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Ultimate Fighting: A Proven Moneymaker - With Plenty of Enemies


Ultimately (no pun intended), people will participate in-and watch-the activities that most interest them.


Last week's Sports Illustrated cover story explored the explosive popularity of mixed martial arts-the Ultimate Fighting Championship, in particular.

Fought in three five-minute bursts (five in championship bouts), Ultimate Fighting participants take on one another using a combination of skills from different disciplines, including boxing, kickboxing, wrestling, and jiujitsu.

The article pointed out that UFC events bring in more pay-per-view dollars than both WWE wrestling and HBO boxing: $223 million, compared with $177 million for boxing on HBO and $200 million for WWE.

And, April's UFC 69: Shootout, held at Houston's Toyota Center, was the arena's highest-grossing event ever.

Frank and Lorenzo Fertitta, the two Las Vegas-based brothers who bought UFC in 2000, certainly know how to make money. Their Station Casinos (STN) is the fifth-biggest gaming company in the country, taking in more than $1.1 billion in revenue last year and earning $309 million, with a stock price that has risen nearly eightfold over the past five years.

In March, the Fertittas acquired their Japanese rival, the Pride Fighting Championship.

UFC president Dana White would not reveal the purchase price, but said, "It was a hell of a lot more than Barry Bonds is making."

The Associated Press quoted an anonymous source who put the figure somewhere around $70 million.

However, there are some who still don't believe in UFC, no matter what the numbers reflect.

"UFC ain't s---," said World Boxing Council junior middleweight champion Floyd Mayweather Jr., at a press conference to publicize his recent bout with Oscar De La Hoya. "It ain't but a fad. These are guys who couldn't make it in boxing. So they do [mixed martial arts]. Boxing is the best sport in the world and it's here to stay."

Regardless of what Floyd Mayweather believes the future will hold for mixed martial arts, if John McCain (R-Arizona) had his way, it would disappear altogether.

After seeing a video of a UFC match in 1996, McCain, a lifelong boxing fan, called mixed martial arts "barbaric", "human cockfighting", and "not a sport." He petitioned the governors of all 50 states to ban ultimate fighting.

David Plotz, of, described McCain's opposition as a "crusade" and said that, "like many crusades, it was founded on misunderstanding."

Said Plotz:

"In countries such as Brazil and Japan, where no-holds-barred fighting has a long history, it is popular and uncontroversial. But Americans adhere to the Marquess of Queensberry rules. A fight consists of an exchange of upper-body blows that halts when one fighter falls."

Thales Leites taking down Pete Sell at UFC 69: Shootout, the highest-grossing event ever staged in Houston's Toyota Center.

Ultimate Fighters now use gloves, in part to appease critics who view bare-knuckle competition as sadistic. Plotz points out that the actual purpose of boxing gloves is not to cushion the head but to shield the knuckles. A boxer going the distance in the ring sustains round after round of blows to the head, often resulting in long-term neurological damage.

Critics have also tried to push the UFC to surround their rings with boxing-style ropes, rather than the chain-link fence currently used, which exudes an air of "savagery". Plotz argues that fighters hyperextend their necks when they are punched against the ropes, because nothing stops their heads from snapping back-the UFC's link fence prevents hyperextension.

Ultimate Fighting won't transform viewers into violent lunatics any more than watching Pulp Fiction might cause one to take up a career as a hit man. And, as might be expected, UFC's success has fostered competition outside the octagon. Several other mixed martial arts leagues have come into existence, including the publicly-traded International Fight League (IFLI.OB).

The statistics show just how popular mixed martial arts are.

Going by the statistics, they're also quite safe in comparison to the injury rates in other popular sports that generate little, if any, public opposition.

2005 data from the U.S. Consumer Product Safety Commission lists the following numbers for injuries treated in emergency rooms, by activity:

  • Basketball: 512,213
  • Bicycling: 485,669
  • Football: 418,260
  • Soccer: 174,686
  • Baseball: 155,898
  • Skateboards: 112,544
  • Trampolines: 108,029
  • Softball: 106,884
  • Swimming/Diving: 82,354
  • Horseback riding: 73,576
  • Weightlifting: 65,716
  • Volleyball: 52,091
  • Golf: 47,360
  • Roller skating: 35,003
  • Wrestling: 33,734

These numbers aren't adjusted for participation levels, but as raw figures, they do tell us something. There were more recreational fishing fatalities last year than there were in all UFC matches, combined-which has never had a death in the ring.

A risky, ill-advised day on the lake

Ultimately (no pun intended), people will participate in-and watch-the activities that most interest them. They will also spend money at events, stay in hotels near those events, spend money on concessions, buy plane tickets and rent cars to get there, and so on and so on.

The market will decide what survives in the end, just as it does with all other products and services.

People know that cigarettes cause cancer, but they still smoke.

"But officer, he said he was 18!"

Motorcycles can be dangerous, but people still ride.

Trans-fats aren't healthy, but people still eat foie gras.

Trying to legislate certain sports out of existence because they might offend some people's sensibilities is Soviet, at best.

Speaking of which, the NIH says that alcohol (the abuse of which is a tremendous problem in Russia) is linked with an estimated 5,000 deaths in Americans under age 21 each year-more than all illegal drugs combined.

Which reminds me of an interesting quote I recently heard regarding the ongoing debate about cannabis:

"If you really want to outlaw a plant, why not make poison ivy illegal?"

No positions in stocks mentioned.
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