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Georges St.-Pierre in a story about UFC for Report on Business Magazine - April 2011 cover
Georges St.-Pierre in a story about UFC for Report on Business Magazine - April 2011 cover

ROB Magazine

How the UFC plans to K.O. boxing Add to ...

Trying to divine the UFC's financial picture is difficult. Moody's Investor Service, the debt-rating agency, estimates Zuffa will have $64 million in free cash-flow in 2011, with another $20 million in the bank after costs, including what White and the Fertitta brothers pay themselves. It recently upgraded Zuffa's credit rating to positive from stable, noting "the growing popularity of UFC, and its scale, brand strength and breadth of fighters under multiyear contracts." All those factors "help serve as an effective barrier to entry."

So far, White and the Fertitta brothers have dealt with rival MMA leagues by buying up the weaker players, mainly as a way to acquire the fighters under contract with those organizations (similar to the talent wars that pro wrestling became known for in the 1990s). But, in the process, they've amassed more than $400 million worth of debt.

As well, there's always the risk that a new, bloodier sport will emerge and eclipse mixed martial arts. Who could have predicted that boxing would ever be relegated to second place behind UFC? Until then, however, it's unlikely that a competing MMA league could build the kind of loyalty White inspires, both among fans and fighters. Though the UFC has no players' union, like the ones that exist in hockey and baseball-a key advantage to Zuffa's bottom line-White has a virtual monopoly on the best fighters and uses cash to ensure they stay on his side. He won't talk about how much fighters get paid, but he has said in the past that between 15 and 20 of them probably make $1 million a year, and he has also been known to cut large cheques on the spot to fighters he feels have been wronged by the judges-in some cases, doubling their appearance fee. For the fight in Vegas, Anderson Silva and Vitor Belfort each made over $200,000, according to MMA websites that track such figures. White also paid out bonuses for the night, including $75,000 for the best knockout-which went to Silva.

The middleweight champ could be in line for an even bigger payoff if the fight against St-Pierre goes ahead. When asked where he wanted to see the megafight take place, Silva said that was up to his boss. Then he added that he didn't want to see it in Toronto, since that would give GSP a home-crowd advantage.

White has mused about staging the event in Dallas, in a stadium almost double the size of the Rogers Centre. But Silva likely won't find any comfort there, since White figures the crowd will be packed with Canadians no matter where the fight takes place-that's how it always is, he says. Especially with one of their own up for title of best fighter in the world.

White doesn't care who buys the tickets-he just wants to sell as many of them as possible. Fill 80,000 seats? No problem. "I don't care what colour you are, what country you come from or what language you speak," White says. "We are all human beings. Throughout history, we've always wanted to know one thing: who the toughest guy in the world is. Fighting is in our DNA, man. We get it, and we like it."

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GOLDEN TICKETS It took just minutes for the UFC to sell 55,000 tickets-for as much as $800-to the April 30 fight in Toronto, which pits Canadian Georges St-Pierre against California's Jake Shields. Here's how the buying frenzy went down.

Day 1 (Feb. 10) At 10 a.m., 42,000 tickets go on sale to the 20,000-plus members of the UFC Fight Club, who pay an annual membership fee. They sell out in seven minutes. UFC puts up an additional 5,000 seats, which are also immediately snapped up.

Day 2 (Feb. 11) UFC releases 3,000 or so tickets for newsletter and radio promotions. They're gone in four minutes.

Day 3 (Feb. 12) UFC reconfigures the Rogers Centre seating plan to find an additional 5,000 seats, which go on sale to the general public first thing Saturday morning. Within 15 seconds, there are 3,500 people in the phone queue. All tickets are spoken for within seven minutes.

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