Opinion: Why it made sense to the UFC to release Sage Northcutt

By Phil Mackenzie

Bloodyelbow.com

The UFC recently let Sage Northcutt go, a decision that surprised many fans. Northcutt is a comedically wholesome karateka; a bricked-up youngster who fell through a reality warp from a 1990s martial arts flick into the modern world. He is in important ways both distinct and recognizable.

The WME-IMG organization picked him up when he was just 19, seeing that there was both star potential and room to grow; paying him more than most prospects, or even established fighters. Now, when he finally seemed to be finding his footing as a potential elite talent, the UFC released him — allowing him to sign with ONE Championship in Singapore.

From at least one very obvious angle, the decision to let him go didn’t seem to make sense. Namely the one that depicts UFC as a pure fight promotion that picks up the best or most interesting fighters, puts them against each other and builds a brand based on the fact that this will organically generate interest. From this perspective, Northcutt is a relatively well-known name, and the UFC needs relatively well-known names. So why not just pay him a bit more?

The basic answer is: because it doesn’t fit with what appears to be the organization’s actual strategy and priorities, and how these have changed. The old idea of the UFC being a tearaway disrupter that was going to dominate the world in a few short years is dead. And with a degree of mainstream acceptance has come consolidation. Now the organization has two broad and increasingly disconnected things that it does. Namely:

• It puts on PPVs
• It fills TV slots

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PPVs need stars

Pay-per-views were the flagship production for the UFC, and remain a way of generating their most out-sized profits. However, as a product they’re disjointed, and becoming more divergent over time. Within the modern era, the UFC’s highest and lowest selling PPVs have both come within the last year. Amanda Nunes vs Raquel Pennington was reported to pull down something in the region of 85,000 buys, while UFC 230 featuring Conor McGregor and Khabib Nurmagomedov smashed the record with an estimated 2.4M.

Whether a PPV sells or not is dependent on whether it has a well-known star headlining. If not, then there is little chance of the PPV hitting much above a baseline. This baseline seemingly sinks over time as the PPV and TV product become indistinguishable. Meanwhile, the presence of megastars like McGregor has simultaneously made the peak higher.

Andy the MMA guy@UpTheDarce

Khabib/Conor(2.4M) accounts for 48% of the UFC’s PPV buys YTD.Where have all the draws gone?

Stipe/Ngannou-380K
Stipe/DC-380K
Khabib/Iaquinta-350K
TJ/Cody-300K
Cyborg/Kuni-260K
Whittaker/Yoel-250K
DC/Lewis-250K
Yoel/Rockhold-130K
T-Wood/Till-130K
Nunes/Rocky-85K

*231 Pending1631:22 AM – Dec 21, 2018Twitter Ads info and privacy74 people are talking about this

Second-tier draws have been largely obliterated. The days of Evans-Rampage pulling down 800K for a non-title fight are gone, and even something like Daniel Cormier trying for history against the UFC’s most successful heavyweight champ can’t crack 400K.

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Star-building

Big PPVs need big stars. So why not just make them? The simple answer is that it is very hard, and the UFC has attempted a lot of pushes in the past that have fizzled in one way or another. A fallacy of promotional success is that it’s predictable, and that it’s possible to tell who’s going to present the right combination of fighting dominance and sale-ability. Worse is the idea that if the UFC just “promoted people correctly” that stardom would be inevitable.

This is obviously false. There aren’t really any rules for who is going to connect. Success is a good initial model, because it’s hard to be a major star without being a good fighter. This is not, in and of itself, enough. Demetrious Johnson is not massively popular.

Success is also unpredictable, because people often aren’t as good as fans and promoters might think they’re going to be. Back-fitting fighters to prior successful ones has generally failed. Is Weidman the new Chuck? Is Uriah Hall the new Anderson Silva? No.

So how does the UFC promote? One guess is that it goes fishing. It has a pool of fighters, and within that pool are likely some that are going to be more successful than others. But the UFC doesn’t know who they are. So, everyone is treated approximately the same. Feeds are directed at the fighters; sentiment analytics for Twitter and Instagram dangled out over the pool like fishing rods. If a fighter starts to cause quivers in the line above and beyond their peers, then it’s time to start slowly reeling them in. They’re moved up the cards, pulled into main and co-main events, and PPV main cards.

Fighters with a pre-existing set of fans or any kind of outside influence have an advantage here. Paige VanZant was popular on social media before she ever set foot in a UFC cage. Northcutt had been hitting magazine covers for years, and McGregor was a cult favorite in Cage Warriors. These individuals also almost certainly have an inherent star quality that made them popular in the first place, the sand at the center of the sale-able pearl.

In this hypothetical fishing metaphor, the detectors set to track slight vibrations start to hum, and redirect more promotional resources towards the fighter in question. This generates a positive reinforcement hype cycle that accelerates the fighter through the ranks.

This cycle moves fast. It’s a common (valid!) complaint that the UFC matches its young talent too hard, that it pushes prospects too quickly. This is true, but perhaps misses what the organization is trying to do. It is not trying to create good, skilled fighters. It is not trying to create mid-tier draws. It is not trying to create Max Holloway, Stipe Miocic, Robert Whittaker, Tony Ferguson etc.

It is trying to create Conor McGregor and Ronda Rousey. It wants meme-friendly, immortal-looking, charismatic fighters that people feel that they simply have to tune in for. This is necessary to push out past the gravity well of the sport.

These kind of stars are rare occurrences, and the alchemy that made them is essentially non-replicable. The solution taken is brute force — to run through the cycle of test, promote, discard as fast as humanly possible. The UFC sifts its large roster for diamonds and then immediately dumps them back into the general population if they don’t work out. What it can’t get through building from the ground up it will get through sheer turnover. Eventually a McGregor will turn up again, surely. When he does (Note: ?), the profits that are delivered are so out-sized that the whole strategy is worthwhile.

The general process probably looks something like this.

Despite being painstakingly constructed and visually beautiful, this flowchart is not totally consistent. But, readers can still likely place where fighters like, say, Francis Ngannou, Israel Adesanya and Cody Garbrandt are at the current time. Is Alexander Hernandez being rushed into his fight with Cowboy Cerrone? By a strategy that considers young fighters to be commodities: yes. By one that considers them as raw materials that must be sorted as quickly and efficiently as humanly possible: no.

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Who is Northcutt to the UFC?

Northcutt has been through the cycle more than once and hit the barrier of just not being good enough. A side effect of having a huge roster and mashing everyone against parity match-ups over and over again is that it mandates rapid improvement, and lightweight and welterweight are especially full of experienced, skilled fighters. While Northcutt had about the lightest possible ride through the hype cycle, this still meant that he had to fight another prospect in Mickey Gall, and a tireless immortal in Bryan Barberena.

So he is not Conor McGregor.

But he should still be worth something to the organization. There is (or perhaps should be) a lot of space between the idea of a McGregor and people who do nothing for the UFC bottom line. Northcutt occupies that space, because he is still likable and photogenic, with a knack for social media. He’s immensely athletic, young, and improving. Reports of him leaving the UFC achieved more mainstream attention than most — including this article from the New York Post, which is certainly an article.

For an organization that has booked Kimbo Slice and CM Punk why not just keep him around? Even if he was unlikely to become a champion, would he add something to PPV buys and TV ratings? Almost certainly.

The question is: how much is that actually worth to the UFC? On that note, here’s a brief look at the TV side of the equation.

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TV: profitable, but needs a lot of stuff

The UFC puts on a lot of TV events. The revenue this delivers is good because it is reliable. Unlike PPVs, the money that the UFC receives is less directly affected by the presence of lower tier draws. The UFC as an organization is heavily levered up on debt, and having consistent revenue streams that can’t be cut short by penis enhancement drugs or a botched weight cut is vital.

The TV business doesn’t look great from one perspective, namely that the UFC has delivered fairly consistent ratings declines. However, the prevailing technological headwinds mean that the organization finds itself still in a good place. TV companies face a generation of cable cutters, and sports remains one of the few things that still works within the TV model. It possesses a measure of time sensitivity, so people are compelled to watch it live, and sit through ads.

As TV and cable monoliths slowly extend their own proprietary streaming services, they also need stuff to fill them. So sporting content providers like the UFC sit at the intersection of new and old delivery models, where they’re able to play them off against one another and push the asking price up. This dynamic allowed the UFC to get a deal with ESPN for much more than their previous Fox deal, despite delivering the aforementioned fall in ratings.

Content provision is, to put not too fine a point on it, the main point of the UFC. They’re still producing The Ultimate Fighter and, for 2019, it looks like there’s a significant chance that they will be putting on their most events ever.

Being a bulk combat sports provider has its challenges, and these events are difficult to run. Injuries, PED failures, Visa issues and sundry weirdness tend to make it difficult to be sure that an event occurs as it was booked. A packed and rolling TV schedule has a lot of events in it, and these problems mean that openings are constantly popping up.

From the UFC’s perspective, the roster needs to be a number of things to address these requirements. It needs to be big (to fill the spots), it needs to be dirt cheap (fighters don’t need to increase how much they cost by very much to become a good deal more expensive overall), it needs to be broadly interchangeable (if Fighter A replaces Fighter B does this seem like a big step down?), and most of all, it needs to be compliant. The organization does not want the fighters talking back, or asking for more money, or otherwise disrupting the production line.

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Compliance and influence

Compliance has always been important to the UFC. Its most eyebrow-raising call came back when Jon Fitch protested over the idea of the UFC owning the fighter’s likenesses in perpetuity for video games, and the UFC responded by threatening to cut the entirety of the American Kickboxing Academy from its roster. Had they kept to this, it could have meant that future champions Luke Rockhold, Cain Velasquez, and Daniel Cormier never fought for the organization at all — or, in Cain’s case, again. At least not without changing camps. Khabib Nurmagomedov would likely have had to find a new American base for his UFC career.

Nowadays their stance appears a good deal more circumspect. The monopsony lawsuit is ongoing and the UFC seems to avoid decisions that could be seen as specifically anti-competitive. The strategy appears to be less “crush with an iron fist” and more “do not negotiate.”

So, there’s been a recent emigration of upper-level competitors who asked for more money and were ignored. The UFC let a premier action fighter, in Eddie Alvarez, go to ONE. Half of the best MMA fight ever in Rory MacDonald went to Bellator. Ryan Bader, Phil Davis, Gegard Mousasi all left the organization with minimal fanfare or attempts to hold them. Demetrious Johnson is someone who (given the narrowness of his loss to Henry Cejudo) still had an argument towards being the best fighter in the world. He’s gone now.

The UFC’s revenue split with its athletes is still (from all visible information) small. It could afford to pay these fighters the relatively paltry increases in pay they likely requested. The issue seems to be not so much money, as what this would represent to the rest of the roster. This is the central similarity that ties Northcutt together with MacDonald, Johnson, Alvarez and the rest. The issue is not whether these fighters are worth more money from an entertainment or even a monetary perspective, but that the UFC needs to prove their lack of influence.

In discussing how Northcutt is similar to them, it’s also worth mentioning the difference: the loss of MacDonald, Johnson, Mousasi etc illustrated how the UFC was no longer obsessively collecting the best fighters in the world — ensuring that they had not only the #1, but the #2, the #3 and so on. Northcutt is vastly less relevant from a sporting perspective than someone like Demetrious Johnson, but he indicates that the UFC is no longer obsessing over having the #1, #2 and #3 most interesting fighters either.

Fighting ability is no longer paramount, as is interest, and so influence becomes more of a relevant factor. As second tier draws have been drowned by the UFC’s ocean of content, there are still a few people on roster who can influence it; who are valuable enough to force it to move in a direction in that it doesn’t necessarily want to. These are: Conor McGregor, Jon Jones, Brock Lesnar, and Georges Saint-Pierre. It’s notable that Khabib Nurmagomedov had a public confrontation with the organization, demanding that they keep his friend Zubaira Tukhugov on roster, despite Tukhugov brawling with their biggest star on their most popular PPV.

Typically this would be cause to resort to the UFC’s Code of Conduct (below), which would result in Tukhugov being dumped instantly:

(NB: despite being visually beautiful and painstakingly constructed, this is not actually the UFC’s Code of Conduct)

Yet the organization has been oddly quiet and Tukhugov is still around. This is perhaps tacit recognition of Nurmagomedov as joining the “needle-mover” tier, with an ability to reach back through to the raw material.

Northcutt didn’t just negotiate with the UFC, he did so while turning up at ONE events, making it well known that he was taking other offers. This may not be acceptable. It is worth more than money and ratings to the organization to face down almost anyone who tries to influence it and say: you are not one of these people, don’t even try to be.

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Good boys get title shots

More recently (and for an excellent precis, read this Mike Chiappetta piece here), the UFC invested some promotional resources in Colby Covington — its interim welterweight champion. This included taking him to see Donald Trump. Subsequently, he was unable to fight Tyron Woodley (Dana White grumbled that his surgery was ‘elective’ and that he could have fought) for a unification bout in September, and so Darren Till stepped in. Following that there were some public jostling between Covington, Woodley and fellow competitor Kamaru Usman to see who would be next.

The most bizarre part of this particular saga was when White indicated that the only guaranteed participant in the next welterweight title fight was Usman. Not the interim champion, or even the actual four-time welterweight champion, but Kamaru Usman. The rationale is that this was due to Woodley not wanting to fight, despite being one of the most active champions on roster.

A more plausible reading simply seems to be that Covington’s interim title always existed to be used as leverage against Woodley, who has consistently clashed with the UFC brass. And that Covington overplayed his hand in believing that he was some kind of genuine star. Usman, meanwhile, absorbed short-notice changes in opponent without complaint and underwent an awful weight cut to stand in as a potential replacement for Woodley-Till. Fixing holes as they open up is behavior to be rewarded. Causing them is not.

Usman is now the next challenger for Woodley. This is despite invested promotional resources in Covington; despite Covington being the more popular option with both fans and seemingly Woodley himself; despite Covington slotting into a promotional demographic (lit: “mouthy white guy”) that has typically done well with the organization. It was still more important to the UFC to send the message: you do not have influence. Good boys get title shots. Comply.

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Can-crushing and diamond mining

From a promotional standpoint, it’s not even particularly risky for the organization that someone like Northcutt goes elsewhere. The competitive brutality of a fight organization built to feed content into the TV-vs-streaming shakedown makes it hard for even very good fighters to rack up nice records and stand out.

It’s easier elsewhere, and can be used to build at least some idea of a fighter being exotic or special. Crushing cans in ONE and having public spats with Dana White didn’t hurt Ben Askren’s popularity. Nikita Krylov picking up some stoppages in Russian organizations allowed him to come back with a measure of hype. Northcutt can do that, too. The UFC can pay him the (relatively paltry) sums necessary to bring him back if and when they want to, and can play this as being the purchase of a valuable outside agent, not as a UFC employee independent contractor talking back to his bosses contract providers.

It’s similarly not terribly risky that the loss of Northcutt (or anyone else) turbocharges the competition and allows them to catch up with the UFC. As mentioned back in an article on Bellator, becoming a draw outside of the UFC while remaining in its core markets is basically impossible (something that has been effectively proven with Bellator’s first homegrown ‘star,’ Michael Chandler). Aaron Pico can’t become Bellator McGregor. Elsewhere, ONE operates mostly outside of the UFC’s area of influence, but its success probably hinges less on the presence of someone like Northcutt and more on the basic idea of whether people in the countries it focuses on are particularly interested in cage fighting.

This all indirectly works against the idea that the UFC needs a large roster to catch the next big MMA star; the idea that it needs to run a “sort, test, discard” promotional cycle on as many people as possible. Its brand dominance and its possession of an actual functioning business model makes this unnecessary. If a star pops up elsewhere, it can always afford to pay them. It simply doesn’t need to build them from the ground up.

Instead, it needs the big roster because TV, shrinking ratings and all, is increasingly its lifeblood. While its biggest profits come from PPV, it can’t take the risk of being a pay per view-based company. These risks only become more acute as the ability to generate big PPVs becomes centered on a shrinking group of a few individuals. This, the revealed strategy, is the most interesting factor behind these releases – and its changing attitudes to championship fights – both in what it does and doesn’t show. It demonstrates that the organization is not the most public and successful face of a sport on its way to conquering the world. Instead it presents as a content provider for a defined niche, with a diamond-mining operation laid over the top.

It bashes fighters together and looks to see if they are a generational stand-out mixture of promotional and fighting ability. Should they fail this test, it pours them into TV slots like jell-o mix into a mold. Its priority is that said jell-o provides minimal resistance.

From these angles, the UFC’s lacking promotion of its lower tier draws can be looked at as a feature, not a bug. Becoming a “needle mover” necessitates standing out among 600-odd peers, distributed across thirteen weight classes, and at least three different viewing platforms, while typically only getting to fight a couple of times a year. The few who make it out of this pulverizing morass have proven themselves. Everyone else needs to get back on the production line. ESPN Fight Night: Ulaanbataar has spots to be filled.

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