Larkin’s Take On Things Makes Some Sense
Published by on May 17th, 2008 in Operation Cleanup

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by Charles Jay

I thought that in light of the reportedly shaky ground his company is treading on, and the fact that he has had a more sophisticated background than most people who are piloting MMA “franchises,” it might be useful to go into the file and pull up an interview I reading a month or two ago where Jay Larkin, the CEO of the International Fight League (IFL) was talking to CBS Sportsline. I found some of his quotes and observations to be very interesting, taking into account recent events in the rapidly-moving world of MMA.

For example:

On the UFC: “They’ve done a magnificent job positioning themselves to be the only name in this sport. So when people such as sponsors and networks hear ‘MMA’, they immediately assume you’re talking about UFC. That may be good for them in the short-term (but) it’s very bad for the industry and the sport in the long-term.”

– I think I would have to agree with that. My own perspective on this (and it doesn’t come out of my own ass, so to speak) is that the UFC is probably less concerned with the growth of the industry in general than it is in the growth of its own operation. That’s not because they don’t care about the business; it’s because they consider themselves and the entire industry to be mutually-inclusive. Companies that are in the fray for the purposes of pure opportunism or do not have the staying power to hag in for very long (as Larkin’s company is rumored to be) are “just visiting.” The real litmus test in terms of their own attitude was the so-called “media ban” they imposed a while back (some of which was lifted). If they truly cared about the entire industry getting bigger, they would never have dared do that. But they want less attention being paid to websites that might cover other organizations as well and all attention paid to their own web presence. Of course, to be an industry, strong competitors have to emerge, and it would seem Larkin is well aware of this, although I’m not sure there’s very much he can do about it at this point in time.

On other MMA promoters: “Some are hemorrhaging money (and) some are surviving, but no one is making money except UFC. Now that is not the sign of a healthy sport. That is not the sign of a growing category; it’s the sign of a growing company. So that’s troubling.”

– It reinforces what I wrote above, and goes hand-in-hand with it in a sense. What’s interesting is that other promoters came into the market, and many of them who thought that there was a mountain of money to be made may have thought they could just open the door, flick on a switch and fans would come flocking. But in point of fact, what has happened is that fans responded to the UFC’s way of promoting; their “brand,” if you will, but not necessary to just any form of mixed martial arts. That’s a testament to their ability to reach the audience, cultivate it and retain it. But Larkin is saying, as far as what I can tell, is that the overall market is not as big as a lot of the optimists thought. i would tend to go along with that. I don’t think the sky is the limit, nor am I so sure that it can continue to grow and grow and grow. What the industry needs is some artful promoters to make that happen. I don’t think the UFC is going to adjust its promotional approach nor the product itself just for the sake of expanding its fan base, because they might lose some existing fans along the way. Larkin’s company has endeavored to put forward a different package along the lines; it’s just that it hasn’t been the right package (i.e., maybe the team concept isn’t a big winner).

On television in MMA: “Everybody makes noise about how they have to have it. The demographic is perfect: 18-35 year-old males, but nobody is paying for it. A lot of these promotion companies have been willing to give it away for the sake of exposure. When you’re giving something away you can’t suddenly stop and turn around and demand to get paid for it.”

– Larkin’s a veteran of the television industry, so I respect his insight here. And he is correct in saying that your product is much more valuable if it an be sold. However, some creativity may be in order here as well. Considering that there is a bigger consumer market in terms of merchandise than there is in, say, boxing, there can be beneficial tie-ins with a number of sponsors. But it’s also not such a bad thing to buy the time, own it and sell it. Sports teams are moving in that direction; they find they can maximize their revenue, execute “bundling” with the signage from venues and radio/TV crossover promotion and leverage the air time better if they control it. If an MMA organization had that kind of sales department, they could affect the same thing, to a certain degree. That way it wouldn’t matter if a cable outfit, which might be cash-strapped, could not or would not buy it.

On competing with the UFC: “Listen, I think rollup or consolidation is the future of this industry. I think you’ve got a whole bunch of smaller companies out there that are struggling. I certainly think the way to do it is have an association; a consolidation, if not an outright partnership with a combination of companies.”

– I have made references to this in previous columns. If companies get together and putting complementary resources together can challenge an outfit like the UFC and make the industry stronger and better, that becomes a very positive thing. Of course, if it has the effect of stunting competition from the perspective that it gives fighters less outlets to sell their services to, it can, in the long run, have consequences. But I guess we’re a long way off from that right now.

On the identity or ‘brand’ of his company: “One of the major things along those lines is that when you watch one of our shows, just by not seeing a cage you know you’re not watching the UFC and that you’re watching the IFL.”

– In a way, he’s got a point. But I don’t know what the greater meaning of that point really is. Yes, the Octagon was a nice selling point and a symbol for the UFC. i suppose the IFL is looking for the “Hex” (a six-sided ring) to have the same effect. I’m not so confident along those lines, at least as it applies to the IFL, but these guys are going to give it a try, which is all they can do.

I know I’ve been jabbing at the IFL a little bit, particularly with the last column as I commented on the introduction of the “Hex.” But Larkin is no dummy, and probably brings some awareness to the table that might not exist in the people around him.

He sounded practical and very realistic in the interview; in fact, he sounded like a guy who would seem not to live in denial, but instead one who would know when it’s time to get out. He’s the guy I’d watch; if you see him flinching, you can bet there is a problem that has gone too far to eradicate, or even “spin.”