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The recent UFC 291 PPV event in Salt Lake City, Utah was the perfect encapsulation of years worth of efforts by Endeavor management to completely upend the old ways of doing business. Why spend your own money to run a show when you can spend someone else’s cash?
You wouldn’t likely think of Utah as the first place that comes to mind when it comes to combat sports. Other than high-altitude training for fighters, what’s the selling point?
For a regular fight operation, not a lot.
For a political and big business operation, however?
Utah is the perfect marriage of big business and big government
It’s home to country club Republicans and major credit card companies. The rich arrive in droves each year to Park City.
Big business and big technology are quickly marrying together for futuristic projects, including technology company Cosm doing research and development of 8k movie theater technology to watch UFC events without a headset.
As an added bonus, Utah is right next door to Nevada. Easy for UFC executives to travel back and forth to supervise business ventures.
UFC is now a political company, first and foremost.
Under the leadership of Endeavor, UFC isn’t simply a sports property. It’s an entertainment company that just happens to be a highly political operation with a cultural cache.
The underlying company philosophy is shifting towards a government contractor business model similar to Raytheon or Pfizer. A recent Salt Lake Tribune article laid out the financial guarantees and backstops required by Endeavor to bring UFC 291 to Utah.
It’s the kinds of taxpayer guarantees that you’re used to seeing with Big Pharma & Insurance companies under the Affordable Care Act. Congress just uses the term “risk corridors.” Different names, same games.
UFC may not be selling bullets or drugs but they are selling an extremely valuable hot commodity.
UFC events are a place to see and be seen
The same principle that is propelling UFC into recruiting new business contracts is no different than the psychology that PRIDE used at their mega events to attract major celebrities and movers-n-shakers during their heyday. Ari Emanuel knows how to build an entertainment magnet.
But why would states and countries decide to agree to pay for UFC events? Sure, the fight business has always had a sold show model – to a degree.
What the fight business hasn’t had is a high frequency of convincing governments to buy shows and foot the bill.
So why now? The answer is simple – UFC is now a political company, first and foremost.
In order to increase profits, minimize risk, and become recession-proof, Endeavor sees local and state municipalities as hungry sugar daddies who will never stop paying for content.
Governments big and small have made the calculation that there simply isn’t any resistance in doling out taxpayer cash to bring shows to the masses. It’s a nice, shiny distraction to satiate the voters. Who can say no to Santa Claus?
Bringing on governments as business partners provides UFC with unlimited potential for new revenue streams while also bolstering legal protections under the color of law.
If the state is married to you, they’re also less likely to want to upset the apple cart because they’d be missing out on the money, prestige, and cultural power that UFC brings to the table.
The more money UFC makes, the more likely it is that UFC will help raise awareness and money for the political leaders that scratch their back. If there’s any sort of scandal that arises from a major UFC event, having the state protect your back is a great way to smother a scandal with a metaphoric pillow.
All a state partner has to do is invoke the time-honored phrase, “It’s under investigation”, and magically all avenues for disclosure – outside of leaks from the disgruntled – are sealed.
Having governments as your business partners is also a great way to melt any sort of regulatory resistance from athletic commissions that used to possess such great powers. As we noted in a recent article about Endeavor’s plans to expand Power Slap in 2024 and beyond, athletic commissions face a devil’s bargain: play ball with UFC and get events. Don’t play ball and risk losing shows, which ultimately means you as a regulator risk losing your job.
As noted on BloodyElbow.com, Utah’s athletic commission recently updated their disclosure rules regarding fighter salaries. If a fighter wants their salary to be public information, they essentially have to opt-in to it.
By creating a system where people have to opt-in, the laws of inertia often come into play. Most people are lazy and aren’t going to actively opt-in or opt-out of anything. Whatever the default setting is for any type of disclosure policy, that’s likely what people will live with.
It’s the kind of psychological trick you would see discussed in a famous book like Nudge by Cass Sunstein.
Does it benefit fighters to have their salaries undisclosed? More than likely, it doesn’t benefit fighters.
It does benefit UFC, however, if many fighters don’t know what their contemporaries are making. Information is power, especially in bargaining labor disputes.
Despite the recent legal setback in a Las Vegas courtroom regarding the mega antitrust lawsuit by former fighters against UFC, Endeavor’s plan to fast-track public/private partnerships with governments is accelerating.
Should UFC lose in court or be forced to change their business practices, Ari Emanuel is positioning his fight operations to be legally and financially protected by both governments and stock investors.
Only a rejection by the Feds of the proposed Reverse Morris Trust to merge UFC and WWE into TKO can stop the momentum of Endeavor’s quest to convert their fight operations into a government contractor business model. Don’t hold your breath on anyone getting in the way.
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