After DraftKings and the Ultimate Fighting Championship entered into a partnership last month, fantasy mixed martial arts prepares to leave its infancy and see if it can make a big impact on the daily fantasy sports market.
Fantasy MMA Perspective
One thing is for sure: Fantasy mixed martial arts is a huge, largely untapped market. Before DraftKings signed on with the UFC, we took a look at why the market is poised for success. Now, with an official partnership between the biggest combat sports promotion in the world and the second-largest DFS site, big things are expected.
There are a lot of reasons to think fantasy MMA has room to grow:
- Until the DraftKings push, there has been very little time and money spent on the market. Unlike other fantasy sports, fantasy MMA doesn’t have a seasonlong precursor that can be used to “prime the pump.” The idea is that once MMA fans are introduced to the concept of fantasy MMA, it has a chance to gain a lot of penetration.
MMA translates to the fantasy market very well. Some in the DFS space would argue it’s actually the ideal structure for DFS play. It takes place over a finite period of time — the length of a fight card. It’s less daunting than its counterparts like football and other team sports, because there are fewer participants to pick from. It all adds up to a player-friendly experience.
- The DK-UFC deal doesn’t close the market. At its core, the deal really only guarantees cross-promotion for the two brands. While the deal initially seemed like a coup for DraftKings, it doesn’t stop anyone else from offering MMA contests based on UFC fight cards. Kountermove — a DFS site for combat sports — has done just that for years. For comparison’s sake, FanDuel has a deal with the NBA, and DraftKings has a deal with the NHL. That obviously doesn’t stop either DFS site from offering fantasy contests in those sports.
The UFC Perspective
For the UFC, the deal with DraftKings is likely all about experimentation. UFC president Dana White and co-founders Frank and Lorenzo Fertitta are hellbent on growing the sport, and gaining as much exposure for their organization and MMA as possible.
The powers behind the UFC have constantly tried to innovate to that end, with concepts like reality TV (The Ultimate Fighter show now has American and international editions), adding women’s divisions, promoting events globally and more. DraftKings rolled out MMA contests in December, and the UFC was happy to get on board and see what happens.
The stated goal for the UFC — as mentioned by White many times over the years — is to become a mainstream sport that rivals the major North American team sports for popularity in the United States. Despite its growth, the UFC still isn’t there as far as cultural relevance or in revenue generated. But getting into the fantasy market certainly won’t hurt its cause.
Entering into the fantasy fray for the UFC wasn’t a surprise at all, and it is basically a no-lose proposition for the mixed martial arts promotion:
- If the fantasy MMA market doesn’t develop as experts project, the UFC can say it tried and move on.
- If the market does pan out, the UFC has a new avenue for regular sponsorship deals, and more interest in its product.
The UFC would like to drive up interest in both its pay-per-view programming and free, over-the-air fight cards via the Fox family of networks, as it comes into the latter half of an initial seven-year broadcast deal. Daily fantasy sports have been credited with driving up interest in televised sports, and the UFC would like to get in on that action, certainly.
The DraftKings/FanDuel Perspective
The official announcement of the UFC-DraftKings deal made no mention of the length or the terms of the sponsorship deal. Kevin Farlow, the UFC’s senior director of marketing partnerships, went on record last month to say that this was a one-year deal. Why? We are only left to speculate, short of a source within one of the organizations telling us why it’s such a short contract.
Most of the speculation centers on the idea that the DraftKings deal is a placeholder until FanDuel decides it wants to enter the fantasy MMA space. After the year is up (in this hypothetical scenario) the UFC would jump to FanDuel, which offers a larger player base and more exposure for the UFC. That line of reasoning assumes a couple of things:
- FanDuel is interested in getting into fantasy MMA. So far, at least, FanDuel has been biding its time. It did not react to DraftKings launching fantasy MMA late last year by rolling out its own MMA contests.
It’s not clear what, if anything, FanDuel wants to with fantasy MMA, at this point. But it seems pretty likely that if DraftKings starts pulling in huge numbers of entries for its contests, FanDuel won’t just let their rival own the market uncontested.
- There isn’t anything about the DK-UFC deal that we don’t know. Could there be certain thresholds that, in terms of entries, money spent, ratings, etc., that would allow DraftKings to stay in business with the UFC beyond year one?
That might not be terribly likely, and since the UFC is in a position of power in the relationship, there would be little reason to think the UFC doesn’t have a way to exit the deal when it wants to. At the same time, we’re sure DraftKings isn’t interested in growing the fantasy MMA market just for FanDuel to swoop in later.
Conventional wisdom would say the DraftKings-UFC partnership isn’t destined for longevity, unless DraftKings shows the ability to cut into FanDuel’s market share this year. DraftKings is clearly hoping that entering the MMA market will help it do exactly that.
There might even be evidence of a possible route that the UFC will take in its own history, with development of an MMA video game. EA Sports, by far the biggest player in the sports video game market, didn’t want to do a UFC video game at first. The UFC proceeded to work with a smaller rival, THQ. Only after THQ couldn’t continue operations did the UFC and EA Sports start working together.
The Kountermove Perspective
The first DFS site into the MMA space, Kountermove, actually sees the DraftKings-UFC deal as good for business:
“Kountermove has been the biggest fish in a relatively small pond for a couple of years, but that is now changing because of recent investment in and acceptance of DFS-style fantasy MMA,” said Christie Sullivan, Head of Marketing & Partnerships for Kountermove. “We are dedicated to combat sports (MMA, boxing, jiu jitsu, kickboxing), which are uniquely suited to DFS. It will probably take a few more years for this market to reach an adoption tipping point, and we are confident about Kountermove’s position and future as this market develops.”
Kountermove has had some of its largest entry rates during the past several UFC cards, which can be attributed, at least in part, due to increased interest in fantasy MMA as fans learn of its existence. A new fantasy MMA site — Draft Ops — recently opened, as well, and inked a partnership with a smaller MMA promotion, Bellator MMA.
The DraftKings-UFC deal created a lot of buzz and recognition of a DFS sector that was not widely known previously. A rising tide could lift all ships.