Things Just Got a lot More Serious for Both UFC & Dana White
Published by on June 22nd, 2008 in Current Events

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By Zach Arnold

Last Wednesday’s announcement that Lorenzo Fertitta would be stepping away from his role as President of Station Casinos to have a 100% active role in UFC management drew two predictable responses from MMA media writers:

a) Ho-hum

b) Dana White takes a back seat

Lorenzo Fertitta, who owns 45% of Zuffa LLC (the parent company of UFC), will now work alongside UFC front man Dana White (who owns 10% of Zuffa LLC). Frank Fertitta III, who remains CEO of Station Casinos, will maintain his 45% share in Zuffa LLC. Last year, it was estimated that Lorenzo Fertitta made $113 million USD from Station Casinos.

Station Casinos was a publicly-traded company that recently went private, thanks to an offer of $5.5 billion USD from both members of the Fertitta family and Colony Capital LLC, a private company that has business investments in the gaming industry.

The move by Lorenzo Fertitta to move from Station Casinos into UFC management is a bold move due to the financial considerations involved. On paper, the math doesn’t add up. Why would someone as powerful as Lorenzo Fertitta move away from a sure thing to a business that, while it’s industry leader, still doesn’t close to generating the kind of revenue that Station Casinos does?

Then again, when you have millions of dollars and you’re not even 40 years old, you can do whatever the hell you want to when you know that you are very successful in the business world.

According to writer Dave Meltzer, UFC President Dana White is very happy about Lorenzo Fertitta’s transition into a full-time position with UFC management. Meltzer claims that White was only spending, on average, 2 ~ 4 days a month at his Las Vegas home. With Fertitta around to help manage some of the company’s business deals, the thought process is that White will have more time to concentrate and focus on important issues in his life.

What makes the relationship between Lorenzo Fertitta and Dana White so unique is that you couldn’t possibly find two more different personalities. White is in-your-face and a new version of Vince McMahon. Fertitta, on the other hand, is not. Nonetheless, both men are wildly successful and in their late 30s. Life is good for them.

There is no question that Lorenzo Fertitta’s increased role in UFC management certainly could set the stage for White’s departure from the company if something bad should happen. No matter what happens to Dana White, he will walk away from the MMA business a very happy camper. He has made his millions of dollars, while cultivating a larger-than-life public persona. It is Dana White who owns a multi-million dollar home in Las Vegas and it is Dana White who will go down in the history books as the front man for UFC’s big and successful turnaround.

One interesting factor that should be raised in light of the latest developments is the status of Zuffa LLC’s massive $350 million USD in loans & lines of credit that the company took out last year to finance operations such as their European business expansion. You have to think that those creditors are breathing a sigh of relief now that Lorenzo is taking a more active role in the company. With Lorenzo Fertitta supposedly heavily focusing on both the merchandising and international expansion side of the equations, there’s a lot of money for UFC to still make on a global basis.

Which makes the move by Lorenzo Fertitta from Station Casinos to UFC management very interesting.

Despite the big success that UFC has had in the last several years, the fact remains that there have been some high-profile set backs. There was the fiasco known as the PRIDE asset sale agreement, which has resulted in a lawsuit by PRIDE FC Worldwide Holdings LLC (the company Zuffa LLC used to transfer the assets) in Clark County, NV court and has now spawned a countersuit by Dream Stage Entertainment Inc. in Federal court. On top of that, Zuffa LLC poured a good amount of resources in trying to run PRIDE in Japan. They never managed to run one show under the PRIDE banner in Japan, the second most-active and high-profile MMA market in the world. Then, there was the expansion into Europe. Despite impressive gates in the UK, UFC has found itself pouring a lot more money into marketing and promoting events in the UK than what they have received in return. On top of both of these situations, you have some fighter unrest involving high-profile personalities such as Randy Couture and Tito Ortiz. Plus, Ken Shamrock currently has a lawsuit in the Nevada court system against UFC over his contract situation. Additionally speaking, there is the mess involving Xyience that has more or less now moved to the backburner of people’s minds.

There is talk that with Lorenzo Fertitta’s increased activity in UFC management that the organization has an eight-year plan for expanding the company into becoming the number-one sport in the world. Lofty talk, but it pays to have high aspirations. The company is talking about expanding into China, India, and Brazil. As far as doing business in China is considered, China should be a code word for Macau (the Far East’s version of Las Vegas). If K-1 cannot break into mainland China, UFC likely won’t be able to any time soon. However, markets like Macau, Hong Kong, and Singapore (where a new casino is opening up soon) are certainly on the table.

The stakes just got a lot higher for UFC in terms of increasing their dominant position as the industry leader in Mixed Martial Arts. The question is how do their rivals respond to the latest develoopments.

FightOpinion.com

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