Lessons from Affliction’s failure

Affliction’s demise as an MMA promoter on Friday shouldn’t have surprised anyone.

Since the first Affliction card took place in August 2008, the company has been on a downhill slide into oblivion, culminating with Friday’s decision to stop promoting fight cards and again become an official UFC sponsor.

What can be learned from Affliction’s demise?

1. Fighter salaries must be kept under control. This is easily the most important lesson to learn from Affliction. For all the complaining that goes on about the disparity betweeen the amount of money main-event fighters make compared to lower-tier guys, you can’t say that the UFC doesn’t have a good business model. Fighters who are popular and proven pay-per-view draws are responsible for 90 percent of the income on UFC cards. So those fighters make more money than the guys who are slugging it out on the undercard. That’s good business logic.

What isn’t good business logic, however, are the astronomical salaries Affliction paid out to its main-card fighters. Tim Sylvia earned $800,000 for his 36-second loss to Fedor Emelianenko in the main event of the first Affliction show. That’s good for Sylvia, who was making approximately $140,000 per fight in the UFC. The problem is that Sylvia’s payout set a precedent that ultimately killed the company because vice president Tom Atencio couldn’t come to terms for a replacement fighter for Josh Barnett. Why? Because they wanted the same kind of money Affliction had paid to guys like Andrei Arlovski, who earned $1.5 million for his loss to Emelianenko.

Affliction didn’t just overpay their main event fighters, however. On the first show, Ben Rothwell earned $250,000 and Matt Lindland earned $300,000. Those figures are more than what just about every UFC fighters makes. Those salaries are almost on par with what UFC mega-stars Brock Lesnar, Georges St-Pierre and B.J. Penn make.

The difference is that Lesnar, St-Pierre and Penn are nearly household names, while Lindland and Rothwell would barely get recognized if they walked down the Las Vegas Strip.

You can build a successful promotion without grossly overpaying your fighters. Strikeforce has been doing it for years, and they’re in zero danger of going under at any point in the future.

2. It’s impossible to properly build a promotion without television. Affliction put on great fights for the hard-core fan, but they failed to realize that 90 percent of fans buy fights to see stars. A card filled with stars in mediocre fights will always outsell a show filled with great fights but few stars. It’s one of the major laws of promotion.

Television is an absolute requirement to make waves in the mixed martial arts business. The UFC was a niche product until The Ultimate Fighter, a show that placed compelling characters and stories in front of millions of people each week. Forrest Griffin, Josh Koscheck, Chris Leben — all are superstars today because of the television reach of The Ultimate Fighter.

Without television, you can’t build up your fights. You can’t build characters. And most importantly, you can’t make people care about the fighters on the show, and what reason do they have for purchasing your show if they don’t care about the people they’re going to see?

3. Going against the UFC is going to be nearly impossible. Zuffa has built a juggernaut of NFL-caliber proportions within MMA, and there’s almost zero chance anyone can beat it at its own game. The UFC’s been around too long, learned from too many mistakes and is too entrenched in popular culture to unseat it by using the same business model.

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When casual fans think of mixed martial arts, they think of the UFC. It has outstanding brand awareness, most of the best fighters in the world and is ruthless. This is a company that publicly states they have no problem with Scott Coker or Strikeforce, yet will counter-program with free UFC shows against Strikeforce shows on premium cable. It simply will not allow a competitor to step in and take away what it’s created.

That’s why Strikeforce is now the No. 2 mixed martial arts company in America. It has a smart salary structure where it stays within its means and pays fighters according to what they bring to the table. It has a television contract and can use that to effectively build fights and cards. And most importantly, it’s not trying to take down the UFC.

It’s simply living in its niche, and thriving because of it. Strikeforce may have found the only way to survive as a secondary MMA company in North America.

It’s too bad Affliction didn’t figure it out before it started.