Pete and Paul Grymkowski, the owners of Gold’s Gym International, Inc., were close enough to the UFC octagon on Nov. 12, 1993, to trace the arc of Teila Tuli’s tooth as it sailed over their heads like a satellite orbiting the earth.

Several months earlier the brothers had agreed to sponsor a new made-for-television event, the Ultimate Fighting Championship, which had been conjured into existence by Art Davie, Rorion Gracie and Campbell McLaren.

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The UFC’s pitch took place at the mecca of bodybuilding, the muscle beach gym that, thanks to Arnold Schwarzenegger and the documentary “Pumping Iron,” became famous enough to franchise.

During the meeting, Gracie spoke about the proliferation of Gracie jiu-jitsu and his dojo in nearby Torrance, Calif. As a matter of policy, Gold’s Gym swapped out weight machines every six months. Making what the Grymkowskis thought was a goodwill gesture, several secondhand weight sets were offered at no cost for Gracie to use at the Gracie academy. Gracie, however, wasn’t interested because his students had no use for weights.

If you don’t lift, the Grymkowski brothers asked him, what do you do?

“We fight,” Gracie said. “We fight all day.”

Perhaps that should have signaled what the UFC’s first sponsor was signing up for.

Or not.

No one had really seen anything like this before.

As it was, the brothers took a chance and agreed to align Gold’s Gym with the inaugural UFC event. Fight posters would be displayed at their gyms across the U.S. They would also provide merchandise as part of the event marketing, push the upcoming pay-per-view in the company’s monthly magazine, and pay a modest sponsorship fee.

“It might have been $10,000, which wasn’t enough to change the economics of the show,” said McLaren, the point man for Semaphore Entertainment Group, which produced the UFC broadcast and eventually purchased the promotion outright.

A day prior to the event, fighters sat in front of a banner that featured the Gold’s Gym logo, and Derek Barton, the senior vice president in charge of marketing for Gold’s Gym, offered a few words at the rules meeting where Tuli famously signed a waiver to keep the event on track.

The next night at McNichols Sports Arena, the Grymkowskis, their spouses and the contingent of Gold’s Gym senior executives who had traveled from LA to Denver “all looked like they were going to see a Mr. Universe bodybuilding show,” Davie wrote in his book, “Is This Legal?: The Inside Story of The First UFC from the Man Who Created It.”

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“I put them in the front row, as close to the action as possible. When Tuli got poleaxed, the shattered ruins of his tooth flew right over their heads. I saw that they were all sick to their stomachs — green at the gills.

“Two of the wives got up and left, right then and there.”

A tooth-dislodging kick to the face as one man was on his feet and the other was not. Stomps to the head of a downed fighter. Certainly these were not the kinds of images with which established companies would seek to align their brands. By the third fight of the card, Royce Gracie’s relatively civil win against Art Jimmerson, the remaining Gold’s Gym contingent got up and left, never to be heard from again.

Less than an hour into the UFC’s first show, the startup’s one, and only, sponsor had already bowed out.

Not that Davie or the executives at SEG seemed to care.

“We didn’t even think about advertising sponsorships,” McLaren said, “because we had a controversial product that immediately started making a lot of money.”

In 2019 the UFC expects to rake in exponentially more than the $10,000 that SEG got on its first day from Gold’s Gym.

After selling for north of $4 billion in 2016, the William Morris Endeavor-owned UFC has pushed to increase its sponsorship revenue. Last year the number grew by 25 percent, the “Sports Business Journal’s” Terry Lefton reported in March.

That may not sound like much next to the 5,500 percent increase the UFC experienced when regular exposure on American television changed the course of its business between 2004 and 2006 (overall revenue skyrocketed from $14 million to $180 million during that span). This represents a significant uptick in the value in and around the octagon, an increasingly coveted space.

Citing Paul Asencio, UFC’s senior vice president of global partnerships since the fall of 2017, “SBJ” tied the increased revenue to new deals with Modelo, a pair of Kraft Heinz brands, Nemiroff Vodka, PokerStars and a large renewal with Monster Energy.

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Several sources with knowledge of the deal confirmed to The Athletic that the rights for placing the Monster Energy logo exclusively in the center of the octagon canvas, as well as additional components of the agreement, costs between $9 to $10 million annually.

Global partners such as the Ukrainian vodka maker Nemiroff, which came on board in 2018 with a multiyear agreement as the first official vodka sponsor of the UFC, gain exposure in every market the UFC visits. According to the press release announcing the Nemiroff arrangement, the UFC’s worldwide programming distribution could expose the brand to 1.1 billion TV households in more than 160 countries and territories in 40 different languages.

“The octagon is one of the key visuals associated with the UFC,” said Yuriy Sorochinskiy, chief executive officer of Nemiroff. “The amount of airplay and in-person exposure at the events is tremendous. Some markets still have a ban on all spirits advertisement. Thus an octagon presence helps to facilitate the Nemiroff global brand awareness and allows us to link our brand image with UFC.”

As part of its intertwining relationship with the UFC, Nemiroff plans to unveil its first fighter affiliation soon.

Based on an internal WME-IMG document entitled “Project Basquiat,” revenue projections for the UFC in 2019 will top out around $940 million, and the yearly take from sponsorship of the UFC could soon approach the $100 million mark. The information was revealed during an ongoing antitrust lawsuit between the UFC and former fighters who allege that anticompetitive practices by Zuffa prevented them from freely pursuing their true value, while also intentionally maintaining the percentage of revenue it pays its fighters at around 20 percent.

This comes as the UFC fully integrates with ESPN and Disney following an expansive media rights deal that was signed by the parties in 2018, a factor that several sources credit with the current spurt in sponsorship revenue.

Selling the canvas and bumpers, along with a variety of other social media and original content, the UFC has become better at maximizing the real estate inside the octagon as it leverages the relationships its owner, WME, one of the most powerful talent agencies in the world, brings to the table.

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Categories such as the automotive space have yet to sign up, leaving room for continued expansion of sponsor money inside the UFC, and making it one of the biggest areas of potential growth inside the company.

Monitored by Nielsen and Repucom, which scores the value of advertising in sports by calculating how much exposure a media logo gets based on its size and the duration of time it appears on screen, the sponsor-partner transaction is based on providing the UFC the right fee in exchange for earning discernible media value. 

As the UFC’s official playing surface, the octagon became a testing grounds for many things, including the organization’s standing with corporate America.

Since the debut season of “The Ultimate Fighter” on Spike TV in 2005, sponsorship dollars have become a consistent and significant piece of the UFC business. But before that historic shift, blue-chip sponsors selling soft drinks or cars or junk food or movies or beer or anything that young men aged 18-34 might want did not care or dare to be associated with a brand that possessed a negative stigma like the one the UFC had.

Blood-glazed controversy and the fix of selling a hot ticket was pumped into America’s veins by Davie and McLaren. Leading up to UFC 2’s nihilistic “there are no rules” promotion, The New York Times media critic Richard Sandomir wrote a story with the headline: “Death Is Cheap: Maybe It’s Just $14.95.” For good or for ill, “UFC” was seared into many minds, and the intensity of the organization’s negative perception repelled potential partners even though its viewers skewed toward a demographic advertisers usually love.

It was hemorrhaging its audience by the time cable companies in the mid-1990s refused to carry the UFC on pay-per-view, which was always the core of its business. Under direct assault, a weakened UFC held no sway as a viable platform for advertisers. The notion that established brands would affiliate their logo with the UFC and risk seeing it doused in the blood of a bare-knuckled barbarian never dovetailed with the positions taken by national politicians such as John McCain, who railed against “human cockfighting” in the UFC.

Among other things, this made money hard to come by. As controversies overflowed around its business, the net effect upended the UFC without destroying it, leaving a dwindling but diehard audience with no option but to follow it into the wilderness.

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Through its darkest period from 1998 through 2000, the value of the UFC brand flagged. Dead in the water, SEG finally offloaded the UFC when Lorenzo and Frank Fertitta presented Bob Meyrowitz a $2 million offer. Based on interviews after completing the deal, it was clear that the Fertittas considered the brand — UFC — as the asset with the most intrinsic value.

As they set off on an inevitable takeover of a sport, it took five years before Zuffa’s forward-thinking marketing, sleek and clean, and the investment by smart casino owners into a well-orchestrated and fairly ruthless plan actually led to a formula that worked.

According to figures compiled by John Nash in a series of articles for Bloodyelbow.com, Zuffa generated $38 million in revenue during its first four years.

Before the UFC found a television partner whose interests intersected with its own, sponsorship made up just 2 percent, an estimated $300,000, of the promotion’s total revenue in 2004. Two years later, according to documents, some 9 percent, around $16.6 million in sponsorship revenue, was generated by the UFC.

At times it felt like Zuffa, awaiting its first blue-chip sponsor, took what it could get, including its first multimillion-dollar sponsorship with an energy drink company that would be featured on the most visible spot on the octagon and plenty of places outside of it.

Xyience wound up an oddity, going from $4 million a month in sales in 2007, according to Forbes, to signing a $15 million sponsorship agreement with the UFC and filing for bankruptcy by January of the following year. When Xyience defaulted on a loan payment, the billionaire brothers behind Fertitta Enterprises seized the assets, and the energy drink with the UFC logo on its can remained a fixture around the octagon until 2014.

The UFC maintained a revenue split with Spike TV for sponsorships that appeared on the octagon canvas. The whole thing had the feel of a small operation until Anheuser-Busch jumped into the cage in 2008 and made Bud Light a presenting sponsor, which it was until Modelo elbowed its way into that spot last year.

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Pushing new stars such as Brock Lesnar and altering the negative perceptions that had been propagated since its earliest years, the public, media companies and top-tier sponsors grew more comfortable with the idea that the UFC could be a mainstream sports property.

What’s a splatter of blood on a logo going to do?

As it turns out, nothing.

Center to catch the start of UFC 241, headlined by a heavyweight title bout between Daniel Cormier and Stipe Miocic, the octagon was filled to the brim with the logos of sponsors, large and small.

Modelo, Motel 6, Nemiroff, ESPN+, PokerStars, Devour Foods, P3, UFC Fight Pass, Parimatch, Toyo Tires, Roar Sports and the feature film “Hobbs & Shaw” surrounded the ubiquitous Monster Energy logo in the middle of the cage.

One-half of the floor seats were wrapped in Modelo banners.

Commercials for Toyo Tires played overhead on the arena screens.

Outside, the UFC Fan Experience was wrapping up. The lines were long and persistent. From noon to 4 p.m. local time, meet and greets and autograph signings happening in conjunction with official UFC sponsors placed fighters face to face with the men, women and children who cared enough about them to show up to this sort of thing.

“I feel like it’s growing still,” said featherweight Brian Ortega, who joined Dominick Cruz in the Toyo Tires booth several hours after representing Modelo in speaking with members of the media. “Fans always seem the same. You can tell who’s been a fan longer. Some of them like to wear old school shirts to the fights. You get the Tapout shirt that’s been washed 50 times. But when someone talks to you, you can gauge if they’re new fans or old fans.”

Represented by WME, Ortega met Modelo executives at his agency’s suite during a UFC event at T-Mobile Arena in Las Vegas toward the end of last year. He shared his story, highlighting his involvement in MMA and how he managed to survive the early part of his life that could have easily taken him down a bad path.

“You get to tell them your story,” he said. “They know I’m from LA. They know where I’m from. They know where I grew up. They know how it is. Everyone from that area knows exactly what I’m talking about. They can relate. And people from big cities all over the world understand. When you have someone you can believe in and truly believe in that person, help them out, motivate them, help them chase their dream. Now I’m doing what I love to do, and it’s different because I don’t have to be back in the neighborhoods. I don’t have to be dealing with these people and politics. I’m out here, having fun. I get to come to the UFC fights, sit front row. It’s a positive different change of lifestyle.”

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There’s little doubt that the growth and decision-making coming from the UFC have impacted the lives of the fighters who compete inside the octagon. Enmeshed in that is the ever-evolving sponsor space.

Once a free-for-all, it was altered forever when the UFC initiated a sponsor tax in 2014.

This, admittedly, rubbed many people in MMA the wrong way, especially the ones who dumped massive amounts of money into startup apparel or sponsor structures that built false hopes with fighters rather than meaningful brands.

Sponsors were forced to step-up their commitments if they wanted to hold any sway over the MMA audience. Fighters lost the ability to make money from outside sponsors, but judging from an optics perspective, there’s a case to be made by UFC supporters that the Reebok fight kits legitimized the appearance of the competition in the octagon, making it seem more professional and thus more attractive for elite sponsors.

Modelo, the official beer sponsor for the UFC in the U.S., has approached its partnership in several ways: leveraging traditional television commercials, digital assets, and experiential marketing that connects it with fans at an event site as part of a strong move to capture non-Hispanic audiences.

Ortega is featured in Modelo’s “Fighting Spirit” campaign this year, picking up the nationally televised commercial spots where Miocic left off. These have quickly become among the most high-profile commercial spots that a UFC fighter can do.

“With WME it brings a different element to the game and to your brand because you go in there and they pitch you to all these people and these people like you,” Ortega said. “Next thing you know, you’re doing something else.”

(Top photo: Zuffa / Getty)

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