How Much Is Too Much – Mixed Martial Arts Growing Too Quickly
For those of you who don’t really know me, let me just start by saying that you will be hard-pressed to find anyone who loves the sport of Mixed Martial Arts more than myself.
Does that mean that I always believe everything that the UFC tells me to believe?
Or that I have total and complete blind faith in the direction of this sport?
I should hope not.
Don’t get me wrong—I love drinking the Kool-Aid just as much as the next person (cherry flavour preferred), but even I can only knock back so much of it.
So, I will ask again in case your ADD has already started to kick in—is MMA growing too quickly?
I know that may seem like a very strange question from a business standpoint, after all, how many of you were once (or still possibly are) aspiring entrepreneurs waiting and hoping for that day to come when your product or service demand finally exceeds your supply?
Growth is always good, isn’t it?
Well, believe it or not, there is always some level of risk associated with growing too quickly in any business, and unfortunately, the UFC is not the “ultimate” exception.
The power of wishful thinking is spectacular indeed. Take a look at how far it has taken the UFC up to now. And for the record, it is the fans who deserve all of the credit for MMA’s increased popularity—not Dana White.
So what happens when growth potential finally meets (or exceeds) its absolute limit (not saying that we are there yet, but eventually that day will come)?
The existing demographic of fight fans are still very much a minority, in terms of mainstream population. Today in fact, I was telling a colleague about the fun interview that I did with none other than Roy “Big Country” Nelson.
“Who?” he asked.
I sometimes forget that as both a fan and a sportswriter, I am constantly being bombarded by an unrelenting amount of MMI (Mixed Media Information), and that the average person still does not have “clue one” about this sport—nor do they care to.
A while back, I even had a student of mine (who was in his early 20’s) ask me about Hulk Hogan.
“What about him?” I wondered.
“Well you’re into all that stuff aren’t you? UFC and stuff? You should write an article on Hulk Hogan.”
I wish I were kidding, but sadly…I am not.
So anyway, what happens when the market becomes over-saturated?
Simple—like everything else in this life, interest will fade, evolve, expand, disappear, change, etc.
I know that seems somewhat unbelievable right now when you consider that most fight fans can’t get enough of anything MMA-related. The more the better, right?
For now.
Having had an executive role in a now defunct fitness franchise (it was good while it lasted, haha), I know a thing or two about the pitfalls of extreme, rapid growth from a business perspective.
I can still hear the President of our company warning us all about what he referred to as “Death by Expedience.” In hindsight, what really sucked, was that he was absolutely correct.
When something is “expedient,” it usually means that it has been contrived or used to meet an urgent need.
Right now, the MMA Community has an urgent need—they crave constant information. Just ask any writer on the Bleacher Report—as fast as they are pumping out insightful, opinion-based articles, there are 10 more to replace it within the hour.
Here’s something else that you might find interesting…
Starbucks is a global superpower in terms of franchise and business-model success. For many years, the coffee giant was the most-discussed, high-growth company in the free world.
Their success and popularity were unmatched in terms of branding and revenue potential.
Then the news of the impending closure of over 600 franchise locations nationwide hit the media. Even the almighty Starbucks managed to somehow fall victim to their own success. “Greed” is kinda funny that way.
Eager to appease investors, Starbucks embarked on a path of overly-ambitious expansion, shifting their focus away from the customer and more toward the bottom line.
“Expansion is a bad idea when it is more opportunistic than strategic . That’s not to say that companies shouldn’t take advantage of opportunities they spot, as that would be counter to the nature of entrepreneurial business growth. What it does mean, however, is that they should approach any expansion with a careful and well-mapped out plan. Once the business has documented their vision, it should ask if it is pursuing growth in the best interest of the company, or whether it is growth only for the sake of growing.”
“Starbucks took advantage of market conditions to fuel expansions that were ultimately unsustainable.”
“From the entrepreneur’s perspective, growing “too fast” would seem like a great problem to have. But if the growth is more opportunitistic than strategic, it can be unsustainable and carry unforeseen risk.”—growthink.com
Is the UFC finally getting to that point?
I wouldn’t think so—not yet anyway.
Who knows? Perhaps we are already starting to see trends to that effect.
When the UFC first made tickets available for UFC 115, they sold out in a record-setting 30-minutes, and the promotion and local MMA fans celebrated at what looked like a strong indication that
Vancouver was wild about its very first UFC show.
The Vancouver Sun later reported, however, that scalpers had acted fast to buy up UFC 115 tickets, but were then dumping tickets on the re-sale market for less than they had paid in the first place.
Tickets are perishable items and no doubt some scalpers were regretting helping the UFC set a very misleading record for ticket sales.
Earlier this week, the UFC was forced to announce that it had moved its August 1 show out of Salt Lake City because it was struggling to sell tickets. The event, headlined by Jon Jones vs. Vladimir Matyushenko (honestly, what kind of nickname is the “Janitor?” It’s no “Back Breaker ”), will now take place in San Diego.
That officially makes the second time in less than a week that UFC ticket sales have been substandard.
“I was very surprised and disappointed in ticket sales,” White said. “As a result, for the first time in UFC history, I decided to pull the plug and move this August 1 event to the San Diego Sports Arena.”
The recent problems in selling tickets is hardly a solid indicator that the UFC is on the decline, but they may indicate that the UFC will be unable to sustain the incredible growth rate that they have been experiencing over the past couple of years.
It wouldn’t be realistic for any business to expect a continued expansion like the UFC has had.
When Dana White and brothers Lorenzo and Frank Fertitta took over the Ultimate Fighting Championship from Semaphore Entertainment Group in 2001, they spent $2 million. Fast forward seven years, and the company was then worth in excess of $1.4 billion (2008).
According to Forbes Magazine, the UFC was estimated to have generated $250 million back in 2008 alone, capturing about 90 percent of all Mixed Martial Arts revenue.
Now think about how much the UFC and MMA have both grown over the past two years. MMA is simply everywhere.
Since day one, the acquisition of the UFC was about making money —not providing a service to a bunch of beer-swilling, karate-kicking, blood-thirsty Neanderthals (clearly I am only speaking for myself here).
So why should the UFC care if they exhaust all interest in the sport of MMA?
How much money do you think that they would have made by the time that ever happens?
From a realistic standpoint, they have to believe that the trend will eventually fade—nothing lasts forever, right?
Then again, I try not to worry too much about the things in life that I can’t control. For as long as there is a pulse beating in the MMA Community (even a small one), there will be life.
Enjoy the fights this weekend—I’m off to Starbucks.
These are my opinions. If you don’t like them…I have others. Check them out at www.mrjamesryan.com
Read more MMA news on BleacherReport.com
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