November 11, 2008

In an effort to open one of the most potentially lucrative U.S. markets for mixed martial arts, the Ultimate Fighting Championship is making its plea to New York politicians in a language they understand -- the economy.

With a national recession draining tax revenues in nearly every state of the union, an economic study released on Monday by the UFC shows the fight promotion could generate millions of dollars in economic activity and hundreds of thousands in tax revenue for the Empire State.

The study was authored by HR&A Advisors and commissioned by the UFC.

The study's findings focused on two centers for event tourism in New York -- Buffalo and New York City. The HSBC arena in Buffalo accommodates up to 19,200 people for events, while Madison Square Garden, the preeminent destination for combative sports, holds up to 20,000.

According to the study's findings, a hypothetical event in Buffalo could generate $5.2 million in economic activity and produce $350,000 in tax revenues for New York State. An event in New York City, presumably at MSG, could generate $11.3 million in economic activity and $917,000 in tax revenues for the state.

The study's economic figures were culled from data on the spending trends of local and out of town visitors, as well as the UFC and the 300 people it employs for each event.

The findings boast tax revenues from both events could buy textbooks for 15,000 New York schoolchildren and hire five new police officers in Buffalo.

Mixed martial arts has had a controversial past in New York. In 1997, near the height of the UFC's battle with senator John McCain over its "human cockfighting" image, a bill to regulate the sport was repealed by legislators over controversy arising from UFC 12, which was scheduled to take place in Niagara Falls.

Since then, MMA shows have taken place in New York, but they are unregulated and generally confined to "underground" events promoted by word of mouth. One such event, Underground Combat League, has managed to thrive in New York City as an amateur competition for the last five years.

Recently, legislative bill 1-11485-A, a new proposal designed to regulate the sport, was delayed in June when the state assembly's Tourism, Arts, and Sports Development committee could not come to a vote on the bill. The delay effectively scrapped the UFC's plans to hold a December event at MSG.

The committee is scheduled to vote on the bill in January of 2009, and a public hearing to educate committee members and interested parties on its consequences is set for Wednesday. Marc Ratner, former Executive Director of the Nevada State Athletic Commission and current Vice President of Regulatory Affairs for the UFC, plans to be in attendance.

Kirk Hendrick, General Counsel to the UFC, said the idea for the study first arose five months ago after a meeting between UFC representatives and New York State legislators.

"We received not an ounce of opposition during any of those meetings," Hendrick said.

Still, there appears to be a gap between the bill's supporters and detractors in the legislature.

Ratner disputed a report on that traced June's legislative difficulties to a labor dispute between Station Casinos and UNITE HERE, a union with strong roots in New York. Station's former president, Lorenzo Fertitta, is a major stakeholder and executive in the UFC and retains an ownership stake in the casinos.

"Whatever the problem is in the state of Nevada has nothing to do with the sport of mixed martial arts being approved in the state of New York," Ratner said. "It has no bearing."

New York State Senator Joe Griffo, a proponent of the new bill who gained firsthand knowledge of the sport through UFC light heavyweight Matt Hamill, is one legislator who is bullish on its arrival in his state.

"It's long past time to look into officially sanctioning this sport in New York," he said. "More than two-thirds of the states commission mixed martial arts matches. There are significant tourist and tax revenue dollars flowing to neighboring states who are hosting these events. We need to immediately examine the potential for the sport to thrive here."

Ratner hopes that a passage of the bill would put the UFC in the Empire State by the third quarter of 2009.

Without a doubt, a market exists for the UFC in New York. The troubled times of New York's economy may provide the antidote to the reservations of its politicians.

"At a time when the New York economy is in crisis, it would be a mistake for the state to miss out on the considerable revenue that our events would generate," said Ratner.

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