Does the UFC have a monopoly in MMA?

by Jim Genia & Dave Nelmark | source: mmaconvert.com
 

Oh Hell No, by Dana White and Lorenzo Fertitta

“There’s always gonna be competition,” said UFC president Dana White on Monday. “There’s tons of shows that happen every weekend all over the world.

“What we’re doing is we continue to expand, grow this sport, grow this business. We need more fighters. As we continue to do all the shows that we’re doing here in the United States – we start pushing into these new markets – we need more guys.

“This isn’t a thing about competition, it’s about growing the sport.”

Lorenzo Fertitta, the chairman and CEO of Zuffa and the UFC, echoes White’s assertion, arguing that there is plenty of competition in the marketplace, vociferously denying any suggestions that his company has an unfair monopoly on the sport.

“Painting this picture that there aren’t options is entirely untrue."

“We wouldn’t have done the transaction if we felt that we were (unfairly controlling the market). There’s literally thousands of promotions and thousands of options for the fighters, it just so happens that with the groundwork that we’ve put in place over the last 10, 11 years, we happen to be the most successful.

“There’s plenty of competition and there’s really no barrier to entry. Anybody that wants to get in this business, they can go file for a promoter’s license, put up some capitol, go sign some fighters, and go get a television contract. It’s a wide open market for anyone who wants to get involved.”

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Nope, by Jim Genia

According to Black’s Law Dictionary (8th edition), a monopoly is “the market condition existing when only one economic entity produces a product or provides a particular service.”  American Jurisprudence (2nd edition, volume 54A), an encyclopedic series of texts on US federal law, further states that “a monopoly is the practical suppression of effective business competition which thereby creates a power to control prices to the public harm.”  However, over a century of case law and legislation has determined that, to exist, a monopoly must possess three components:
a single seller;
market power wielded by that seller; and,
high barriers to entry into the marketplace.

Zuffa has long dominated the market.  But they’ve been far from the only “seller” the list includes Bellator, Shark Fights and whatever events are aired on HDNet. 

“Market power” is the ability of a producer to alter the price of its product without fear of losing customers to its competitors.  In this instance, Zuffa is the producer and their events are the product.  While Zuffa may charge close to fifty dollars for a pay-per-view, there’s no arguing that if the cost exceeds what the market is willing to bear, people just won’t buy it.  Unlike an essential good, a UFC on pay-per-view is a luxury that’s easy to forgo.  Plus, there are often cheaper options available.  Whether they be a twenty-dollar Moosin on pay-per-view or a fight show on MTV2, they’re out there.

The last component of a monopoly, “high barriers to entry”, means that there are legal or economic obstacles keeping a potential competitor out of the MMA business. The continued existence of other MMA organizations (again, like Bellator, Shark Fights, or whatever events are on HDNet), and the fact that new ones continually sprout up, prove that this essential component of a monopoly is not present.

Strikeforce-is-not-a-monopoly/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+mmaconvert+%28MMAConvert%29" target="_blank">Read entire article...

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Maybe, by Dave Nelmark, Esq.

Maybe.

A loose definition of a "monopoly" is an enterprise that has enough power in the relevant market to control prices. The key question here is how the relevant market is determined?

If the market is defined as "entertainment"
Zuffa definitely is not a monopoly due to other entertainment options such as video games and movies. If it's narrowed to "sports entertainment," Zuffa still competes with other big-time professional sports such the NFL.

If the market is defined as "combat-sports entertainment"
there are lots of other options out there, especially boxing.

If the market is defined as "mixed martial arts"
it starts to become a closer question. But Zuffa still can point to the hundreds of regional MMA promotions around the country.

If the market is defined as  "televised MMA"
the competition still would include Bellator Fighting Championships, MFC and others.

Finally, if the market is defined as "pay-per-view MMA."
Zuffa clearly has a monopoly, as Zuffa does have a truly dominant market share, notwithstanding the internet PPV offerings of companies such as Shark Fights and the occasional televised PPV from companies such as Shine Fights.

UFC president Dana White thinks the few barriers are easily overcome for someone to launch a competing entity. "All you've got to do is go out and raise some cash and jump into the business. All you've got to have is some big balls – some big balls and some money behind you."

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tags: UFC   Strikeforce   Dana White   Lorenzo Fertitta   



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Recent Comments »

The Sultan site profile image  

3/17/11 12:00 AM by The Sultan

 Not a monopoly yet, but in terms of high level, quality MMA pay, they are up there in terms of controlling the market. They are a super power in MMA.

vruntson site profile image  

3/16/11 11:10 PM by vruntson

What other options are there for the punter?The UFC is the Walmart of MMA. All other organisations are just corner shops. Dana and the Ferts now have ownership of a monopoly. Any other organisation that emerges that has any decent chance of survival or poses any real competition to the UFC will simply be gobbled up. That there is an unfair monopolistic advantage.Only one hope remains. Perhaps one day after Japan emerges from the crushing blows it has been dealt recently, the masterminds of MMA entertainment over there can re-establish a new powerhouse of MMA.

shartkuri site profile image  

3/16/11 10:31 PM by shartkuri

 Well of course not. In other news, this isn't a global recession either ; )

sevr1 site profile image  

3/16/11 10:27 PM by sevr1

they're definitely majority owners, but no way

DonStirFrye site profile image  

3/16/11 8:46 PM by DonStirFrye

How could the entertainment/media industry be a monopoly in your eyes when you believe it to be controlled by THREE companies?

siouxNYC site profile image  

3/16/11 7:44 PM by siouxNYC

word, those authors are dicks.

afflikshoN site profile image  

3/16/11 7:10 PM by afflikshoN

To my knowledge, NFL, MLB, NBA, and NHL have antitrust exemptions with respect to television broadcasts. See the Sports Broadcasting Act of 1961.

Tahiti Bo site profile image  

3/16/11 6:25 PM by Tahiti Bo

Exactly. This is the same case that popped into my mind as I read the stupidity on this thread. Black's Law definition?  LOL.   Try FTC definition, and learn what a product market is. Now, UFC may or may not actually be an unfair monopoly.... dunno... but I can tell you that none of the article's quotes or posts here get any where close to an answer.  

Unseen site profile image  

3/16/11 6:19 PM by Unseen

 Government only gets involved if a company is monopolizing an essential product or service.  If the fed won't get involved in shady energy companies or insurance companies I seriously doubt MMA is on their radar.

Darup site profile image  

3/16/11 5:51 PM by Darup

 I really wouldn't expect Warren Court decisions, especially when there are easy ways to side step the issue, to be holding on the current Supreme Court. The UFC has very little to worry about in regards to antitrust claims.



 

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