The Ultimate Fighting Championship (UFC) specializes in knock-outs. Recently, the UFC found itself fighting an invisible foe in an Internet cage-fight over its support for the Stop Online Piracy Act and the Protect IP Act, contentious anti-piracy bills.
Numerous accounts on Twitter, allegedly associated with Anonymous — a leaderless group of politically motivated hackers purporting to fight for worldwide Internet freedom, attacked UFC President Dana White last week for his company’s support of the bills and for making what they deemed “too much money.”
The bills, which would have given the Justice Department the authority to obtain a court order to block foreign website domain names found to be facilitating the unauthorized distribution of copyrighted material, attracted online protests that sucked the wind out of the sails of supporters.
White, with an estimated net worth of over $150 million, has on numerous occasions donated to charitable causes straight out of his own pocket. He fired back: “who the fuck are u to tell me what I should have and shouldn’t have!? U guys talk about freedom and BS but think I have to much $?”
White told his assailants that he did not know who they (Anonymous) were and was only concerned about dealing with the piracy that affected his business. He even agreed with the hackers that the bill wasn’t perfect, yet the barrage continued. When White called them “terrorists,” “cowards” and challenged them to attack him, the hackers were only too happy to oblige.
The charge was led by Anonymous-affiliated accounts that claimed to have posted White’s personal information –including his phone number, Social Security number and mailing address — on the programmer site Pastebin.
White later denied via Twitter that it was his personal information the hackers posted, but rather information belonging to other people, including the leaked information of Las Vegas woman Julie Breeler, who was bombarded over the weekend with phone calls from people who saw the information posted online.
“We’re all for free speech and the marketplace of ideas,” Ike Lawrence Epstein, executive vice president and general counsel for the UFC, told The Daily Caller. “I think it says a lot about these people when all they want to do is hurt somebody. It’s completely inconsistent with the values that these guys are trying to espouse.”
“I can’t tell you the groundswell of support we’ve received, and a lot of it has been coming from people who had issues with SOPA and PIPA,” Epstein told TheDC. “All we’re trying to do is advocate for legislation to be changed.”
This was not, however, the mixed martial arts organization’s first round with hackers and online pirates. In fact, the assault on White was only the latest in a long string of attacks from hackers on UFC, a company that developed a business model highly dependent on corporate sponsorships, event ticket sales and pay-per-view buys.
Epstein told TheDC that over four years ago the UFC started to notice a significant problem with taped events and archived material showing up on sites like YouTube and DailyMotion. Three years ago, the company saw the advent of live streams of its pay-per-view events.
“The value of our content is higher when it’s live, and it was something that scared us,” said Epstein. Pay-per-view buys are where the UFC makes “the lion’s share of its revenues.”
One estimate from 2011 put revenue losses at up to $30 million annually due to the online streaming of UFC content. The company, valued at over a billion dollars, reported in its 2011 mid-year financials that it was down $24 million from the same point in 2010. Fighter pay, not including bonuses, remained at the same level.
“Every time we have a pay-per-view fight, we have a partner, and many times are partners are our fighters,” said Epstein. “Nobody is really seeing how this is hurting our fighters.” Epstein told TheDC that the UFC worked with various law enforcement and used PR to combat the problem, but realized “this is not a situation you can sue or negotiate.”
Even though the company served subpoenas to streaming sites Justin.tv and Ustream.tv in July 2010, Epstein said the current legal severity of Internet piracy — presently a misdemeanor — was not worth a federal prosecuter’s time. “There are limited resources that federal prosecutors have,” he noted. “Prosecuting misdemeanors are not sexy to federal prosecutors.”
The UFC, which had sought support on Capitol Hill for a bill that would offer a solution to their problem, was encouraged to support the controversial anti-piracy bills.
“We were encouraged to throw in with the SOPA and PIPA guys,” Epstein recalled. “We knew from the very beginning that if we jumped in we would draw criticism, but we were advised that this was the most politically expedient way to get things done.”
“There was tons of support for SOPA on the House side,” he added. “There was bipartisan support, everybody thought this was going to be one of the few successes in this Congress.”
Online piracy is hurting the sport of mixed martial arts and “hurting fighters,” said Esptein.
A persistent criticism of the music recording industry — one of the major proponents of SOPA and PIPA — from pirates is the industry’s slow response to build new business models that meet the demand for their product in a form that consumers want and at a price that they can afford.
Epstein said that a major difference between the UFC and the music recording industry is that the UFC has “absolutely provided for quite some time the ability” for fans to “purchase our content on any platform that they want,” and that the UFC’s support for anti-piracy legislation was about the people who choose to illegally stream copyrighted material and profit off of that material.
“Any place you want to watch our content, you can do it,” said Esptein. “You have to pay for it, but you can get it.”
Fans are able to pay for and view UFC content on their TVs, computers, smartphones, or at the local bar. The UFC also hosts numerous free events for its fans, available through Facebook, Fox and other media outlets.
“We love technology,” said Epstein. “Our fans are young and tech saavy.”