Wednesday, November 25, 2009

The Decline and Fall of the Fertitta Empire (pt 2)

Why Boxing Won

Many of Guatemala’s crimes are mundane: murder, kidnapping, robbery. Some are novel and disturbing, such as officials demanding thousand dollar bribes to release a newly adopted child. Some are otherworldly, a vigilante response to a worthless legal system. Lynchings. Mobs dousing corrupt cops with gasoline. Mobs lighting matches. Processions of civilians through streets in the night, flashlights and weapons in hand. And the weapons: axe handles, shovels, chains, knives … if lucky, you may see a pair of nunchaku.

But the most alien are simply prehistoric. Local rumors hold that foreigners steal children and kill them to sell their organs. Tetsuo Yamahiro and his busdriver, Edgar Castellanos, were beaten to death by a mob of 500 Maya due to suspicions raised by the tourist’s photography of children. Castellanos was also doused in gasoline. Someone in the mob had a light.

Strangely isolated, these Guatemalan Maya. Many do not speak Spanish. Their women wear brightly colored, woven dresses, which differ from tribe to tribe. In the Spanish schools they give seminars, often on their dress, aimed at preserving Maya identity, and occasionally they parade together in their dresses in a show of Maya solidarity.

From conversations I know that many of them, as in any group, are unaware of the roots of their tradition. They’re unaware that their tribe-based color scheme was a Spanish-implemented Maya filing system, or that their dresses are old world peasant garb. They certainly don’t learn so in the second-rate schools they’re sent to.

The poorest of them live, isolated, in their villages, struggling to learn Spanish as their languages die, practicing fascinating variations of Catholicism (one of which includes a department store mannequin as a god), farming coffee beans, weaving, and dying by governmental incompetence. Their only act of defiance, through decades of civil war, severe poverty, and systematic discrimination, is to hold tight to the beautiful slave uniforms of whose origin they’re unaware.

But their defiance should be a reaction, a casting off, a look back to their greatness. How many psilocybin mushrooms must I offer for them to see their true path to glory? Hasn’t it become obvious? They must shed their clothes, restore the Maya calendar, and build a step pyramid in Guatemala City.

For our purposes, let’s skip the shrooms and head straight to LSD. How do you feel about boxing?

UFC fan on boxing: Boxing is dying. It’s the sport of old men. The UFC is the future!

Two tabs of LSD later: Our perspectives change and we reexamine the UFC. We watch the pseudo-mobster president sitting in the crowd, his amateur boxing record stamped on his forehead. The roaring crowd behind him coordinates. He stands and throws rhythmic punches and they follow with poor form behind him, Nu Metal blasting out over them, the sweat pouring to the floor.

From somewhere we hear Don Frye’s distinctive voice – he’s in the ring, fighting, but looking directly at Dana.

“I'm starting to realize why your wife might want to give your son a sissy name."

We look in another direction and see the vice president. He’s wearing a sequined headband with the inscription: “Marc Ratner: Inductee, Boxing Hall of Fame”. Next to him sits John McCain, surrounded on this hot Las Vegas evening by boxing promoters fanning him with hundred dollar bills. Behind them sits Larry King, or a wax figure of him, and they speak gravely of human cockfighting. Lorenzo Fertitta’s not far away; we see him on a committee arguing persuasively against sanctioning.

Next to the judging box sits Keith Kizer. He looks jealously towards the Zuffa employees. Both of his positions in the commission were vacated by employees relocating to Zuffa, and he knows it’s his turn next – the internship is almost over. He gives a thumbs up to the judges.

There they sit: Adalaide Byrd, Cecil Peoples, and Patricia Morse Jarman. Rutten lands repeated leg kicks and knees to the body. The judges yawn. Frye secures the takedown. Byrd goes to the bathroom. Peoples dozes off. Jarman furrows her brow.

“What is he doing?” she asks Kizer.

He shrugs. “Good matchmaking creating tough, close fights that are hard to score. The judging criteria are posted on the NSAC’s official website:”

The next round begins. Rutten lands a beautiful four-punch combination. These boxing judges ooh and ah and scribble frantically with their pencils. We suddenly see the scoring criteria, and note, with disappointment, that they are little more than revisions of boxing’s. Our trip ends.

Our conclusion: boxing defeated the UFC years ago, castrated it, purchased it, and took over. The UFC is boxing marketed to the young – more permissive to appeal to youthful rebellion, but boxing all the same – right down to the reality show.

The supposed battle between boxing and the UFC is much the same as the choice between two political candidates who differ on irrelevant but divisive issues, with no ultimate plan to fix anything.

With the rise of the reality show, legions of fans in Zuffa-brand shirts laughed as the ratings rose and gloated as boxing’s fell. There was a strange animosity. It was as though they felt themselves part of some counter culture pitted against the boxing mainstream, and they attack boxing to this day. Perhaps we will see a Zuffa-shirted parade of solidarity against boxing. I’m sure that would make Ratner’s day.

A note on the reality show. The standard narrative is that the reality show increased the UFC’s popularity, which lead directly to greater fighter salaries. When looking at fighter salaries compared to revenue, however, the UFC actually reduced total fighter salaries compared to revenue for close to year. This was likely due to the watering down of cards allowed by reality show contestants. It was only after the emergence of several threatening organizations that salaries significantly climbed.

It is Strikeforce that has now become the most threatening. Dana White’s personality ruined the Fedor deal and a shot at NBC. Now Strikeforce has both. If you are a Whiteshirt, the following graph may disturb you:

The red line represents UFC searches, the yellow Lesnar, the blue, Fedor. Fedor alone captured more interest than the entire UFC. If you don’t believe that’s significant, name another such fighter. I know of only two: Carano and Kimbo. But Carano is gone and Kimbo’s a short-term investment. Fedor and network exposure are a frightening combination.

We can also examine Wikipedia page views:
Ultimate_Fighting_Championship has been viewed 115963 times in 200911.
Brock_Lesnar has been viewed 291713 times in 200911.
Fedor_Emelianenko has been viewed 520780 times in 200911.

Kimbo, as stated, is a short-term investment. Oversaturation of weak cards in a recession is a short-term decision. Bad judging, which protects favored fighters but disillusions fans, is a short-term decision. And that explains everything.

The UFC is in debt. Remember Xyience? Xyience was, for a time, portrayed as a top-notch sponsor for the UFC for the purposes of securing a 325 million dollar loan. But Zuffa was funding Xyience, and Xyience was run by old Fertitta friends. Once the loan was secured, the company went bankrupt.

And what was the loan used for? To increase fighter pay? Advertising? No – it was used to purchase and destroy Pride.

And then Station Casinos went bankrupt. A Nov. 20 report from Rich Bergeron, discoverer of the Xyience debacle:

“A new report from Local 226 (see below), an unlikely source but nonetheless an appropriate voice, reveals how the Fertitta family and other insiders at Station allegedly turned a personal profit of over $1 billion on the back of the business.”

“Still, if the Fertittas continue to struggle and get bogged down and distracted because of the Station Casinos bankruptcy, they will not have as much of their own personal money to put toward getting the UFC out of debt. There is talk of selling an interest in the company, and it’s not as unlikely now to think about the whole thing going up for sale in time.”

This is consistent with the management’s recent treatment of the UFC as a short-term investment.

The Fertitta empire has declined and is nearing its ultimate fall. The black swan event of simultaneous main draw illnesses is a significant blow. Strikeforce will continue forcing the UFC to pay greater salaries to retain talent and buyrates will continue to fall with oversaturation of weak talent. The sponsorship bans will make Strikeforce contracts more profitable than a salary comparison would imply. Poor judging will disillusion fans. The UFC will be sold, White fired, and we will see a new equilibrium between fight organizations.

And none of it will matter.

The commissions will still be in place. Strikeforce, with its ban on elbows, is yet another step towards boxing. The judges will still be incompetent, the incentives towards corruption enticing, and the scoring system absurd. Regardless of what happens to the Fertittas and Dana White, the Citadel will still stand, and no true form of MMA shall pass through its gates.

Imagine what the Castrati, along with newer, non-Whiteshirt fans, the types who do not mock allusions to works such as “The Decline and Fall of the Roman Empire”, could invent to replace the sport of Nu Boxing. It is trivial to design a better sport. What are the sport’s three greatest problems? Poor judging, early/late stoppages, and boring fights.

All three can be eliminated by changing the scoring system from the “Ten Point Must” system to the “Predict – Wager” system. It is incredibly simple, eliminating the pages of criteria judges seem incapable of remembering.

The Predict – Wager System:

“The judge shall be paid in accordance to his return on real-time wagers on the fight. The judge will bet on the likelihood of fighter A finishing fighter B by placing a wager, weighted by his estimation of the likelihood of a finish. The value of the wager drops as time passes, and the value of the chips used in wagering drops as more total chips are wagered.

“If there is no finish, the judge will be recorded as voting for the fighter he bet most heavily on to finish the fight, the fighter who receives the most votes shall win the decision, and the judges shall be paid a fixed rate.”

A judge, witnessing a knockdown, would bet strongly, as he would upon seeing a close armbar attempt. He would bet weakly on takedowns, depending on the finishing ability of the fighter on top. He would bet very little on a fighter like Sherk. Racking up points would become obsolete. The FOTN would be easy to calculate, based on total chips bet. Skilled judges would be quantitatively identified simply by being those who make the most money – those who saw danger and predicted it without having devalued their chips. Unskilled judges would then be dismissed, or would quit due to low pay. With three judges betting very heavily that a fighter is about to be finished, the fight could be automatically stopped, and the referees who stop the fight at the correct moment can be easily identified. To greatly increase the action and risk taking of the sport, we would make the fighter’s pay in large part determined by the amount of chips bet.

We thus change the incentives: first having no incentive to judge correctly, the judge is now paid directly in accordance with how well he judges. People who know MMA then have a strong incentive to become judges; Peoples would quickly retire. And previously having little incentive to finish a tough but controllable opponent, a fighter now has every incentive to attempt to finish the fight at all times.

Such a system is far too efficient for the Citadel, but imagining alternate systems is marvelous escapism. And escape is exactly what we need. My next post will detail the escape from and defeat of the Citadel, the construction of the Step Pyramid, and the promised explanation of the role of the Castrati.

Sunday, November 22, 2009

The Decline and Fall of the Fertitta Empire

Part 1: Castration, Collusion, Corruption

Once upon a time the UFC had its own set of rules, its own referees, and its own judges. The crowds cheered and stars were born, the management poor but the product pure. All too soon its popularity threatened the boxing establishment, the Luddite before the mechanized loom. The response was violent. The establishment used political influence, in the form of McCain and the athletic commissions, to castrate the virile, threatening sport in its youth.

With boxing promoter gratuities and battle cries of human cockfighting, McCain annihilated the cable revenue stream, leaving his gutted victim to wither away in obscurity, leaving establishment-approved combat sports nicely protected and taxed in this indestructible Citadel of corporatism.

Proud new owner of an enemy’s balls, shrunken though they were by the former lack of testing, the Citadel began to mold the UFC in its own image, imposing gloves, rounds, and weight classes; arbitrarily restricting techniques it disliked, including “pressure points”.

Though a eunuch may have a decided advantage in a human cockfight, the Citadel is all but invincible in total war. Our castrato could only plead, in his pleasant soprano voice, for sanctioning. He needed recognition by the Citadel – recognition that would allow him to breathe.

The Citadel simply waited, merciless and patient, for SEG to breathe its last. Then, for two million dollars, former Nevada State Athletic Commissioner Lorenzo Fertitta and his brother made the purchase. The NSAC immediately provided sanctioning, the pay per view contracts were restored. Business, now paying the required tribute, was booming. Former MMA-ban proponent, Executive Director of the NSAC, and boxing HoF member Marc Ratner eventually became Vice-President for Regulatory Affairs. The UFC had been assimilated. It was now part of the Citadel.

The CSAC, obviously, is within the walls. You need only read of its treatment of promotions in competition with the UFC/Citadel, most notably the difference in treatment of Diaz and Sanchez for identical crimes.

Sponsorships, pay per views, and finally, the infamous reality show on Spike, buoyed by a timeslot following pro-wrestling. Spike, reality TV, and pro-wrestling. Three apparent contradictions of the Flynn Effect.

The marketing of Dana White was one of the program’s most effective manipulations: pre-TUF fans observed what was once a cringing, middle-class, suit- wearing aerobics instructor, ever smirking forced congratulations and awkwardly awarding belts, transformed by the magic of editing and acting into a hard-talking, street-tough father figure, fair but firm. This image appealed to the young fans of the show, many of whom were likely fatherless bastards, and to this day, any post criticizing the UFC or White is met with a torrent of misspelled vitriol, stamped with post-04 join dates. These are the UFC’s unofficial soldiers, a sort of Dana White fanclub / paramilitary organization. They are most fittingly referred to as “Whiteshirts”.

The Whiteshirts, of course, now hold most of the power, and many eunuch-era fans have lost interest. Those impotent originals that remain, though having lost immediate influence to the castration, maintain the most extensive networks of contacts in the MMA community, and hold the majority of the knowledge. The elite twenty percent of the Pareto Principle. I will leave a small hint to these, the Castrati, as to their future role, which will be fully explained in a future installment.


“An important figure in the Ottoman court was the Chief Black Eunuch (Kızlar Ağası or Harem Ağası). In control of the Harem and a perfect net of spies in the Black Eunuchs, the Chief Eunuch was involved in almost every palace intrigue and could thereby gain power over either the sultan or one of his viziers, ministers or other court officials.”

“The Ultimate Fighter” itself is such an effective tool of manipulation, such an efficient popularizer of mediocrity, and so widely watched and well known that it must be considered as nothing less than the Citadel’s propaganda wing.

Returning to sanctioning: the Castrati were ecstatic, and, defending it, often wrote proudly of MMA being “a sanctioned sport”. This approval was, to my memory, unanimous. The benefits are obvious, and both the Castrati and the Whiteshirts approve of them. Oversight. Regulation. Prevention of corruption. These ideas are so widely believed and so little questioned that few would consider an alternative.

But we view reality with imperfect eyes. At times, it is helpful to alter our perception as the ancients and the mystics did: with drugs. A tiny tweak of your neurotransmitters to connect our points of view. I offer you a single psilocybin mushroom.

Common sense: Sanctioning reduces corruption by providing external oversight.

Psilocybin mushroom: Sanctioning increases corruption through displacement of blame. Consider boxing, which we all know to be corrupt, in which promoters wine and dine, or sometimes bribe, judges, and consider that those same judges now work the UFC. What is the standard Whiteshirt response to accusations of corruption after the results of absurd decisions? “The UFC doesn’t appoint the judges; the athletic commission does.” Any idea of boycott is quickly abandoned.

The UFC, then, and indeed, the Citadel itself, has little incentive to provide fair decisions, and in many cases, a large incentive to provide foul ones. If we accept that boxing judges are influenced by promoters, and thus that promoters have found ways to influence them, it becomes obvious that the UFC, as a quite profitable sub-department of the Citadel, could easily use such methods to influence Citadel judges.

There exists motive; there exist means. And the evidence? We will assume that it is profitable to the Citadel that the fighter with greater name-recognition wins. I have selected what I believe to be the most controversial decisions of post-assimilation UFC:






-Ortiz-Griffin 1


The decision in each of these fights went to the fighter who had greater name-recognition prior to the fight, with the sole exception of Jackson-Griffin (easily explainable by TUF vs. Pride implications). Verify on Google trends. I already have. If you have a counter-example – a very controversial decision in post-assimilation UFC in which the decision went the way of the fighter with lesser name-recognition – please let me know.

Motive, means, evidence. And what of unsanctioned MMA? What was widely considered the worst decision in UFC history prior to assimilation? Rutten-Randleman. In Pride? Jackson-Rua, perhaps. These may have been poor decisions, but they certainly can’t compete in terms of outrageousness with half of the sanction-enhanced list. Simply put: there were no Rua-Machida level robberies in MMA prior to sanctioning because the promotion would have borne the blame.

What, then, does sanctioning provide? The unified rules and judging criteria, which are nothing but a ludicrous permutation of boxing’s, created by boxing bureaucrats for boxing bureaucrats.

Pride, on the other hand, with no need to please such an out-of-touch group, designed rules and judging criteria specifically for MMA. When comparing Pride’s rules and criteria to the UFC’s, both Whiteshirts and Castrati agree, in most cases, that Pride’s were superior, with two exceptions: the ban on elbows and the ring.

It’s quite telling that the two main “problems” with the pride format are precisely those that descend from boxing. Importing boxing artefacts such as the 10 point must system, mandatory gloves, and overly short rounds is at best debatable and usually absurd.

What else, then, does sanctioning provide? Judges such as Peoples – the quintessence of sclerotic bureaucracy: utterly incompetent, corrupt, and immune to dismissal.

And lastly, sanctioning provides an extra tax, called a “licensing fee”:

NRS 467.107 Additional fees for license of promoter; exemption; regulations.1. In addition to the payment of any other fees and money due under this chapter, every promoter, except as provided in subsection 2, shall pay a license fee of:(a) Four percent of the total gross receipts from admission fees to the live contest or exhibition of unarmed combat, exclusive of any federal tax or tax imposed by any political subdivision of this state; and(b) Three percent of the first $1,000,000, and 1 percent of the next $2,000,000, of the total gross receipts from the sale, lease or other exploitation of broadcasting, television and motion picture rights for that contest or exhibition, without any deductions for commissions, brokerage fees, distribution fees, advertising, contestants’ purses or any other expenses or charges.”

So for the service of decreasing the quality of the judging, rules, and integrity of a promotion, the NSAC feels entitled to charge a tax that must also decrease fighter’s salaries.

The entire Citadel – the UFC, the commissions, the boxing promoters, the casinos, the corporate sponsors, the lobbied politicians – is simply another iteration of the corporatist phenomenon, and the UFC-NSAC’s interchangeable personnel, shared financial interest, and collusive nature recall the relationship of Goldman Sachs to the Department of the Treasury. The protectionism of government bureaucracy coupled with corporate power breed the worst kind of arrogance – not the ambitious arrogance of a creative entrepreneur, but the passive, innate arrogance of a bored, entitled monarch. As John Derbyshire writes of a 30 year Goldman Sachs employee:

“For me the turning point in the drift toward paranoia was this summer when I listened to an interview with Charles Ellis, author of The Partnership: The Making of Goldman Sachs. What disturbed and alarmed me was Ellis’ undisguised contempt for the radio host and the callers. Granted, it is generally frustrating for intelligent people to come on these shows where they are asked to hold forth for 30 minutes and engage with dull interlocutors. But Ellis’ own attitude to the whole affair suggested an angel come down from on high, he made no effort at all, and refused to hide his lack of effort. What he thought of everyone else was clear, mortals were beneath his consideration. When he did deign to speak Ellis calmly would assert that Goldman Sachs was insured and protected no matter what happened to the economy, specifically, even if AIG collapsed.”

Now who does that sound like? People who plead to Keith Kizer to fix the problems (invariably answered with bureaucratic condescension) are missing this key fact: Kizer is the problem. You’re asking the man who’s directly in charge of selecting the judges of all non-title fights for change. He neglected to watch Machida-Rua or Couture-Vera. He’s not worried about incompetent judges - he’s the one who selects them.

Boxing has had decades of sanctioning, and is filled with corruption and incompetence. It sucked the life from the sport. Now it begins in MMA. The UFC-NSAC hybrid has no oversight – but it also has no foresight. It will consume itself in its corruption and incompetence while another promotion emerges.

My next installment will explain exactly how, and how the Castrati will help.