How UFC Went from a $2 Million Niche Company to a $4 Billion Juggernaut

Monday’s ​sale of the mixed martial arts outfit is the largest ​transaction in the history of sports.

Ricardo Moraes / Reuters

In an interview with David Samuels for The Atlantic back in 2008, the CEO of Ultimate Fighting Championship Lorenzo Fertitta reminisced on an early mixed-martial-arts match he attended with the current UFC president Dana White.

We went down to a fight in New Orleans, and we got to New Orleans, and there was no feeling that there was even an event going on. Nobody knew about it and there was nothing going on. We got in the car and we drove out to the venue and it was kind of far away, and there was nobody there. I said, ‘You know, I want to buy a UFC t-shirt, it sounds cool.’ Nobody was even selling t-shirts. They weren’t selling programs. Maybe 15 percent of the seats were full. It was just amazing, and I was sitting there watching the event going ‘Wow, this could really be something. What am I missing? What’s different about me—am I really that sick and twisted—that I REALLY like this? Not that I kinda kinda like it, that I really like it, and nobody else cares.’

On Monday, it was announced that Fertitta would be stepping down after the company he and his brother Frank purchased for $2 million in 2001 would be sold to a powerhouse group of Hollywood talent-and-private-equity titans for the princely sum of $4 billion. The sale is the culmination a months-long process, which included overtures from several other deep-pocketed suitors.

The purchase of UFC is a story of a company that evolved from a producer of unregulated and widely-banned fights—Senator John McCain once likened mixed martial arts to “human cockfighting”—to a mainstream and international juggernaut with revenue-churning, arena-filling pay-per-view bouts, an on-demand streaming service, hefty sponsorship and broadcast deals, and reality-television extensions. There are now nearly a dozen UFC-branded video games and gyms in several cities. ESPN has its own mixed-martial-arts (MMA) news vertical and dedicated MMA programming.

Along the way, UFC events, which showcase fighters from different disciplines and backgrounds squaring off in an octagon-shaped ring, have accrued a loyal following among Millennials for whom traditional pugilism with its long rounds does not appeal. (UFC matches are shorter bouts that tend to start and finish in a flurry; the average length of a UFC fight, in any weight division, is not quite 12 minutes.) Celebrities have also caught on. On Saturday night, Justin Timberlake and Tom Brady were seen palling around in the crowd of the UFC 200 spectacle in Las Vegas. Charlize Theron, Anthony Bourdain, Mandy Moore, and Rosie O’Donnell are among the names on a list of unlikely UFC devotees.

This degree of mainstreaming was made in part by new rules enacted to bring order to an otherwise unpredictable sport. Unlike its bouts in the 1990s, which were reminiscent of street brawls, matches now have clear-cut time limits, weight divisions, fouls, and equipment guidelines. “It’s the first sport to mature with the internet,” Bill Simmons theorized on his new HBO show Any Given Wednesday last week, pointing to the proliferation of trash talk by fighters on Twitter, YouTube, message boards, and blog posts. “The UFC just makes more sense in 2016.”

Owing to its appeal, UFC fighters have become cross-over stars themselves. Chuck Lidell, who was a star fighter in the Aughts, has appeared in movies and televisions and commercials, including The Simpsons, Bones, and as a contestant on Dancing With the Stars. Meanwhile, in the past year, Ronda Rousey, the former female champion, has graced the cover of Sports Illustrated and appeared in the movies Entourage and Furious 7. She also is the sport’s highest-paid fighter and has a larger following on social media than any other female athlete.

Despite its insane growth, UFC’s long-term viability is undercut by factors both within and without the sport. Fighters routinely claim that they are underpaid for their work by UFC, particularly in comparison to boxing, a sport whose popularity has waned during the ascendency of mixed martial arts. The main event for this past weekend’s UFC 200, billed as “the fight of the century” between Jon Jones and Daniel Cormier, was canceled just days before the event after Jones was flagged for a potential doping violation, not the first time the specter of performance-enhancing drugs has made headlines. Lastly, like pro football, which remains the most popular American sport by far, mixed martial arts’ built-in component of violence may eventually work against it as fans and fighters come to terms with the consequences of the sport. Until then, much of the future grappling seems reserved for the Octagon.