Dave Doyle: “Would the WEC fighters lose something if you moved them from the smaller WEC cage to the bigger UFC Octagon?”

Dana White: “Actually, we’ve been talking about making the Octagon smaller. We’re considering making it smaller. [UFC matchmaker] Joe Silva wants it. I think he wants to turn the thing into a [expletive] bathtub. Have them fight in a little tollbooth.”

UFC President Dana white hinted at the possibility of the UFC shrinking the Octagon, in a Q&A with Dave Doyle of YahooSports. The reasoning behind it is uncertain, and Dana did not touch on it in the Q&A at all, but I certainly have my reservations.

“Thanks to [expletive] B.A. Baracus, I couldn’t [expletive] pull it off,” White said. “B.A. [expletive] me. The collateral damage that was done by him doing this thing was unbelievable.”

“You have no idea how much collateral damage was done by [Jackson] pulling out of this thing. It literally screwed up the rest of our year. We’ve got B.J. Penn fighting in Memphis, you know what I mean?”

“What happens is, [Jackson] calls up and says he’s doing this movie. I said, ‘No, you’re not. You’re going to fight Rashad in December. You do whatever you want to do after this fight. You want to retire and become an actor? You want to join the monastery? I don’t care what you do after this fight, but ‘Rampage,’ you’re going to fight this fight.’

“He said, ‘OK.’ Then he had his manager fly in from England and met me at the hangar before I was leaving to go out of town to tell me that he wasn’t going to (fight Evans). [Rampage] and I haven’t talked since.”

White and Jackson will hopefully settle their differences, and we will get to see Jackson and Evans inside the Octagon in the near future. However, the ripple effect caused by one man pulling out of a fight shows how fragile the plans for a major MMA promotion can be.

First reported by Dana White at Friday’s UFC 101 Q&A session, and officially announced Monday by Spike TV, The Best of Pride Fighting Championships series starts January 11, 2010 at 11pm on Spike. The show will be a weekly one hour series following a similar format to that of the UFC Unleashed, and will be hosted by former Maxim Magazine “Hometown Hotties” finalist Kenda Perez.

The television series will make use of the extensive library of Pride video footage that Zuffa, LLC (parent company of the UFC) purchased when it purchased the promotion back in 2007. It is expected to include footage of many of the former Pride stars that now compete inside the UFC Octagon, including Dan Henderson, Quinton “Rampage” Jackson, Anderson Silva, Mirko “Cro Cop” Filopovic, and Wanderlei Silva. Spike has also claimed that they will include Fedor Emelianenko in some of the broadcasts, despite his notable absence from the UFC.

This move by Zuffa was foreshadowed by Owner Lorenzo Fertitta sporting a Pride T-shirt at and around UFC 100 in early July. Since that sighting of Fertitta in the Pride paraphernalia, an official Pride store has been added to the official UFC store on the promotion’s website, and can also be reached by visiting www.pridefcstore.com. The store includes shirts, shorts, hats, and a DVD.

Perhaps Fertitta’s shirt, and the creation of the Pride store were just done in anticipation of the upcoming creation of the The Best of Pride Fighting Championships television series, or maybe all three are foreshadowing another future move by Zuffa, LLC involving the Pride banner. This author believes there may be something bigger brewing with the Pride name, but then I could be completely off base. Only time will tell if I’m right about that, but at least we get to re-watch some great fights.

This morning UFC President Dana White appeared on Setanta Sports, to promote tomorrow’s UFC 95, as well as talk about some of the recent announcements coming out of the UFC and some of the upcoming events. You can follow the above link to the Setanta site to view the full video, but some of the key quotes, and points made were:

• “There isn’t a place on earth that I couldn’t get a fighter from, that’s how popular (MMA) is getting right now”
• “Within the next ten years this will be the biggest sport in the world; bigger than American Football, bigger than soccer, bigger than anything.”
• UFC 100 will include GSP vs. Alves
• All five belts will not be on the line at UFC 100 (thankfully), but there will be three major fights on the card.
• Bisping vs. Henderson is on tap for UFC 100, with a title shot to take place in the UK on the line.
• There will be another title on the line at UFC 100. (Expected to be Rashad Evans vs. Jackson/Machida)
• BJ Penn vs. Kenny Florian is likely for UFC 99 in Germany.
• The UFC is in talks to get CroCop on the Germany card.
• Wanderlei Silva is likely for the Germany card (as rumored) but nothing is official yet.
• Lesnar vs. Mir 2 is definitely planned for May.
• Machida’s wait for a title shot will end “this summer”.
• A WEC card in the UK is likely in the future.
• “We’re going into Germany, we’re going into France, we’re going to Dubai, we’re taking this thing to all these different countries and its happening very quickly. We’re in 175 different countries right now on television.”
• The UFC is still pursuing Fedor, but whether he will ever fight for them is up to Fedor.

Manny Gamburyan

In the world of MMA, when a fighter runs into a road block they often change weight classes. If they’re small for the class they’re in they usually shed the extra weight, eat a little less junk, and cut a little more weight on weigh-in day. “The Ultimate Fighter 5″ runner-up Manny Gamburyan recently told MMAWeekly that he will be joining the ranks of fighters dropping down in hopes of getting back on track, after a little pressure from the brothers Fertitta that is:

Last summer, Gamburyan said UFC co-owners Frank and Lorenzo Fertitta wanted him to make the leap to the WEC’s marquee division after taking on Rob Emerson at UFC 87. But Gamburyan lost, and revised the plan. He would defeat Tavares, challenge two fighters he felt he had unfinished business with (likely Nate Diaz and Sean Sherk), and cut the weight.

Those plans were derailed when Gamburyan suffered a split decision loss to Thiago Tavares at UFC 94 in January. Gamburyan does plan on competing at lightweight again in the future, though in which promotion that may be is, as yet, uncertain. The article went on to give some of the other details related to the decision to move down, and over to the WEC:

“There are a lot of good guys at 145 also,” he said. “Mike Brown, Leonard Garcia, Urijah Faber, Jens Pulver. But I think my ability to drop to 145 – I’m going to be a lot stronger, and quicker. At 155, my technique is my advantage, because the day I’m fighting, I’m 160, 162. The guys are outweighing me by at least 20 pounds every fight, so I don’t think that’s fair.”

Gamburyan does not have a date for his WEC debut, but expects to fight in May or June, depending on the promotion’s schedule.

Mauricio Rua is recovering in Brazil after surgery a few weeks ago on his knee.

“The surgery was very quick, lasted 50 minutes, was quiet,” Rua told Sherdog.com. “Now I hope for healing and I think here in about two months I can return to training slowly, very cautiously.”

The Brazilian light heavyweight ruptured the ACL in his left knee while preparing at his academy for a bout against Chuck Liddell. “Shogun” said he had tried to explode into a maneuver while training with Vitor Miranda, and his knee moved strangely.

Rua is expected to return to the octagon in the fall.

There are three key goals of UFC television programming at this point: build brand awareness, create stars, which are really all about number three, sell pay-per-views. At some point advertising revenues and television rights fees will become more significant considerations, but there are no indications that we are close to that becoming a reality with pay-per-view accounting for 75% of revenues. In light of these goals each potential television partner brings different strengths and weaknesses to the table.

A deal with the ESPN, the Worldwide Leader in Sports, would put the UFC squarely into the mainstream of the sports world. Going mainstream is key to the UFC’s continued growth because reaching the casual sports fan is the difference between a wildly successful show (500,000-750,000 buys) and a blockbuster (750,000-1,000,000 buys). The network has already proven its power through its promotion of Liddell-Ortiz II and Liddell-Jackson II. Both of those fights received significant coverage on ESPN and not coincidentally are believed to be the two top grossing UFC pay-per-views of all time.

The network’s addition of NASCAR this year provides a blueprint for what ESPN could do for the UFC. The network has done a terrific job of embracing NASCAR as a new television property, devoting the entire year to enhancing the brand through saturation marketing and programming across its family of networks. A similar push for the UFC might include the return of Inside UFC, regular features on Sports Center, and promotional appearances across the rest of the network’s programming (such as Pardon the Interruption, The Jim Rome Show, etc.) in addition to any potential live events.

However, there are risks to an exclusive partnership with the network. While the UFC enjoys the advantages of being Spike’s number one property, the brand would rank significantly lower in the ESPN hierarchy. The NFL, NBA, MLB, NASCAR, College Football & Basketball, would all rank above the UFC in terms of network priorities. As a result there is a real possibility that the UFC could get lost in the shuffle.

On the other hand Spike is heavily invested in the UFC’s success since the network’s success is largely tied to the brand’s success. Spike builds its television schedule around its UFC programming including extensive marketing blitzs for live events. When the UFC needs television time all it has to do is ask. UFC events on Spike are given the top priority while on ESPN at best they would receive equal billing with the week’s biggest traditional sporting events.

While a deal with ESPN would bring tremendous mainstream exposure, a deal with HBO would bring prestige and legitimacy to the sport and the brand. HBO Sports is one of the most respected entities in the sports world, the gold standard as White has called it. The UFC on HBO would signal the sport’s arrival and clearly establish the UFC as its premier brand. The price to pay for this legitimacy however appears to be relinquishing production control, something the UFC has been steadfastly unwilling to do.

Other professional sports broadcasts feature independent announcers and producers hired by the network who televises the event. In contrast the UFC’s broadcasts are produced in house. White other sports sell television rights, the UFC essentially sells a complete ready-to-air product, featuring company employees as announcers pushing the product in a manner closely resembling professional wrestling.

I think the production of the UFC has played a huge part in not only the brand’s identity but it’s success. The format provides continuity and allows the company to seamless promote its live events. The use of in house announcers is particularly effective at promoting the business and also allows the company to maintain complete control over how the brand is presented. Furthermore, without the UFC’s signature production the broadcasts risk becoming more bland and generic, losing what Mark Cuban calls the “spectacle” atmosphere that has been so successful. The gladiator opening sequence with its Optimus Bellum Domitor theme, Joe Rogan, and Mike Goldberg in many ways are the UFC.

It appears that White hopes to have the best of both worlds by reaching deals with Spike and ESPN, as well as eventually HBO. How these deals would fit together is pure speculation, but we can safely assume that each deal would involve exclusive content thus increasing the amount of UFC television. That realization raises a key concern that has emerged over the last year: oversaturation.

White is on the record that oversaturation is not a problem. He likes to point the NFL as an example that as long as you produce a quality product, you can never have enough. The decline in the ratings of the Ultimate Fighter seems to tell a different tale, however, it should be noted that this has not yet impacted the pay-per-view business. The effect of more live events on television could be a different story.

It would seem that, at least in the short term, it is in the company’s best interest to keep live fights on television rare in order to preserve the significance of the pay-per-view events. It seems logical to conclude that the more common place live fights become on free television, the more selective viewers will become in their pay-per-view purchases. However, there is a counter view that the more exposure you give the product on free television, so long as its a quality product, the more pay-per-views you can sell.

The company will run 19 live events this year and an increase in the number of live events next year seems inevitable. If an agreement with ESPN materializes it will almost certainly include live fight cards and its hard to imagine Spike renewing without live content. The question becomes how many more events is the company capable of producing per year without a sacrifice in quality? Some would argue that the company has already been stretched thin by this year’s slate of events, not merely in the talent department but also in the Zuffa organization.

One plan that doesn’t seem to be in the offering: weekly live events. Tuesday night fights was the original concept pitched by White to Spike. However, earlier this year White stated that he didn’t think the talent was available to produce such a show.

“XYIENCE has been a long time sponsor of the UFC(R) and we look forward to our future endeavors together as both of our companies continue their explosive growth,” said Dana White, UFC President.

“We believe that the combination of new financing and the extension of our UFC relationship firmly positions the company for success as we embark on a worldwide expansion of the XYIENCE and Xenergy brands,” said Adam Frank, XYIENCE CEO.

Terms of the sponsorship were not disclosed.

Proceeds of the term loan were used to pay a one-time special dividend to Zuffa’s owners, the Fertitta brothers (90%) and Dana White (10%), and to refinance the company’s existing debt. We can only speculate about the amount of debt the company refinanced and the amount it paid out in dividends, however, some comments in the S&P reports suggest that the dividend payments could be quite substantial. It is also interesting to note that the term loan was originally proposed at $275 million, as of the May 22 report, only to be increased to $325 million after June 30. This time frame coincides with the closing of Zuffa’s purchase of Pride’s assets. The significance of this increase and its connection to the purchase of Pride is purely speculative.

The loans are secured by bank issued securities as opposed to the company’s assets. The company’s assets are almost entirely composed of their brands, contracts, and cash, with very little in the way of tangible assets. S&P estimates the resale value of the company’s assets, assuming a forced liquidation, at roughly $150-240 million dollars. As a result of these numbers, free cash flow is paramount in the minds of the company’s creditors. The company’s credit rating outlook was cut because of weak free cash flow caused by decreased operating margins. Unless free cash flow improves, the owners will have to cut dividend payments to avoid a cut in their rating.

“After lots of discussion it became apparent that the business model doesn’t make sense for either one of us. So we agreed to go our separate ways,” said HBO Sports president Ross Greenburg in a statement. “You never know what the future holds. We have enormous respect and admiration for the executives we dealt with at the UFC. We wish them well.”

HBO has been in talks with UFC about carrying live UFC events on the 28-million subscriber pay service, but sources close to both sides said the discussions had heated up over the past two months. In fact, UFC President Dana White was quoted in the Miami Herald this past August guaranteeing a HBO/UFC deal by the end of 2007, saying that it would “definitely be in place for a winter fight.”

Though a deal with HBO may have aided the UFC’s rapid expansion even further, future deals with non-premium channels like Spike and ESPN could have far greater reach and impact not only for the promotion but the sport as a whole.

The UFC is currently in talks with Spike over a major renewal of their contract though I would not be surprised to see the rights to broadcast events split with additional networks, specifically ESPN. Their current plan does not allow broadcasting of the UFC on other cable networks though a new deal may allow this. This rather minor modification could mean more free UFC events being broadcast to larger audiences, allowing the UFC to tap into markets that may have seemed unimaginable several years ago.