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Fighting cage match to turn UFC into national phenomenon

UFC

Jake Michaels / The New York Times

A photograph from a fight at the Ultimate Fighting Championship office in Las Vegas, March 22, 2016. Frank and Lorenzo Fertitta, brothers and owners of the UFC, have worked to bring what martial art critics have derided as “human cage fighting” into the lucrative mainstream of spectator sports.

It has been a while since Frank and Lorenzo Fertitta tried to choke each other into submission. The brothers took private jujitsu lessons in the early 2000s, and at the end of each they were given the chance to try new moves in a dojo in Las Vegas. But you reach a certain age (Frank is now 54, Lorenzo is 47) and turn up in Forbes (which estimates each brother is worth $1.6 billion), and brawling starts to seem like a bad idea.

That does not mean the Fertittas have given up on combat. After earning their first fortune through an empire of casinos, they spent $2 million to buy the Ultimate Fighting Championship, a struggling mixed martial arts company, in 2001. Since then, the brothers have worked tirelessly to bring into the mainstream what critics have long derided as “human cage fighting.”

Ultimate Fighting Championship events are now broadcast in 158 countries. Until last week, they were legal in all but one state in the union.

The lone holdout was New York.

The Fertittas have tried since 2007 to persuade lawmakers in Albany, New York, to overturn a law that expressly prohibits all forms of combat sports, except boxing. Year after year, they were thwarted by an unlikely opponent: a Las Vegas union for kitchen workers.

It turns out that Culinary Union Local 226, which represents 55,000 employees in Sin City’s hospitality industry, had an ally in — of all people — the former speaker of the New York State Assembly, UFC officials say. That would be Sheldon Silver, long the state’s most effective legislative gatekeeper. Silver, a Manhattan Democrat, refused to allow a vote on legalizing mixed martial arts.

But he left the Assembly last year after a conviction on corruption charges. Then, a UFC triumph was only a matter of time.

The time was Tuesday afternoon. With ESPN cameras rolling to capture the moment, the Assembly voted 113-25 to overturn the ban.

“It’s a terrible, nasty, violent sport,” said Michael Benedetto, a Democrat from the Bronx, explaining his highly ambivalent “yes” vote on the Assembly floor. “But it is everywhere else.”

Through a lawyer, Silver declined to comment.

The “banned in New York” stigma was long an impediment to the kind of respectability the sport has craved. It kept the UFC from holding events in what it calls the largest and most important media market in the world. It also prevented major companies from signing sponsorship deals.

“A couple have said, ‘We love the product, we love what you guys do, we love the demo that you deliver,'” said Lawrence Epstein, a UFC lawyer. “'But our compliance guys are scaring us, asking us how can we sponsor a company that is illegal in New York.'”

Creating a professional sports league is one of the trickiest ventures in the business of popular culture. The list of failures in recent decades includes Major League Volleyball, the National Bowling League and — who can forget? — Pro Cricket, which expired in 2004, the same year it was born.

Against long odds, the Fertittas are well on their way. Today they estimate that 30 million to 40 million people watch their biggest pay-per-view events, in homes or at bars, a number that far exceeds the audience for any game of the 2015 NBA finals.

Unlike the NBA, though, the UFC is run almost entirely from one office. It produces its own events, owns its own intellectual property, sets the amounts it will pay its fighters and all but dictates fight nights to its athletes, who are independent contractors. It is possibly the most vertically integrated of any sport.

‘$660,000 Per Letter’

The Fertittas are built like former bouncers and they clearly enjoy watching a roundhouse kick to the head as much as the next fan. Little else about them fits the profile of a mixed martial arts enthusiast. They wear $5,000 bespoke suits and they are on the ARTnews Top 200 Collectors list, having accumulated a catalog of work by artists like Andy Warhol, Richard Prince and Damien Hirst. On a staircase in the UFC’s offices, in a nondescript industrial park near an In-N-Out Burger in Las Vegas, there is a huge spin art painting by Hirst, with “UFC” inscribed in the center.

“He’s become a very good friend,” said Frank, the taller of the brothers, speaking of Hirst. “Sweetheart of a guy. Big fan. Brings his kids to the fights.”

The brothers were sitting one recent afternoon in the offices of Station Casinos, their original business and now a collection of 21 properties, mostly in Las Vegas, that they own or manage. With more than 12,000 employees and $1.55 billion in revenue last year, it is one of the largest gambling companies in the country. If you’ve never heard of it, that is because Station caters mostly to residents of Las Vegas, a population that tends to shun the extravagant, goofily themed casinos that appeal to tourists.

Targeting locals was the idea of the brothers’ father, Frank Fertitta II, who rose from blackjack dealer to part owner of a 5,000-square-foot casino, which opened in 1976. He taught his sons the casino trade and also instilled in them a love for boxing, bringing them to such classics as Ali vs. Spinks and Hagler vs. Hearns.

Before they acquired the UFC, the brothers briefly considered entering the boxing business. But they thought the sport was a mess: too many promoters, no long-term vision.

“Every boxing match is a going-out-of-business sale,” Lorenzo said. In other words, promoters seek to maximize revenue — padding their fighters’ records instead of fighting the fiercest opponent, for instance — without much regard for the future of the sport.

Why, Lorenzo asked, did it take so long for Floyd Mayweather Jr. and Manny Pacquiao to square off, which they did in 2015, five years after negotiations began? “Those guys probably thought they could do other fights and milk it,” he said. “We have a different mentality. If the fans want to see the fight, let’s do it.”

For the Fertittas, the appeal of the UFC was building a sport they could control from top to bottom. Initially, though, it was a reclamation project. The company was started in 1993, and one of its co-founders was Bob Meyrowitz, best known for creating the King Biscuit Flower Hour radio program. He hyped the UFC’s reputation for unchecked aggression — hair pulling, for instance, was allowed — and reveled in its semi-outlaw status.

In the 1990s, the brothers learned about mixed martial arts through a high school friend of Lorenzo’s named Dana White, who was training boxers and business executives in need of a workout. A hybrid of boxing, judo, taekwondo, wrestling and other disciplines, mixed martial arts intrigued the brothers. White enrolled them in jujitsu lessons, and the three became regular sparring partners.

“It was really competitive,” said White, now the public face of the UFC and the one who separates fighters as they taunt one another at weigh-ins. “I choked those guys out a bunch of times, and they did the same to me.”

When Meyrowitz went looking for a partner, the brothers bought him out instead. There was not much to buy, they soon realized. But the league’s name, as tarnished as it was, had become synonymous with MMA.

“We spent $2 million on three letters, basically,” Lorenzo said. “About $660,000 per letter.”

The brothers created Zuffa, Italian for “fight,” a promotion company, to operate the UFC. They took the emphasis off anything-goes savagery. Rules were adopted, 31 in all, including prohibitions against head-butting and “groin attacks of any kind.” The brothers grew up in gambling, a highly regulated industry, and they decided that the way to build the UFC was to get it regulated by state athletic commissions, making the sport palatable to a broader audience.

“When we bought the UFC, it’s not on television,” Lorenzo said. “The only thing you have are live events. Our big push was to get this legalized in all states. And because the gold standard for regulation is Nevada, that was our first state.”

The first few years were disastrous. In September 2001, the three flopped in their pay-per-view debut because they did not buy enough airtime. The main event, at the end of the evening, was cut off in the second round.

“Staffers in our broadcast truck were actually crying,” Lorenzo said. “We had this elaborate after-party planned. It was worse than a funeral.”

The brothers lost $8 million to $10 million a year for the next few years, and briefly considered surrender. In 2005, they opted for a final win-or-walk-away push in the form a $10 million investment to produce a reality show, “The Ultimate Fighter,” which ran on the Spike television channel. Combatants lived and trained together in a house and fought one bout per episode.

The season finale was “the most epic fight ever,” Lorenzo said. The show lost money, but the corner had been turned. The next year, pay-per-view events were profitable, and in 2007, the UFC had 5.1 million buyers for 11 pay-per-view fights. Last year, UFC took in $600 million in revenue from ticket sales for live events, TV licensing fees and merchandise. Its athletes have been featured on the cover of Sports Illustrated. One of them, Ronda Rousey, hosted “Saturday Night Live.”

Every Tuesday at 1:30 p.m., major decisions about orchestrating the league and its roster of 523 fighters are made in Zuffa’s offices at a meeting called Match Making. It is held in a second-floor conference room attached to a kitchen run by a chef lured away from Nobu, a storied Japanese restaurant. Lorenzo is a fan of the paleo diet, and main course options one afternoon included grilled beef tenderloin with Meyer lemon zest port wine reduction.

Lorenzo sat at the head of the table. A list of coming fights was posted on a white wall. Over the low clatter of cutlery, eight executives plotted bouts in the weeks and months ahead. It was like assembling a jigsaw puzzle with living pieces.

“She’s not going to jail,” one participant said, quizzed about a fighter’s availability. Another fighter refused to fly to Brazil to take on a Brazilian. A fighter named Paige VanZant was unavailable because she was on “Dancing With the Stars.” Conor McGregor was the topic of a lot of talk.

“You need to talk to him,” someone told Lorenzo.

“He doesn’t wake up until 4 p.m.,” Lorenzo replied.

The UFC is like the NFL minus the team owners or a players’ union. There are rival leagues including Bellator MMA, which is owned by Viacom. But the UFC, by its own account, is the leading player.

That has led some critics to argue that the UFC grossly underpays fighters. One of them is Ryan Jimmo, a light heavyweight from Canada.

“The talent is being exploited,” Jimmo said in a telephone interview. “The UFC is basically where the NFL was in the ‘60s, before the players were paid anything close to their current salaries.”

Robert Maysey, a lawyer in Arizona, has filed a class-action antitrust lawsuit against Zuffa, asserting that it has a monopoly on the mixed martial arts business and exploits it to keep fighters from earning a fair wage. The case has six named plaintiffs, including Jimmo.

Maysey said entry-level fighters earned $12,000 a bout, and $12,000 more if they won. Fighters in title bouts earn base pay of $300,000 to $500,000, and bonuses that could be worth $3 million or more at the highest level. Marquee fighters can also earn a cut of pay-per-view revenue.

“If these fighters were boxers, they’d make $30 million, not $3 million,” Maysey contends. “Boxing is competitive; promoters have to compete. They’ll pay out 85 percent of revenue to fighters and keep the rest. In mixed martial arts, those numbers are reversed.”

The UFC counters that before the Fertittas, there was no market for MMA fighters. Now competition is ferocious, and the UFC can name half a dozen athletes it has lost to rival companies.

“We are proud of the compensation we pay our athletes,” Epstein said. “It’s comparable to leagues of our size, like Major League Soccer.

The Jujitsu Clause

The two brothers have equal stakes in Zuffa. And while there is no hint of tension between them, a lawyer insisted that their contract needed a dispute-resolution mechanism in case they ever differed over corporate strategy. Lorenzo had an idea: They would fight.

“A sport jujitsu match, three five-minute rounds,” he said. “Dana would be the referee. Whoever won got to vote the other guy’s shares.”

It has never come close to blows, the brothers say. But privately, each says that if combat were required, the other would win. “Frank’s getting ornery in his old age,” Lorenzo said. “Just kidding.”

On a Saturday night in March, the Fertittas were standing backstage at the MGM Grand Garden Arena, getting ready for UFC 196. (All pay-per-view events are numbered.) The Hollywood superagent Ari Emanuel, who handles the brothers’ television deals, nibbled hors d’oeuvres.

In the arena, 16,000 fans were being worked into a state of manic anticipation. The Who’s “Baba O’Riley” signaled the start of the night’s five televised bouts. Hundreds of Irish flags waved in honor of McGregor, whose attempt to win the welterweight title at 170 pounds, 15 pounds above his fighting trim, was the evening’s top attraction.

Before Lorenzo took his octagon-side seat, he stopped by McGregor’s dressing room to show him an email from Bono, of U2. It contained a sketch of the fighter with the words, “Conor McGregor, unbeatable at any weight.”

“That’s brilliant,” McGregor said, with a grin, as an aide taped his hands for the fight.

‘Dana, I’m Sorry’

While the UFC’s producers manage every detail of the evening’s staging, they cannot ensure excitement once the bell rings. And on this night, fight after fight was dull.

Mixed martial arts bouts often end quickly — the record is six seconds — but they can also drag on, with evenly matched athletes circling each other uneventfully. During one of the night’s more static matches, the crowd booed.

The loser of that fight, Gian Villante, leaned over the octagon fence, toward White. “Dana,” he yelled over the din. “Dana, I’m sorry.”

White waved him away benignly, but he was stewing. Asked to rate the evening, three fights in, he said, “I give a big fat F!” adding an obscenity to underscore the point.

“We need some good fights,” Lorenzo said.

He got his wish. In the penultimate fight, the challenger, Miesha Tate, whose nickname, Cupcake, seemed more ironic as the match wore on, squeezed the throat of the champion, Holly Holm, until she lost consciousness.

“She sunk in the choke and put Holly Holm to sleep!” shouted Joe Rogan, the pay-per-view announcer.

Then it was the men’s turn. McGregor faced Nate Diaz, a vegan who had just 11 days to prepare for the fight after the original opponent pulled out with a broken foot.

In the first round, it looked as though the fight would be brief. A punch left Diaz bleeding so profusely from a cut beside his right eye that it was hard to imagine he could see. But in the second round, Diaz put McGregor into something called a rear naked choke.

A few seconds later, McGregor tapped the canvas. Diaz had won by submission, in a huge upset.

The crowd howled in wonder and elation. It was as though this display of aggression, courage and surrender had transformed people from fans into witnesses. Everyone talked about what happened the way someone would talk after seeing a meteor destroy a building.

Even fans from Ireland seemed satisfied. “I’ve been to a lot of sporting events — boxing, football, rugby,” said William Donnelly, who had flown in from Belfast, Northern Ireland, with friends for the fight. “I’ve never experienced anything like that in my life.”

Afterward, in the waiting room, White and the Fertitta brothers were joined by Epstein, the UFC lawyer, who cheerfully reported that he had just met Leonardo DiCaprio.

“He said it was the most exciting night of his life,” Epstein said. “I was like, ‘Wait a minute, you just won the Academy Award!'”

Don’t Fear the Guillotine

Those who consider mixed martial arts excessively brutal would have found much to confirm their opinion at UFC 196, if they could bear to watch. As Holm lost consciousness, she threw sad, eerie little punches into the air, the reflex of a fighter whose lights were going out.

The next day, the Nevada Athletic Commission suspended nine fighters for a variety of possible injuries. The UFC said three fighters were taken to a hospital, as a precaution, and that none had concussions.

The company concedes the perils of a sport that allows a move called the guillotine, but says it is paying for research into concussions and points to a long list of protocols that protect fighters. Medical examinations are conducted before and after every fight. Two plastic surgeons were in the arena the night of UFC 196, for immediate stitch-ups.

In the New York Assembly, dozens of lawmakers are appalled by mixed martial arts. But this vocal group does not fully explain why the state rebuffed the UFC for so long.

Zuffa executives maintain that its real problem was the Culinary Union Local 226, which operates out of a white, pink and blue building in Las Vegas emblazoned with the words “In solidarity we will win!”

Labor activists credit the union with making the city one of only a few in the country where waiters, maids and dishwashers can earn a living wage. It has contracts with almost every casino on the Strip. But the Culinary Union has spent more than a decade trying to unionize Station Casinos properties, with no success.

The Fertittas say that their employees are happy and note that UFC events hire thousands of union workers annually.

According to participants on all sides of the drama, the Culinary Union enlisted the help of the New York Hotel and Motel Trades Council (HTC), an influential lobby in Albany. The Culinary Union and the HTC share a parent group, Unite Here.

HTC had a strong relationship with Silver, because it represents 32,000 New Yorkers and because it gave — and continues to give — generously to the New York State Democratic Assembly Campaign Committee, which was for years was controlled by Silver.

The HTC and the Culinary Union were rarely public about their opposition to mixed martial arts, though in 2012, the Culinary Union sent lawmakers a mailer criticizing UFC fighters.

In the New York Senate, the UFC had no problems. Every year starting in 2010, the Senate passed a bill legalizing mixed martial arts. But it never came up for an Assembly vote. Zuffa’s representatives and many others have pointed out that Silver controlled what legislation reached the Assembly floor.

In effect, the Culinary Union had set up a roadblock in Albany from an office 2,500 miles away in Las Vegas, hoping to turn Zuffa’s problem in New York into concessions at the Fertittas’ casinos in Las Vegas. Zuffa executives said it is no coincidence that they succeeded soon after Silver was gone.

An official from the Culinary Union declined to comment.

This wasn’t the first time that the union took a local fight out of town. When Deutsche Bank owned the Cosmopolitan hotel in Las Vegas and would not negotiate with the union, union members poked at a sore spot — in Washington. They sent more than 900 postcards to the Federal Reserve featuring a house with a foreclosure sign, arguing that Deutsche Bank was a bad actor in the U.S. housing crisis.

In May 2014, Deutsche Bank sold the Cosmopolitan to the Blackstone Group. By February 2015, the casino was a union shop.

Even after its loss in Albany, the Culinary Union Local 226 still shadows the Fertittas. In coming weeks, an initial public offering is planned for Station Casinos. The brothers stand to make more than $100 million each, according to the prospectus, for selling their management company to the casinos. Unite Here has created a website to denounce the offering as a sweetheart deal for the Fertitta family.

“They don’t give up easily,” said Ruben Garcia, a law professor at the University of Nevada, Las Vegas, referring to the Culinary Union. “This is a union that engaged in the longest strike in gaming history, the Frontier Casino strike in the ‘90s, which lasted six years and which the union won.”

The Fertittas savored their victory in New York on Tuesday with a brief Champagne toast. Then it was back to work. The UFC is already starting to assemble a fight card for the first mixed martial arts event at Madison Square Garden, tentatively set for November. Even if you do not have a ticket, Lorenzo promised, you will know something big is afoot.

“You’ll see the UFC take over Manhattan,” he said. “It’ll be no different than if the Final Four were in town. The city will be buzzing.”

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