighter of the night, who scores the quickest finish. Dell and Thomas Popcorn hands out bags of popcorn to attendees as they exit. Warner Bros. Studios is also there. Ring girls throw T-shirts into the crowd to promote 300, Warner’s theatrical film set for release on March 9.
And Suzuki gave away an all-terrain vehicle at an off-site event. The IFL set up a full-size ring at comic book convention Wizard World Chicago last summer. It brought in ring girls and coaches for autographs. Attendees submitted ballots for the chance at the four-wheeler. Shamus is also the owner of Wizard, a publisher and event organizer.
Both the UFC and IFL offer customized sponsorships. These deals can include logos on bumpers and mats, commercials on Jumbotrons, sponsored replays, announcer call-outs for promotions and tags and logos on TV spots.
Fighters will also show up at events and meet-and-greets. And brands’ logos can be placed on the athletes’ shorts and seat covers.
Mickey’s decision to get involved with mixed martial arts stemmed from consumer research it conducted as plans for a new brand positioning got underway last spring. Focus groups were held with customers both on the West Coast, where the sport is popular, and in towns like Chicago, where it is still developing.
“What consistently came back was their interest in UFC in particular,” says Patrick Minogue, associate brand manager for Mickey’s.
Minogue says the sport is a good fit for a beer company because of its social aspect as friends gather at home or in bars to watch the fights.
Mickey’s is sold at concession stands where possible. And the brewer stages mock weigh-ins for consumers at events. Participants can have their photos taken posing with models featured by the brand.
“The photo is something they can take home that strengthens that association of consuming Mickey’s and participating in the UFC,” Minogue says.
Mickey’s, as well as other brands, also sponsor individual fighters through deals set up by the organizations. It is set to launch its first national promotion for the brand, themed around the UFC.
A series of 24-ounce collector’s cans will feature popular fighters. The beers will be sold at convenience stores and gas stations.
This month features Chuck Lidell, the light heavyweight champion. George St. Pierre will appear, as will Forrest Griffin, a fan favorite. Griffin will also be the face of a promotion scheduled for this summer.
Meanwhile, a dedicated Web site that goes live in June helps Mickey’s collect consumer information. A June -through-August sweeps will offer a trip for four to Las Vegas to the championship fight with Griffin as the host.
“We would like to keep a conversation current with those consumers about Mickey’s and the UFC,” Minogue says.
He adds: “We’ll deliver content and information about some of the fighters that they can’t find elsewhere.”
In addition, Mickey’s nights will be held in bars in at least 10 cities this year during pay-per-view fight bouts.
Posters, table tents, fighter appearances and street teams will support the efforts. The events will take place nationwide with a focus on California and Texas where sales of the brand are strong. “We’re stocking the growth where we see it,” Minogue continues.
TV deals getting numbers
The UFC has found its niche, reaching consumers in three ways. Thirteen fights will be shown on pay-per-view TV this year, including at more than 1,000 bars around the country. Live events last year drew anywhere from 11,000 to 17,000 people, resulting in ticket sales of up to $5.4 million at each venue.
A big break came in a 2005 deal with Spike TV, which this year will air about 10 live events. Last year, the shows drew as many as 4.2 million viewers, according to the UFC.
Another venue for exposure is the reality TV show Ultimate Fighter, a deal between the UFC and Spike TV. The fifth season premieres April 5. The show focuses on up-and-comers in the organization, fleshing out their backgrounds and athleticism. The premiere of season four last August drew 1.1 million viewers, the UFC said.
“It’s an impressive buildup to the fights,” Minogue says. “It helped build the fan base and the drama of the actual events.”
Statistics on pay-per-view viewership are not released by the UFC. However, a February match brought in $20 million in PPV purchases and ticket sales, according to a CNBC report. That’s quite a feat for a sport that not so long ago had to give tickets away to fill seats.
“It’s quite staggering the growth of the UFC in the last year,” Minogue says.
Xyience, an energy drink and nutritional sports supplement company, is one of the UFC’s largest sponsors. It has even created products with fighters specifically to promote at events.
The hope was that attendees “would say, ‘if it’s good enough for the fighters, then its good enough for me,’ and give it a try,” says Ted Joiner, president of Xyience.
Xyience brands its products on the mat in the center of the ring. It may also do some couponing.
Toyo Tires, which signed on last year, is planning to hang 5- × 10-foot banners featuring photos of the fighters and their cars near the arena exits.
“We want to make sure it’s not an in-your-face type thing,” says Stan Chen, manager of events and motor sports for Toyo Tires. “[It’s] just a brand awareness that the fighters use our tires.”
Most firms measure sponsorship value in incremental sales, as driven by coupons, samples, follow-up marketing and on-premise promotions.
The IFL recently signed a number of deals that will expand its exposure. It inked a multi-year agreement last month with Fox Corp. to broadcast 22 one-hour shows — the entire season — airing Fridays at 11 p.m. on Fox Sports Network. And Warner Home Video will put IFL fights on DVD this fall.
But just because the sport is able to draw that kind of audience, doesn’t mean sponsors will come running.
“Corporations are now saying, we get it and we’ll figure out when and if it works for us,” says USC’s Carter.
