Elevator Pitch: The Blog so Far

Well, it's official. As of today, I can actually live up to the name on my blog. No longer an MBA Candidate, I'm finally a full-fledged MBA!

In celebration of my graduation from Case Western Reserve University, I have put together this one minute elevator pitch of what I've been able to accomplish with 'An MBA on MMA' during my final year as an MBA student.

Rather than an ending, I think of my graduation as a milestone for the blog and hope to continue regular contributions.

Hope you enjoy the video!

Strikeforce Acquisition a Key Cog in the Global Expansion Plans of the UFC [Updated]

Dana White officially announces the purchase of Strikeforce by Zuffa

 

This is great news for MMA fans! It may take some time, but this acquisition should eventually lead to some interesting match ups and, more importantly, help to ensure that the best fighters in the world will always be able to fight one another.

Time will tell, but from a business standpoint I see this acquisition as exactly what the UFC needs in order to make a push into new global markets. Zuffa has been faced with a very common problem for successful businesses: how do we grow without eroding the success that we currently enjoy? With two separate promotions at their disposal, Zuffa can now push forward into new markets with Strikeforce while maintaining their strong hold with the UFC in North America.

 ESPN Contributor John Gross fills in some of the details of the acquisition

Below, I've attempted to capture the current state of Zuffa, llc (including Flash Entertainment who owns a 10% slice of the pie)  within a single graphic. The key takeaway is that there is not much in the way of major competition out there for the UFC anymore.  More importantly, Zuffa appears to be positioning themselves for an aggressive global expansion. With two major promotional brands, key cross promotional relationships, and a growing MMA fight library I like their chances for success. 

Click Image for Full Size Version

Video Submission as Finalist for the Weatherhead School 'Outstanding Marketing Student Award'

Recently, I was notified by the Marketing department of my school that I have been selected as a finalist being considered for the 'Outstanding Marketing MBA Student Award!'

Specifically I was told:

Marketing faculty has chosen you in recognizing your fine academic performance as well as your interest and dedication to the field of marketing among all the graduating MBA students this year.

They further explained the next steps in the process:

To help the marketing faculty learn more about your accomplishments and intentions, we ask that you...submit a video version of the application that helps us highlight and showcase you on the department website. The video should be no more than 2 minutes. This is the next step in determining a winner of this award. Your application will assist us in selecting the most deserving finalist for the award!

As you can imagine I am both excited and humbled by my selection as a finalist for this award. It's an awesome opportunity and I want to make the most of it. As a result, I've decided to post my video submission on this blog where I can easily share it with friends and family. I hope you have as much fun watching the video as I did making it. Enjoy!

Lorenzo Fertitta Talks Business on 'Fighting Words with Mike Straka'

I stumbled upon this video courtesy of HDNet and was struck by the candor of Lorenzo Fertitta and by his obvious passion for the sport of Mixed Martial Arts. He touches on some very important and interesting business topics as they relate to his job as Co-owner and CEO of the Ultimate Fighting Championship. Enjoy!

 Fighting Words with Mike Straka - Lorenzo Fertitta Interview

 

 Lorenzo  Fertitta: Me and my brother are 50 – 50 partners on everything we do…and when we started drafting the partnership agreement…the lawyers came to me and said: ‘What if you and Frank can’t agree?” I’m like, we always agree…we’ll figure it out, we’re brothers. They go, no legally we kind of have to have some dispute resolution in there…so we kind of came up with this concept, thought it would be funny but it’s true.  3 Five minute round – sport jujitsu - Dana’s the Referee, but we use the point system.

Chuck Norris's 'Blue Ocean' of Combat Sports

I finally had a chance to read up on "Blue Ocean Strategy" as a part of my Marketing class on Value Creation and thought enough of it to try to make some connections to the Mixed Martial Arts industry. If you're unfamiliar with the 'blue ocean' concept, the basic idea is that companies have a tendency to play within existing industries and fight to outperform one another within the context of the generally accepted rules and business practices. This traditional space is referred to as 'red ocean' because the fighting becomes so intense that the waters turn red with blood. A 'blue ocean' strategy, on the other hand, is one that creates new market space by expanding or even ignoring industry boundaries, making the competition irrelevant.

One of the more interesting examples of this 'blue ocean' strategy is Cirque du Soleil. The success of Cirque is detailed in this excerpt from the "Blue Ocean Strategy" text:

A one time accordion player, stilt-walker and fire-eater, Guy Laliberte is now CEO of one of Canada's largest cultural exports, Cirque du Soleil. Created in 1984 by a group of street performers, Cirque's productions have been seen by almost 40 million people in 90 cities around the world. In less than 20 years Cirque du Soleil has achieved a revenue level that took Ringling Brothers and Barnum & Bailey's Circus - the global champion of the circus industry - more than one hundred years to attain. What makes this all the more remarkable is that this rapid growth was not achieved in an attractive industry. It was in a declining industry in which traditional strategic analysis pointed to limited potential for growth. Supplier power on the part of star performers was strong. So was buyer power. Alternative forms of entertainment - ranging from various kinds of urban live entertainment to sporting events to home entertainment - cast an increasingly long shadow. Children cried out for Play Stations, rather than a visit to the traveling circus. Partially as a result, the industry was suffering from steadily decreasing audiences and, in turn, revenue and profits. There was also increasing sentiment against the use of animals in circuses by animal rights groups. Ringling Brothers and Barnum & Bailey's Circus set the standard and competing smaller circuses essentially followed with scaled down versions. From the perspective of competition-based strategy, then, the circus industry appeared unattractive.

If Cirque du Soleil can successfully reinvent the circus it got me wondering what the equivalent might look like within the sport of Mixed Martial Arts. This topic is particularly interesting given that, in many ways, the UFC itself began as a 'blue ocean' idea. Originally conceived in 1993 as a "War of the Worlds," the idea was pitched to Semaphore Entertainment Group (SEG) who was looking to create new categories for a pay per view market dominated by wrestling, porn, and Mike Tyson. Jonathan Snowden details the history of the birth of the UFC from the perspective of Adman Art Davie in his comprehensive book on the history of MMA "Total MMA: Inside Ultimate Fighting."

Davie said, "Milius, Gracie and I were sitting around talking one night, and we began to have a conversation, like guys used to have in Vietnam, about if Sugar Ray Robinson were alive and fought Bruce Lee who would win. People always have those 'what if?' conversations in the martial arts. Out of it came a desire to do this event. I went back to my agency and had my art department put together a comp called 'War of the Worlds.'"

In many ways, Davie and SEG were doing for combat sports what Cirque du Soleil did for the Circus. The idea of fighting as a spectator sport was certainly nothing new, but the tournament format in which competitors would be required to fight multiple times in a single night to win, the octagon shaped cage as a replacement for the traditional boxing ring, and the representatives of different fighting styles competing under a loosely defined set of unified rules were all 'blue ocean' concepts. Combat Sports would never be the same.

After the jump I will take a closer look at Chuck Norris and his 'blue ocean' ideas.

UFC Cares?

Just a few short years ago, there was a debate about the image being portrayed by the NBA.  Some felt that the image that the players exuded was not consistent with what was expected by the league's primary business-oriented customer base.  Interestingly, the highest profile aspect of the actions taken by the NBA turned out to be the dress code.  The union reps at the time famously demanded some sort of stipend for purchasing dress clothes.  I can understand how the media would have chosen to cover the hilarity of these claims about millionaires needing assistance to afford a suit.  But, what went largely unnoticed at the time was the other element of the attempt at addressing this image concern: The NBA Cares.  

Launched in 2005, the program's mission is as follows:

"NBA Cares is the league’s global community outreach initiative that addresses important social issues such as education, youth and family development, and health and wellness. The NBA, its teams, and players support a range of programs, partners and initiatives that strive to positively impact children and families worldwide."

Most impressive are the quantifiable results of the program's efforts:

"Since October 2005 when NBA Cares was launched, the league, players and teams have raised more than $145 million for charity, provided more than 1.4 million hours of hands-on service, and built more than 525 places where kids and families can live, learn or play in communities around the world."

As fans of basketball, we may not think about it very often, but the efforts of the NBA cares program have become an expected element of our favorite teams' broadcast.  Most fans can recall images of recognizable stars reading books to children in their local communities or handing out presents around Christmas time.  I would argue that such efforts are far more influential to the brand perception than the more highly publicized dress code.     

So, how does this apply to the UFC?  No, I'm not suggesting the UFC has an image problem.  In fact, the interesting paradox about the brand is that mass acceptance would actually harm its value in the long run.  There needs to be a sense of rebellion associate with the sport of MMA, or it loses a lot of its appeal.  But, I do feel very strongly that the UFC is missing out on an excellent chance to reach out to the communities it entertains in very meaningful ways.

More about potential action steps after the jump...

From Fighting Legend to Business Executive

It's official...Liddell's fighting career is over. To many of us hardcore MMA fans, and even those who began their MMA journey with the original season of The Ultimate Fighter reality series, this news is bitter-sweet. Liddell was an amazing talent, one of the most recognizable stars in the sport, and perhaps the greatest Light Heavyweight champion of all-time. But, as good as he looked early on in his final fight against Rich Franklin, the end result was an increasingly common and down-right disturbing sight of the 'Ice Man' unconscious on the octagon floor. It was time.

But as one career ends, another begins. Dana White announced in a press conference (video after the jump) that Chuck Liddell has accepted a position as the new UFC executive vice president of business development. It's hard to say what this means in terms of job responsibility, but I would argue that these details really don't matter very much. I love this move for a number of reasons, none of which depend on Chuck's roles and responsibilities. 

First, this ensures that the Hall of Famer ends his career in the UFC. The same cannot be said for other legends of the Octagon like Ken Shamrock and Jens Pulver.  Instead, they waste away on lackluster cards of small-time promotions, fighting, one gets the feeling, because they have to. From a business perspective, keeping Liddell's name off of the main event of a competing promotion is also important. The UFC already suffers a bit from being the "Kleenex" of MMA and releasing The Iceman  - their most recognizable star - to go elsewhere would just add to the confusion.

Second, it sets a strong precedent that successful UFC fighters can have a future with the organization after their fighting days are over. This sport is unique in that it is so young that many of the original stars are still active as fighters; many of them because they simply did not make the kind of money in the early days of the sport that they can make fighting now. The UFC needs to step up where ever possible and find ways to reward these fighters who helped to make this sport what it is today.

Lastly, Chuck is a great guy and an excellent spokesman for the sport. He is college educated, has a background in traditional martial arts, and has successfully crossed over into mainstream popularity with his unique look and laid back personality. He will represent the UFC well.

Check out a short article by Ariel Helwani and a video of the press conference after the jump.

UFC to absorb WEC

"UFC absorbs WEC, adds lighter weight classes"
Neil Davidson, The Canadian Press

Looking to expand its brand, the UFC is absorbing its sister World Extreme Cagefighting circuit.

The consolidation immediately gives the mixed martial arts juggernaut two more weight classes — featherweight (145 pounds) and bantamweight (135 pounds) — while the WEC lightweights will be rolled into the UFC's existing 155-pound division.

The merger adds some 60 to 70 new fighters to the UFC ranks, swelling the roster to 260.

Those extra resources will help make it easier for the UFC to continue spreading its tentacles round the globe. And given the UFC has bigger name value than the WEC, it will get more bang for its buck from the WEC fighting alumni.

Authentic Brands Group Acquires TAPOUT and Silver Star Casting Company

Big news for major brands in Mixed Martial Arts today as Authentic Brands Group, LLC announces the acquistion of TapouT and Silver Star with the press release below.

Personally, I see this as a move that TapouT had to make in order to reach that next level of acceptance into the mainstream retail market, especially after the passing of their emotional leader Charles "Mask" Lewis, who truly defined the brand for most hardcore MMA fans.  However, it will be interesting to see if there will be any backlash from these hardcore fans.  Much of the appeal of TapouT was the grassroots nature of their creation, from selling t-shirts out of the back of their car to a television show on the Versus Network about being crazy fans of the sport of Mixed Martial Arts.

  

Interestingly, as a hardcore fan myself, I've never personally identified with the "in your face" style of most MMA brands. But, I've always digged the message that "Mask" and TapouT represents, which to me has been this notion that they don't seek out champions to represent their brand, and they wouldn't even cut a fighter for losing 10 straight fights.  Rather, it's a recognition of the incredible courage, determination, and willingess to put it all on the line as an athlete competing in this sport of MMA...win or lose.  Let's hope the Authentic Brands Group can keep that original message alive.   

NY/LA/Toronto – September 6, 2010 – Authentic Brands Group, LLC, with offices in New York, Los Angeles, and Toronto, is proud to announce the acquisition of TapouT and Silver Star Casting Company (Silver Star), two of the biggest names in the mixed martial arts (MMA) industry. MMA is the world's fastest growing sport with billions of dollars in annual revenue and global appeal. Authentic Brands Group acquired TapouT and Silver Star as part of its multi-branded distribution strategy designed to protect brand integrity.

Authentic Brands Group has global brand building experience in apparel, action sports, consumer electronics, home and celebrity brands. The company's innovative marketing strategies include traditional and social media, and securing partnerships with high profile athletes and celebrities.

Authentic Brands Group's Chairman & CEO Jamie Salter said, "This sport is still in its infancy. We strategically chose these acquisitions as our first big move because we're getting into the right business at the right time. We're looking forward to working with the best brands and the best athletes in the world as we transition these two companies into global lifestyle brands with our retail and licensing partners."

With the acquisition of TapouT, Authentic Brands Group now owns the number one MMA lifestyle brand in the world, a brand name that has become synonymous with the sport itself. TapouT has global brand awareness that has grown alongside the MMA over the last 15 years by staying focused on the athletes and the fans. Built by three impassioned men who trained in MMA, the late Charles "Mask" Lewis, Dan "Punkass" Caldwell and Timm "Skyskrape" Katz, TapouT has maintained its authenticity through its rapid growth by staying deeply rooted in the MMA culture.

The rest of the official press release after the jump.

Ratner Earns Another Victory; Ontario Sanctions Mixed Martial Arts

UFC Vice President of Regulatory Affairs, Marc Ratner (Sherdog.com)

Not enough has been written about the importance of Marc Ratner's role with the UFC.  He is a man with a mission - an ambassador for the sport worldwide.  The interesting thing about Ratner's efforts is that they do not exclusively benefit the UFC.  In fact, it is more common for the first event in a newly sanctioned city to be from a competing promotion.  But, the UFC shouldn't want it any other way.  I have heard many making the argument that the WEC should be repurposed as a "farm system" for the UFC.  I couldn't disagree more.  The UFC has farm systems all around them.  While some may view these promotions as the Competition, in a 5 Cs Marketing analysis, I would define them as Collaborators.  The Competition is all the other things that fans can do with their Saturday night besides buying a UFC pay per view.  Maybe I'll develop these ideas futher in a separate post...I'm getting off track.

My point about Ratner is that he fights a battle for Mixed Martial Arts, not just the Ultimate Fighting Championship.  The genius of this is the UFC's realization that they don't have to play within the constraints they've been given.  So much of strategy in business is about analyzing and disecting industries with tools like Porter's 5-Forces framework.  Afterwards, we step back and make judgments about the relative attractiveness of said industry.  In a similar way, we might size the market opportunity and decide whether an investment is warranted.  I'm not saying the UFC hasn't done a similar analysis of the industry and market potential, I'm sure that they have; they just view this information as a starting point from which to build.  If you don't like the size of the pie, just make it bigger.  Of course, as the opportunties get bigger, so too does the list of promotions eager to collect on the fruits of their labor.  But these promotions bring with them more opportunities for first time trial/viewing of the sport by new audiences, new practice grounds for the develpment of talent, and the want of something more from the fans in attendance...for the world class version: The UFC.        

Joe Myers with Sherdog.com explains the details of Ratners victory in Canada:

The sport of mixed martial arts has taken another step towards legitimacy, as the Canadian province of Ontario announced it will sanction MMA beginning in 2011. “We’re thrilled [MMA is being sanctioned],” said UFC Vice President of Regulatory Affairs Marc Ratner. “Ontario and Toronto, in particular, are hotbeds for MMA and not to have it there didn’t make sense. In the past, it wasn’t that the government was against sanctioning MMA; it’s just that it wasn’t the right time for it. Now, it’s the right time, and we're excited about it.”

Ratner has said previously that Toronto is one of the UFC’s top markets in terms of pay-per-view buys and viewers on a per-capita basis. The UFC’s Canadian office, which opened about three months ago, is based in Toronto. At that time of the opening, UFC CEO Lorenzo Fertitta said Canada was the promotion’s second biggest market outside of the United States, accounting for 17 percent of its overall business.

Sophia Aggelonitis, the Minister of Consumer Affairs for Ontario, said the decision to sanction MMA in the province was one that has been a long time in coming.

Full article after the jump.

The UFC "Brand Molecule"

 

Case Western Reserve University includes an introductory Marketing course as part of its core curriculum in the full-time MBA program. The class is taught by Professor Gary Hunter who stresses the importance, as a Marketer, of understanding your brand in very high-level conceptual ways.  Its very easy to get caught up in the daily hustle, putting out fires, and swimming in details.  But, if you let these daily occurrences dictate your decisions around the brand, then you really have no strategy at all. One method of brand conceptualization which we examined in detail was the Brand Molecule.  The idea of this method is to create a graphical representation of the relationships your central brand has with its surrounding environment. Some of these relationships will influence the purchasing decision favorably and others negatively.  The trick is to understand the current situation and then make a conscious decision to shift these relationships in deliberate and strategic ways.  Below is my attempt at a UFC Brand Molecule:       



Learn more about the concept of Brand Molecules

MMA Rankings by Weightclass (August 2010)

While the main purpose of this blog is to explore business concepts as they relate to the MMA Industry, I'm still a hugely opinionated MMA fan who rarely agrees with published rankings.  One format that I do respect, is the US Today Consensus rankings.  Here is a quote from Bloodyelbow.com which further explains the Consensus methodology: 

"We collect and average the rankings of the top MMA websites to produce our consensus rankings. We compile the top MMA rankings from each of our sources and award 25 points for a first place ranking, 16 for a 10th place ranking, 1 for a 25th place ranking. A formula is used to “normalize” the data so all fighters are awarded points from those lists that do not include a full 25 fighters. This formula ensures that each ranking site awards the same number of total points regardless of how many fighters they choose to rank. Each fighter’s total is divided by the number of possible points to determine their standing in the Consensus Rankings."

I really like this method because it pulls from reputable sources and does a great job of smoothing out the results without too much reliance on any one person's opinion. Therefore, I've decided to use these rankings as a starting point each month with a few adjustments based on head-to-head match-ups, record against the top 25, and a little bit of common sense.  My stance regarding rankings is that, rather than awarding points for past achievements, they should capture a moment in time in which every fighter ranked above another would be favored to win in a match taking place on that very day.

I will update these rankings at least once per month and will always welcome a healthy debate.  Complete rankings by weight class after the jump.