Is UFC the Next Knockout Superbrand Sport?
Oct 4th 2011 4:30PM
Updated Oct 5th 2011 4:33PM
If you've been an Ultimate Fighting Championship fan for more than a decade, you remember the days when the only way to see an event was to rent it on a VHS tape from your neighborhood Blockbuster.
UFC has come a long way. The organization is now at the center of a young male consumer ecosystem, with big-name blue-chip sponsors that want their brands front and center with this demographic.
Mike and I are part of that ecosystem, and on Saturday night, we got to see in person exactly how far the sport has come at UFC Live 6 at the Verizon Center in our hometown of Washington, D.C.
Blue Chips Muscling into the Arena
The card was packed with action from start to finish, with bantamweight champ Dominick Cruz capping off the night with multiple vicious suplexes of game challenger Demetrious "Mighty Mouse" Johnson to win the decision and keep his belt.
Between fights, you could gaze around the Verizon Center and clearly see that the UFC has hit the big time.
The UFC really picked up business momentum in 2008, which turned out to be a breakthrough year for the company. It landed two blue-chip deals with Anheuser-Busch InBev's (BUD) Bud Light as its exclusive beer sponsor and with iconic motorcycle brand Harley-Davidson (HOG).
These relationships, both of which were renewed this year, go beyond a simple advertising agreement where the sponsor merely slaps its logo all over the venue and provides little else of value outside of a check that clears. What the UFC has with Bud Light and Harley-Davidson is so much better.
These are collaborative promotional partnerships to get both the brands of the sponsors and the UFC out in front of fight fans. For example, there was a limited edition Bud Light bottle bearing the UFC logo, and Harley-Davidson is pitching in on the fight promotion side of the business with the Hometown Throwdown event where fans can vote to bring a UFC event to their city.
Fight Club Endorsement Deals
It's not just the UFC benefiting from high quality corporate relationships: The fighters themselves are seeing big-name businesses interested in leveraging their popularity.
Mighty Mouse Johnson entered the octagon this weekend sponsored by Microsoft's (MSFT) Xbox 360. And the UFC's welterweight champion, Georges St. Pierre, has joined premier athletes like the NFL's Tom Brady in endorsement deals with sports apparel leader Under Armour (UA).
Even grassroots companies like Affliction and TapouT are getting in on the action, creating successful clothing lines for the MMA audience.
Has Escape Velocity Been Reached?
For all of its recent success, the UFC is only on the brink and hasn't quite broken through as a truly mainstream professional sports organization.
There was a strong turnout for UFC Live 6, but the arena wasn't filled to capacity -- and this is a venue that regularly sells out for the NHL's Washington Capitals. While comparing ticket sales to a hometown team that has built brand loyalty with local fans for decades isn't necessarily fair, there's really nothing fair about the big business of sports.
The UFC comes up on a major test of its brand power on Nov. 12, when its first-ever fight card under a new partnership with FOX Sports airs. UFC moved this heavyweight title bout between champ Cain Velasquez and challenger Junior dos Santos off a pay-per-view show and onto free live TV.
It's a shrewd and necessary move if UFC wants to truly reach the big leagues -- and if it pulls it off, it will be viewed as one of the watershed moments in UFC history.
The UFC gets one chance to make a first impression with a mainstream audience that may not be as familiar with the caliber of its fights as its core fan base is. This will be a litmus test of the power of its brand and its ability to pull serious ratings on major network TV. We'll be glued to our sets for sure.
Motley Fool Associate Advisor Charly Travers doesn't own shares of any company mentioned in this article. Senior Analyst Michael Olsen owns shares of Microsoft. The Motley Fool owns shares of Microsoft and Under Armour. Motley Fool newsletter services have recommended buying shares of Microsoft and Under Armour, as well as creating a bull call spread position in Microsoft.