MMA events in New York worth $68 million a year, new UFC study says

UFC middleweight champion Chris Weidman, who grew up in Baldwin and still lives and trains on Long Island, campaigns for legalizing mixed martial arts in New York State during a news conference where the UFC introduced a new study on the sport's potential economic impact in the state. Videojournalist: Chuck Fadley (Nov. 21, 2013)

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Legalizing mixed martial arts events in New York State would generate more than $68 million in economic activity per year, according to a UFC-commissioned study released Thursday morning.

That figure is nearly three times higher than a 2011 study released by HR&A Advisors, which also conducted the new analysis. According to the study, statewide expansion of UFC Gyms would generate an additional $67 million in spending per year by 2017. That would bring the total yearly economic impact of MMA to $135 million within four years.

The increase in forecasted economic activity from MMA is due to more planned Ultimate Fighting Championship events (five, up from two), combined with events from mid-sized promotions such as Bellator and World Series of Fighting and smaller, regional promotions such as Ring of Combat, plus overall growth in popularity of the sport. The study cites a 2012 sport-watching survey that said 50 percent of respondents regularly or occasionally watch MMA. The study projected 35 UFC Gyms in the state, up from nine, within the next four years. Long Island has three franchises in New Hyde Park, Commack and Huntington.

HR&A is a real estate, economic development and energy efficiency consulting firm based in Manhattan and was contracted by UFC, the sport’s leading promoter, to perform the study. The firm’s clients include New York City’s departments of transportation, the housing authority and city planning.

"It is the only place where MMA is banned," Sen. Jose Peralta said Thursday. "New York is not living up to its potential, its sports potential. $135 million dollars, that is essential. That is something we cannot turn away."

MMA, which combines jiu-jitsu, judo, kickboxing, boxing, wrestling, Muay Thai and other martial arts, is legal in every state but New York. The bill has passed the New York State Senate in each of the past four years but stalled in the Assembly each time. Gov. Andrew M. Cuomo made favorable comments about legalizing MMA during the last legislative session. His office declined to comment on this study.

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Opponents of MMA's legalization have cited the violent nature of the sport and some anti-Semitic, anti-gay and anti-female sentiments conveyed by fighters and others in the MMA community.

"I don't believe it is anti-female at all," Assemb. Aravella Simotas (D-Queens) said. "I have a 15-month old daughter at home, and if she came to me 16, 18 years from now and said she wants to be a professional MMA fighter, I would be there watching her and cheering her on."

The Culinary Union in Nevada has been lobbying against the Lorenzo and Frank Fertitta, who own the UFC and Station Casinos, a large non-union gaming entity in Nevada.

"There's no more arguments about health and safety, or is this morally right or wrong," Lorenzo Fertitta said. "Everybody has accepted us as a sport in America, so the fact that we're being held back by a Culinary Union in Las Vegas, we're not going to quit fighting that. I can tell you that. We're going to fight hard."

The bill has failed to come to a vote in the Assembly the past four years. Assemb. Andrew Hevesi said at Thursday's news conference that it is not because of Assembly Speaker Sheldon Silver, as UFC president Dana White and others have said. Hevesi said the Democratic conference of the State Assembly abides by a rule that if there aren't enough votes to pass in the conference, the bill doesn't get brought up.

"It's not that one man is stopping it, it's that we haven't reached the requisite number of votes," Hevesi said.

Fertitta clarified the difference, saying that Hevesi referring to just the Democratic conference, not the Assembly at large.

"With the votes we know we have in the Democratic side of the caucus, and when you take the Republican caucus on the other side, we're a huge winner if the vote was actually to come to the floor," Fertitta said.

According to the study, two UFC events in New York City would generate $16 million in economic activity. That number does not reflect ticket-sales revenue.

The study estimates $12.2 million in ticket sales per event, which would break the UFC’s record of $12.075 million at Toronto’s Rogers Centre in April 2011. (The largest U.S. gate was $6.9 million for the Anderson Silva-Chael Sonnen rematch in Las Vegas in July, 2012.)

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The scope of “economic activity” for events includes hotel stays, bar and restaurant bills, shopping, wages from job creation, taxes levied on ticket sales, plus other tourism and transportation expenses, the study said.

"A lot of people's dreams are being crushed," said UFC middleweight champion Chris Weidman, who was raised in Baldwin and still lives and trains on Long Island.

Language in the bill to legalize MMA in New York State calls for collecting 8.5 percent tax on ticket sales, so a gate that large would generate $1.037 million in direct revenue for the state. (That’s more than or close to what 13 counties collected in sales tax in October, according to estimates from the state’s Department of Taxation and Finance.)

Three UFC events per year in upstate cities such as Buffalo, Syracuse and Albany would produce $18 million in economic activity and create 170 full-time equivalent jobs, the study found.

During the legislative session earlier this year, Fertitta had guaranteed four fights per year across the state. The study's projection are based on five UFC events, a number Fertitta said is completely doable. At the news conference, Fertitta said the UFC will be putting on 54 events across the world in 2014, a number he lowered to 46 afterward.

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"New York is not going to make or break us as a company," Fertitta said. "It's more on principle. This is the epicenter of media and entrainment in the world, not just the United States."

The study also said that MMA events hosted by other companies such as Bellator or World Series of Fighting would produce another $34 million of economic activity per year. That number is based on approximately 65 events held statewide, ranging in attendance from 1,500 to 8,000.

New York would collect $5.8 million per year in state and local taxes from all MMA events, according to the study's projections. That includes taxes on ticket sales and broadcast fees, plus those collected on merchandise, fighter salaries, hotel stays, restaurant bills and associated travel expenses.

HR&A’s study estimates $28.4 million in gross ticket sales and an annual attendance of 220,000 across New York State.

Professional MMA fights have been banned in New York for the past 16 years, but amateur MMA remains legal and unsanctioned by the state’s athletic commission. In 2013, nearly a dozen amateur MMA fights have been held — and openly advertised -- in New York City and Long Island.

The Prudential Center in Newark will host UFC 169 on Super Bowl Weekend, the fifth UFC event in New Jersey since 2010. The last event there -- in April 2013 -- did a reported gate of $2.7 million. Bellator regularly puts on shows in Atlantic City. WSOF, a newer promotion, brought two of its five cards so far in 2013 to Atlantic City.

The MMA ban was signed into law by then Gov. George E. Pataki in February 1997 when the sport operated with few rules, fewer regulations and no weight classes. Pataki has since said he supports the legalization of MMA now that it operates under its unified rules and is sanctioned and regulated by each state¹s athletic commission.
 

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