Opportunity Knocks?: The Rising Cost of Original Programming on Cable TV

The May 5 edition of BusinessWeek features an article entitled Spending Like Mad Men on Cable TV. The article notes the growing cost of original programming on cable television which is up to $1 million per episode for one-hour scripted dramas on basic cable and $3 million per episode on premium television. The run-up is threatening to begin eating into profit margins at the networks.

In theory, depending on the success of EliteXC's debut on CBS in May, this trend could create increasing interest in MMA programming. The product is relatively cheap to produce in comparison to other original programming options (at least from the networks' prospective) and has demonstrated an ability to draw viewers and sell subscriptions. The key factor that would seem to be holding back expanded MMA coverage on cable is the lack of mainstream acceptance and success for anyone outside of the UFC, two things that could change on May 31.

One particularly interesting potential development in the television industry that could affect MMA is prospect of a new premium television station started by Paramount, MGM, and Lionsgate. On April 21, the studios announced they will leave Showtime to start their own network in 2009. Such a network could easily be in the market for cheap, attractive programming.

However, according to BusinessWeek, some analysts believe the studios' threat is merely a negotiating ploy. Showtime was asking the studios' to accept a lower fee during negotiations for an extension. It is apparently a difficult time to launch a new network with major cable and satellite companies saving space for HD channels and other services (such as on demand video).

Downsizing: UFC Planning Major Roster Cuts

One of the UFC's favorite talking points in demonstrating its dominance of the MMA industry is the number of fighters it has under exclusive contract. 250 is the standard talking point, although Forbes magazine reported it at 275. According to the Wrestling Observer Newsletter, the actual number is closer to 200, but not for long.

Dave Meltzer reported in the most recent edition of the newsletter that the company plans to cut its roster down significantly, perhaps to as low as 150 or less. The stated rationale is that the company is struggling to keep all of its fighters active, despite having recently increased cards from nine to eleven bouts.

The first casualty of the new policy appears to be Jake O'Brien who was cut after suffering his first career loss to Andrei Arlovski. Kalib Starnes is the latest announced cut, although he claims to have requested a release, but will not be the last. The recently announced move to cut the WEC Light Heavyweight and Middleweight divisions also fits nicely with the new policy.

According to Meltzer, the company's goal is three fights per year for contracted fighters. That number looks about right for the top fighters, but will likely be less well received by mid to lower level fighters who are accustomed to fighting 4-5 times per year at a minimum and depend on their fight purses to a much greater degree than more established names.

Money is another obvious factor in the move. The company is not doing as well financially as it was in 2006 with rumors of a round of layoffs at the corporate office and pressure to reduce costs. As the minimum contracted payouts slowly, but steadily, increase the incentive to sign and stockpile talent diminishes, particularly at the bottom of the card where it becomes cheaper to bring in new talent.

To some degree Tim Sylvia fits into this conversation as well, as an example that the days of simply paying what it takes to keep a guy are over. The company appears to be serious about containing its fighter costs and is willing to let some of its top fighters go.

UFC 83 Review: Breaking Kayfabe

"kayfabe. n. the showbiz and stagecraft of professional wrestling, including the ring personas of professional wrestlers, especially when maintained in public; insider knowledge of professional wrestling." - definition from DoubleTongued.Org (emphasis added)

"We're buddies. We might have a drink together, so please don't do anything to this guy. He's a gentleman. He just said stuff to hype up the fight and I did as well." - George St. Pierre on Matt Serra after his dominant victory at UFC 83

The influence of pro wrestling on the MMA industry is undeniable. Many top executives from across the industry grew up watching WWE, or more appropriately the WWF as it was formerly known, and take many of their cues from Vince McMahon's promotional model. That model is fairly simple at its core: Take two characters. Create a conflict between them. Tell a story that makes people care what happens when they square off. Deliver a resolution. Repeat.

The UFC's biggest business has followed that simple strategy to a tee whether it be Tito Ortiz v. Ken Shamrock, Chuck Liddell v. Tito Ortiz, Randy Couture v. Tim Sylvia, etc. The difference being, those "feuds" or "storylines" are real or at least real enough to be believed to be real by the general public. While everyone understands that "hyping up the fight" is part of the show, the conflicts aren't seen as fake.

The most simplistic explanation of the MMA-pro wrestling crossover is that those fans want to see real fights, but that is only part of the story. If that was the case then the biggest events would likely be those featuring the most competitive fights. Instead the UFC's two biggest pay-per-views in history featured what were believed to be uncompetitive fights. No one thought Shamrock had a chance against Ortiz and few gave Ortiz much of a chance against Liddell.

The fact is that real fights is only part of the equation and perhaps a smaller part than is widely assumed. The results suggest that it is authenticate conflicts that people want to see. That is not to discount the value of the fights themselves, which provide authenticate dispute resolution, but it does go a long way towards explaining why 785,000 will pay to watch a short one sided affair between Ortiz and Shamrock, but roughly half as many, of the same audience, will pay to watch Anderson Silva v. Dan Henderson, a battle of highly regard fighters with no real conflict.

It's also why I expect UFC 83 to do better than expected on pay-per-view. The fight garnered a lot of momentum thanks to the hype surrounding the seemingly real conflict between GSP and Serra. Saturday night fans went home happy with that conflict resolved, however, anyone paying close enough attention got the rug jerked out from the under them by St. Pierre's post fight comments.

As an isolated incident the incredibly brief and relatively unnoticed comment is nothing to get worked up about, but breaking kayfabe on a regular basis is not a good idea for industry. The magic of the hype only works if the audience is allowed to believe that these conflicts are real or at least based in reality. The audience is generally willing to look the other way after the payoff (or resolution) when the hated enemies shake hands and compliment each other, as with Ortiz-Shamrock, but that wink-wink "burying of the hatchet" is different from being outright told they've been had.

So while building the fight and blowing minor conflicts into outright "hatred" is just part of the business, it's part of the business better left unsaid.

Other notes from UFC 83:

• Edge Shaving Gel became the company's latest main stream sponsor with a prominent place on the octagon mat.
  
• Michael Bisbing looked impressive at 185 pounds and would appear to be on the fast track as a charismatic challenger to Anderson Silva's invincible aura.
• Kenny Florian was a stellar stand-in for Joe Rogan and could be in play as Randy Couture's replacement as the third man in the booth.
  

Quick UFC 83 Preview

The Countdown show was revamped and completely remade. The formula was simple, straight forward, and very effective. The focus was on the fighters and off the hype with the typical Dana White sound bites (which I'm actually quite fond of) faded into the background. As a result, the show had more of a sports documentary, reminiscent of the Olympic athlete features of NBC Sports, and less of a barker/hype show feel. The production values were taken up a level with a new graphics package and voice over. The result was one of the strongest shows I can remember.

There is a strong story to be told for the Serra-St. Pierre fight and it was powerfully and cleanly presented it in the first segment of the show, in the words of the fighters and those close to them. From there the show very effectively profiled Serra and St. Pierre in separate segments. Once again instead of using White, Rogan, or a journalist to tell their story, they got it from the horse's mouth or family members. This gave the show a very personal feel and created a strong connection to the fighters, the key to creating stars and selling pay-per-views.

The show might best be described as Countdown unplugged, the acoustic performance compared to the normal rock show hype. The stripped down version was amazingly simple and remarkably effective. This is the issue. These are the fighters. Watch this Saturday to see the resolution.

Interesting to note that St. Pierre and Serra were both shown in Affliction gear.

Saturday is a big night for St. Pierre and the UFC. A GSP victory is critical to the company's changing of the guard. With Couture gone, Ortiz as good as gone, and Hughes and Liddell on there way out, the time to develop new stars is now. GSP, along with Quinton Jackson and Forest Griffin, are being groomed to take over, but each has to earn his spot in the octagon.

The Ultimate Fighter 7 Rating Analysis

The Ultimate Fighter Cumulative Ratings:

Season		Overall		% Change		M18-34		% Change
1		1.6		---		2.2		---
2		1.4		-12.5%		2.5		13.6%
3		1.69		20.7%		2.9		15.6%
4		1.24		-26.6%		2.0		-30.1%
5		1.18		-4.8%		1.6		-20.3%
6		1.12		-5.1%		1.5		-4.3%
Average		1.37		-5.55%		2.13		-5.1%

The Ultimate Fighter is dying and everyone knows it. That's not a knock on anyone, diminishing returns is the reality of television--particularly reality television. The UFC and Spike know it, that's why they're readying its replacement, a live weekly fight series which is scheduled to debut in 2010. However, under terms of the contract extension signed last year, the series is scheduled to continue through 2011 with five more seasons.

To their credit, the powers that be at the UFC and Spike shook things up this year with the new win and you're in the house twist, resulting in the first two episodes featuring 8 fights each. The fight quarter hour is always the highest rated quarter of the show and the conventional thinking is/was that more fights equal better ratings.

That hasn't been borne out this season, with the wall to wall action of the first two episodes drawing a 1.3 and 1.2 respectively. The season premiere's 1.3 rating is the lowest in the series' history. The 1.2 rating for episode two is the second worst rated week two in series history, despite featuring eight qualifying fights.

Those early returns don't seem to bode well for the ratings for season seven. On average, there is a 32.1% decline in the overall rating from episode one to episode twelve. If that pattern holds true this season, the rating for episode twelve would be in the 0.9 range, which would tie the series' worst rated episode (episode twelve of season two which aired outside of its regular time slot).

Of course it should be noted that in looking at the weekly ratings from the past six seasons, it is clear that if TUF were a stock it would have strong support at the 1.0 rating. The critical question this season is will that baseline number hold? If it does, the series can continue as a status quo success. If it doesn't, we may be witnessing the beginning of the end of the TUF era.

Silva-Jones is Off, But a Crossover Bout is Inevitable

The prospective Anderson Silva-Roy Jones Jr boxing match has been nixed by UFC President Dana White. This week Jones expressed disappointment to the NY Daily News:

I don't see how it could discredit the UFC. The guy has boxed before and he's a tall, slick, left handed fighter. That gives everybody problems. It would be a good fight. As fighters we're supposed to be trying to do things that amaze people and make history. This could have been something that people really wanted to see... I just think it's wrong not to allow him (Silva) to get the opportunity to live out his fantasy to be in the ring with one of his heroes. That's the kind of thing that boxing promoters usually do.

According to a recent edition of The Wrestling Observer Newsletter, Silva and his management went into business for themselves on the bout, floating the idea publicly without approaching White. The standard Zuffa contract is exclusive as to all forms of combat sports, making White's approval a prerequisite. White apparently did the calculus and decided the risk outweighed the reward, at least for now (SEE: Crossover Appeal? Mayweather-WWE & Silva-Jones).

A return match in the octagon could be just the stipulation needed to make a high profile boxer v. mixed martial-artist bout a reality. Such an arrangement would in theory provide a split decision result palatable to both sports generating tremendous amounts of revenue. Unfortunately, Jones has no interest in stepping into the cage because he has no wrestling background. However, make no mistake about it, a high profile boxing v. MMA match in a ring/cage near you is a matter of when not if.

MMA Q1 Quick Review

On October 4, 2007, MMAPayout.com offered the following forecast for 2008: "fighter salaries noticeably increase; first high profile free agent bidding wars; UFC loses its first top star; over-saturation; true competitor emerges to challenge the UFC?" That forecast can be divided into three key themes:

1. Increased Leverage for Fighters
2. Over-Saturation
3. Emergence of a Competitor to the UFC
   

With the first quarter of 2008 now in the books, it seems like an appropriate time to look back at how those predictions are holding up so far and to look ahead to what the rest of the year might hold.

The first theme manifested itself even earlier than expected, when Randy Couture resigned from the UFC in late October. The trend has continued through the first quarter of 2008 with Tim Sylvia leaving the UFC and Tito Ortiz announcing his intention to leave later this year. Andrei Arlovski also appears set to test the free agent market (once his exclusive renegotiation period with the UFC expires).

Couture's resignation appears to have emphatically announced a new era of increasing fighter leverage in the MMA industry. Fighters have become more willing to challenge and even leave the UFC, despite its status as the undisputed dominant force in the industry. As more promoters enter the sport, the competition for the top fighters continues to increase and with it their leverage and earning power as well.

Similarly, over-saturation has also become a relevant buzzword for the industry thus far in 2008. On television one needs look no further than last Wednesday's Ultimate Fight Night and Ultimate Fighter 7 debut. The 1.1 rating for UFN 13 has to be considered a disappointment given that the previous twelve installments produced an average 1.46 rating. January's UFN was also well below average with a 1.2 rating. The debut of TUF 7 was the lowest rated premier in the history of the series with a 1.3 rating.

On pay-per-view, the UFC has averaged roughly 400,000 buys each for its first three events of 2008. That's down on average 70,000 buys per event compared to Q1 '07 (two events) and 40,000 off the average for all of 2007. However, that number is a bit misleading since it includes UFC 80, a tape delayed low-caliber international event, which was up compared to UFC 72. Excluding UFC 80, the pay-per-view average is slightly up. Of course, you can also argue that the number is inflated thanks to Brock Lesnar's debut. Overall, the numbers suggest that pay-per-view is holding up thus far under the pressure of an expanded schedule, but it is still too early to issue a verdict.

The final theme that appears to be emerging in 2008 is that of a true competition. The UFC is and will be the 800 pound gorilla of the industry for the foreseeable future, however, some cracks in its armor have emerged in recent months, opening the door for a competitor to establish itself as a legitimate alternative, the Pepsi to the UFC's Coke.

EliteXC instantly cemented its position as the UFC's top competitor with the announcement of a prime time CBS deal. The company has a enormous gap to close in order to become a legitimate alternative to the UFC, particularly on pay-per-view where the UFC remains unchallenged. However, a successful run on CBS for the rest of the year could quickly change the dynamic of the industry, setting the stage for the first signs of legitimate competition in 2009.

Electric: EliteXC-Strikeforce, Shamrock-Le Deliver Memorable Night

The honest truth is that most MMA events, like most sporting events, are forgettable. The event is hyped, some better than others; fans are excited, sometimes more than others; anticipation builds; the event happens, some are more entertaining than others; fans are satisfied, sometimes more than others; and the process repeats itself with the last event forgotten, remembered only for its relevance to the hype of the next event. As the relentless expansion of MMA on television continues, this is phenomenon that will on increase. But occasionally an event, or at least a fight, transcends that pattern and becomes something special.

Only hours removed from the glow, last night's EliteXC-Strikeforce co-promotion, or at the very least its main event, feels like one of those special nights that people remember. From top to bottom this was one of the strongest shows I can recall seeing, with conclusive finishes in every fight, but it was the main event that may transform this from a good show into a legendary show, an "instant classic" in MMA.

The tone for the night was actually set five minutes before the live broadcast began with a brilliant five minute Showtime short interview with Frank Shamrock. It was five of the most effective promotional minutes you will ever see. There was nothing fancy about it, just a get to know you rapid fire interview with Shamrock's charisma turning it into something great. In case you didn't believe he would be one of the biggest draws in the sport instantly with the right television platform, he proved it again later in the broadcast during another promotional piece.

The Shamrock-Le main event is a must see and a rematch is a no brainer. EXC's second CBS date is reportedly set for July, giving Shamrock three months to heal. The politics of the EXC-Strikeforce arrangement have always been difficult and will undoubtedly become more difficult now that both have their own network TV deals, but Le-Shamrock II may be the best fight all of MMA (including the UFC) can offer on network TV right now.

Despite what was probably a disappointing finish for some, the fight is an early fight of the year candidate and one of the best fights I've ever seen. It was such a great fight for three rounds, enhanced by a hot crowd, that I was shocked at the finish (when Shamrock couldn't come out for the fourth round with a broken arm), but not disappointed.

This was a star making turn for Le and perfect timing for Strikeforce as they go national on NBC with Le as the face of the promotion. If NBC representatives were in the building, or even watching at home, it is easy to imagine visions of the rematch live on NBC dancing in their heads. This was that kind of main event on that kind of show.

The weakest segment of the entire broadcast was a live interview with Kimbo Slice in the middle of the cage. He got a nice reaction, but nothing close to a super star reaction, at least not at the level of Shamrock or Le. Even though he's become the face of the brand and is a legitimate phenomenon, EXC has to be careful about shoving him down people's throats. Kimbo has a great look and persona to go with an exciting style, but the segment died when he started talking. In his defense, he was put in a position to fail with nothing to talk about (like who he will be facing on the CBS debut).

It will be interesting to see what kind of numbers the show does to see if there was any bump from the CBS publicity or the strength of the event itself. Speaking of CBS, it's a shame that EliteXC can't bottle tonight for its network television debut because it will be hard pressed to live up to this performance. This was the kind of show that gains traction for a brand, the kind of show that people point to as the turning point for a company. However, given than it was Strikeforce's main event and live promotion, the case can be made that, if there is a turning point to be pointed to, it belongs to Scott Coker and company, not EliteXC.

Crossover Appeal?: Mayweather-WWE & Silva-Jones

Crossover is the current buzzword in sports management. For today's athletes competitive accomplishments are merely a means to an end. Building a brand, reaching new audiences, and crossing over into the mainstream of American culture is the name of the game. As Matt Walker, agent for Randy Couture and Gina Carano, told FIGHT! Magazine, "most of these athletes at the end of the day want to take the celebrity that they’ve built on the field or through their sports and translate that into other opportunities whether that is business, entertainment, or whatever they may want to do.”

Cases in point: Floyd Mayweather and Anderson Silva. Mayweather is currently engaged in a month long tour of duty with WWE, culminating at Wrestlemania on March 30 in a match with the Big Show, while Silva has made news in recent weeks by challenging Roy Jones Jr to a boxing match. But all crossover opportunities are not created equally.

A $20 million appearance fee was floated by WWE and Mayweather's management as the original justification for Mayweather's WWE deal, but it has now become clear that his actual compensation is probably much closer to $2 million plus a pay-per-view bonus. The only remaining rationale is his manager's stated goal of exposing the boxer to WWE's audience of roughly 5 million viewers each week.

Thus far the mainstream buzz generated by the angle has been low with most of the exposure ambivalent at best. Furthermore, according to a recent marketing study cited in the Wrestling Observer Newsletter, only the Jerry Springer show has a more negative image among advertisers than pro wrestling. Therefore it would appear that any benefit gained from WWE would be more than offset by the negative effect on Mayweather's brand of being associated with professional wrestling.

Mayweather's profile has never been higher coming off high profile fights with Oscar de La Hoya and Ricky Hatton, including valuable exposure on the critically acclaimed 24/7 promotional vehicle, as well as a spin on the last season of ABC's Dancing With the Stars. On the heels of that type of mainstream exposure, professional wrestling seems like a step back, particularly with mainstream sponsors.

Silva's challenge of Jones Jr. on the other hand, while certainly risky and perhaps bordering on quixotic, has a tremendous potential upside for Silva and MMA. The first high profile meeting of a martial artist and boxer, whether in the cage or ring, is going to draw significant mainstream interest. Such a contest would legitimize MMA in the mainstream by elevating Silva to the same stature as a legendary boxer.

If Silva were to beat Jones at his own game it would establish MMA as a legitimate sport and mixed martial artists as skilled athletes instead of bar room brawlers in the eyes of the mainstream media. Even in a close defeat, with Silva demonstrating competence in a secondary discipline, Silva and MMA as a whole would be elevated.

The greatest risk of course is an embarrassing loss, particularly a knockout, which would be seized by the established media to paint MMA as boxing's inferior unskilled cousin. That storyline would prove irresistible, despite the obvious fact that boxing is not MMA and Silva is not a boxer by trade. Furthermore, a convincing loss would hurt Silva's air of invincibility, the one thing he has going for him as a draw right now.

The calculus of a potential Silva-Jones boxing match will ultimately be weighed by Dana White, not Anderson Silva. Even if Jones agrees to the bout, the final decision rests with White per Zuffa's standard exclusivity contract clause which covers boxing and professional wrestling in addition to MMA. The proposition is high risk, high reward, which just happens to be White's business philosophy in a nut shell.

Iron Ring Review

Iron Ring premiers on BET this Tuesday night at 11PM EST. The format is basically The Ultimate Fighter meets the IFL with a twist, hip hop celebrity owners. The vehicle appears to be designed as something of an introduction to MMA for BET's primarily African-American audience. The lack of diversity in the MMA demographic has been a topic of concern for some in and out of the industry.

The one hour premier episode (two thirty minute episodes combined) focuses largely on the celebrity owners and their coaches. The show has a gritty feel provided by low key production and locations as well as a strong hip hop influence. The opening scenes looks more like the rawness of fight club than the spectacle of major MMA. Whether this will be the case once the actual competition begins remains to be seen, but the product definitely has a distinctive feel, unlike any other MMA production. Street Certified may be a more appropriate title for the series than it was for EliteXC's previous offering.

The competition features six teams and takes place in three weight classes, Lightweight (170lbs for purposes of the show), Middleweight , and Heavyweight. There was no sign of a cage in week one with all the action taking place in a ring. Rashon Kahn plays the Dana White role as "arbitrator" of the competition and motivational speaker, although I seriously doubt Kahn can live up to Dana's "do you want to be a fighter" speech.

The first thirty minutes offer no fights or fighters, focusing exclusively on the owners and coaches of the teams. The only two coaches familiar to MMA fans are Krazy Horse Bennett and Shonie Carter. The second half of the premier episode focuses on the tryout process, one TUF style workout followed by a win and you're in type exhibition tryout.

Team Luda and Dipset are announced on the show with the tease for the following week built around a cut fighter trying to fight his way back onto the show. The complete team rosters are:

• MONEY MAYWEATHER BOYS
• Owner - Floyd Mayweather
• Coach - Roberto Traven
• LW - Andy Roberts
• MW - Dymond Jones
• HW - Abdelaziz Essafoul
  
• TEAM LUDA
• Owner - Ludacris
• Coach - Abdul Mutakabbir
• LW - Joe Comacho
• MW - John Fields
• MW - Franz Mendez
• HW - Joe McCall
  
• TEAM NELLY
• Owner - Nelly
• Coach - Jermaine Andre
• LW - Eric Marriott
• MW - Darryl Cobb
• HW - Mike Cook
  
• TEAM GRAND HUSTLE
• Owner - T.I.
• Coach - Charles "Krazy Horse" Bennett
• LW - Josh Gaskins
• MW - Primus Moore
• MW - Jamie Yager
• HW - Joe Thomas
  
• TEAM DIPSET
• Owner - Dipset (Julez Santana & Jim Jones)
• Coach - Novell G. Bell
• LW - Josh Key
• MW - Daniel Akinyemi
• HW - Carlos Moreno
  
• HEAD BUSTERS
• Owner - Lil John
• Coach - Shonie Carter
• LW - Macrus Brimmage
• MW - Brian Rodgers
• HW - Abongo Humphrey

Ultimately, Iron Ring is likely more interesting for what it might inspire rather than what it actually is. Expanding MMA's demographic reach is an important component in the sport's continued growth and mainstream acceptance. Instead of just another MMA series, it may ultimately be remembered as the industry's first inroad into the African-American demographic.

Ready for Prime Time?: EliteXC on CBS

ProElite has what UFC President Dana White so desperately wanted and has publicly stated is the next important step for the MMA industry: network television. But the old adage goes, be careful what you wish for because you just might get it. Has ProElite, and with it the entire MMA industry, bitten off more than it can chew? Is MMA in general and EliteXC in particular ready for prime time?

The answer to that question will shape the future of the industry. EliteXC on CBS will either prove to be a ratings hit and other promotions will see their opportunities expanded or MMA will be branded a mainstream failure, a niche audience with no place on major network television. That’s why as much as White despises his competition even he has to hope his rival does at least good enough numbers to keep the door open for the UFC.

“The CBS deal didn’t work for us,” White said recently. “At the end of the day, listen, when you are talking about a show like ProElite or any of these other shows, they will give up their right (expletive) to get on television. They will give away everything to be on TV.”

This statement, along with statements by Top Rank’s Bob Arum, seem to confirm what MMAPayout.com has reported before, that the ProElite-CBS deal more closely resembles a quote-unquote “time buy” than either side is anxious to admit. There is no shame in that fact, while the UFC as the questioned industry leader is in position to hold out for creative control and a fairer financial deal, ProElite, as the challenger who had been largely treading water at best, had nothing to lose and everything to gain by making a deal with CBS by any means necessary.

The UFC on the other hand has already established itself as the only viable company in the sport and the unquestioned giant of the industry. In the eyes of the mainstream media and corporate world, the UFC is MMA. With its position secure, the UFC has little incentive to risk its reputation and position on a deal that doesn’t give it whatever it believes it needs to be successful on network television.

However, by ceding leadership of the industry to ProElite on major network television, White has now effectively put Doug DeLuca and Gary Shaw in charge of securing a favorable outcome for the entire industry, the UFC included. EliteXC’s numbers on CBS will hang around the neck of every promoter in the industry during negotiations with television partners for years to come. If successful, a major new revenue stream in the form of lucrative rights fees may be opened up to the industry as a whole. If ProElite fails, MMA risks losing its mystique as the fastest growing sport in the country and all the financial opportunities and exposure that goes with it.

Such an important task would almost certainly be better left to White and the UFC. Granted there are criticisms to be made of White, but the fact remains that he is the only promoter who has proven he can make this product work. As much as others in the industry may dislike him and his company’s aggressive trade practices, it the UFC’s growth, under White’s distinctive leadership, that has opened the door for everyone else in the industry. As White is all too fond of saying, MMA is not hot, the UFC is.

There seems to be a fairly strong sentiment within the industry that EliteXC is facing an uphill battle to draw the kind of numbers that would equal success on a major broadcast network. The UFC's biggest overall rating is a 3.1 (average of 4.7 million viewers) for UFC 75. That event featured Quinton Jackson v. Dan Henderson in the most watched fight in the history of MMA with 5.9 million viewers.

To put those numbers in perspective, CBS through February of this year is reportedly averaging almost 11 million prime time viewers.

In searching for benchmarks for MMA on network TV, a frequent comparison is made to World Wrestling Entertainment. From 1985 through 1992 WWE's Saturday Night Main Event was a major draw on network TV, averaging a 9.3 rating during that span. The recent reincarnation has been a flop, averaging a 2.55.

What changed? A major factor, outside of increased competition from cable television, seems to be the product’s increased exposure. With four hours of original first run programming each week, some would say that today’s WWE is overexposed despite the fact that on average the programs draw 4.2-5.7 million viewers per week. During the company’s glory run on NBC and FOX major weekly television shows were not part of the equation, making network television specials must see TV.

Overexposure has been a hot topic of debate in MMA this year, particularly with the UFC’s ever expanding pay-per-view schedule. However, without the presence of a glut of original weekly programming, or the temperance of a $44.95 price tag, it is hard to believe MMA will suffer the same fate as the WWE recently has on network television.

One of the biggest overlooked factors in the ultimate success of the entire venture is how much promotional money CBS will put behind the events? Will the network fully embrace the sport with a major integrated rollout or simply shove EliteXC into the television wasteland of Saturday night to sink or swim on its own?

Early indications from inside the network and CBS’s financial investment in the company suggest that if EliteXC fails it won’t be for lack of network support. However, the structure of the deal reveals a strong, but fluid relationship between the two companies. CBS is invested in ProElite, but not truly committed. Look at your breakfast plate for the difference. The chicken is invested, but the pig is committed.

New Era?: UFC Debuts on Yahoo! Pay-per-view

UFC 82 may ultimately be remembered as a milestone in the MMA industry, the first pay-per-view event distributed online by Yahoo! Sports. As part of a clever promotional campaign, and convenient beta testing program, Yahoo! made the online feed available for free to members of the online media. The results, at least based on my personal experience, were sterling.

I consider myself somewhere in the middle of the great technology divide that separates the tech savvy from the technophobe. Two simple cable connections, one quick scan of a randomly Googled (my apologies to Yahoo!) how to guide, and ten minutes later my television was broadcasting the Yahoo! internet feed in picture perfect quality.

At the risk of sounding like a cheap shill whose opinion was bought and sold for $44.95, the quality of the feed was impeccable and the experience was surprisingly painless. Outside of the fact that I was unable to take advantage of my full television screen, which I presume was the result of own ineptitude and/or personal technological limitations, there was no discernible difference between the standard pay-per-view experience and the Yahoo! pay-per-view experience.

That said, there is also no discernible benefit to buying the online version, at least for now. Yahoo! touted that the replay is available for 24 hours following its conclusion and it can be viewed by fight/chapter, but noticeably missing is the greatest promise of internet pay-per-view, a lower price tag.

Assuming that the basic assumptions about internet pay-per-view are true, then theoretically Zuffa has every incentive to drive business online by offering a lower price point. In theory the move would be more than compensated by a more favorable revenue split (with Yahoo! as compared to cable distributors, although as Zuffa's stature has increased, so has its leverage with distributors) and increased buys as a result of a lower price point.

But that will not happen anytime soon because Zuffa (or WWE or HBO Boxing) simply cannot risk raising the ire of the traditional television pay-per-view industry by aggressively driving consumers online with more attractive price points and a value added product. While the balance of power is shifting, the online revolution is simply not mature enough to sustain the company.

The traditional pay-per-view industry would retaliate against any move that threatened to cannibalize it. The UFC product could be deemphasized by cable and satellite distributors with dire results for Zuffa's bottom line. Put simply, the current dominant pay-per-view distributors could literally run Zuffa out of business by cutting the marketing, specifically direct targeted marketing, and placement of UFC events before Zuffa could successfully convert its audience online.

As an example, assume that Zuffa began offering UFC events on Yahoo! for $23, roughly half the price of what traditional cable or satellite providers currently charge. It is likely that those providers have most favored nation status when it comes to UFC pay-per-view, meaning they have first right of refusal on price point. They would likely balk at a significantly lower exclusive online price point.

Zuffa has already experienced a mild rebuke from the traditional distributors after it experienced early success with online streaming, thanks at least in part to a heavy promotional push for UFC.com and UFC on Demand during its pay-per-view broadcasts. As a result of pressure from the distributors, Zuffa stopped marketing its online pay-per-view steam in 2006, but maintained the product on its own website.

So if prices cannot be reduced, at least in the near term, what can Yahoo! offer that traditional pay-per-view cannot or will not? That is the (multi) million dollar question and one that the online world is waiting for the answer to.

One likely value added feature is exclusive content in the form of extra fights that cannot be shown on cable/satellite because of maximum time commitments. Yahoo!’s greatest advantage as a distributor might be its unlimited platform, in terms of time, allowing it to provide virtually endless extra content. It remains to be seen what other tricks Yahoo! may have up its sleeve in the pending pay-per-view arms race.

A new era may be dawning in the MMA industry in the form of online pay-per-view streaming, but its zenith is years away. Until then Yahoo! will spend its time refining the logistics of the new platform and quietly exposing consumers to its possibilities. The future is coming, but its not here yet.

UFC 82 Review: All Hail the King

One fact was inescapable in the the hype leading up to UFC 82: in Dana White's mind, Anderson Silva is the best pound for pound fighter in the world. White's campaign for Silva has been relentless since UFC 77, and deservedly so given Silva's reign of terror in the UFC (6-0 by way of 4 KOs and 2 submissions, all without leaving the second round). The Countdown show for UFC 82 was filled with enough references to Silva's status as "the best pound for pound fighter in the world" to leave even the skeptic subliminally convinced.

Saturday night Silva proved White right, turning in another stunningly brilliant performance that cemented his place on the throne of MMA. Simply put, there is no one in the sport today with the air of invincibility that surrounds Silva. Georges St. Pierre is undoubtedly the superior athlete, but make no mistake about it, until GSP decimates a division the way the Silva has, there can be no debate: Anderson Silva is the undisputed King of MMA.

What Silva means to business remains to be seen, he has yet to prove himself as a pay-per-view draw, but has arguably been hampered by a lack of marque challengers in the middleweight division. For all his accolades, Rich Franklin, Silva's most prominent opponent, has never shown to be much of a pay-per-view draw himself. Given Dan Henderson's limited exposure in the United States, its hard to imagine this event being Silva's pay-per-view breakout, but its possible given the undisputed champion angle, plus Silva's dominance and Henderson's high profile loss to Quinton Jackson last September.

Where Silva goes from here is a question mark. The next obvious fight is Yushin Okami who holds the last victory over Silva, albeit by disqualification. Regardless of Silva's stature, that fight will mean very little for business. The biggest money matches on the table for Silva at 185 would come in the form of welterweights Matt Hughes and the aforementioned St. Pierre.

The most predictable direction would be Silva-Okami in the late summer leading to a big match for Silva in December against either Hughes or St. Pierre stepping up in weight. There has been some talk of Silva stepping up to Light Heavyweight, but that seems premature with that division already stacked, not to mention whether or not Silva truly has the body to compete at 205.

In the post event press conference, White said that he was working on some major things for Silva, but declined to tip his hand. Leading up to the fight Silva talked about challenging the top boxers in his weight class following a win over Henderson. Most inside the industry believe that a major boxer v. mixed martial-artist fight is bound to happen eventually, once the money is right. Could White have something up his sleeve? Only time will tell.

The rest of the live card was exciting at times, but sorely lacking in star power. The entire card was promoted solely on the strength of the main event, which combined with a relatively bland under card, created, for better or worse, a big time boxing feel. Whether that was the shadow casted by a highly anticipated main event or the first effects of dilution, both in product and perceived importance, remains to be seen.

The biggest news coming out of the show was the announcement of Brock Lesnar v. Mark Coleman for in August from Minneapolis. Hind sight being 20/20, that looks like the fight that should have been Lesnar's first. The questions raised before concerning the longevity of Lesnar's drawing power remain, but with Coleman as an opponent, as opposed to the rumored match up with Justin McCully, the odds of another big pay-per-view number are greatly enhanced.

UFC 82 Preview

A busy week on the business side has nearly overshadowed UFC 82. The show got a solid build on the Countdown show. Silva-Henderson is definitely a highly anticipated fight among the hardcore fan base, but what about the casual/mainstream fans? That is the difference between a baseline show in the 350-400,000 range and a breakout show above 500,000.

Silva's track record on pay-per-view is fairly consistent:

• 10/26/06 - UFC 64 - Silva v. Franklin - 300,000
• 2/3/07 - UFC 67 - Silva v. Lutter - 400,000
• 7/7/07 - UFC 73 - Silva v. Marquardt -425,000 (also featured Ortiz v. Evans)
• 10/20/07 - UFC 77 - Silva v. Franklin II - 325,000

Henderson has never headlined a UFC pay-per-view before, however, his last fight with Quinton Jackson was watched by 5.9 million on Spike, making it the highest rated fight in MMA history.

At the end of the day, its hard for me to see this show topping 500,000, but I still believe that Silva is gaining momentum as a draw. Silva's it factor combined with Henderson's exposure of Spike could lead to an upside surprise here.

The co-main event of Heath Herring v. Cheick Kongo leaves a lot to be desired and is a testament to where the heavyweight division is right now. The live card is rounded out by a pair of Middleweight contender fights showcasing Chris Leban and Yushin Okami, as well as the return of Evan Tanner and a place holder fight for Jon Fitch.

The most interesting fights, at least from a business perspective, may be taking place off the live broadcast as Andrei Arlovski and Josh Koscheck each finish their current UFC contracts. Dana White stated at yesterday's press conference that he intends to resign them both, but with the entry of several new players as well as aggressive moves by EliteXC and HDNet Fights, this promises to be the most competitive free agent market the industry has seen.

Birds of a Feather: Zuffa's Future in Light of WWE's 2007 Financial Results

World Wrestling Entertainment probably deserves more attention in the MMA industry than it receives. The company is the Zuffa's closest corporate comparable, not to mention growing evidence that suggests pro wrestling, not boxing, is MMA's true competition. Furthermore, Dana White is an admitted admirer of Vince McMahon and the similarities between the company's promotional models is undeniable. In many ways WWE is what Zuffa aspires to be.

This month WWE announced its results from the fourth quarter and full year of 2007. The headline number was an all-time record $485 million in full year revenue. That number represents a 17% increase over 2006.

The company posted a EBITDA of $77.8 million, up from $74.3 million last year. Excluding the $15.7 million loss the company took on a feature film, EBITDA would have been $93.5 million, a 26% increase over last year. For comparison, Zuffa is believed to have grossed $190 million in 2006, with an EBITDA of $76 million.

In looking at WWE's finances, compared with what we know about Zuffa's, it's interesting to see just how diversified WWE has become, which is perhaps an indication of where Zuffa's future lies. The company began, much like Zuffa, as primarily a live events and pay-per-view company, however, today those two sources account for only roughly 40% of its total revenues, compared to 75% for Zuffa.

Consumer products and digital media were WWE's growth leaders with each posting its own 24% increase in revenue over last year. Live and televised event revenue was up 8% with much of the increase attributable to increased international touring. Pay-per-view was relatively flat at $94.3 million compared to $93.6 million last year. That number includes Wrestlemania 23 which drew 1.2 million total buys and over 750,000 domestic buys.

The most obvious under developed revenue streams for Zuffa are in the area of merchandising and licensing. Zuffa appears to be moving in that direction with a video game in development and the mass mailing of a merchandise catalog last fall. However, it will be interesting to see how the company handles what may become a difficult situation moving forward as it tries to develop its merchandise business. Unlike WWE where performers get a cut of merchandise sales, Zuffa pays no merchandise royalties to its fighters per the exclusive ancillary rights clause in the standard Zuffa contract. That played a significant role in Randy Couture's dispute with the company and will become an increasingly sensitive issue as merchandise revenue accelerates.

Zuffa also has the potential for substantial growth of its television rights fees, especially if the company is able to establish a successful live weekly format scheduled to debut in 2010. WWE took in $92 million in television rights fees last year, principally for four hours of original weekly programming. In contrast, the UFC is believed to receive roughly $33 million per year in television rights fees from Spike for two seasons of the Ultimate Fighter, four live events, and a handful of new episodes of Unleashed under the terms of its recent contract extension.

Diversifying its revenue streams is particularly important for Zuffa because there doesn't seem to be much room for significant growth on pay-per-view, at least not domestically. It's hard to imagine the company can do much better than the 500,000 per show it averaged in 2006. In fact, many believe that is is unlikely to be able to merely sustain those numbers. Pay-per-view in the United States at this point is simply not a growth business.

Buys for typical shows should flatten out at best over the long term while there is room for growth on the mega shows (with two million looking like the ceiling base on Oscar De La Hoya's last fight). The realities of domestic pay-per-view are likely a big factor in the company's international push. WWE has already developed a very strong international pay-per-view business.

Like WWE, new media and international expansion are also key growth areas. For Zuffa, international expansion still seems a bit premature given that by White's own admission the company has only scratched the surface of its potential in the United States. However, it is becoming obvious that part of the company's urgency regarding international expansion relates to its major new media initiative with Yahoo!. White has consistently associated the two together in public, including in last week's announcement of Yahoo! as the UFC's online pay-per-view distributor.

As discussed before, internet pay-per-view has the potential to change the entire industry, a subject worthy of a discussion all its own.

The comparison between WWE and Zuffa takes on even more significance given a recent report in the Wrestling Observer Newsletter that WWE is at least investigating the possibility of entering the MMA space. This is not a new development, however, it has taken on increased scrutiny in light of rumors that the UFC may be for sale. The company has flirted with MMA before including a meeting with Dream Stage Entertainment about purchasing Pride last year and being solicited by Dana White in 2004 when the Fertitta's were considering selling the UFC.

It is interesting to consider the value of Zuffa in light of the recent sale rumors and the closely comparable relationship between the two companies. WWE has a market cap of $1.28 billion, roughly 16.4 times its 2007 EBITDA. Therefore, using Zuffa's reported 2006 EBITDA of $76 million, Zuffa would be valued at roughly $1.25 billion.

However, it should be noted that 2006 represented the company's best year and all indications are that 2007's EBITDA, and thus value, was significantly lower, perhaps as much as 50% lower. The company has also secured a $350 million secured credit facility since that time, which must be factored into valuation.

Perhaps most importantly, it remains to be seen whether or not Zuffa's current business model, the one that closely resembles the WWE, can be maintained going forward. Most within the industry believe that a model more closely resembling boxing is inevitable and there are growing signs that the company's current promotional model is under attack.

If true, Zuffa's window to become the WWE of MMA may be closing before it was ever really opened.

Upon Closer Examination: Impact of HDNet v. Zuffa on Couture-UFC Dispute

HDNet Fights shocked the MMA industry this week when it entered the legal fray of the ongoing dispute between Randy Couture and the UFC. The complaint has not surfaced yet, but from conversations with those familiar with it and the larger legal proceedings, MMAPayout.com has identified several issues that bear watching.

The most interesting immediate legal issue raised by the suit is the exclusive jurisdiction/venue clause contained by all Zuffa promotional contracts. The clause, a standard feature of contract law, names the 8th Judicial District of Nevada as the exclusive site of any litigation arising out of the contract. Because HDNet Fights is not a party to the contract, it is presumably not bound by the clause, therefore allowing the action to proceed in Texas. However, regardless of the venue, the contract will interpreted under Nevada law.

There are several potential advantages of proceeding in Texas. First, the state is believed to have more lenient legal standards concerning declaratory judgments. The ripeness doctrine in particular is reportedly more plaintiff friendly in Texas than Nevada. Ripeness is a legal term that refers to whether or not an issue is ready to be decided in court.

Another obvious advantage is the shifting of the home field advantage. Lawyers often worry about "home cooking" when one of the parties has strong ties to the local community in which a case is pending, and there is no doubt that Nevada is Zuffa's comfort zone. However, sources have told MMAPayout.com that the judge handling the case in Las Vegas has a reputation for fairness and Couture is expected to receive a fair shake. Nonetheless, in Las Vegas HDNet Fights and/or Couture must find local counsel to battle Zuffa's experienced local attorneys, whereas in Texas, it is Zuffa that will be forced to retain new counsel licensed to practice in Texas.

The biggest advantage of the move may be the systemic shock it represents to Zuffa. Zuffa is used to dictating the terms, timing, and location of its battles. By unexpectedly filing suit in Texas, HDNet Fights surprised Zuffa and put the company on its heels. Essentially, until this point the company has been on the offensive in the Couture dispute. Now it must play defense.

Another significant benefit for Couture that can't be overlooked is legal fees. With HDNet Fights shouldering the declaratory judgment action, Couture stands to save hundreds of thousands of dollars in legal fees. This also negates the advantage Zuffa has over Couture when it comes to financial resources. Without HDNet's "support," Couture faced the real possibility of being financially strained by the proceedings, providing Zuffa with the kind of leverage necessary to force a favorable settlement and even potentially force Couture back into the octagon. At the end of the day, Mark Cuban, like the Fertittas, can spend whatever he deems necessary in pursuit of a favorable outcome.

It remains to be seen whether the Texas court will accept the case and what Zuffa's response will be. Zuffa could ask for removal to Federal Court under diversity of citizenship, however, that move may be complicated if the company is also registered in Texas. It also seems likely that Zuffa will move to add HDNet Fights and possibly Mark Cuban himself to its lawsuit against Couture in Nevada, using the Texas suit as evidence of a conspiracy to commit tortious acts. Ironically, that move might play into Couture's hands by allowing HDNet Fights to shoulder the financial burden there as well.

If the Texas court does exercise its jurisdiction and ultimately enters a decision in the case, several more complex legal issues may arise. Per the doctrine of res judicata, an earlier resolution of Couture's contractual status by a Texas court would presumably be binding in Nevada. However, Nevada might be reluctant to abide by Texas's interpretation of Nevada contract law under the circumstances.

If Texas and Nevada were to each offer competing interpretations of the contract, the dispute could enter Federal Court for a final resolution. In such a scenario, it seems hard to imagine the Federal Courts enforcing a Texas court's interpretation of a complex contractual issue under Nevada law over a Nevada court's own interpretation.

Despite many uncertainties, one fact is very clear: the entry of HDNet Fights into the dispute significantly changes the equation for all parties involved moving forward.

Special Thanks to Jeff Thaler of FightOpinion.com and JM.

EliteXC Street Certified Preview

The eyes of the MMA world are focused on Miami this weekend, where tonight EliteXC presents Street Certified. The event is reportedly a sellout (capacity around 7,000) and will air live on Showtime. The main event is one of the more interesting fights booked so far this year as street fighter turned professional fighter Kimbo Slice takes on the UFC's legendary tough man Tank Abbott.

EXC has taken some heat for the Kimbo-Tank fight, undeservedly so in my opinion. The first goal of any promoter has to be to make money, true competition comes second. No one will argue that this is a top 10 heavyweight fight, or that it has major implications for the division, but what is undeniable is the importance of the fight for the company.

For better or worse, Gary Shaw has chosen to build around an internet legend in the form of Kimbo Slice. It's been mildly successful, outside of Frank Shamrock's fights this is probably the most anticipated fight the promotion has put on. Slice has even garnered some mainstream media coverage such as an appearance on Jimmy Kimmel Live.

I would describe his first fight as disappointing, though through no fault of his own, and this is important chance for him to pick up an impressive win over a name opponent. I'm not sure where Kimbo goes from here with a win, but the gig may be up as anything more than a mid-card curiosity with a loss.

Click here for a full preview from Sam Caplan.

In Focus: The WEC

The WEC is live on Versus tonight from Albuquerque, New Mexico in the brand's first venture outside of the friendly confines of Las Vegas since being acquired by Zuffa. The card is strong from top to bottom with three title fights. The only thing missing is star power, specifically the brand's golden boy Urjah Faber. Our friend Sam Caplan has a full rundown of the card at ProElite.com.

In a familiar situation, Spike is counter programming with UFC Unleashed at 9 & 11PM. I recently had the opportunity to speak with Brian Diamond, Vice President of Sports at Spike, for an upcoming FIGHT! magazine piece on the relationship between the UFC and Spike. Diamond indicated that he stays in touch with his counterpart at Versus to make sure they don't get in each others way. However, it appears that cooperation doesn't go much deeper than not going live head-to-head, something Zuffa wouldn't allow anyway, as both have chosen Wednesday night as the home of their respective MMA brands and consistently go head-to-head.

Despite the fact that it produces an entertaining product and is arguably the second best brand/promotion in the industry, the WEC's future is not entirely clear. The stated goal, at least for public consumption, is to build a brand on par with the UFC, something that I don't believe will ever be allowed to happen. It is possible to envision the brand becoming, if it isn't already, the premier 145 pound and below promotion in the world, but what that's really worth remains to be seen. I could see a future in Japan and Latin America for the brand given the lighter weight focus.

The WEC is scheduled for six shows in 2008 with plans to take the brand on the road with California, Texas, Okalohoma, New Jersey, and Florida mentioned as possible destinations by Vice President Peter Dropick. The brand is also eying its first pay-per-view event, most likely built around Faber v. Jens Pulver.

It is hard to see the financial payoff for Zuffa of promoting a second pay-per-view brand. WWE, with a legitimately equal second brand, ultimately found diminishing returns in its experience with multiple pay-per-view brands. WWE currently maintains three television brands, but has shifted from separately branded pay-per-views to tri-branded pay-per-views.

Furthermore, as the UFC continues to expand its live event schedule, the pressure will become greater to use the WEC as a farm system for the UFC, plucking the top talent for "the big show," or to merge the brands outright.

For now, it seems the only practical reason for the brand's existence is ultimately its television deal with Versus. The brand was explicitly purchased by Zuffa in order to allow it to enter into an agreement with Versus, thus blocking a competitor from a relatively strong television clearance. Until that contract expires and the network loses interest in UFC-lite, the WEC appears set to wander on producing some of the most exciting shows in MMA, but ultimately facing the glass ceiling of being Zuffa's B-brand.

Final Thoughts Before UFC 81

The event got the A-treatment on the Countdown show with the enhanced graphics and quasi-24/7 feel that marked the build for UFC 79. Word on the street is that the company is expecting somewhere in the neighborhood of 700,000 buys on the strength of Brock Lesnar. That seems a little high to me given that only two shows have ever drawn that, both of which featured two top flight stars (Ortiz v. Liddell, Shamrock v. Ortiz) at time when the company was much hotter.

I would expect something closer to the 500,000 range, maybe approaching 600,000. That said this is something of uncharted territory since the company has never made a direct marketing push to pro wrestling fans using a former WWE Super Star. There will be a lot of people, inside and outside the company, very interested in the pay-per-view results.

Lesnar looked like a star and the company did a good job creating interest in his debut. Several people who aren't fans of the sport have volunteered to me that they are intrigued by the fight and interested in seeing it just based on the television commercials. These folks also aren't pro wrestling fans, which suggests anecdotally that Lesnar has some appeal to the general public just based on his natural charisma and freak genetics. He may have hit the nail on the head during the Countdown show when he said that the public is hungry for a legitimate physically dominant heavyweight.

Of course the only thing standing in the way of Lesnar fulfilling that hunger is Frank Mir. Mir has become a trendy underdog pick in the media. While I don't normally make predictions, I think that Lesnar is not only going to win the fight, but I expect him to finish Mir in impressive fashion. Monday's headline will be "UFC 81 Review: The Next Big Thing."

The other big storyline of the Countdown show was the complete absence of Randy Couture from the conversation in building up Sylvia-Nogueira. Not unexpected, but amazing none the less. Even more interesting is the duplicity between the company's statements to the media and its direct statements to its fans.

The willingness to address, incesantly, the Couture situation to the media while ignoring it on the company's broadcast seems to suggest that White believes the company's audience views the UFC more as an entertainment production, a spectacle if you will, than a sport. A small percentage of the audience for CSI, or perhaps more analogously American Gladiators or WWE, follow the show behind the scenes, they are largely interested only in the product itself. Whereas in professional sports, a great percentage, I would say a majority, of the audience is equally attuned to what is going on off the field as it is to the sporting events themselves.

SEE ALSO: UFC 81 Preview: The Pro Wrestling Push

UFC 81 Preview: The Pro Wrestling Push

In case you haven't noticed, UFC 81 is shaping up to be something of a major marketing test in the MMA industry. One of the biggest questions in the industry today is where does the sport draw it's burgeoning audience from? Despite the media's preference of the boxing v. MMA narrative, which is enthusiastically embraced by some of the sport's most ardent fans, there is a growing body of evidence to suggest that pro wrestling is MMA's closest comparable and biggest competitor.

The results of UFC 81 will go a long way towards answering that question with the event's marketing built on former WWE Superstar Brock Lesnar's ample shoulders. The UFC has chosen to explicitly target the pro wrestling audience, reaching separate deals with the two largest companies in the professional wrestling industry, WWE and TNA.

The company purchased footage of Lesnar as well as a promotional push on WWE.com from the WWE for what was reportedly a nominal fee, while TNA has aired a series of vignettes with Kurt Angle, pro wrestler and former Olympic Gold Medalist in wrestling, promoting the Lesnar-Mir matchup. Additionally, commercials for UFC 81 will be in heavy rotation during WWE RAW and Smackdown and the company distributed promotional materials at last night's WWE Royal Rumble in Madison Square Garden.

The UFC's motive's are obvious as Lesnar is a virtual unknown outside of the WWE audience. Despite Dana White's public reluctance to fully embrace pro wrestling, he is obviously betting that the UFC does draw from the pro wrestling audience and that Lesnar can expand that segment of the audience. It's a fairly low risk opportunity for the UFC to expand its audience, although there has been some backlash from the "hardcore" fan base at the promotion of a pro wrestler, especially at the expense of an interim Heavyweight Title fight pitting two top five fighters.

TNA's participation is easily explained by the fact that it is a fellow Spike property and depends on the network's support for its continued meager existence. It's not hard to imagine that if White went to Spike and wanted time on TNA, TNA had little choice but to be more than willing to give it. The WWE on the other hand is harder to explain.

It was McMahon's blessing that allowed the UFC onto Spike in 2005 and thus launched the company's current run. Hindsight being 20/20, with growing evidence that the WWE's declining pay-per-view numbers may be correlated to the UFC's increasing numbers, the conventional wisdom is that McMahon might regret that decision. However, on it's face, cooperating with the UFC's push of Lesnar certainly doesn't suggest much heart burn on McMahon's part.

The other interesting storyline of UFC 81 will be the promotion's handling of Tim Sylvia-Antonio Nogueira. The fight is officially for the Interim Heavyweight Title despite the fact that the company has still not acknowledged Randy Couture's resignation which precipitated the interim title match. If the past four months are any indication, the odds of a frank discussion of the Couture situation are slim to say the least.

However, the company's handling of Sean Sherk's steroid suspension during UFC 81 was mildly encouraging. The issue was addressed frankly on the Countdown show, but was completely glossed over on the pay-per-view, despite the fact that Sherk did commentary for the Lightweight Title fight. Depending on your perspective the combination was either a small step forward towards a legitimate sports approach that acknowledges inconvenient truths or a muddled compromise that leaves everyone unsatisfied and confused.

The key difference between Couture and Sherk is that Sherk is still with the company and his suspension will inevitably be a big part of the build for his fight with Penn, whereas Couture is no longer with the company, is embroiled in a bitter legal dispute, and by all indications intends to fight elsewhere as soon as possible.

In other words, the company was essentially forced to acknowledge Sherk's situation, whereas if they can get through the build for Sylvia-Nogueira without acknowledging Couture, they can arguably simply pretend he never existed from here on out with little consequence to business. They have made it almost four months without confronting the issue, stopping now would almost be a waste, creditability with its audience does not seem to be a commodity that the UFC values.

The rest of the live card is rounded out by Jeremy Horn v. Nate Marquardt and Ricardo Almeida v. Alan Belcher in a pair of fights that could quickly put the winners in contention in the thin Middleweight division. The swing bout has the potential to be the best fight of the night as Gleison Tibau faces Tyson Griffin in the 155-pound division.