Bellator CEO Bjorn Rebney studied the failures of those who came before him. | Photo: Dave Mandel
In the fast-changing business side of the mixed martial arts landscape, numerous organizations have emerged as fleeting, big-time players, only to disappear in sudden, often shocking fashion. With an eclectic mix of business models, promotional tactics and unforgettable characters and events shaping their fates, the classification of “second-tier MMA promotion” has often served as the preamble to an ultimately doomed effort.
Some flirt with major television deals before everything goes awry -- think EliteXC. Others are undone by both inevitable and unanticipated forces -- think Affliction. Still others, like the International Fight League, go bankrupt or, like Strikeforce, are acquired by Zuffa LLC, parent company of the Ultimate Fighting Championship.
In 2011, the playing field has been radically culled down compared to just a few years ago, with the UFC enjoying the post-2005 boost and a host of imitators and carpetbaggers. The game itself has changed, as well. Now largely unfettered by noxious, Johnny-come-lately promotions, the UFC finds its sole major remaining competitor in Bellator Fighting Championships, which has quietly slid into the No. 2 promotion spot since Zuffa acquired Strikeforce in March.
“Having gone to business school and with a law degree, I know you can’t just jump into this,” said Bjorn Rebney, Bellator’s founder and CEO. “You have to do a lot of empirical digging and really understand the industry -- and brand differently from the 800-pound gorilla that is the UFC.”
Rebney was president and CEO of Sugar Ray Leonard Boxing, which aired Leonard’s “Friday Night Fights” series on ESPN2 from 2001-04.
If there is a defining ethos for how Bellator has approached establishing itself in the MMA world, it comes from tapping into proven strategies to build a promotion while avoiding the mistakes of its predecessors, many of which brought a fatal mix of hubris to the equation in thinking they would compete with the UFC after a few shows out of the gate.
Thus far for Bellator’s Rebney, the promotion sits right where it is supposed to be: well-entrenched in a recurring network deal on a major channel -- MTV2 -- and populated with good talent, including world-ranked champions Joe Warren, Eddie Alvarez and Hector Lombard. Currently eying its fifth season, the promotion has jumped from ESPN Deportes to Season 2 and Season 3 on the Fox Sports Network, with Telemundo and NBC doing delayed, late night airings. In its current incarnation, the MTV2 deal runs through 2013, with an average of 27 shows per year.
“Seasons two and three weren’t the optimal television deal, but it allowed a lot of people to see Bellator many times each week. It was that next evolution,” Rebney said. “And the tournaments worked well. Guys didn’t get injured, and they moved forward.”
D. Mandel
Anything can happen in MMA.
Meanwhile, Josh Barnett’s alleged failed drug test began the unraveling that ultimately killed Affliction’s doomed final pay-per-view in August 2009, though that promotion’s demise may have been inevitable given Affliction’s jumping into the deep end of the pool with little brand awareness among fans; its initial pay-per-view numbers were paltry, at best.
Fate tipped the scales in Bellator’s favor when Toby Imada’s inverted triangle over Jorge Masdival, voted “Submission of the Year,” went viral two years ago, providing a huge spike in free advertising for the promotion. The footage, pushed out by Bellator and quickly picked up in the blogosphere and on MMA sites,
gave it a huge stamp of recognition -- something no
MBAs can factor into a business plan.
“We started seeing one or two million views of it. It became a free branding tool. Everything was working in synergy,” Rebney said.
While Bellator’s top-level talent -- Alvarez, Warren and Lombard -- is impressive, the gap between it and potential title contenders remains considerable. However, the belief in the tournament format and its ability to generate interest in potential challengers is what endures, Rebney believes. For example, the much-anticipated Warren-Patricio Friere featherweight title bout -- delayed from July 23 after Friere broke his foot -- will still happen this fall. Friere’s Season 4 tournament win guarantees it. In the interim, Warren will still compete in the Season 5 bantamweight draw. There are a lot of moving parts to the equation, but an earned title shot is an earned title shot in Bellator. There are no substitutes.
Another unique part of being the second-tier promotion involves the war for talent. For Bellator, that means holding on to existing big names.
“It’s the nature of a competitive landscape,” Rebney said. “If you sign a multi-year contract to work for somebody and you’re highly talented in what you do, when that contract comes up, you’re gonna have the option to go on the open market and secure a better deal.”
Ironically, the battle over Bellator’s best fighters may play a more significant role in its ultimate success than previous UFC rivals. Few stuck around long enough for that to become a deciding factor, but none had achieved a long-term programming deal like Bellator.
For potential free agents going either way, Bellator’s growth provides a fallback bargaining position for UFC fighters, as well as swoop-in opportunities for the UFC; in the months and years ahead, we will be able to gauge how much of a competitor the UFC thinks Bellator is precisely according to how much effort it puts into luring away its best fighters. Promoters, PR hacks and sound bites often lie, but the numbers never do.
Forrest Griffin vs. Stephan Bonnar 1 changed everything. | Photo: Jeff Sherwood
Turning Bellator into a reality required a lot of hustle. Rebney estimates he pitched 70 different groups before getting his first investor commitment. In addition to obtaining those, he also had to secure a network for distribution, which was ultimately found through ESPN Deportes for the promotion’s first season.
A longtime fan of MMA who would rustle up friends to watch events, Rebney began seriously considering getting into the promotional side in 2005, a seminal year for the sport. “The Ultimate Fighter” proved a smash hit, with the Forrest Griffin-Stephan Bonnar finale pulling in 10 million viewers in an epic battle. Yet despite MMA seemingly getting over the critical hump of proving it was viable on cable television, Rebney still had to convince potential backers it was not a flash in the pan.
“A lot of people came to me and knew I followed MMA, but they weren’t hardcore. They said, ‘This will never work. It’s too violent,’” he recalled. “My response was, ‘When people see this from a big-market perspective, on free TV, this will explode. It will be the genesis of something.’”
After a year and a half of scrutinizing these and other promotions’ business models, Rebney hit the road.
“I went on a road show where I would go from city to city and state to state and sit in front of potential groups, investment banks, some extremely large and some extremely small,” he said. “When we finally got the [financial] commitments, then I went to ESPN and said, ‘We’ve been talking about this for over a year, and you’re sick of me showing up in your offices in Bristol, [Conn.].’”
Ironically, the fact that EliteXC and the IFL were publicly traded allowed Rebney, a self-professed numbers geek, to pore over their financials and literally turn over every rock.
“
It’s inherently unfair
because it’s a literal
human being sitting
behind a desk [deciding
who fights next].
”
In Bellator, tournaments to crown weight class champions are followed by tournaments to produce title challengers. For Rebney, it mimics professional sports more closely than the dubious, backroom vibe of his boxing days, when sanctioning bodies, politics and connections interfered with the best competitor getting the next shot.
“It’s inherently unfair because it’s a literal human being sitting behind a desk [deciding who fights next]. What would you say if, after the Super Bowl, the commissioner of the NFL stood up and said, ‘Next year, the Giants will play the Dolphins in the Super Bowl?’ That happens in fighting sports every single day,” he said.
The relationship between promotions and networks is no longer what it was in the mid-2000s. MMA is no longer a sport dying for a chance to get somewhere, anywhere, on cable TV, a hobo begging for alms. No, it is a vetted commodity with proven appeal, and, as such, the sport’s promotions have more juice at the negotiating table than ever, along with the ratings, massive pop-culture appeal and money to back it up.
Buoyed by its success as the sport’s biggest brand, the UFC is in negotiations to buy a controlling stake in G4, according to recent reports in the Wall Street Journal and the New York Times. With the UFC-Spike TV relationship seemingly soured and the current deal running through 2011, many have wondered whether such a risky move in acquiring a network will help or hurt the UFC. Plus, with a suddenly UFC-free Spike TV in need of MMA programming, some wonder where Bellator lands in the equation.
Rebney insists that Bellator is on MTV2 at least through 2013, as spelled out in the current contract. When asked about the UFC acquiring G4, he offered his thoughts.
“It’s hard to second-guess the decision making of the UFC. They have been very successful,” Rebney said. “The question of starting one’s own network is a very interesting, costly, labor-intensive undertaking, but you’d have to assume the UFC has thought it out very much. There’s a lot of smart people working at that organization. There may be a whole variety of reasons behind starting their own network. The one thing about the entertainment business is nothing shocks me.”
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