The heavily rumoured ongoing Federal Trade Commission (FTC) investigation of UFC is a story that has been three months in the making. Indeed, it's one that Dana White and Lorenzo Fertitta expected as soon as they purchased their main competitor Strikeforce from Scott Coker and Silicon Valley Sports and Entertainment. They even had their answers ready for the FTC regarding monopoly and anti-trust issues stemming from the sale before they had even been asked, getting their propaganda out immediately in Dana's interview with Ariel Helwani where the big announcement was made and their subsequent joint press conference with Coker two day later discussing the sale in more detail. That's why their mantra was "business as usual", even though it was obvious that wouldn't be the case, and why Lorenzo and Dana, respectively, made these laughable statements making it sound oh so easy to enter the MMA game:
Lorenzo Fertitta: There are thousands of other promoters, thousands of other options, plenty of competition. There's no barrier to entry. Anyone who wants can go in.
Dana White: All you have to do is raise some cash and jump in the business, try and get a TV deal and have some big balls.
If you haven't been paying close attention, then you would think our tale ends here, but this is only the beginning, much more after the jump.
Indeed, the anti-trust and monopoly talk all but stopped after that press conference, which was fine when there were no further developments in the story. Not so fine, when it became apparent that something would come of the original talk. The FTC investigating UFC story was actually broken on May 8th by MiddleEasy.com buried in their Sunday Morning Rumor Mill, even though it's only now starting to gain traction:
A few days ago, I heard from a very reliable source that the Federal Trade Commission is in the process of investigating UFC for past trade practices. The FTC is not just investigating the recent acquisition of Strikeforce by ZUFFA, but past business deals with Affliction, WEC, RVCA, TapouT and Pride. I'm told that ZUFFA is aware of this and have a few attorneys dealing with it. The FTC has started or plans to interview a few people/businesses in the MMA industry to determine whether tortious interference was at play. It's a non-public investigation, so if you contact the Federal Trade Commission they will not deny/confirm if this investigation is going on.
To the best of my knowledge updates since then have been very limited from the MMA media. MiddleEasy.com reported nothing new till last Sunday and even then it was just the following tidbit about how UFC was going about handling the investigation:
It's rumored that the UFC hired a law firm from New York to deal with the impending FTC investigation.
The next day MMA journalist Robert Joyner confirmed on Twitter that the FTC's planned interviews were indeed about to be conducted:
The FTC investigation into the UFC continues, as interviews are set up for this week with involved parties...
However, the best evidence that's something is going down came from Dana White's behaviour at UFC 131.
As Geno Mrosko of MMAMania and Zach Arnold of FightOpinion pointed out, Dana White was over the moon, literally salivating, to get given the opportunity by his favourite post show interviewer Ariel Helwani to cut promos on boxing promoters Gary Shaw and Bob Arum, who recently brought up the monopoly and anti-trust issues with UFC's purchase of Strikeforce in an interview with FightHubTV.com. It's worth reading the comments from Shaw and Arum and White's response to them, so I've included some snippets from Zach Arnold's transcript of those interviews:
Gary Shaw: Great for the UFC, Fertittas, brilliant, brilliant move. For the fighters, terrible move because they don't have another place to really go and bargain. So, you know, if you ask me as a businessman, I think it's brilliant on the part of the UFC. I'm not even sure that when Strikeforce's contract is up with Showtime that they just don't fold it into the UFC at that point, let's make it for PPV. For the fans, it's bad. For the fighters, it's bad. For the UFC, it's terrific.
Bob Arum: Well, I don't know what the laws are, but there seems there's an anti-trust problem somewhere, but all credit to UFC for buying out Strikeforce, that's a great way to make your competition disappear.
Dana White: Gary Shaw's a moron, OK? First of all, this guy's going out and copying everything that I say. He's like, ‘Oh, they put on too many PPVs and they don't give any free fights.' What the hell are you talking about, you moron? First of all, Gary Shaw, what did he do, he's done three fights this year and when I say that, fights that he actually promoted himself that were his actual fights and all three of them were on Showtime. Showtime is not free, okay? We've done 11 fights this year and four of them were free on free television, actual free television, free cable, OK, Gary, you idiot? You're so dumb, I can't even believe that I'm [responding to] your [response].
And then the other one, Bob Arum? Let me tell you what about Bob Arum. First of all, Bob Arum is copying, you go to a Top Rank fight now, they're copying everything we do, right? Now, Bob Arum is also the guy who, you know, he's out there crying ‘Anti-trust! Anti-trust!' Bob Arum, go back and look through the records in an interview that he did, he was laughing at the Fertittas for investing in this company, he was laughing at them, basically saying, ‘they're idiots, they're losing oodles and oodles of money.' Now you're crying anti-trust, Bob? Bob, you weren't smart enough to do this. You weren't smart enough to do what we did to buy a company like this and basically change the fight industry forever and now you're crying anti-trust? You guys sound like a bunch of crybabies.
You're so mad, I take it the Federal Trade Commission is indeed investigating the UFC then Dana? He didn't deny it when Helwani asked him outright if the government was investigating the purchase, instead sidestepping the question with another rant about how they revolutionised the sport and the people poking around are just jealous.
It's worth noting that this story has already received in depth financial coverage by Bryanna Fisori, the Legal Analyst for BoxingInsider, on June 7th and June 13th, which are worth reading to get a feel for the technicalities involved in the investigation. There's a similar breakdown that is less technical by Sean Farrell of Ringside Report - "The Heart Of Boxing", but the partisan tone hurts the good points he makes. Meanwhile, as noted earlier, most MMA sites have avoided the story like the plague so far. They have different masters to please I suppose.