From Regulator to Regulated

To many, slap fighting as a form of organized entertainment owes its origins to Eastern Europe. This was the site of viral videos featuring burly Russians knocking one another out, which eventually washed onto Western shores via YouTube and Twitter. This, in turn, induced a handful of small American promotions to get into the business of showcasing competitive face slapping in the mid to late 2010s. And, like a snowball rolling down a hill, the new entertainment product caught the eye of celebrity investors like former California governor and movie star Arnold Schwarzenegger, social media influencer Logan Paul, and, ultimately, Dana White.

But this is only one small part of a much longer and more sinister story.

That story began in 1996, long before the viral videos. It was the year that White’s friend and future business partner, Lorenzo Fertitta, was appointed as a commissioner of the Nevada State Athletic Commission (NSAC). NSAC, then and still, is the most influential regulatory body in all of combat sports and forms the key ingredient to the UFC’s continued dominance in mixed martial arts and in slap fighting’s sudden legitimacy.

The son of Frank Fertitta Jr, owner of Station Casinos and big-time Republican donor, Lorenzo was just twenty-seven years old and a few years out of college when he was appointed to the commission by Governor Bob Miller. Miller was a longtime associate of Frank Jr, and Lorenzo’s appointment was a textbook case of nepotism and political patronage. Which is to say that it was business as usual for the Silver State. As remarked by Las Vegas Sun columnist Dean Juipe in 1998, “NSAC members are appointed by the governor and in many instances, those asked to serve are major contributors and supporters of whatever governor happens to be in power. The job is seen as a perk, an honorarium, a political plum to be passed out among the governor’s cronies.” At least Fertitta was a boxing fan.

Fertitta served on the commission from 1996 to 2000 while also managing his family’s nongaming enterprises, which spanned securities trading, hospitality, real estate acquisition, and property development. Over his tenure, he became intimately acquainted with the booming combat sports industry, whilst also being mentored by commission chairman Dr. James Nave, later to serve on the Station Casinos board.

Nave was one of the architects of the federal Muhammad Ali Boxing Reform Act, which was introduced in Congress in 1997 and became law in 2000. The Ali Act took aim at the “exploitative, oppressive and unethical business practices” of boxing promoters and conferred some basic economic rights on the fighters, while busting promotional monopolies operated by the likes of Don King.

Fertitta was also serving on NSAC when the UFC, still managed by its original owners the Semaphore Entertainment Group (SEG), sought sanctioning in Nevada circa April 1999. According to SEG president Bob Meyrowitz, Fertitta cast the deciding vote against sanctioning, only to quit the commission the following year and, in February 2001, purchase the ailing UFC company at a bargain price. Four months after he assumed ownership, NSAC reversed its prior decision, sanctioning mixed martial arts and giving Fertitta a pathway to resuscitating the UFC brand and getting it back on cable. Fertitta brought in White, a friend from high school, to manage the company and poured tens of millions of his family’s money into the enterprise. They got to work building moats around the industry.

The State as Sword and Shield

In the ensuing fifteen years, Fertitta and White used many of the same techniques that Congress had excoriated boxing promoters for employing at the turn of the century to expand their MMA empire. In so doing, they built a sprawling monopoly via anticompetitive methods and ruthless market consolidation, which enabled the company to brutally suppress labor costs and keep upwards of 80 percent of revenues. The UFC’s first-mover advantage and its use of coercive contracts — long-term, below-market agreements offered to athletes as a precondition to competing for a championship — were lynchpins in this process. The UFC maintaining ownership in their “world” titles, controlling how their fighters were ranked, and matching up fighters according to their commercial interests (rather than via competitive architecture) were also key ingredients in the promotion’s success.

The UFC’s business model would have been dead on arrival in boxing due to the Ali Act. But MMA was never included in the original legislation, and the UFC has since successfully lobbied against its expansion.

The increasingly interdependent relationship between the Fertittas, the UFC, and NSAC has been crucial to this.

In 2006, the UFC hired Marc Ratner, NSAC’s highly respected executive director, to head up the company’s regulatory affairs division. Luring Ratner to follow Fertitta into the private sector as a lobbyist responsible for convincing other states to sanction MMA was, perhaps unsurprisingly, a high-yield investment. By 2016, the UFC could do business in all fifty US states. What’s more, state legislatures which had tried to introduce laws regulating the economic relationship between promoters and fighters — like California’s Assembly Bill 2100, which proposed to grant contractual protections for fighters — were deftly fended off.

Later in 2017, the House Subcommittee on Digital Commerce and Consumer Protection convened a hearing to discuss a bill expanding the Ali Act to MMA. Ratner, who’d been a supporter of the original Ali Act and its application to boxing, appeared on behalf of the UFC to zealously defend the status quo. He argued, with a straight face, that the MMA was free of the “conflicts of interest and self-dealing” that had characterized boxing prior to the passage of the original legislation. In response, Congressman Markwayne Mullin (who introduced the bill) labelled the UFC “the Don King of MMA” with its “take it or leave it” contracts, and accused Ratner of “misleading the American people.”

Ratner and the UFC were the eventual victors, and the bill never proceeded to a vote. At the time of writing, it has yet to be reintroduced in Congress.

The same year the Ali Expansion Act was being debated, Station Casinos executive vice president Staci Alonso was appointed to NSAC. Three years later, in 2020, she spearheaded a successful campaign to have NSAC reduce public access to information around fighter pay. Previously, the commission had disclosed athlete purses as reported to it by promoters, giving fighters and media a critical data point regarding fighter compensation.

In equal measure, the UFC has been able to extract convenient regulations from government when it needs to, while ably shielding itself from rules that would interfere with its profit margins and monopoly.

Perhaps inevitably, the UFC has since set out for new worlds to conquer.

Combat Sports in the New Gilded Age  

Lorenzo Fertitta and his older brother Frank sold their majority stake in the UFC over 2016 and 2017, transferring ownership to entertainment conglomerate WME-IMG (now Endeavour) in exchange for approximately $2 billion apiece. They’ve largely kept out of the combat sports limelight since then, splitting their time between crushing union-organizing efforts in their Las Vegas casinos and cavorting on their super yachts.

An exception to this has been the Power Slap league which the Fertittas, through their company Fertitta Capital, founded last year with Dana White (who remains president of the UFC) and a handful of other UFC executives and associates. The familiar team cut the ribbon on their new enterprise by announcing — surprise, surprise — NSAC had agreed to regulate and oversee slap fighting as a licensed athletic competition in Nevada.

In announcing the news, the UFC’s chief business officer Hunter Campbell, also a Power Slap cofounder, stated that the company had worked closely with NSAC officials to develop a rule set, structure, and medical safeguards that mirrored those in effect in MMA. Blurring the lines between the two entities, Campbell outlined how Power Slap’s rules — developed by the private sector but enforced by the state — would provide “a level of integrity to the sport and provide a system that’s safe moving forward.”

Barely three weeks later, Power Slap announced an eight-episode series airing on TBS, making it, by definition, slap fighting’s market leader and flag bearer. It is likely that, without the promotion’s partnership with NSAC, this deal would not have come to fruition. So too is it difficult to envision the NSAC getting involved with the sport if not for its relationship with Fertitta and the UFC.

Since then, the UFC has integrated Power Slap into its UFC event programming, parlaying the enormous popularity of its UFC fighters — themselves sorely underpaid and exploited — to hawk its latest venture.  At UFC 290, one of the biggest fight cards of 2023 pitting featherweight champion and pound-for-pound great Alexander Volkanovski against interim titleholder Yair Rodríguez, it inserted a slap-fighting heavyweight match during the weigh-in show, to the outrage of some fans. Some MMA commentators suspect this move was a prelude to bullying other states into regulating slap fighting. Whilst many commissions have expressed hostility to the idea given slap fighting’s obvious health and safety issues, as Bloody Elbow’s Zach Arnold observed recently:

With the integration of Power Slap contests at UFC weigh-ins and an attachment of Power Slap events . . . it is dawning very quickly upon various athletic commissions that they may be facing a hypothetical scenario they hadn’t previously planned for. What happens if UFC, directly or indirectly, threatens to pull shows from a state if the state doesn’t sanction Power Slap?

Copy-Pasting the UFC’s Exploitative Business Model

The iron law of monopoly capitalism is a lack of competition, not only in the market but in the realm of ideas. So it is with Power Slap, which has adopted a business model and competitive architectures which are identical to the UFC’s.

The promotion exercises near-unilateral control over matchmaking, rankings, and marketing, giving precisely zero agency to the athletes who make the whole enterprise possible. The TBS reality show Road to the Title, aired earlier this year, was likewise, identical in format to the UFC’s long-running The Ultimate Fighter series. The program showcases slap “athletes” as they live and train together in a Las Vegas mansion, competing for an opportunity to be included in Power Slap’s inaugural pay-per-view and for the promotion’s inaugural set of “world” titles.

Slap fighters, even more so than the UFC athletes who work the broadcast and act as quasi–brand ambassadors for Power Slap, are small and interchangeable cogs in a business designed to funnel nearly all the profits to owners at the expense of labor. Whilst NSAC no longer discloses athlete compensation anymore (see above), former UFC fighter Eric Spicely alleges he was offered a contract from the Power Slap league which would earn him just $2,000 to compete and another $2,000 if he won. In addition to paltry pay, slap fighters are contractually prohibited from displaying their own sponsors, instead having to wear a promotion-imposed “uniform” with corporate logos they aren’t compensated to display.

Like most things UFC, the checks are written out to the promoter.

Owning the Supply Chain, Deskilling the Workforce

In light of these conditions, it is perhaps no wonder that as a group Power Slap fighters bear little resemblance to professional athletes. Many appear to be in their forties or are overweight. Others are washed-up MMA fighters, without much tread left on the tires. Almost all say that Power Slap represents an opportunity to escape poverty. And one hundred percent of them are expendable.

That may sound counterintuitive, given how much professional sports depend on individual stars to drive viewership. But for White and the Fertittas, suffocating popular athletes has always been a big part of the UFC’s business model and brand. Star fighters are the ones less willing to put up with low pay or accommodate the promotion’s event schedule. Star fighters might try to exercise some agency around whom they fight and how they’re promoted. Star fighters can try to jailbreak the promotion — like the UFC’s heavyweight champion Francis Ngannou did in January — giving oxygen to competing players in the MMA industry.

The UFC’s twenty-year balancing act to build popular but pliable fighters was stabilized in 2019 when the promotion signed a long-term TV and streaming partnership with ESPN which guaranteed the lion’s share of the promotion’s earnings, regardless of how popular any individual event is. Because of these settings, an extraordinary 87 percent of the UFC’s 2022 revenue went to the owners — up from 80 percent in previous years.

With Power Slap, White and the Fertittas hope to reach the destination of steady profits and dirt-cheap labor costs while avoiding the hassles — the drawn-out contract disputes with megastars like Jon Jones, Georges St-Pierre, and Ngannou; the weak but reputationally damaging union-organizing efforts — it encountered in MMA.

Odds are that this play will be successful. Even if Power Slap is a fraction as popular as White makes it out to be — TBS ultimately dropped Power Slap after only one season, forcing it to move to Rumble —  so long as there companies out there willing to shell out some money for the streaming rights, that money will go to the owners.

The recipe of a largely unskilled and anonymous workforce, low overhead, and plenty of viral videos all but guarantees it.

And with the state firmly in Dana White’s corner — where it’s been for the past two decades — expect Power Slap to be around for the long haul.