Mark Cuban: The Man Who Could Be King
Published by on February 9th, 2008 in Operation Cleanup

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Charles Jay
THE MAN WHO COULD BE KING

One entrepreneur has a chance to break UFC’s stranglehold on the sport – that is, if he really wants to

Well, the last time I was heard from I was telling you about someone who could conceivably compete on even terms with the UFC – if he really wanted to.

Many of you may have guessed – that fellow’s name is Mark Cuban.

I say that not because he is now involved in mixed martial arts. I’ve been saying that ever since he expressed an interest in mixed martial arts. Cuban was a rabid fan of the sport, indicating he has some passion for it and isn’t just another opportunist who has come along just because it looks like there’s a buck to be made.

Cuban has something not even the UFC has at its disposal – his own television network. HDNet has been poohed-poohed by some observers, and doesn’t deliver the same kind of audience as Spike TV, for example. But it is gaining some ground on cable systems and no doubt when all the televisions have to adapt to high definition he will be in a stronger position. Besides, when you control your own network you can develop and air as much support programming for your “franchise” as you want, which can help mitigate the effect of having a lower audience base.

Cuban also has other interests which provide for the possibility of vertical integration. He has some control over the American Airlines Center in Dallas, which means he has control of advertising, concessions and production facilities. He has access to sponsorship relationships that might already exist with his other enterprises. He has the advantage of foot traffic in the arena for the sake of cross-promoting with his Dallas Mavericks basketball team and can call on a big mailing list for purposes of drawing live gate numbers.

Cuban has money – lots of it – so that if he decided to get into a spending war with anybody he could hold his own. And he seems to understand something that I think is very fundamental to the way MMA is going to operate in the coming years – that is, once MMA has started to mature, the brands will mean less and the performers will mean more. He is talking about equality in contracts and in giving the fighter a greater piece of the pie and if that’s not just blowing smoke, then he’s most certainly on the right track as far as that’s concerned.

He also has ready avenues to pay-per-view, both through cable carriers and through a unique pay-per-view channel he has with DirecTV. As I understand it, he offers a subscriber service for movies, in which viewers can see films on his network before they premier in theaters. And not only does he own a film production company (Magnolia Pictures) but he also operates a movie theater chain (Landmark theaters) and a company that distributes DVD’s that has inroads to major retailers (2929 Entertainment). Not all of these apply, but some of them do. Example: he is contemplating the distribution of his live events to his string of theaters. he controls them, and he can market within them. He can also promote alongside films he has a hand in producing. Whichever way you slice it, there is no question he is well-positioned to get his product to the public.

Cuban is nothing if not competitive. He took a Mavericks franchise that had been a sad sack and turned it into a perennial contender and did so using a lot of innovative techniques. For example, he gathered a group of ten assistant coaches so that the players could get more personal attention. And he improved locker room facilities so that his players would be as comfortable as possible. But his rationale is sound – he has an investment of tens of millions of dollars in each player, and as long as they perform on the court there is nothing wrong in taking care of them.

Now contrast that with what some disgruntled competitors are saying about the UFC these days.

And then hang on for the next installment, when we talk a little more about Cuban and his possible future plans.