TV/Business NotesThe Slugfest in the Executive Suite
By Amy Chozick,
The New York Times - Feb. 17, 2013
ATLANTIC CITY.- Beyond the pinging slot machines and the felt-topped card tables at the Caesars casino here, inside a steel cage built for maximum pain, Darrell Horcher is slipping a triangle choke hold on Chris Liguori.
Fists land — left jabs, right crosses, quick combinations to jaws and abdomens. Knees sock solar plexuses. Hands claw faces. Bodies smack and thud. From the crowd, the refrain goes up: “That’s got to hurt!” After three rounds, Mr. Liguori is bleeding from his right eye. On this chilly December night, the decision is unanimous: Mr. Horcher is the winner.
So it goes in the Ramboesque world of cage fighting, more politely known as mixed martial arts. In this hugely popular — not to mention lucrative — sport, fighters employ agonizing moves like the “modified guillotine” and the “bicep slicer” as they punch, kick, knee and choke each other into submission.
But it’s got nothing on Hollywood. In fact, two media heavyweights are locked in a smackdown of their own over the future of this sport, which Senator John McCain has likened to human cockfighting.
In one corner is Ari Emanuel, the Hollywood superagent who represents the Ultimate Fighting Championship, the premier cage-fighting league. In the other corner is Philippe P. Dauman, the urbane chief executive of the media conglomerate Viacom.
From 2005 to 2011, the U.F.C. was shown on Spike, a Viacom channel, where it became a ratings powerhouse. Then, in 2011, in renegotiating the U.F.C.’s deal, Mr. Emanuel asked for a 50 percent fee increase and made other demands. When Viacom balked, the U.F.C. struck a $700 million, seven-year deal with Fox Sports to show its fights on Fox, FX and Fuel, all owned by News Corporation.
But Mr. Dauman counterpunched, and Viacom decided to enter the fight business itself. In fall 2011, the company paid around $50 million for a majority stake in Bellator Fighting Championships, according to people with knowledge of the deal who did not want to be identified discussing internal company business.
That Viacom, home of Paramount Pictures, MTV and SpongeBob SquarePants, now owns a gritty league of muscled gladiators — who travel the country fighting in a 710-square-foot circular cage — speaks to the fierce battle for live sports rights. In the DVR age, networks desperately want to hang on to live viewership.
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BUT it also demonstrates the evolution of cage fighting, which has grown in the past decade from a fringe spectacle banned in many states to one of the fastest-growing sports properties on TV. Mixed martial arts dates back to the ancient Greek Olympic sport of pankration (or “all powers”) that emerged circa 648 B.C. It allowed fighters to use a blend of fighting styles, though biting and gouging out an opponent’s eyes were outlawed. In modern times, mixed martial arts largely evolved from a Brazilian combat sport known as vale tudo (Portuguese for “anything goes”) popularized in the 1920s.
In the 1960s, Bruce Lee, the actor who has been called the father of mixed martial arts, drew big audiences to fighting that used a variety of disciplines. But the sport didn’t take off in the United States until the 1990s, when a prominent Brazilian family helped found the U.F.C. and began promoting nationwide fights.
The current sport allows fighters to use a hybrid of disciplines including Brazilian jujitsu, kickboxing, karate, taekwondo, judo and Greco-Roman wrestling. It is fought in a cage “because a fighter may find himself pressed up against the fence, but he won’t fall out,” according to the U.F.C.
Once almost a free-form bloodfest, M.M.A., as the sport is known, now comes with a strict set of rules enforced on a state-by-state basis (no hair-pulling, kicks “to the kidney with a heel” or “twisting the flesh”) and a standard of three rounds of five minutes each, or five rounds of five minutes each for championship title fights.
Last May, New York lawmakers maintained the state’s ban on mixed martial arts, leaving it one of the few states that do not sanction the sport. Adherents say that M.M.A. is safer than boxing because fighters aren’t allowed to get up after a knockout, and that the freer form means combatants don’t endure as many blows to the head.
In Atlantic City on Dec. 7, Bellator workers spent 19 hours transforming the Caesar’s ballroom, with its gaudy carpet and a cash bar, into a place that feels like a secret, exclusive fight club. “I think they had a bar mitzvah here last night,” joked Bjorn Rebney, a 6-foot-3 former college football player who is founder and chief executive of Bellator.
Most of the fans had received $52 to $165 tickets free, a casino perk offered to high rollers along with a Polynesian-themed circus and all-you-can-eat buffet coupons. Just past $10 blackjack tables, Mike Wessel, a hulking, tattooed heavyweight called “the Juggernaut,” defeated a Belarussian in a grueling five-minute round. In a later bout, the bantamweight favorite Zach Makovsky put his opponent in a “modified guillotine,” a type of front headlock.
On this night, the fighters, most of whom came from towns in New Jersey or Pennsylvania, brought cheering sections of friends and family. Most of the fighters received $3,000 each to show up and an additional $3,000 for winning.
The money didn’t look like enough in Bout 7, when a sweaty Mr. Horcher, a 154-pounder from Shermans Dale, Pa., bested Mr. Liguori, of Toms River, N.J. But the thump of the fighters hitting the mat with each body slam echoed through the strobe-lit room and energized the crowd, made up mostly of men. Fighters often stayed on the mat for several minutes using wrestling moves, prompting the crowd to stand up to see who was choking whom. (Hint: the combatant on the bottom was often winning.)
A contingent of fans let out a chant of “Jersey strong!” when local fighters entered the ballroom under pulsating lights. But the 1,100 banquet chairs did not fill up until the final bouts, when fans took a break from the casino floor where cocktail waitresses served free drinks. During the bouts, the handful of women in the crowd mixed some cringes with their cheers.
Sitting at cageside, Kevin Kay, the president of Spike — who estimates that he has attended more than 400 fights — is talking over loud rock music to Mr. Rebney about getting Bellator ready for prime time. They agree, for one thing, that Bellator has to discover its own fighters. “We don’t want to be picking up rejects from the U.F.C., because there’s a reason they’re leaving,” Mr. Kay says later. “Either they weren’t a fan favorite or they weren’t making money. You have to build your own talent up.”
As they look around the converted ballroom, they discuss bigger locations that would look better on television. (The Atlantic City fights were broadcast only on MTV2 and on Spike.com as practice for the Spike premiere in January. Those fights took place at the 5,000-seat Bren Events Center in Irvine, Calif. and were watched by 938,000 viewers on Spike. Later, Mr. Kay said, “We’ve saved up to make sure we’re in the right kinds of venues. There are no ballrooms on Spike.”)
Outside, in the casino parking garage, a traveling circus of Bellator-branded 18-wheelers is packed with men who travel to each location and work as sound editors and producers, putting the final touches on the bouts and cutting highlights for online broadcasts and television replays. Viacom has provided additional television staff members, experts at making combat sports look good on TV.
Unlike Dana White, the U.F.C. president, who has become a constant presence inseparable from the league’s brand, Mr. Rebney plans to maintain a more distant role as Bellator’s C.E.O. Still, several fans called out for photographs and autographs from Mr. Rebney, whose black suit seemed the unofficial uniform of the evening’s V.I.P.’s.
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THE new league, renamed Bellator M.M.A., certainly has not stopped the bad blood between the U.F.C. and Viacom. Mr. Dauman of Viacom says that “in airing U.F.C. fights and reality shows, Spike really built U.F.C. from almost nothing.”
Mr. White, the outspoken president of the U.F.C., calls Mr. Dauman’s characterization “the most pompous, arrogant thing to come out of someone’s mouth.” He adds, “Everybody thinks they can buy a cage and do what we do.”
Founded in 1993, the U.F.C. is widely credited with bringing sanctioned mixed martial arts to the United States. The league, owned by Zuffa L.L.C., based in Las Vegas, struggled for years to broker a television deal. Finally, in 2005, Mr. White says, the U.F.C. paid $10 million to produce “The Ultimate Fighter,” a reality series that follows mixed martial arts fighters living and training together in Las Vegas, and gave the show to Spike, a Viacom channel aimed at men. The Season 1 finale featured the first U.F.C. fight broadcast on Spike.
There, the U.F.C. became a surprise hit and led to other shows based on mixed martial arts, including “U.F.C. Unleashed,” that filled much of Spike’s schedule, along with reality series like “Bar Rescue” and “Tattoo Nightmares.”
Today, the U.F.C. is shown in 145 countries and territories in 28 languages and by Zuffa L.L.C.’s estimate is worth around $2 billion, roughly the same price a group of investors recently paid for the Los Angeles Dodgers.
Part of what draws media companies to mixed martial arts is the sport’s allure to what marketers call “superconsumers,” or men aged 18 to 34 who watch sports but are otherwise tough for advertisers to reach.
“It’s one of the few sports that still has amazing growth in the really core, young demo,” says Eric Shanks, co-president and executive producer of the Fox Sports Media Group. “It really is a cliché, but it’s one of those sports that crosses over into being a lifestyle.”
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UNLIKE many of its media competitors, Viacom does not own a sports network or pay heavily to program sports on its cable channels. During negotiations, which started in mid-2011 and were largely led by Mr. Emanuel, Mr. White and Thomas E. Dooley, Viacom’s chief operating officer, Viacom began to consider looking for an alternative.
As the U.F.C. gained attention on Spike, competing mixed martial arts leagues started to pop up. “It was like there was a new juicer and suddenly you saw 100 different types of juicers,” Mr. Rebney says.
Named after a Latin word for warrior, Bellator began in 2008. Mr. Rebney, a former Ohio University running back and boxing promoter, took out a second mortgage on his house in the Brentwood district of Los Angeles to start the league. It now has 175 fighters and seven 18-wheelers that travel the country.
A publicist for Spike says the audience for mixed martial arts is more heavily college-educated and female than stereotypes suggest, making it especially appealing for all types of advertisers.
“Sixty-four percent of M.M.A. fans are college-educated. That’s a four-year college,” Mr. Rebney says as the crowd trickles into the ballroom at Caesars. “It’s wealthy guys showing off to their girlfriends.”
Despite the statistics, the fans at Caesars that night were almost all men, and did not particularly ooze affluence: there were lots of cutoff T-shirts, acid-washed jeans and high fives. Mr. Dauman, ranked as the nation’s highest-paid C.E.O. in 2011 and known for his custom-tailored clothes and Hermès cuff links, has not yet attended a fight.
Mr. Rebney, a disciple of the sports agent (and “Jerry Maguire” inspiration) Leigh Steinberg, previously worked as agent for the boxer Oscar De La Hoya, helping to broker his TV and sponsorship deals. Mr. Rebney approached Spike in mid-2011 when he heard through the M.M.A. rumor mill that the U.F.C. might not renew its contract.
“I saw the writing on the wall and started setting up meetings,” he says.
As talks soured between Mr. Emanuel, the U.F.C. and Viacom, Mr. Dauman and Mr. Dooley approved the purchase of Bellator. A person involved in the negotiations said the U.F.C., in addition to the rights increase, had wanted to own a 50 percent equity stake in Spike and to maintain too much control over which fights the league broadcast on pay-per-view. Under the Fox deal, the U.F.C. still gives its biggest fights to pay-per-view first.
Mr. Dauman saw other benefits in owning a league outright, like profiting from pay-per-view, digital and international broadcasts, Bellator action figures and perhaps someday casting a Paramount film with Bellator fighters, for example.
“You have to ask yourself, what can we afford and what is the return on investment?” Mr. Kay says. He emphasized the importance of ancillary revenue that comes from owning Bellator outright. “If you don’t have the back end and are building someone else’s business, you see the end coming,” he says.
Mr. White says he preferred to take the U.F.C. to Fox because “it’s a real sports network with N.F.L., Nascar, and this is what they do.”
Mr. Emanuel declined to comment. Mr. Dauman said: “I personally have a lot of respect for Dana White” and “as far as I’m concerned there’s no bitterness at all.” Viacom has flooded the airwaves with ads for Bellator, broadcast during U.F.C. fights on Fox’s local television stations. In the ads, Bellator fighters poetically suit up to the song “I’m Coming Home.”
“We have enormous respect for the U.F.C. and now we will compete with them head-to-head,” says Doug Herzog, president of the Viacom Entertainment Group.
Mr. White praised his working relationship with Mr. Herzog, whom he calls “a stud.” But he says the idea of Bellator competing with the U.F.C. “is like saying the local high school football team is going up against the N.F.L.”
Business is brutal in the fight world, and in recent years many of the start-up mixed martial arts leagues that were intended to compete with the U.F.C. have disappeared or been acquired. In 2011, Zuffa bought Strikeforce, a rival league that had fleeting television deals with Showtime and NBC.
“We got into this 14 years ago because we fell in love with the sport and the athletes and we had a plan and a vision,” Mr. White says. “These other guys just think it looks like a fun business for guys. Sure, if you love losing money and burning cash, it’s so fun.”
Bellator has fared better than most U.F.C. competitors, building a loyal audience and a stable of fighters who compete tournament-style.
In Atlantic City, Mr. Rebney is schmoozing at cageside with network executives and advertisers. He has a shaved head and a couple of days’ worth of stubble and wears a black-on-black suit to every fight.
“I have a suitcase full of them,” he says.
Now that Viacom is in the fight business, advertisers can put their logos on the arena and the $4,000 mat that lines the cage. (The mat, blood-spattered by the end of an event, is replaced each night.) Mr. Rebney says that he knows Bellator is the underdog, but that he hopes that viewers will watch because of the tournament format, which will spotlight fighters and their often tear-jerking back stories.
“We’re athlete-focused,” Mr. Rebney says. “People tune in to see superstars, not the brand.”
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THE main attraction on this night was set to be Rad Martinez, 34, a featherweight who became an Internet sensation after he was featured in a heart-wrenching ESPN segment about fighting so that he could take care of his paraplegic father. He ended up sitting out the fight after his opponent contracted food poisoning.
Before the only female matchup, in a video broadcast to the crowd, Zoila Gurgel says of her opponent, Jessica Eye: “There’s no one I want to hurt more than her.” Ms. Eye, 26, with braids and a wide smile, had been hit by a car years earlier and thought she’d never walk again. She choked Ms. Gurgel temporarily unconscious and won the fight in 58 seconds.
http://www.nytimes.com/2013/02/17/business/media/cage-fightings-popularity-has-media-giants-in-a-slugfest.html?ref=television 
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