The driving forces behind UFC, Lance Pugmire - Los Angeles Times - 11th July 2009

Lorenzo Fertitta and his brother Frank have brought mixed martial arts from the fringes and into the mainstream, creating a $1.1-billion franchise along the way.

Reporting from Las Vegas -- In 2001, Ultimate Fighting Championship, the mixed martial arts circuit, was struggling. The bouts were banned from most cable TV outlets and its finances were dismal.

But that did not stop Lorenzo Fertitta, a Las Vegas casino owner, and his brother Frank from making a deal to buy UFC for $2 million. "All of my consultants said I was out of my mind, that this would be a black eye, but I felt the term Ultimate Fighting had relevance because it introduced America to the sport," Lorenzo Fertitta told The Times.

Today, Fertitta, 40, will celebrate the 100th UFC event, which long ago sold out at an 11,000-seat arena at the Mandalay Bay hotel in Las Vegas, with its top tickets priced at $1,000. The pay-per-view telecast is $49.95, and in a sign of UFC's international reach, 51 countries will air UFC 100 live, and another 24 nations will show the event on tape-delay, the company said.

Forbes magazine last year valued UFC at $1.1 billion, ranking both Fertittas among the world's 900 richest people. "It's the most valuable franchise in sports," Lorenzo Fertitta said. "We have a sport that transcends culture and audiences."

The current recession, though, has hit the Fertitta brothers' Station Casinos hard, with the gaming company nearing bankruptcy to deal with its big debt load. Fertitta said the casinos' problems do not "in any way, shape or form" affect UFC.

There's no question, though, that mixed martial arts is threatening to surpass boxing as the country's most popular combat sport. Seven of the last 10 top live-gate fights in Las Vegas have been UFC events.

Fertitta got his first taste of the sport in the late '90s when he crossed paths with a former high school classmate, Dana White, who managed some fighters for UFC circuit.

Fertitta was introduced to MMA fighters, took lessons at a local gym and quickly became "addicted" to the sport, he said. MMA then was hyped as a "no holds-barred" contest, using boxing skills, jujitsu, wrestling and karate. However, the lightly regulated sport prompted Arizona Sen. John McCain to infamously call it "human cockfighting" after one fighter repeatedly head butted an unconscious foe.

But Fertitta, then a Nevada boxing regulator, was charmed by the toughness and charisma of MMA fighters and turned into a "groupie," he said. "We'd go fly out to some podunk town in Louisiana to see these guys fight."

He named White as UFC president, and they shrewdly grew the sport by accepting rule changes, including banning knees to the head of a downed opponent, to win states' approval. UFC's popularity also surged with the hit reality TV series, "The Ultimate Fighter," which Fertitta bankrolled, and catapulted UFC into the mainstream and made stars out of fighters Chuck Liddell, Randy Couture, Brock Lesnar and Tito Ortiz.

UFC also packaged adrenaline-pumping montages in its arenas and on the Internet to lure 20- and 30-year-old fans to mixed martial arts. In 2006, the Liddell-Ortiz UFC fight reportedly generated more than 1 million pay-per-view buys. UFC controls about 90% of the mixed martial arts business, puts on fights monthly and the sport is approved in 38 states, up from seven when the Fertittas bought it.

Richard Schaefer, chief executive of retired boxer Oscar De La Hoya's Golden Boy Promotions, has watched UFC grow. "As far as which is the bigger sport, why does it matter? They can coexist," Schaefer said. "We just set our pay-per-view record two years ago, and UFC was around then. . . To say they're the best franchise in sports . . . I'd rather own the New England Patriots or the Lakers or Manchester United or Golden Boy Promotions."

David Carter, a professor at the USC Marshall School of Business, has also studied UFC's rise. "Before they took over, the sport was wayward. They've been tactical -- very targeted and methodical -- in getting media coverage, marketing the sport effectively, with savvy lobbying . . . distributing international content, introducing video games . . the creative ways [UFC] delivers their content is something other leagues look at."

The Fertitta brothers were raised in Las Vegas by their father, also named Frank, who ascended from a card dealer to casino owner banking on the idea that locals would flock to a casino off the famed Strip. Lorenzo got a master's degree at New York University in 1993 and then went to work at his father's Station Casinos as the company grew rapidly at the start of this decade, expanding with resorts such as Red Rock and Green Valley Ranch.

Sports were part of their life. Lorenzo's father took him to Leon Spinks' upset over Muhammad Ali in 1978. He was hooked and recalls the thrill of watching heavyweight boxing champions Larry Holmes and Mike Tyson make ring entrances in their prime as music blared. The kid was taking notes. Then at 27, Lorenzo became a Nevada State Athletic Commission member and was assigned to supervise boxing cards.

After Fertitta bought UFC, he hired Marc Ratner, former Nevada State Athletic Commission executive officer, as his point man on government relations. "A brilliant move," said Gary Shaw, a rival MMA promoter.

Fertitta says he seeks uniform MMA safety rules in all states. Although a few fighters have suffered broken limbs in UFC fights, no one has died.

The Fertitta family has also spent heavily in campaign donations. Public records show Fertitta family members contributed more than $460,000 to candidates, including to presidential candidates Hilary Rodham Clinton and Rudolph Giuliani in New York -- where MMA remains prohibited by law -- and McCain.

Last year, Arizona approved MMA, and McCain discussed his opinion of the sport with ESPN: "They've cleaned it up . . . they're in compliance now with most of the things we've approved of."

Clearly, Fertitta's cash was critical to the sport's growth. Dozens of TV producers dismissed his offer to air the "The Ultimate Fighter" reality TV series, which followed fighters battling each other to win a six-figure UFC contract.

Advertisers initially blew off the project. Then the 2005 fight between Forrest Griffin and Stephan Bonnar was one of the sport's most compelling slugfests and drew 2.6 million viewers. Fertitta said he and Viacom TV executives "cut a long-term deal that night on the back of a napkin."

Liddell, who became a mega-UFC star, said: "No way this happens without Lorenzo and his brother, going $40 million in the hole before it turned around."

As lucrative as MMA has become, there have been complaints by fighters, such as Ortiz and Couture, that the UFC could share more of its wealth and provide more blanket health coverage beyond fight-night insurance.

Unlike in boxing, in which promoters are obligated to disclose financial figures to a fighter and state commissions, MMA organizations can keep profits from pay-per-view sales private. Fertitta says UFC is generous with incentive bonuses and routinely pays for whatever medical attention a fighter injured in training requests.

"Quashing the competition as they've done hurts the fighters," said Shaw, whose rival Elite Xtreme Combat organization folded last year. "The UFC gives its fighters whatever it wants, and there's no outcry because the only person who can do that is a fighter. If he does, the next thing you know, he'll be on his way out."

Fertitta answers: "If you're a champion, you're a multimillionaire. If you're a contender, you're making hundreds of thousands."

Liddell said he has no complaints: "Look at where [UFC] was. I can remember fighting for $1,000. . . . These guys marketed it right, got it sanctioned, and look what's happened." (Credit: Los Angeles Times)

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