Ultimate Fighting League Struggles

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Once famously condemned by Senator John McCain as "human cockfighting," the U.F.C. is now so mainstream that Bud Light is a sponsor. Aggressive marketing and product bolstering helped reshape attitudes about the savage, free-form sport, transforming its image from scrawny freak show to brawny money machine. The U.F.C. routinely generates more income than boxing or professional wrestling, often at the same venues. Its tournaments have drawn 19,000 spectators; ringside seats have fetched as much as $1,000.

The U.F.C. not only outsells boxing and wrestling at the box office but, more impressively, its pay-per-view buys beat boxing and wrestling in all but the most elite bouts. In 2006, the league's payout was $223 million, which broke the industry record for a single year. Recent U.F.C. events have been bought by between 300,000 and 1 million homes, with shows priced up to $54.95. In contrast, the I.F.L.'s Las Vegas show was carried live on Mark Cuban's HDNet, a small cable channel that pays no rights fees and is unavailable in standard definition. It was cruel proof of the maxim "What happens in Vegas stays in Vegas."

The ratings of the U.F.C.'s weekly Spike TV reality show, The Ultimate Fighter, often stomp Nascar, baseball, and preseason N.F.L. games in the sought-after 18- to 34-year-old male demographic. Before tournaments, the names of its fighters are among the most popular entries on internet search engines. "The U.F.C. has done a phenomenal job of branding and positioning itself as the only name in the sport," says Larkin. "That's great for the U.F.C. in the short term, but terrible for the sport in the long term. The company is growing, but not the industry. For better or worse, mixed martial arts and the U.F.C. are synonymous."

Ultimate Fighting was conceived by a Southern California advertising executive in 1992 as a made-for-TV spectacle. Barefooted, bare-knuckled pugilists of varying styles were pitted against one another in an eight-sided structure with walls of chain-link fencing. "The first events were banquets of violence that lowered civilization's limbo bar," Wertheim says.

In those frontier days, the U.F.C. had no weight classes, no time limits, and only two rules: A fighter couldn't gouge an opponent's eyes or attempt to crush his windpipe. The competitions were informal; the spectators bloodthirsty; the bouts more Marquis de Sade than Marquess of Queensberry. An early slogan: "There are only three ways of winning: by knockout, submission, or death."

Unsurprisingly, politicians—notably McCain—campaigned to outlaw Ultimate Fighting. By 1997, 36 states had. Effectively banned from TV, the sport went underground, and events were organized on the Web. "Mixed martial arts wasn't even allowed on pay-per-view!" says White. "Porn was, but the U.F.C. wasn't."

Seven years ago, with the U.F.C. on the brink of extinction, two Las Vegas investors bought the league in a fire sale for $2 million. White was installed as president and given a 10 percent stake. The no-holds-barred approach was jettisoned, rules tightened, drug testing enforced, and state athletic commissions won over. In a matter of months, the U.F.C. had secured deals with an array of pay-per-view channels and was packing major arenas. Still, the new owners lost $44 million before The Ultimate Fighter debuted on testosterone-targeted Spike in 2005 and turned things around by becoming a must-see cult sensation.

The change in the U.F.C.'s fortunes did not go unnoticed by Gareb Shamus, founder of Wizard Entertainment Group in New York. The 39-year-old Shamus oversees comic-book conventions and a cluster of niche publications that includes Anime Insider, Special Ops Report, and his flagship title, Wizard, a pop-culture review aimed at nerds with Spider-Man and Angelina Jolie fetishes.

"I'm constantly scouring the world markets to identify what guys will be into next," Shamus says. "I saw Ultimate Fighting as a burgeoning sport with the potential to get really hot." And spin off lots of merchandise. Shamus and his partner, real estate developer Kurt Otto, fashioned a toned-down version that they thought would be more palatable to sponsors.

On November 29, 2006, exactly seven months after its inaugural event at the Trump Taj Mahal in Atlantic City, the I.F.L. made a public stock offering. Stoked by a 60 Minutes feature touting Ultimate Fighting as the next Nascar, shares shot from $4 to $17 by January 2007-a market cap on par with the most prosperous professional franchises.

The new league swaggered into the crowded field of M.M.A. contenders with $20 million in capital, weekly TV shows on Fox Sports Net and its emerging subsidiary MyNetworks, and plans to expand internationally. Thirteen events were planned across the country for 2007.

 
Itching for a fight, the U.F.C. rocked the upstart before it even answered the opening bell. No sooner had the I.F.L. announced its inaugural tournament than the U.F.C. sued the league for hiring two of its former employees. Though the case was settled out of court, litigation delayed the kickoff and spooked the unsigned Fox Sports Net and several sponsors.

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