January 25, 2012
Consumer demand leads to MMA boom
By Michel Kelly-Gagnon, QMI Agency
Walking in various Canadian cities, one cannot help but notice several billboards and advertisements for a relatively new sport called mixed martial arts (MMA) and one of its leading stars - Georges St. Pierre.
But it hasn't always been this way.
Once seen as a fringe sport, known to only a small faction of hardcore fans, MMA has matured to become one of the fastest growing sports in North America and continues to see great success, despite several government interventions against it.
Government intervention, as is often the case in various sectors of the economy, initially harmed the industry of mixed martial arts and almost drove it out of business. In the late 1990s, a few years after the sport was introduced in Colorado, many athletic commissions in the U.S. refused to sanction MMA bouts and many states even banned it. The same holds true when MMA first hit Canada, as Ontario was very late to legalize the sport and Vancouver officials threatened to shut down events because of the city's insurance concerns.
Under the mandate of "protecting" the fighters - similar to how the government wants to protect us from eating, drinking or smoking - the government set out to ban the sport, arguing that it was too violent and prone to serious injury, even death.
If only the government had done its research.
In 2006, the Journal of Sports Science and Medicine released a thorough study that revealed the evidence did not support the government's claim. In more than 170 MMA competitions examined over a four-year span, there were no serious injuries much less deaths, and more than half of the reported injuries had to do with cuts, bruises and broken fists. In other words, no worse than hockey.
Yet, while the government was trying to ban this sport, entrepreneurs were continuing to innovate and consumers were increasingly demanding the product. As time passed, MMA would self-regulate by implementing more rules, such as adding rounds and weight classes, not so much to appease the government but rather to cater to consumers who wanted more high-paced action and more competitive fights.
If government intervention in MMA had succeeded in its early attempts to ban the sport, this would have truly been an injustice to the millions of satisfied consumers, hundreds of innovative producers and the growth of a new industry that has brought Canada another global sports icon in Georges St. Pierre.
St. Pierre himself could not have developed his own publicity and sponsorship business based on his iconic status. He is not only an athlete, but an entrepreneur developing his own branding, dubbed "GSP 2.0," to prepare for the time when he won't be able to fight anymore. He already generates between $10-15 million a year. His team wants to get him into movies and video games.
Fortunately, the "invisible hand" of Adam Smith finally prevailed. Or, in this case, it would be more accurately described as the "invisible fist".
I would like to thank my friend Joseph Humire, senior fellow at the International Freedom Educational Foundation, for bringing this topic to my attention and inspiring me in writing this column.
Michel Kelly-Gagnon, President, Montreal Economic Institute (www.iedm.org).