Homegrown mixed martial arts league becomes major tourist draw
An evening of men punching each other in the face in an eight-sided fenced ring has become one of the area’s top business ventures and tourist drivers, according to a new study by a local firm.
The results were not surprising to Lorenzo Fertitta, chairman and chief executive officer of Zuffa, which owns mixed-martial arts league Ultimate Fighting Championship.
"It’s built on the root foundation of the first way human beings competed," said Fertitta, referring to Pankration, one of the events in ancient Olympic games. "So we don’t think this is a fad, or that people are going to get sick of watching people compete in martial arts. This is something we think is going to go on forever and grow."
The UFC’s growing fan base is also benefiting Las Vegas.
"The UFC is closely associated with Las Vegas by everyone who is involved: patrons, participants, more so than other events," said Jeremy Aguero, a principal of business advisory firm Applied Analysis, which was contracted to produce an economic impact study for the UFC. "The growth of that brand has benefited Las Vegas in the same way Las Vegas has been good for the UFC."
Zuffa requested the economic impact study from Applied Analysis to see how its events stack up against the economic impact of other local events, such as the National Finals Rodeo or NASCAR events.
"I wanted to do some research to see what kind of impact we’re having on Las Vegas," Fertitta said. "I was curious how we stacked up against things that seem to get a ton of press and people seem to talk about."
The UFC generated $86.2 million in nongaming revenue for six events between Feb. 2, 2008, and Jan. 31. Only the NASCAR UAW-DaimerChrysler 400, which generated $134.3 million on March 2, 2008, ranked higher.
The UFC events attracted 80,087 people, with 56,435 of them coming to Las Vegas for the event, numbers provided by Zuffa show.
The league’s attendance numbers place the UFC behind, in order, National Finals Rodeo, NASCAR, ACDelco NHRA Drag Races, the Aviation Nation Air Show, NHRA SummitRacing.com race, the Professional Bull Riders National Championship and the 10-day Cowboy Christmas Gift Show.
Add in attendance at Zuffa’s seven smaller events — The Ultimate Fighter events, Ultimate Fight Nights and World Extreme Cagefighting — and the UFC’s local economic impact climbs to the No. 2 spot.
"We felt like we were not getting the appropriate amount of credit for what we’re bringing to the local economy," said Lawrence Epstein, Zuffa’s executive vice president and general counsel.
Applied Analysis used event data tracked by the Las Vegas Convention and Visitors Authority for its study.
Researchers from Applied Analysis also conducted interviews with 400 attendees of UFC 94 on Jan. 31 at MGM Grand and compared the data to visitor statistics from the visitors authority.
Among the study’s findings, which Applied Analysis said has a 95 percent confidence level and involved an equal number of male and female UFC event attendees, the company found:
• The UFC 94 was the primary reason 90 percent of the attendees traveled to Las Vegas. Only 5 percent of visitors to Las Vegas come for a special event.
• 71.8 percent of attendees were from the United States and 27.5 percent were from Canada.
• 38 percent of attendees were from Southern Nevada.
• The UFC 94 was the first UFC event for 67.5 percent of the surveyed attendees.
• 73 percent of respondents said it was likely or very likely that they would attend another UFC event.
• 84 percent of the UFC visitors stayed in hotels — four points lower than other visitors to Las Vegas — spending $149 per night.
The survey’s results come as little surprise to MGM Mirage, which hosts the UFC main event cards at two of the company’s arenas.
"(Zuffa) have really done a great job of marketing," said Richard Sturm, president of entertainment and sports for MGM Mirage. "It really becomes an event when they’re here."
UFC 94, which drew the largest attendance in the study, for example, attracted 14,948 fans to the MGM Grand Garden arena. The UFC 100, scheduled for July 11 at the Mandalay Bay Events Center, sold out in minutes.
Strum said the UFC events bring a good demographic to the host properties. Translation: UFC attendees fill the restaurants and spend lots of money in the casinos.
The Applied Analysis study confirmed that.
According to the study, 42 percent of UFC 94 visitors have a household income greater than $100,000, compared with 24 percent of the city’s overall visitors.
UFC visitors also gamble more than typical Las Vegas visitors, arriving with a gambling budget of $931 compared with $556 for all visitors.
Nongambling expenses for UFC 94 visitors was nearly double those for other visitors, too: $1,528 per person versus $869 per person.
Fertitta said that although the UFC’s local economic impact ranks second to NASCAR’s, the mixed-martial-arts league’s fan base may surpass even the fan base of the one-day auto race, thanks to television.
"Arguably, we are the most significant impact for (TV) impressions brought to Las Vegas," Fertitta said.
UFC events are seen in more than 100 countries and territories in 20 different languages. The league’s fan base via television is anchored by the UFC’s reality series, "The Ultimate Fighter," which just finished its ninth season with a series of matches at the Palms.
The UFC’s pay-per-view audience also brings exposure to Las Vegas and MGM Mirage.
The study shows that just more than 4 million households ordered pay-per-view for the six events in the study. That’s a lot of exposure for Las Vegas, based on the study’s findings that each pay-per-view purchase has an average of eight viewers. Based on that number, the six events garnered a total of 33.7 million viewers.
"People are watching our events and there are always shots of MGM Grand, shots of Mandalay Bay, shots of Las Vegas," Zuffa’s Epstein said. "We’re constantly promoting the city. We’re just generating the 10th season of ‘The Ultimate Fighter’ television program, a reality show based here in Las Vegas. And that show is a great poster child for the city, great vanity shots of Las Vegas."
Beyond television, the UFC’s reach is extending into dens and playrooms around the world through video game sales.
"UFC Undisputed" for Xbox 360 and Playstation 3 was released in May.
The game also helps promote Las Vegas. The game includes screen shots of the city and lets players choose which venue they want to play in, including the arenas at the MGM Grand and Mandalay Bay.
Zuffa President Dana White said the video game’s sales, 1 million copies the first week on the market, compared with the 300,000 the company expected, are just one sign of the league’s wide appeal.
"If you look at the growth that we’ve had, we’re only 9 years old," White said. "You look at all the countries we’re in, all the television deals we have, to beat boxing in pay-per-view, we outrated ‘Monday Night Football’ on television."
Nine years is also a record of sorts for Las Vegas and the UFC.
White, who grew up in Las Vegas and attended Bishop Gorman High School with Fertitta, noted that in his lifetime many sports teams have moved to Las Vegas, but just as many disappeared quickly.
"How many years of my life growing up here, all these sports franchises that would pop up, and come and go every other weekend," White said. "(But) we’ve been here for nine years."
Fertitta and his brother, Station Casinos Chairman and CEO Frank Fertitta III, acquired the fledgling UFC, which was founded in 1993, for $2 million in 2001. Before the recession, the company was valued at more than $1 billion.
After the Fertittas bought the league — the Fertittas each own 45 percent of Zuffa and White owns 10 percent — many of the events were moved to Las Vegas.
The UFC wasn’t an instant success for the Fertittas.
Its first events, held at the Thomas & Mack arena, were poorly attended. A November 2001 event drew just 4,300 people and gated $502,550.
Zuffa decided to move the events to the MGM Mirage arenas and the league began to take off.
The first event with MGM Mirage, a March 2002 event at MGM Grand, drew 7,663 people for a gate of $898,850. UFC 94 drew nearly 15,000 people with a gate of $4.3 million.
"The first couple of years it wasn’t doing as well and we saw a potential in it and liked the event and stuck with it," Sturm said. "And we’re glad we did."
Contact reporter Arnold M. Knightly at aknightly @reviewjournal.com or 702-477-3893.
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