Learning From MMA’s Money Losers

By Zach Arnold

With the dominant success of UFC as MMA’s industry leader and everyone else falling by the way-side, it is important to analyze each promotional failure in the business and try to learn some important lessons as to why things fell apart for certain companies.

It is clear that UFC’s blueprint of casino world-backing is something that we may see future players in MMA emulate on a worldwide stage. However, most promoters who try to get into the business or who are currently in the business have no connections whatsoever to the casino world. The concept of three-wall deals and four-wall deals simply doesn’t enter into the equation.

With promotions like the IFL sinking faster than a cement block in a body of water, what are some important lessons to be learned and studied for individuals who are bold enough to get into the MMA business? We will take a look at 10 lessons that all promoters should consider before they even spend a cent producing an MMA event.

1. Don’t bother promoting MMA shows if you plan on giving up your day job.

Your name is not Vince McMahon. You did not inherit a 3rd generation promotional company. Therefore, if you plan on giving up a steady-paying office job in hopes of chasing your dreams and making big money in MMA, stop considering those dreams right now. End them, and in a hurry.

Name me the promoters right now in MMA that are making a profit and not losing massive amounts of money. Hint: You can count them with the fingers on one hand

Unless you have major money marks who are looking for a quick tax write-off or looking for a fast way to launder money, don’t even try to get into the business. Even rich people get tired of losing money in a hurry, too.

2. Promote your product on a local/regional scale and garner national exposure that way.

If you aren’t sure about this concept, take one look at what Scott Coker is doing with Strikeforce in San Jose. A Heavy emphasis on local and regional promotion, media coverage, advertising, and pushing local talent is a key to moderate success in MMA.

So why aren’t other promoters attempting to copy the formula? It’s not always the sexiest way to promote MMA. Most people who jump into the promoting business are dreamers who think that they can be national players starting with their first show. They get caught up in the media hype that, hey, maybe they’re the next big thing to come to MMA. These same wannabe promoters are the type that scream, “Look at me, Dana White!” on MMA message boards.

The idea of getting television access and becoming a national player in 2008 is absurd. There is so much content right now on cable, satellite, and digital TV that being on TV means nothing any more. It’s what you do with that television program that makes all the difference between losing your ass financially and perhaps breaking even.

3. Work with big buildings and co-promote shows with them.

In the case of Strikeforce, take a look at what they have been doing recently with shows at the HP Pavilion (San Jose Arena). The building has open dates on its calendar and they want those dates booked. Scott Coker wants to run a show at a building like HP Pavilion but is not going to pay full price to do so.

Time for a compromise.

Buildings like HP Pavilion want to do business with individuals like Scott Coker and are more than willing to do a revenue split to get the building booked a few times a year for big shows. What is the advantage of a promoter working with a big building of this nature on a gate split? The building often has their own customer database list and can greatly assist in promoting shows on a local basis. Do not understand the power of the ground game.

4. Do not paper shows. You’re wasting your time.

There are two big reasons that you often see promoters willing to paper MMA events. One, they paper simply due to their own vanity and wanting a building to look as full as possible. Two, there’s an idea that if you can get more warm bodies into a building at any cost that perhaps they’ll spend money on merchandising, which is the only possible way to make up for lost revenue at the gate.

Both of these notions are misguided. There is a big difference between papering a show by giving away some tickets to charities or local businesses as opposed to papering because you’re desperate to get bodies in the seats at any cost. The only message you’re sending to your customers by papering shows is that your product isn’t worth paying a ticket to see. How would you feel as a fan if you paid $70 for a ticket to go see a show and find out that the clown sitting next to you got a freebie because he waited at the last-minute for a comp. ticket? You wouldn’t want to pay again for a ticket to see that promoter’s events.

Papering shows is a quick way of burning a town and more importantly, your own credibility as a promoter.

5. Don’t be one of the many idiots who thinks that you only have to use the Internet to promote your show.

The Internet is a great tool for national companies and political campaigns. However, it’s not a great tool for a promoter who is running a show in a state like Florida and finds out that a lot of his readers are in Iowa. Are those readers going to fly from Iowa to Florida to go watch every MMA show produced by that said promoter? Of course not.

Just because this is the age of MySpace and Facebook doesn’t mean that the ground game is dead. It’s still, by far, the most effective way to promote a big show on a local and regional basis. Mailing and customer database lists are all critical tools to have at your disposal. Sure, the Internet can be a great took to make money via ancillary methods (merchandising). However, Billy Bob in Birmingham isn’t likely flying to every one of your shows in New York City.

6. Your internet presence would be more than just a slew of press releases.

First off, stop relying on MMA message boards to get the word out regarding your local MMA show. It is a waste of your time. Second, sending out a bunch of press releases and hoping that they get picked up on Google means nothing in the end for your bottom line at the gate.

Your presence on the Internet should be a fully-functioning multimedia experience for users, featuring free content. Videos, podcasts, RSS feeds, news updates, widgets, blogs. Everything that a savvy Internet user expects should be on your site. Be professional and the fans will look at you as such.

7. Build a brand identity and keep it.

Notice how promotions like the IFL constantly keep reinventing themselves seemingly every six months? First it was the team concept, then it was the six-sided ring, then it was a camp-based concept. If you have to gimmick up your basic MMA product every year because people aren’t watching what you’re producing, then produce something better!

MMA is simple. People want to watch two men or women fight. Preferrably, two men or women who hate each other. They want a good fight and a clean finish. How hard is this to understand when it comes to telling a story? Not too hard.

Always assume that the audience watching your product knows nothing or very little about your company. Therefore, put on a good front and keep your product as simple for the casual fan to understand as possible. This is our company, this is what we promote, this is our philosophy, and this is our product that we deliver.

8. Big names cost big money.

Booking big-name fighters may get a look at your company from someone like Josh Gross or Loretta Hunt, but those same fighters likely won’t draw you very much money at the box office. There is a big difference between booking famous fighters for autograph or seminar sessions and booking those same individuals to actually fight on your event card.

9. Avoid expensive advertising markets when promoting shows.

Outside of UFC, name me one major MMA league that has drawn big money in Southern California promoting MMA. You can’t. Won’t happen. Media markets like Southern California and the Tri-State area are incredibly expensive. More than likely, you simply won’t get a positive ROI (return on investment) if you aim to make a big splash in a big market right away.

10. No one is your real friend in the fight business.

Don’t go into the MMA business thinking that you’ll make partnerships and co-promote fights with other promoters (as if your name is Gary Shaw or something.)

If someone like Gary Shaw, who made his bones in boxing working with different promoters, thinks that going solo is the way to be in MMA, what does that say about the industry’s current climate? Rather than work with individual promotions like Icon Sport (Hawaii) or King of the Cage, Shaw and Pro Elite Inc. simply bought them out. They felt that a farm system needed to be created.

If, after reading this list of 10 lessons to be learned in Promoting MMA 101, you still feel as if you have the itch to promote an MMA show in your area… your best bet is to find someone locally or regionally who is already promoting events and work alongside them. Minimize as much of your personal risk as you possibly can while getting an education on how promoting successful shows in the business really takes place.