Three Reasons the UFC Will Stay On Top in a Slowing Economy

You don't need me to tell you the economy is slowing. Banks are going under, people are losing their jobs, and housing prices are going down faster than Ken Shamrock this Saturday night.

But this being an MMA blog, it's time to discuss what impact the weakening economy will have on the Ultimate Fighting Championship (UFC), and why the company will not feel the sting of the slowdown.

At the very least, developed economies like the United States will see a modest slowdown in consumer spending, with the most immediate impacting being some weakness in ticket sales to live events in MMA hot spots like Las Vegas. It is easy to imagine that building a vacation around a UFC event is a tricky proposition for a lot of people right now.

On the pay per view side, the numbers may see a small dip simply because of people not being able to afford cable television. However, in the near-term, the negative impact from the economy may be offset by strong matchmaking by the UFC. Headlining bouts like Brock Lesnary/Randy Couture and BJ Penn/Georges St. Pierre 2 should drive huge numbers.

The ongoing credit crunch will also make it awfully hard for competitors, especially faltering ones like ProElite, to continue funding their businesses. During the rise of the credit bubble, obtaining capital was so easy that the money-losing IFL was actually able to go public. But 2008 is the start of a new age, and with investors being extremely risk-averse, they're not going to be willing to throw money against the UFC steamroller.

As a result, the UFC should see some moderation in the cost of talent, and possibly a chance to bolster its roster in the face of a less competitive environment. For example, if EliteXC and Affliction were to go under, top free agents like Jake Shields, and dare I say it, Fedor Emelianenko, will be forced to consider coming to the UFC.

So at the end of the day, even if the UFC see some near-term weakness from the downturn in the global economy, it will stay on top for three reasons:

1) It has a large stable of quality fighters under exclusive contract
2) It has by far the strongest brand name in MMA
3) The deep pockets of the Fertitta brothers ensure the company will always have access to capital

That's the recipe for success in big-time MMA, and it won't change any time soon.