Sometimes it’s the investments that you don’t make that haunt you the most, but “hindsight’s always 20/20.” In the new Netflix documentary series Mr. McMahon, Shane McMahon, son of WWE founder Vince McMahon, revealed that the UFC approached the WWE about a potential buyout in the early 2000’s:
“At the time, the UFC, they got in some financial problems and came to us and said ‘would you like to purchase the UFC?’… I said ‘Dad, let’s just go for this one.’ I thought we could really grow that brand because it’s tailor made for what we do. We have a production team, we have a live events team, we have a merchandising team, we have all of it just ready to go. To me it was plug and play.”
But his old man didn’t see it that way. It wasn’t the financial troubles that bothered Vince but, instead, the business model. The WWE founder didn’t see the UFC as “plug and play” at all:
“I didn’t like that business model. Our business model [is to] create characters much like Disney or someone else, and we can use them forever, as opposed to boxer / UFC [fighter]. Once you’re beat, you know, once you’re hurt or something, your career is over. We’re in show business. That’s a sport.”
As such, the elder McMahon declined the offer, and the rest is history. Zuffa, a company started by Lorenzo and Frank Fertitta and high school friend, Dana White, purchased the UFC for $2 million in 2001 and sold the business to Endeavor for just over $4 billion in 2016. It wasn’t always easy going, though. By 2004, the Fertittas had invested over $40 million in the company which had yet to turn a profit.
While things eventually turned around, and the Fertittas were able to unload the business to Ari Emanuel founded Endeavor for over $4 billion in 2016, the company’s success was far from guaranteed, a fact Vince McMahon believes that Shane fails to recognize:
“10 years later or something, UFC was sold for a lot of money, and I think Shane wants to take credit for the idea of buying UFC… so Shane, you take your money and put it in, which didn’t work. It wouldn’t work. Because it would take a huge investment.”
Shane’s ability to make the investment work on his own seems somewhat irrelevant. His opinion was that he and his dad could make the UFC profitable through utilizing experience and assets of the family’s existing line of business, professional wrestling.
While the UFC’s massive success seems to validate Shane’s belief, it’s impossible to know the counterfactual. Moreover, Vince makes a great point. At first glance, the WWE and UFC seem to have similar business models, but significant differences exist.
The WWE can afford to spend vast sums on promoting individual wrestlers, as the company controls fight outcomes. As such, the return associated with investing in a professional wrestler’s character development is somewhat predictable.
The UFC, on the other hand, is forced to operate under a great deal of uncertainty. Big stars lose and get injured. Sean O’Malley, for instance, recently lost his belt to Merab Dvalishvili. Conor McGregor has been sidelined for years with an injury.
One is left to wonder what the UFC would be today if Conor sustained the same injury prior to claiming the belt, if Jon Jones received a suspension as long as Nick Diaz did, if Jorge Masvidal didn’t landed that knee, if Sean O’Malley ran into Merab a year earlier, if Anderson Silva didn’t submit Chael Sonnen in the last moments of their title fight. Complaints about the current champions seem particularly relevant to this discussion.
The point is, a great deal of the UFC’s success hinged upon chance. Of course, immense effort, talent, and bravery were needed to take the UFC from what it was in 2001 to what it is today. But maybe, just maybe, the ingredients that went in were the perfect mix, the only mix that would have resulted in this outcome.
