New York State's smaller sports arenas could benefit most from new professional mixed martial arts bouts set to debut in the Empire State, according to a stadium financing expert.
Randy Gerardes, a senior municipal bond analyst at Wells Fargo Securities, said New York's legalization of MMA this past spring after a 19-year ban will help arenas in upstate cities like Rochester, Syracuse, Utica and Albany that aren't home to National Basketball Association or National Hockey League franchises. The sport combines the fighting disciplines of martial arts, boxing, kickboxing and wrestling with contestants squaring off in a ring or fenced area.
"These smaller cities could see a bigger impact because the arenas are so much smaller," said Gerardes. "[MMA events] are certainly are going to help the arenas' bottom line."
The Ultimate Fighting Championship is planning four New York events annually for the next three years and has committed to visit smaller upstate cities in addition to Manhattan's Madison Square Garden and the Barclays Center in Brooklyn. UFC events are already scheduled in November at Madison Square Garden and December at the Times Union Center in Albany. UFC is also planning to visit Buffalo, Rochester, Syracuse, Utica and the Nassau Coliseum on Long Island in the coming years with other professional MMA organizations also slated to hold multiple competitions at various arenas throughout the state.
The Dec. 9 UFC event at the Times Union Center will arrive five months after the Albany County Legislature approved $19 million in renovations for the arena that will be paid for through bonds. The borrowing will be backed through arena profits and hotel occupancy taxes.
Gerardes said the new UFC events will benefit arena revenues as well as the host cities from economic activity generated through fans staying in hotels and visiting restaurants. A report released by UFC in late 2013 prepared by HR&A Advisors said professional MMA would generate $135 million in annual economic activity to New York State including $85 million from professional bouts. The wildcard on how much lift the smaller cities receive, according to Gerardes, is how many attend from outside the region.
"The question with the benefits UFC provides to New York is how much of that economic activity would have happened anyway," he said. "In smaller cities the challenge is to get people from other cities to these cities."
Former New York Gov. George Pataki led efforts to ban MMA in 1997 due to safety concerns, but lawmakers ended the ban in March, citing in part new UFC safety measures. Under the bill signed by Cuomo, New York State will collect a 3% tax on gross receipts of ticket sales and broadcast fees from UFC events.
Michael Britt, UFC's vice president of government relations and corporate communications, said the organization is planning new economic impact studies to be released early next year showing how the events in Manhattan and Albany benefited the state economy. He said UFC plans to reach as many New York arenas upstate and downstate as possible over the next few years.
"We want to get to everybody in the state, especially in upstate New York because there are so many fans up there and in Canada," said Britt. "Our tickets aren't cheap so the people coming have bigger disposable incomes and will spend money in the restaurants and hotels."
Chris Weidman, a Baldwin, N.Y., native who held the UFC middleweight title from July 6, 2013 to Dec. 12, 2015, aggressively lobbied state lawmakers to legalize MMA and attended Cuomo's bill signing ceremony with former UFC Women's Bantamweight Champion Rhonda Rousey. The former All-American wrestler at Long Island's Hofstra University said that since the 2013 HR&A Advisors study MMA has only grown in popularity and he has witnessed from recent UFC bouts how businesses in host cities get a big jolt.
"During fight week the whole city really relishes over the UFC," said Weidman. "The exposure is going to be big for the state."
