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Has UFC Hit An Inflection Point?

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Three recent events indicate that the UFC has reached an inflection point in their business cycle: the decision to cancel UFC 145 in Montreal; the decision to test new UFC fighters for PEDs before signing them; and the UFC's continued stubborn advocacy of SOPA even after it failed.

SAN JOSE, CA - NOVEMBER 19: UFC President Dana White attends the UFC 139 post-fight press conference at the HP Pavilion on November 19, 2011 in San Jose, California. (Photo by Josh Hedges/Zuffa LLC/Zuffa LLC via Getty Images).
SAN JOSE, CA - NOVEMBER 19: UFC President Dana White attends the UFC 139 post-fight press conference at the HP Pavilion on November 19, 2011 in San Jose, California. (Photo by Josh Hedges/Zuffa LLC/Zuffa LLC via Getty Images).

Its obvious that the UFC has entered a new phase of its history with the move from Spike TV to Fox/FX/Fuel and the loss of their two biggest pay-per-view draws Brock Lesnar and welterweight champ Georges St. Pierre. This is a critical phase in which the trajectory of the business for the next 18 months to 3 years will be determined.

Three unrelated events over the last week have made me suspect that the UFC might have hit an "inflection point" in the life of their business. For those of you who didn't take calculus, an "inflection point" is the point on a curve where it changes direction. For a fight promotion like the UFC an inflection point is a critical point in time that determines whether the next phase of the business will be one of growth, stagnation or decline.

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The recent three events that may hint at the direction of the UFC's fortunes in the near term were:

  1. The decision to cancel the planned March 24 UFC 145 pay-per-view from Montreal
    While its a retreat, it's the most positive sign of all. This is the first time ever that the UFC has cancelled or postponed an already announced (pay-per-view) PPV. Since at least UFC 108 when the planned Rashad Evans vs. Quinton Jackson headliner was replaced by Evans vs. Thiago Silva, the promotion has pressed forward with numerous weak events after losing their planned headliner.

    This is a classic case of swallowing their pride and doing the right thing for the business. After a three-year period in which even the weakest UFC sold 350,000+ PPV buys, the UFC's string of weak headliners in 2010 and 2011 saw their base fall to just over 200,000 PPVs.

  2. The decision to begin testing fighters for performance enhancing drugs (PED)
    The UFC has long relied on a strategy of pushing any responsibility for testing MMA fighters onto the athletic commissions of the states in which they compete. UFC President Dana White has often publicly commented to the effect that MMA is one of the most toughly regulated sports for PEDs due to the testing by athletic commissions. The fact that the UFC has long done its own testing in jurisdictions like Texas, Australia and England with little or no public regulation went unmentioned.

    The recent announcement that the UFC will now test new fighters for PEDs before signing them is a long-overdue admission that there is too much to be done to clean up the sport to leave it to the athletic commissions. This willingness to confront PED use by fighters directly is a sign of a maturing business that's willing to confront difficulties before they explode.

  3. The decision of the UFC to continue to publicly endorse SOPA after the failure of the legislation
    Of course for every two steps forward, there's a big step back. The UFC has long supported the movie and recording industries in their lobbying efforts to crack down on Internet piracy. That's understandable since they believe that illegal streaming of their PPVs is seriously hurting their business. Unfortunately they supported the recent SOPA/PIPA legislation and continued to publicly do so after the bills were withdrawn in the aftermath of a massive online protest led by leading websites such as Reddit, Google and Wikipedia. UFC executive VP Lawrence Epstein wrote an op-ed in the Las Vegas Review Journal last Sunday continuing to advocate for the already defeated bills. I have to wonder what their strategy was in advocating for hugely unpopular legislation that had already been defeated.Regardless of their intentions, the result was that they came to the attention of a number of hackers who brought down UFC.com for much of Sunday. Even more ominously, online responses to the op-ed indicate that this is one issue where the UFC does not have the support of their fan base.

All-in-all these moves reflect an organization that is making moves to attack serious issues that present long-term threats to their business. Only time will tell if these are the right moves. Luke Thomas and I will discuss these points in our next video chat so put your thoughts and questions in the comments and we'll respond.