SBJ/Jan. 10-16, 2011/Leagues and Governing Bodies

UFC goes another round in effort for N.Y. sanction

The owners of the UFC and their often blustery CEO, Dana White, will join the president of Madison Square Garden Sports and others in New York on Thursday at a press conference to discuss the economic windfall that a mixed martial arts event would deliver to the cash-strapped state — were it not one of only four that still prohibit the sport by law.

They will commit to bring future events to the Garden and other venues in New York if legislators pass a law that allows the state athletic commission to sanction it.

On that same day, tickets will go on sale for UFC 128, an event scheduled for March 19 at the Prudential Center in Newark, N.J. When the UFC visited Newark last March, the promoter announced attendance of more than 17,000 and a live gate of $4 million. UFC executives said about one-third of those tickets were purchased by residents of New York.

So begins the latest installment in a push that began late in 2007, when UFC parent company Zuffa paid a well-connected upstate New York firm a $10,000 retainer to lobby on its behalf. Since then it has spent more than $1.5 million on lobbying and public relations campaigns in the state. It also has contributed $165,000 to election campaigns.

The result: steady coverage of the quest in newspapers and on television, a percolating cauldron of grassroots chatter on the Web, a broadly acknowledged shift in attitude toward the sport by many legislators and, perhaps most importantly, a steady stream of bills — all of which died on the vine.

And so, even as the once clandestine sport of mixed martial arts has surged toward mainstream acceptance, gaining state-regulated sanctioning in holdouts such as Illinois, Pennsylvania, Indiana, Massachusetts, Wisconsin and Alabama, it remains illegal in the most-watched market in sports.

“Why in all these states, but not New York? That’s the $64,000 question,” said Marc Ratner, the prominent former Nevada fight regulator whom the UFC hired to forward its legislative cause in May 2006. “I can’t get a straight answer. It’s maddening. But, we’re going to keep trying.

“Our mantra has been that we run to regulation, not away from it, and we will continue that. I’m very bullish on New York and I think this will be the year.”
When Ratner headed the Nevada Athletic Commission from 1992 to 2006, he testified in front of Congress about the perils of mixed martial arts, an emerging enterprise that at the time he found to be barbaric and lacking in sport. He made those very points again alongside Sen. John McCain during a 1995 appearance on “Larry King Live,” where he predicted that the 36 states that refused to sanction mixed martial arts events at that time would prevail over the long haul, regulating it “out of existence” across the U.S.

That was 15 years ago. Today, Ratner works to turn his own prediction on its ear. For the last five years, he has crisscrossed the country, convincing state legislators and athletic commissions that today’s MMA is safe for fighters, with rules that did not exist when he fought staunchly to ban it. Since the recession took hold, the argument of MMA as a driver of tax revenue and economic impact also has resonated with many.

Commissions in 23 states sanctioned and regulated MMA events when Ratner joined the UFC. Five years and several million dollars in lobbying expenses later, MMA events are sanctioned in 44 states, or all but four of the 48 that have boxing commissions: Connecticut, West Virginia, Vermont and New York.
The last of those towers above the rest as the remaining priority.

“It’s important because it’s the biggest sports market in the world,” said Ken Hershman, head of Showtime Sports, which airs MMA events promoted by UFC’s competitors, Strikeforce and M-1. “It’s a natural fit for the continuing expansion of mixed martial arts that it have a home in New York.”

UFC action
ICON SMI
UFC can’t get into New York City but it can get close, as it did for UFC 111 on March 27 at the Prudential Center in Newark.
The UFC’s legislative strategy is similar to that of other sports properties. It lobbies in support of legislation that favors its business interest. The difference is that, while most properties operate on the national landscape and monitor legislation on a range of issues, the UFC works in individual states with a singular goal: To pass state laws that allow for and regulate mixed martial arts.

The billionaire casino owners who bought the UFC 10 years ago, brothers Frank and Lorenzo Fertitta, recognized that was crucial to the venture’s survival from the beginning, said Lawrence Epstein, executive vice president and general counsel of UFC and its Las Vegas-based parent company, Zuffa. Hiring Ratner, who then brought along legal adviser Michael Marsh, formalized that commitment.

In populous states with vast agendas and complex bureaucratic webs, the quest can be expensive.
The tab for lobbying in New York last year eclipsed $500,000, based on public filings and interviews with UFC executives. Zuffa also contributed $130,000 to political campaigns, including $36,800 to incoming Gov. Andrew Cuomo, $34,000 to Democratic campaign committees, $10,000 to Republican campaign committees and $1,000 to $3,800 to a dozen different influential state senators and assembly members. Zuffa spent $530,000 lobbying in New York in 2009 and $595,000 there in 2008.

In less populous states, the cost is far lower but the tactics are the same.
UFC spent about $75,000 lobbying in Indiana in the 18 months leading up to the passage of legislation there in 2009, according to filings in that state. It spent $216,736 in Wisconsin, where lobbyists logged 366 hours with government officials on its behalf leading up to the law’s passage last year. To get a bill passed in South Carolina in 2009, UFC spent $46,550 on lobbyists and contributed $4,250 to campaigns, giving $1,000 each to the chair of the committee where the bill originated, the chair of the subcommittee that reported favorably on it, the senate president and the senate majority leader.

“With some of the campaigns we’ve run, it’s not a cheap number,” Epstein said. “It’s not just about hiring a lobbyist to help you navigate the political landscape and showing up at the state capitol. You have to hire a PR firm. You have to do grassroots. Internet. A grass-top strategy. You have to interest decision-makers. And then on top of that there’s lobbying. In a lot of states, a much more in-depth program has to be put in place.”

In New York, where UFC has spent the most and worked the longest, it still has not broken through, even with the public support of MSG and the chair of the state athletic commission. A 2007 bill passed the Assembly but stalled in the Senate. In 2008, it got stuck in the Assembly’s tourism committee, where it originated. In 2009, it died in Ways and Means.

Last year, the UFC was optimistic that it had found a strategic advantage. Then-Gov. David Paterson included about $7 million in funding from the projected tax revenue from sanctioning MMA in his budget, giving potential cover to legislators who had opposed the sport because they found it too violent. Opponents could hold their noses and accept the arrival of MMA, explaining that larger budget issues prevailed.

But that didn’t work, either. The speaker of the house opposed tying the issue to the budget. The Senate passed a free-standing bill on a close vote, but it stalled in the Assembly when opponents in the state’s powerful Democratic caucus carried the day over supporters.

UFC plans the same tactic again this year, lobbying legislators to support a free-standing bill and also working to get Cuomo to include funding from an MMA tax in his proposed budget.

“Right now it’s very close,” said Steve Englebright, an assemblyman from Long Island who introduced the bill last year and planned to do so again last week when the new legislative session began. “I think it would be fair to say we have a divided conference, with some very strongly held opinions in both directions. And it doesn’t break down to an analysis based on the type of neighborhood that you’re from. We have members from both urban and suburban who are on both sides of the issue.”

The UFC’s lobbyists say they’re urging legislators who have embraced MMA sanctioning for economic reasons to become more vocal in their support.
“Two or three people in the [Democratic] conference will speak up against it, and the speaker is sensitive to that and he doesn’t move it,” said Ron Rock, a lobbyist with Brown & Weinraub, the firm representing UFC. “We’re getting out our supporters. They’re starting to be more proactive. We need for the speaker to hear from them.”

Lobbying is the top-down piece of the UFC’s legislative equation. There’s also a piece that works from the bottom up. Since 2008, Zuffa has employed Global Strategy Group to design and manage a campaign to mobilize MMA fans to push for legislation. Zuffa paid Global $35,000 a month in 2008 and the first half of 2009, and $22,500 a month since then to build a grassroots campaign and drum up conversation online and in the media. The website it created and manages is packed with information that argues for sanctioning. It also offers easy ways for fans to e-mail legislators and craft letters to their local newspapers.

“A lot of it at the beginning was educating fans to the fact that we can’t have events here,” said Justin Lapatine, senior vice president of public affairs for Global Strategy Group. “UFC fans are rabid. They are energetic. They love this sport. They believe deeply in it. It’s really about getting them energized and helping them understand how they can play a role.”

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