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1/22/08 7:57 PM
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Edited: 22-Jan-08 08:02 PM
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Obviously the sport has become mainstream. However, it seems like a lot of businesses in the industry fail (i.e Xscince filing for bankruptcy today). Why do you think so many business associated with MMA fail or struggle to build long-term successful business models? Also, why do you think the UFC is such an exception to this rule?
1/22/08 8:00 PM
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Mad Xyientist
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Edited: 22-Jan-08
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Ridiculously high barriers to entry
1/22/08 8:01 PM
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Elias Cepeda
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Edited: 22-Jan-08 08:06 PM
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I don't know how many companies associated with MMA have failed or struggled (do you mean fight organizations or sponsors?), but I don't think MMA is in the  mainstream yet.  
1/22/08 8:03 PM
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sanbrn
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Edited: 22-Jan-08
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Fight promotion is a tough, tough business. And a promotion only starts to make money after establishing itself with an audience. The UFC was a loss-maker for years, despite PPV revenue. The good news is that there's going to be investment now in bringing new promotions to scale, and there will hopefully be genuine business talent following those investments.
1/22/08 8:03 PM
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Edited: 22-Jan-08
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High barriers of entry in what? Do you say that because MMA promotors are trying to duplicate the UFC model (which is obviously very expensive)? Do you think vendors have a tough time to get their products to the masses without spending too much to make it work. Let's look at a vendor. Why is Tapout growing but other vendors struggling to make money?
1/22/08 8:05 PM
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Edited: 22-Jan-08
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sanbrn, If the shows are having trouble making money now, how do you think this will impact fighter's pay in the future? Will bigger fees for fighters help or hurt the situation?
1/22/08 8:06 PM
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Kneeblock
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Edited: 22-Jan-08
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Simplicity and endurance.  Tapout has been around a long time and their product is very simple, straightforward.  Only now is there more diversity in their line, but in the past, it was just that simple logo plastered on beanies and shorts.  Also, they've got a bonafide disco producer or something managing their marketing.

1/22/08 8:07 PM
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Edited: 22-Jan-08
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Didn't Tapout have some deal with the UFC that got them some unique publicity? Also, it seems like a lot of fighters use the Tapout products? Do they pay fighters to market their clothing?
1/22/08 8:08 PM
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TheRealJoker
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Edited: 22-Jan-08
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Too many companies spend tons of money sponsoring fighters and giving free shit away and not enough time building up their brand. By the time their brand name is semi-recognizable they've already lost tons of money and have decided to cut their losses.

Tapout has been around since the beginning and has built up their brand quite nicely. I see their stuff in many retail outlets, you cant say the same about 99% of the other MMA apparel companies.
1/22/08 8:08 PM
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TKOWarehouse
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Edited: 22-Jan-08 08:14 PM
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MMAOverload.com

Most businesses fail in darn near every market :)

edit: And Joker is correct IMO!

1/22/08 8:09 PM
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syracusebjp
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Edited: 22-Jan-08
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i think a big thing with smaller MMA organizations is they spend way more than they can realistically make, especially starting out. this local org. here in Western Mass. (EFI) just folded, even after having 2,500 fans at their last show at the big hockey arena in town. casual fans aren't going to spend $100 a ticket to see a bunch of guys they've never heard of.
1/22/08 8:11 PM
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Edited: 22-Jan-08
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It seems like the "Brands" that the masses tie to MMA like Tapout and the UFC are the big winners. Maybe the focus of new companies should be on how to become a brand. Even if you look at MMA forums like this one or Sherdog, they seem to set themselves apart from the crowd. Does anyone feel like someone like Mark Cuban (big resources and marketing capabilities) can build a brand with his product or is there more to success than deep pockets?
1/22/08 8:13 PM
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Edited: 22-Jan-08
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As for local shows, we had one in Florida just shut the doors. The owner was a Harvard graduate and a good business guy. After taking a beating on 2 straight shows, he decided to shut the doors. I talked to this person on various occassions and he seemed to have champaigne dreams with a beer budget. I do find that proper capitialization is a key to building a brand for most companies. It is hard to do it out of working capital.
1/22/08 8:17 PM
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Mad Xyientist
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Edited: 22-Jan-08
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I'm speaking mostly of non-financial barriers to entry. The biggest one being brand awareness. MMA is very young, with most consumers only having come on board in the last 5 years. That means they have little knowledge of the entire market and cling to the brands they know and are comfortable with. The UFC in promotion and TapouT in apparel are successful because they have multi-year leads on their competition in branding. Most fans of MMA (the ones not on this board) will order the UFC show and have no idea what Yarennoka was or even know the local shows in their area.
1/22/08 8:21 PM
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Edited: 22-Jan-08
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As for the branding concept, look at Pro Wrestling. Only one product, the WWE, has become a brand. While others have made short in roads, no one has lasted over time. I wonder if the same will occur with the UFC.
1/22/08 8:23 PM
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TheRealJoker
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Edited: 22-Jan-08
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Mad Xyientist nailed it.
1/22/08 8:24 PM
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Mad Xyientist
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Edited: 22-Jan-08
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The problem with that is that as the public becomes more educated about the sport (through independent media coverage and other means) they will find MMA elsewhere. This will be accelerated if big fights, like Fedor vs. Randy, happen outside the UFC, because guys like Sportsline, Yahoo, and ESPN WILL cover it. That is why the UFC is so protective of having all the big fights in house or not at all.
1/22/08 8:24 PM
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Edited: 22-Jan-08
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On the business of fighters, it does seem that some of the big ones are starting to do OK financially. However, it seems like they all come out of the big shows. In other words, if the masses of fans don't know you, your likelihood of a big payday appears to be limited. I think that is why so many fighters are willing to fight for the UFC for so little money. Obviously the visibility has a bigger value than the fighter's purse.
1/22/08 8:26 PM
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Edited: 22-Jan-08
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Mad Xscientist, Do you feel the UFC is helping or hurting the growth of MMA as it relates to others being successful in the business of MMA?
1/22/08 8:33 PM
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Dratherbe
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Edited: 22-Jan-08
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I think part of it is a 'positioning' issue. It seems like the most successful positioning (how the market sees/relates to your brand) of these MMA brands is pro-wrestling style positioning - ala TapOut, Affliction, etc. The 'train like an athlete' - ala Xyience and the sports supplement product - has a very limited market because, I would guess, that a very low percentage of MMA fans actually train rigorously or desire to be top-level athletes. I think the sport primarily feeds on a large segment of the pro wrestling market. Just my 2 pence...
1/22/08 10:46 PM
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Kirik
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Edited: 22-Jan-08
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Mixed Martial Arts LLC
The problem right now is that as Dana put it "every guy in America with two nickels to rub together wants to get into this business." But they don't know where the money is (UFC has 80% of it, for one thing). So there is a lot of opportunity to make a small fortune (by starting with a large one :-)
1/23/08 12:17 AM
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sanbrn
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Edited: 23-Jan-08
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To build another UFC-sized brand will take serious capital investment by a major concern. I keep waiting for McMahon/WWE to make a serious investment. Or one of the established boxing mega-whales. Heck, ESPN has deals with several sports (among them Arena Football) -- the guys in Bristol should take all that cash and reinvest it in an MMA startup in which ESPN has an ownership stake. Building a UFC-sized brand from the grassroots? No way.
6/14/08 4:47 AM
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Macedawgg
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sanbrn - To build another UFC-sized brand will take serious capital investment by a major concern. 
 

Or, simply, adoption by the talent, i.e., the fighters themselves.  That brand would instantly be one of the biggest brands in the sport.

6/14/08 8:02 AM
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whoabro
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barriers to entry: capital & existing brand equity (ie, UFC == MMA at the moment)

even if the talent is willing to go along, it takes a lot of money to pay them and a lot of time and money to build awareness of a new promotion
6/14/08 9:33 AM
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ryanJ
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Edited: 06/14/08 9:36 AM
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 I think the engine that keeps the sport going is two-fold:

1. The hardcore fans..(they call everyone else TUF noobs)

2. The sports fans that just like to see the fights (they are the buddy in your office that you say "Hey, UFC this weekend..." and he says "Oh, really...cool let's order it."

Unfortunately for things like apparrel companies/supplement companies etc. those two groups are relatively tough to crack.  The hardcore fans will always be too hip for anyone they see "jumping on the bandwagon"...Xyience, ridiculous fight shirt companies etc.  The hardcore fan will look at people who buy that stuff like you look at the guy who goes to the concert and wear's the band t-shirt. 

The sports fans aren't really engaged enough to want to use Xyience because that guy with the mohawk that fucks everybody up is promoting it, or spending $40 on a UFC t-shirt.

For other fight leagues the problem is similar...the hardcore fans pick them apart because they don;t have the depth of talent and often have to resort to sideshow matchups.  The casual fan doesn't watch them for the same reason that many baseball fans don;t follow AAA ball.

The UFC is also doing a hell of a job using expansion to choke their competition..The UFC by expanding to like 1-6 new things to watch per month (with TUF and the PPV's) doesn't give the average fan the time to search out other alternatives.  The very hardcore fans will seek out the local shows (for the same reasons that big music fans try to search out indy music), but there is not a lot of space right now for the national shows that aren't the UFC.

 

 

 


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