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Five business lessons from UFC’s meteoric rise

Apple, Google, Tesla — those are the caliber of companies that everyday business leaders look to for insights to use themselves, and rightfully so. However, you can glean valuable information from a host of other corporations, some of which you’d least expect.

Enter Ultimate Fighting Championship, mostly known as UFC. Yes, the mixed martial arts fighting promotion. Before you laugh or turn your nose up on us, give us a chance to convince you otherwise. The UFC over its controversial, but successful history, has proven its business chops in unconventional ways. Here’s five big takeaways:

  1. Avoid The Naysayers

As we alluded to, UFC is no stranger to controversy. And with that, comes critics. Lots of critics. In UFC’s early days, they almost single-handedly brought the company down and if not for both persistence and acceptance from UFC brass, the critics would’ve probably prevailed.

While punching, kicking, and choking an opponent inside an octagon ring is accepted in society nowadays, it wasn’t in the mid ‘90s when UFC was first birthed. Government officials — most notably ex-presidential candidate John McCain — tried to shut down the sport repeatedly over the violence, which they deemed “human cockfighting.”

However, UFC officials fought back and admittedly, accepted some of the criticism. They instituted weight classes and more rules to avoid mismatched fights. It worked and politicians slowly backed off, letting the sport flourish. So listen to the critics, sort of, but don’t completely cave in to them, either.

  1. Sell When The Time Is Right

Up until 2016, the UFC was mostly a family-run business. Two brothers — Frank and Lorenzo Fertitta — saved the company from sure-fire bankruptcy in the early 2000s with a $2 million purchase. Up until then, the Fertitta’s had made their fortune running a multitude of casinos in Las Vegas.

But none of that casino success would compare to their sale of the company 16 years later for a grand-whopping $4 billion to WME-IMG (now known as Endeavor). No, that’s not a typo either. If you do math, that’s a 200X return on the initial buy in less than two decades.

Of course, the brothers had a soft spot for the UFC, which along with president Dana White, had built almost from the ground up. But everyone has a price — and for the Fertitta’s, that was $4 billion. It’s a good reminder to never get too attached to your work that you’ll let a once-in-a-lifetime offer go to waste.

  1. Build Around Your Talent

Every for-profit organization has superstar talent — marketers, salesmen, accountants, recruiters, etc. But in the UFC, the superstars are the fighters themselves that draw box-office crowds and pay-per-view buys. No matter the skill set, a good organization knows to maximize that talent.

Look no further than one Connor McGregor. He’s UFC’s cash cow — one because of his own talents, but also because UFC’s savvy promotion.

Take his one-off boxing fight with Floyd Mayweather for example. How many companies would allow their top talent to play with the competition (boxing in this case)? Not many. UFC did, however, and it only made McGregor a bigger star with casual fans, which they’ve since lured to UFC events.

  1. Pivot When Business Demands It

Media is undergoing a seismic shift as you read this. Over-the-top streaming networks such as Netflix and Hulu have changed how people watch content. With that, traditional TV and pay-per-view (PPV) models have fallen by the wayside.

The latter of which was UFC’s big revenue-driver at one time. However, in 2019, the company signed an exclusive contract with ESPN that would put all of its PPV events on the network’s ESPN+ streaming service and nowhere else. It was the perfect pivot on UFC’s behalf before traditional PPV lost all of its luster (which it mostly has since).

  1. Solve, Not Sit Back

When the COVID-19 pandemic struck, UFC flung into action rather than inaction. It was the first pro sports organization to return to business — with strict testing, social-distancing requirements, and even a government-sanctioned location they called “Fight Island.” All the while the MLB and NBA grappled with a return strategy for months longer.

That quick reaction from UFC was rewarded handsomely. UFC 249 generated 700,000-plus PPV buys and it was one of the most bet-on events in UFC history. It pays to take action quickly.

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