How the UFC Became a Multi-Billion Dollar Brand | My First Million #179

Shaan Puri

If you're already doubting, having doubts, or experiencing imposter syndrome, that's you engaging in self-talk in your head that you're not the best, that you're not good enough, or that you're not whatever. Well, then maybe you should replace that with something that says, "I am the best." That's where I got over the idea of this being just like, you know, cheesy voodoo stuff. I realized that there is self-talk happening no matter what. It's either going to be negative or it's going to be positive. I might as well actively make it positive.

Sam Parr

Hey, what's going on, everyone? We've got a good episode, but before we get to it, we've been releasing these new episodes called "Greatest Hits." They're actually not new to the world, but they might be new to you. Basically, before we started doing the podcast as it is now, it was just Sean interviewing a bunch of people. He did about 20 or 30 interviews, and they were really good, but they were from about two years ago when we launched them. A lot of the people have done some really interesting things since then, so we've actually been re-releasing them. I give an intro, and there's also Sean's intro where I provide an update on the folks. Anyway, give it a listen! When you do, make sure you click "subscribe" if you're on iTunes. If you're listening to this on the podcast app, click "subscribe." If you're on Spotify, click that "follow" button. The reason why is that we're doing a bunch of these Greatest Hits episodes, but I'm actually the one going in the back and finding all these old episodes. I'm trying to uncover all this interesting stuff. In the next couple of weeks, we're going to be releasing a series where we look at some of the greatest predictions we've made, as well as some of the worst predictions. However, we're not releasing them entirely on a regular cadence because I have to go and find all of them. So, make sure you click "subscribe" because, A, you can be notified when that new episode comes out, and B, it actually helps us go up in the rankings. Right now, we're ranked like number 20, I think 20 or 19, in Spotify in the business category. The higher we go up in rankings, the more content we can produce because the more listeners we have. Well, you get the idea. So, just please, please, please leave us a review. And Sean, what are we talking about in today's episode?

Shaan Puri

Okay, we talk about... we're going to discuss the UFC, both the business aspect of it and a pretty cool moment that happened in the recent UFC fight. We also touch on self-talk, which is something that both of us do but don't usually admit to. It's a practice that many UFC fighters engage in before they perform, before they go and do their thing. So, we discuss the UFC, the business of the UFC, and self-talk. Then we jump into some new ideas. Sam had a great idea or met a guy who's doing something really cool around saving money on property taxes. This falls under a general class of ideas called "money savers." Additionally, we have another idea called the "no loss lottery" that we want to talk about. That's what today's episode is about. I think you guys will like it, especially the part about self-talk. I believe that's going to be the most popular segment.

Sam Parr

And we did have a few technical difficulties in this episode. Sean's internet is not working, so hopefully you won't notice too much. But if you do, sorry! It's not going to happen again.

Shaan Puri

To the editors, I'm sorry. You're going to have to salvage like five restarts. To the listeners, hopefully, it's not too bad.

Sam Parr

We're finishing a conversation we are having about what we have to do. Yeah, we gotta select a new... I've got 89 drawings or art clips that we've gotta select. And then I'm having Abreu interview. Did we announce on the podcast about Abreu?

Shaan Puri

no we didn't

Sam Parr

Abreu's leaving, unfortunately. This is kind of part of the plan, but it sucks. So anyway, we've got 50 people that we've got to...

Shaan Puri

Sam, have you had this before at The Hustle where people want to leave to go do their own startup? Specifically, not like "I got another job," but...

Sam Parr

Yeah, yeah... Most people, yes. I always tell them, "Just so you know, this feels like a startup now, and it is a startup." I think of Bray, who's different because he wasn't a full-time employee, but I say to others, "Don't expect even the nice stuff that we have at the moment for a little while." I always try to get them used to it. I'm like, "Just so you know, it's going to be really bad for a little while."

Shaan Puri

this shithole is shitty wait till you start your own thing

Sam Parr

Yeah, so that's happened a lot. Although Abreu, I think, actually understands that he's been saving money. He's been living at home and stashing money, or living somewhere where he has cheap rent. So yeah, I think he'll do good.

Shaan Puri

There's this thing called "The Alliance" that Reid Hoffman wrote about in his book. He talks about how, back in the day, people used to expect an employee to stay with you for 20 years. That was what people used to do - they'd be at a company from start to retirement. Then that became less and less common, and now, I think in tech, the average tenure of an employee is like 2 years or something... maybe even less.

Sam Parr

yeah I think facebook it's even less

Shaan Puri

And so, yeah, Reid Hoffman, who is the CEO and founder of LinkedIn, wrote this book which was like, "Look, you can't just close your eyes and pretend that's not happening. You can't get upset every time somebody leaves; that's actually the norm." So, what's the right way to manage in this type of scenario? He calls it **the alliance**, which is a mutual understanding between the person working with you and you as the manager.

Sam Parr

I I actually am very curious I wanna know about this the alliance people leaving whatever yeah

Shaan Puri

so I haven't read this book but

Sam Parr

I think great great way to start off

Shaan Puri

Well, I know of the book and I understood the premise. I don't... 90% of the books that I'm a fan of, I haven't actually read, and this is one of them. So, what he says is basically you need to have an understanding with the person who's working for you or working with you. They’re going to be there as long as this is mutually beneficial. The expectation is that after a certain number of years—2, 3, 4, whatever that number is, probably not much more than that—they may leave and go do their own thing. When that time comes, you're going to support them. He talks about this in a way that shows he’s a big believer in networks and network effects. He says that when that person leaves your company, they’re not just sort of dead to your company. They should now be your champion and advocate outside your company. You'll cross paths again; you might invest in their company, they may come back and work for you later, or they may refer someone to you. So, he describes how to thrive given the constraint that people are going to leave early on, or in tech, there's a high turnover rate of 1 to 2 years with people hopping jobs. This is not what Array was doing, but it just reminded me of that.

Sam Parr

Yeah, and I still like the problem that I'm going to solve for whenever I start a company again. Even now, at least when I start from scratch, I could hopefully do this early on. Basically, how do you build a company where someone wants to work there for 10 years? I still believe that even in this world, where the average person only works somewhere for 2 to 4 years, I think it's quite possible, though.

Shaan Puri

See, my problem is that I like working with and trying to recruit the best results from entrepreneurial-type people. That's who I get along with; that's who thinks like me. They work really, really hard in these bursts, but those are like the worst people for retention because they want to go start their own company. That's why they're entrepreneurial-type people; they're not going to be long-term employees, sort of by definition. So, I've always struggled with the retention side of things in that sense. But, you know, I'm cool with it. I think I can just continually recruit more people that want that experience.

Sam Parr

So, before we get into some ideas for this episode, can I tell you something that I saw recently? We're going to bring this topic up when we talk about UFC. Did you watch the Rose Namajunas... is it Rose Namajunas?

Shaan Puri

yep I

Sam Parr

I watched a UFC fighter named Thug Rose. She is like a darling—not just in terms of her physical appearance, but also her attitude. "Darling" is the best word I can use to describe her, although she could, like, kill you.

Shaan Puri

Yeah, so the story of this is interesting, right? She's really... I don't know, she's 5 foot 3, very petite. Have you seen her with long hair?

Sam Parr

yeah she was like beautiful

Shaan Puri

Beautiful looking girl. At the beginning, the UFC was marketing their female fighters with their kind of sex appeal, basically.

Sam Parr

Yeah, right. They made her wear a bikini at the weigh-in, which is just so stupid.

Shaan Puri

Right, and some girls leaned into it. Like Paige VanZant, she got a boob job and she's like... she kind of sucks as a fighter. She's very mediocre, but she's famous and gets paid well because she has good sex appeal. People want to watch her; people are fans of her. There's a karate fighter called "The Karate Hottie." That's her nickname, "The Karate Hottie," because again, she's playing on that. Rose went the other way; she's a beautiful girl. They were like, "Oh dude, you want to go do Dancing with the Stars? We can make you into a star." And she's like, "Fuck that!" She shaved her head and was like, "I don't want this whole beauty thing; it's a distraction. I'm actually trying to be a martial artist," which I thought was badass.

Sam Parr

And that makes her great. I think that there are only a few sports in the world where the women are equally or more popular than the men. I guess there's tennis, maybe.

Shaan Puri

maybe national soccer team I think that's kind of the the only other one that I can think of

Sam Parr

But in the UFC, if you look at the top ten most popular pay-per-views of all time, it's like Conor McGregor and Ronda Rousey make up collectively like 8 of the top 10. And whenever we think of an Amanda Nunes fight, I don't think like "it's a great women's fight," I think "this is just awesome."

Shaan Puri

I I put

Sam Parr

I'm going to watch this. Anyway, I think it's good. I hope... I think the whole bikini thing is offensive. That's just my opinion.

Shaan Puri

And, and, bullshit. Dana White was famously once stopped by TMZ, and they asked him, "Dana, when will we see women fighting in the UFC?" He responded, "Never, dude. No, we don't want to see... nobody wants to see girls fighting in a cage." Then he, you know, did a complete 180. To his credit, he changed his mind when Ronda Rousey came around and he thought, "Okay, she's a star. I can build this whole side of the sport around this woman." And he totally did. Now, it's like you and me both know that when there's a great women's fight, it's just as good, if not better, than the men's fights.

Sam Parr

Yes, and so there was a fight. We didn't actually talk about it, but it was two weekends ago. This woman named Rose Namajunas, she's awesome. There's this clip that I'll share again, so people can just go to my thing or somewhere to find it. But basically, she's in... like, first of all, going into a cage, you're in your underwear. You're getting watched by potentially over a million people, and you're kind of fighting to the death. Even if you do have someone who's going to stop you, the likelihood that you can die definitely exists. So, like, you're going into a life or death situation in your underwear in front of all your friends, family, and the world. And the most...

Shaan Puri

And if you fail, you sort of fall back to the bottom of the totem pole and have to climb back up, which is like fighting a bunch of monsters along the way. In a normal sport, you go in saying, "I'm going to play a basketball game" or "I'm going to play a football game." It's like, "I'm going to play the game; I hope I don't get hurt." In a fight, it's like, first of all, it's not even called playing. There's no "play fighting"; it's just fighting. It's actually not a sport you play. The second thing is, you're definitely going to get hurt. It's not like an aberration; it's not an unusual thing when you get damaged. Like you would in basketball, with fighting, you're for sure going to take hits, and you're going to hurt yourself a little bit.

Sam Parr

What the fighters say is, "I left a piece of me in that ring." What they really mean is that in a hard fight, it's like, "I know that I just took 6 months off my life. I left that in that ring." It's pretty amazing, and I mean, it's weird... it's odd, but I love it. In this fight, the camera is... They announced she's fighting Weili. Was it Weili? I think that's her name.

Shaan Puri

zhang wei li yeah

Sam Parr

yeah this woman from china who's just like a beast and

Shaan Puri

She's like a Terminator, dude. She's just unbelievably physically strong. And again, Rose doesn't look like that. She doesn't have bulging muscles; her neck is not popping with veins. She looks like, if you've ever watched *Stranger Things*, she looks like Eleven, the character in *Stranger Things*.

Sam Parr

And then they... and Wei Li, I love that woman as well. She's great too. But this Doug Rose is her name. They zoom in on her face, and she's saying, "I'm the best, I'm the best, I'm the best." She's saying it over and over again. In two minutes, she was the underdog. She was supposed to get her ass kicked, and I actually would have bet that she was going to get her ass kicked. I thought she was going to get knocked out. Within two minutes, she did a front leg kick, which is already kind of weird, and knocked Wei Li out. The crowd goes wild! I remember watching it live; I was in tears.

Shaan Puri

I was so happy I have chills right now just remembering it

Sam Parr

Rose kicks this woman in the head a minute and a half in. Two minutes in, she knocks her out. We all go crazy! At the end, her husband is her trainer or part of the training team. He gets down at her level because he's like 65 and she's probably 5'6" or 5'4". He looks at her face and says, "We've been saying it for years, you're the motherfucking best. No one could fuck with you. Who's the best?" She responds, "I'm the best." Then, in the interview with Joe Rogan, he says, "You kept saying, 'I'm the best,'" and he puts the mic to her. She replies, "Because I am the best." I'm kind of getting emotional even remembering this.

Shaan Puri

I'm getting chills right now just while you're talking because I was watching it and it was very similar. I don't think if you didn't watch it, or if you don't follow the UFC, you probably don't care about this. If you didn't watch it, well, it's hard to relate. I think I even just missed...

Sam Parr

Don't watch it. I don't think... I think even if you don't watch the UFC, you should go and watch this clip because this woman, she's had emotional issues where she's like broken down from stress. Which is understandable, given that she's fighting to the death. So like, fair. It's just... it was...

Shaan Puri

So, I think the key part of this, by the way, is that there are a lot of UFC fighters who are all bravado. They always talk about how they're the best, saying things like, "Oh, I'm gonna win! I'm the best! Nobody can touch me! I'm on another level!" However, she's not one of those people. She's ultra-quiet and humble. A lot of people perceive her to be sort of mentally weak because she's had some issues before, and she doesn't typically come out with that bravado. That's why it was very atypical to see this very small, gentle giant basically standing in the cage, facing her opponent, and just muttering to herself. You could see she was telling herself before the fight, "I'm the best! I'm the best!" And for her, it's not trash talk; it's not bravado. It was self-talk, which is a very different thing. She was trying to reinforce it to herself so she could go perform. And then she performed with a stunning knockout.

Sam Parr

And the way that she delivered the "I'm the best" line, you could tell that her coach—or it must have been her coach, who is her husband—was like, "Rose, you're the best. As a matter of fact, for the next year, when I ask you who's the best, you have to reply, 'I'm the best,' or I'm gonna make you do push-ups or run or whatever." You could tell that that's how it was. It's like when you're in high school and they make you carry a football all day, or a baseball, or in my case, the running baton. If you drop it, it's like a discipline thing. That is what happened with her. You could tell that if anyone said, "Who's pretty good? Who's the best?" and if she goes, she would have to say, "I'm the best." It was interesting because it brings back to business and launching stuff. You have that same doubt. Granted, you might lose money and get embarrassed. Thankfully, you're not gonna get your ass kicked or killed, most likely. But you still need that self-talk. That minute-and-a-half clip is like the best example of self-talk for normal people.

Shaan Puri

do you do self talk yourself

Sam Parr

yeah I yeah I I definitely it's a trick question

Shaan Puri

In a way, because everybody has an internal monologue, everybody's doing self-talk just in their head. But I'm just being more... Do you strategically [use self-talk]? Because a lot of people think this is like cheesy, lame... like affirmations.

Sam Parr

go stand in

Shaan Puri

the mirror and say you're beautiful you're beautiful you're beautiful whatever

Sam Parr

It's necessary because, like, whenever you're doing anything... So, like, whenever I'm launching anything or whenever I have fear, like, for example, even when I bought my home, I... you know, I have a pretty unhealthy relationship with money. I don't like spending it because I was poor. I know what it's like to be broke. I was like, "No, this is normal. This is normal to feel this emotion. This is incredibly normal. Do it anyway." And then, so yeah, I do that all the time. But I try to normalize it as, "This is normal. This is what I'm supposed to feel this way, and I'm supposed to do it anyway." So I tell myself that all the time. Is that what you do?

Shaan Puri

I don't do that but I do I have 2 kind of routines that are like this that I've probably never told anybody about alright so these are I would say this one is fairly new I told you kind of like I had like this moment where I was like alright what do I care about I I'm always been a self improvement guy right I talk about tony robbins he's he's been a big kind of like influence on me so I have this thing on my wall and it's basically what I wrote like like most people write goals like what they want to achieve what they wanna have I wanna have a mansion or I wanna hit this dollar amount I wanna get promoted and for me I have a a thing that's called I wrote on it who am I becoming and I the way I do it is because I think about myself like every year it's like a software update right what's version I'm 30 I just turned 33 what's version 33 of sean look like right and I I literally write this out beforehand I write out the like the notes like oh I used to have this bug where I got jealous about people that's fixed you know like hey I added this new feature now I can play the guitar whatever right like I treat myself like a whole new version upgrade anyway so the all those little bug fixes and features they all add up to something what am I trying to become and it's like kind of like a root philosophy which is life is not about what you achieve or what you have it's about who you become and so I said alright well what do I wanna become and I sort of wrote these four things out right I said I wanna become a person who is who is fit through healthy habits I wanna become a teacher you know the favorite teacher of millions of people I wanna be you know a a a great family man who lives in a house full of love and I have like a last one right one more after that so anyways I have these four things that are like the things I wanna become and I do this thing in the morning when I like do my kind of morning routine which is like my reminder for the day before I go and start just doing a bunch of work and a bunch of tasks and dealing with all the emails and shit that comes my way I just walk in a circle in my office which is a tiny tiny office I have like a I don't know 8 by 8 foot office and I just walk in a circle and every circle is I'm basically I'm basically talking like I'm you know talking to myself or my own coach about those about those four things so I'll say like you know you know I'm becoming a teacher I am I am a teacher I'm a teacher who millions of people love what I love what I create they learn from me they're inspired by me I'm a teacher that means I gotta learn every day so I have something to teach I'm a great teacher right so I just say it in the present tense I am this not I'm trying to become this and then I'll say this the next one you know I'm a great dad you know even when things are going off the rails I'm patient that's when I get even more patient I'm poised I'm a great dad I'm always there for them they know I got their back I'm a great dad

Sam Parr

you you sound like muhammad ali

Shaan Puri

Exactly. You know, I said I was the greatest before I am. So, I've been doing that now for like, I don't know, probably about a year, and I love it. It's just kind of fun for me. So, that's the first kind of self-talk I do. The second kind of self-talk I do is what I call "revision." I fall off the horse a lot, like most people, right? Like, "Oh, I'm trying to eat healthy," and then, like, in the middle of the day, there's a bag of chips, and I ate the bag of chips. Or, you know, I say I'm going to be a patient dad, but then I just lose it when she wouldn't let me change her diaper. So, obviously, I'm not perfect. The other self-talk I do is revision. At the end of the night, I just imagine that same scenario that happened. It only takes me 30 seconds. I think back to that moment that I'm not proud of, and I reimagine it in a way that I'm acting in a way that I'm proud of. That's it. I don't decide I'm going to do things differently. I don't write it down. I don't pledge to myself I'll never do this again. I just imagine it going the right way, and then I go to sleep. That act of reimagining things the way you want to see it is a form of self-talk in my mind. It's just like Rose saying, "I'm the best," and imagining herself, you know, knocking out the other girl. That's kind of what I do in my daily life.

Sam Parr

And the takeaway, I think, should be: if someone's crazy enough to look up to you, Sean, or look up to me, then at least now they know that someone they look up to has doubts and has to do that self-talk. The cool position that you and I are in is that we know people who are, at least in terms of financial success—which is a limited version of success—some of the most financially successful people in the world. We talk to them and we know firsthand that they're like, "I'm so depressed. I can't do X, Y, and Z." In our case, I look up to a lot of these UFC fighters who seem like tough individuals, like Thug Rose, doing the same thing. So anyway, this isn't hokey pokey; this is actually something everyone experiences. It's interesting. So look up that Thug Rose video—it's badass!

Shaan Puri

There's one other thing I'll put out there, which is my trainer was big on this sort of like not talking so much but on visualization and imagination. He's always like, "Oh, you're too analytical. You're just trying to think your way through everything. Just imagine it. Don't worry about how it's gonna happen; think about what you want to have happen." In my head, I was always like, "Yeah, yeah, but at the end of the day, somebody's gotta figure out how it's gonna happen. It's gonna have to be me." So, just imagining it is not gonna do it, right? I was kind of resistant to it up front, but I came around when I realized one thing: everybody in their head is already imagining some outcome. So, if you're ever stressed, worried, or in doubt, what is that? That's your head imagining the thing not going right, not going well—failure, whatever, right? So, if we are willing... it sounds kind of hokey and cheesy to imagine things going well. It's like this hippie-dippie thing to do. But the other side, which is imagining things not going well, everybody's doing all day anyway. Anyone who's ever had stress, fear, or doubts—if you just break down what that is, that's imagining things not going well. It's imagining a future where this doesn't work. If you're willing to imagine things not going well, you might as well start imagining things going well, too. And if you're already doubting or having imposter syndrome, that's you doing self-talk in your head that you're not the best, that you're not good enough, that you're not whatever. Well then, maybe you should replace that with something that says, "I am the best." That's where I got over the idea that this is just like, you know, cheesy voodoo stuff. I realized there is self-talk happening no matter what. It's either gonna be negative or it's gonna be positive. I might as well actively make it positive.

Sam Parr

and if it is cheesy who gives a shit like if that gives me just a slight edge then or then I'll

Shaan Puri

take it

Sam Parr

if it

Shaan Puri

was because I

Sam Parr

need everything I can get

Shaan Puri

alright we should jump in

Sam Parr

let well really quick before we get into ideas michael harris do you know who that is

Shaan Puri

no who is that

Sam Parr

Michael Harris, whose nickname is Michael Lowe, is a notable figure. I don't know where the "O" comes from, but he founded Death Row Records. He was, I believe, a cocaine dealer and went to prison, particularly San Quentin, for 25 years. Prior to prison, he made close to $100 million from selling cocaine and used that money to fund Death Row Records. He is a co-founder of the label and owned all the original masters of everything. Anyway, he's out of prison now. He's a good friend of my good friend Chris; it's his good friend.

Shaan Puri

did you go pick him up when he got out

Sam Parr

well he he he got he got he got picked up in a bentley which is pretty funny

Shaan Puri

but

Sam Parr

anyway he wants to come on the pod you you want him

Shaan Puri

amazing yeah and death row who's death row so death row was tupac or death death row who was

Sam Parr

Yeah, so it was Pac, it was Dre's early stuff. Right, so yeah, it was Snoop. So basically, this whole... a lot of modern rap originated because of Death Row Records. This whole amazing, you know, "f*** the police" gangster... stuff. They kind of invented that.

Shaan Puri

love okay great that's gonna be awesome

Sam Parr

alright you wanna talk about ufc again or do you wanna talk about something else

Shaan Puri

Let's talk about UFC, but this time we're going to discuss the business side of it real quick. The parent company that owns the UFC is called **Endeavor**. Endeavor went public, and anytime something goes public, you can see the financials and read the prospectus because they have to do that in order to file for going public. This is the first time that the UFC's financials have really seen the light of day. They've been shrouded in mystery. Fighters have always wanted to know the numbers because they want to get paid more; they feel like they're super underpaid. Dana White kind of talks about numbers, but nobody can ever verify how many pay-per-view buys there were or not. I thought it was kind of interesting, so I want to talk a little bit about Endeavor and see what you think about this.

Sam Parr

yeah endeavor is I'll go ahead go ahead go ahead I was

Shaan Puri

The two guys who are in charge of it, I believe, are Ari Emanuel and Patrick Whitesell. Ari, if you ever watched *Entourage*, the character Ari Gold is based off of Ari Emanuel. He's kind of like a power player in Hollywood. They had their own talent agency that sort of took over WME. They have three parts of their business. 1. **Agencies**: Like WME and others, managing Hollywood talent, musical talent, and so on. 2. **Sports Businesses**: They own sports assets, notably they bought the UFC. They also own some other things, like EuroLeague basketball and PBR (Professional Bull Riders). They own a bunch of other assets as well.

Sam Parr

bull riding

Shaan Puri

Bull riding... sorry, yuppie. Yeah, they own a couple of sports assets, and then they have kind of like a third arm to the business, which is their events business. They have the Miss Universe pageant, they have New York Fashion Week, and they basically bought the company that hosts the event on the Super Bowl, On Location. So, they have all these events, and these three arms of the business.

Sam Parr

They also do publishing. They do all types of shit... like, frankly, how that company even operates I don't understand. Because there is some cohesiveness, but there's also a lot of *not* cohesiveness, and it's...

Shaan Puri

It's incredibly confusing, really. I think it's like a roll-up of one theme, which is sports and media entertainment. So they roll all these companies together, and they have a brand licensing thing where they have the brand for Harvard and the NFL. They'll go license it out and give revenue back to Harvard and the NFL. So they went public, and it's worth $18 billion now.

Sam Parr

so something okay as of as as of right now it's 21.3

Shaan Puri

Right, so it went up just in the time of my research here. I should have bought. They do about $4 to $5 billion a year. Specifically with the UFC, I thought this was kind of interesting. I didn't know how much revenue the UFC does, and I was a little bit surprised to learn that.

Sam Parr

can I guess

Shaan Puri

yeah I don't know if you've you've seen it or not

Sam Parr

No, I haven't. Okay, I would say $800 in revenue and $200 in profit.

Shaan Puri

Alright, very close. We're very close on the revenue side. So here's their [revenue for] 2018, 2019, 2020: - 2018: $700,000,000 - 2019: $875,000,000 - 2020: $900,000,000 last year Wow, so very close on revenue, but their margins are a lot better than you think. So you were saying $200,000,000...

Sam Parr

2

Shaan Puri

Yep, so their margins are about **36%**. They have **30% EBITDA** on their product, which is very good. Fighters only get **20%** of revenue. In every other major sport, like the NFL and NBA, it's closer to a **50/50** split. So, you know, the fighters are sort of right when they say that they're underpaid. Their business is interesting because they have media rights. Guess how much the media rights sold for? It used to be on Fox, and now it moved to ESPN. Guess how much ESPN did it for?

Sam Parr

I think it was a 1000000000 over 6 years right

Shaan Puri

I don't know how many years it is, but it's $3,300,000,000 a year. So I think it's actually more than $1,000,000,000. So the Fox deal, I think it was $1.5 billion over 5 years.

Sam Parr

I think so wow

Shaan Puri

So, yeah, the Fox deal was **$168,000,000** a year, and then the ESPN deal was **$300,000,000** a year. That actually paid off pretty big because of their **$900,000,000** in revenue. **$300,000,000** comes from the media rights; the rest comes from merchandise, events, pay-per-view, and ticket sales—all that good stuff. I thought that was pretty interesting and a good business overall. It's much more profitable than I would have expected, given all the different moving pieces that go into it. Overall, it's kind of an incredible business because they bought the UFC for **$2,000,000** about 20-something, maybe 25 years ago. They bought it when it was going bankrupt. Dana White, who's the president of the UFC, convinced his two childhood friends, the Fertitta brothers, who are basically part of a mafia family and own a casino, specifically the Red Rock Casino in Vegas.

Sam Parr

I think Fertitta's son, or one of the Fertitta kids, who is our age, listens to the podcast. I don't think he would like that if you said they were mafia.

Shaan Puri

Public, it's like... it's like public. It's like well-known information, it's been published everywhere. And I also think, by the way, when I say "mafia," I'm not judging. I think that's pretty fucking cool, and I think my people in the mafia also think being in the mafia is pretty cool. So I hope they don't get offended by that. And if they do, you know, I live in Austin. You can go find me over there, so...

Sam Parr

yeah right

Shaan Puri

So anyways, the Fertitta family is pretty interesting. They started casinos. Frank and Lorenzo were the ones who Dana convinced, "Hey, let's go buy the UFC." So they bought it for $2 million, and then they ended up selling it.

Sam Parr

for for

Shaan Puri

4 to 5,000,000,000

Sam Parr

When they bought it, they pretty much just got the cage, which is probably a $20,000 piece of equipment, right? And they got the name. Yes, the UFC. They were like, "We just loved that name. It was such a great name." And they go, "We paid $2,000,000, but we didn't really get anything."

Shaan Puri

right and but

Sam Parr

for some reason we did it

Shaan Puri

They had to pour in way more money after that. So, it's kind of the easy story: "Bought it for $2 million, sold it for $5 billion," which is obviously amazing. But there were multiple years of just pouring money in and losing money before this thing turned around. They couldn't get regulated in a bunch of places. John McCain called it "human cockfighting," and they couldn't get licensed. The business model wasn't there, they wouldn't get put on TV, that sort of thing. And so they poured in, I think, $80-something million.

Sam Parr

Yeah, I was gonna say '65. They said in the documentary he was like, "We put a lot into it and it failed and failed and failed." By like year 6, they convinced Spike TV (which I don't even know if that's a thing anymore) to air "The Ultimate Fighter." Yep, and there was... it was Forrest Griffin and I forget the other guy's name. They had this big fight, and I remember as a kid watching that fight.

Shaan Puri

yeah

Sam Parr

I remember that fight as a kid. These guys were going at it. They looked like... it was the first time that we thought, "Wow, they're like athletes." They're not like these guys are... they are not necessarily like thugs or meatheads. These guys are athletes who are fighting, right? And I remember watching it, and right when that episode aired, their ratings went up. And they go, "**Boom!** We just saved the whole company!" ...right from that one fight.

Shaan Puri

the thing with that show is they show them in a house it's like a reality show right they're showing them living in a house and then training and then competing so it wasn't just the brutal fighting part it was like you got to know the guys you see their backstory you see them lying in their bed looking at a picture of their family right before their training session being like alright this is who I'm doing it for blah blah blah so people got emotionally invested so it's similar you know like the kardashians also like they use reality tv to build the brand that ends up being a commercial brand right because you perform an emotional connection of you know them and their sort of reality you know although it's quite edited and then you know then you're more likely to be a buyer in the future so so yeah they ended up turning this thing around kind of an amazing outcome for them just a super cool business and I would say if you don't follow the ufc there is one kinda like cool business lesson to learn from it which is dana white dana white is the most unorthodox president of a company that I think I've ever seen like people think elon is kind of like out there and he'll tweet random stuff he's kind of unafraid he's pretty bold dana makes elon you know look like a like a you know like a honor roll student dana will like so he's been involved with the business from the from the beginning but he will go in the instagram comments where somebody's you know hating on something and he'll just be like go fuck yourself you know like you know in the press conferences he is as much a character as any of the fighters and the same way that vince mcmahon did that in wwe but but that's fake that's scripted dana does it in the unscripted format and I had an investor tell me once we were talking about esports and I was and you know a lot of people think esports is really interesting space because it's you know the viewership is really high but the business is kind of nascent still and people are wondering is there a ufc like opportunity there could you buy something today for 2,000,000 that's gonna end up being worth 4 5,000,000,000 and what this investor told me I think is so spot on he goes esports needs its dana white it needs its person who's gonna take this sport from like just the underground and brick by brick build it into a mainstream brand and like take no prisoners and like organize the whole fucking thing along the way

Sam Parr

Let me ask you this: Dana White, when the deal [to sell UFC] went through, he made $400 million. I think that was public. He owned 4% of the company... or 10%, I forget.

Shaan Puri

10 10%

Sam Parr

It's 10% sold for $4. He made $400. Then he probably made like... he was probably getting paid $10,000,000 a year.

Shaan Puri

he's like more than that 50,000,000 at least as my guess

Sam Parr

before the sale before the sale

Shaan Puri

I'm sorry before the sale yeah yeah

Sam Parr

So, he was wealthy ahead of time and he made money in a thousand... who cares? Let's just be conservative and say that he's worth **$600 to $700 million**. That's conservative, I think. And like all the celebrities are wanting... like the people who we think are cool, they're the ones who think Dana's cool. Like, everyone thinks Dana's cool. Do you know what I mean?

Shaan Puri

I mean

Sam Parr

Like the famous people, Dana's famous to the famous people. So he's got power, he's got people who want to... people think he's cool, yada yada yada. He's got money. Would you trade spots with him?

Shaan Puri

no his lifestyle is brutal it's brutal absolutely

Sam Parr

Brutal. Do that, dude. It looks horrible. He still kind of looks fit, but he looks exhausted. His face is red and like he's...

Shaan Puri

A game guy, £150 since starting this thing. Now it's kind of like muscle fat, but because he takes steroids and stuff. But no, he's... dude, he's on like... they do an event every weekend basically. He has to manage headquarters, plus he goes to the event. He does the press conferences, he's watching ringside, then he goes and talks to the fighters afterwards. He deals with the weigh-ins and the "oh, this guy can't make it, this guy got hurt, we gotta find a replacement." He does that 52 weeks out of the year. And like, there's a reason that Dana's not like, you know, happily married at home with kids and a great dad and, you know, unstressed. There's a reason that Dana's got bags under his eyes. Because he chose that life, and he nailed it. I would not choose that life; it's not for me.

Sam Parr

yeah yeah not a chance I wouldn't either but but

Shaan Puri

I respect the hell out of it

Sam Parr

I am happy... What do I always say? Cornrows and neck tattoos. I'm happy they exist, I don't want them. Alright, you wanna try another one? Oh, I didn't even see... I didn't scroll down. You had the revenue down here all the time. I never saw it. Yeah... oh, sorry. Did you wanna wrap up with this or no?

Shaan Puri

No, that's it. I just think it was kind of interesting. I mean, I don't really have like a major opinion on "oh good business, bad business." I think as somebody who's a fan of the sport, the business side of it is just as interesting as the actual sport itself.

Sam Parr

Yeah, I think that UFC is mainstream popular now. I can't exactly tell because the people who like it, like, it's my sport. It's like my Monday Night Football. I follow it just as much as a hardcore football fan follows all that. I make my wife watch it with me now. She is actually finally into it because she understands the story behind it. It's basically just WWE wrestling, right? Exactly. It's just like fake drama, which I love. So anyway, we watched it, and I think it's beyond just our crew now. I think it's like mainstream; almost everyone knows who Conor is. A couple of episodes back, we talked about business models that save you money. They just take a percentage of savings, and how that's like the biggest no-brainer of all time. We said taxes were good, like income taxes. We talked about software savings, car savings, and a bunch of stuff that was kind of an interesting episode. I hung out with this guy who lives just a few doors down from me. He started this company called Student Loan Hero. You know Student Loan Hero?

Shaan Puri

never heard of it

Sam Parr

I don't even know what it does. It basically helps you consolidate debt, I think. So like if you have student debt, you go to their website and you purchase some... I don't know. I haven't had a lot [of experience with it].

Shaan Puri

Of debt, I think what it does is... I've seen models like this. I haven't looked up their website, but CommonBond is another one of these. They basically just refinance your debt at a lower rate, so they save you money. Then, they make money because the new lender will pay them a fee for the loan they originated for them.

Sam Parr

Exactly. I just haven't had to do that, so I'm not exactly sure how it works. Anyway, he sold that company, bootstrapped it, and sold it for **$60,000,000**. His new company is called **Proper Lot** (properlot.com). Well, his goal... I went with Sarah to his house the other day for breakfast. He kind of just... I took a picture of myself in front of my house. I don't remember what I was doing, but I posted it online. He said, "I don't want to be creepy or anything, but I think I live like five doors down from you. Do you want to hang out?" So, I went to his house, and we hung out. He's got this new company called **Proper Lot**, and they're doing something with property taxes. There are a few interesting things about this. The first thing is that he's trying to make this **Kies' theory** work, where he thinks he can make it relatively big—like **$1,000,000** in revenue—with him being the only employee. So, that's what he's doing. That's interesting in itself.

Shaan Puri

2nd how do they save you money on property taxes is there a simple explanation or no

Sam Parr

Yeah, so the second is the actual business. Where I now live in Austin, your property value goes up every year or every two years. Then you're taxed 2% of your property value because there's no income tax; that's how they get their money. I bought my house for about $1,000,000. It went up crazy, very oddly. It's odd, but it sucks for me that it went up like 20% in the first 60 days of owning it. Now I owe 2% of about $1,200,000 a year in taxes. So let's just say that's around $24,000 a year in taxes that I owe. What Proper Lot does is you tell them your address. They look at the assessed value of your neighbors and tell the government, "Hey, this actually isn't fair that you charged us $1,200,000. Our value actually should be $1,100,000." All in all, it saves me about $1,000 a year, and they take $300 of that fee. There are a few companies in the space, but a lot of them are older, like old school. One's called, I think, P.O. The URL is poconoredotcom. They do about $100,000,000 a year in revenue with 200 people. Another one is called 5 Stone, which is local to Austin. They filed 24,000 protests last year and made about $4,000,000. The way the company works is that the average revenue per customer is about $50 to $300, and it usually saves customers 2% to 5% of an appraised value. It lowers your appraised value by 2% to 5%, and they have a 70% success rate. So for 70% of the users who sign up, they reduce your value by 2% to 5%. It's kind of an interesting business model, and I don't know if you had heard of it, but I think it's great.

Shaan Puri

That's pretty cool. I like that a lot. I wonder... you know, how do they need your permission to do it? For example, do you have to sign up as a customer and request it, or can they just be proactively doing it and then leave a flyer at your door? "Hey, we did this for you. Would you like these savings? Well, you know, it's ready for you. Just claim your account." That would be a crazy growth hack if they could do it.

Sam Parr

yeah no you have to sign up but that actually would be a great marketing scheme

Shaan Puri

gotcha okay cool I like this idea a lot did you have anything you wanted is there a riff of it

Sam Parr

no I just thought it was cool

Shaan Puri

no I think it's cool

Sam Parr

The other day, one of our listeners, Jordan, told me that he listens to us just because we tell him cool stuff he'd never heard before.

Shaan Puri

of so yeah that was

Sam Parr

that was one of a

Shaan Puri

Okay, speaking of that, I have a cool thing that I don't know if you've heard of. Have you heard the term "no lost lotteries"? No? Okay, so this is pretty cool. I met this guy, Leighton, who is behind this thing called PoolTogether. If you go to pooltogether.com, you can see what it is. What PoolTogether is, is it's a savings account, and this is in the crypto world. But this exists everywhere. It's a savings account where instead of just getting, you know, if you go to a bank today and get a savings account, you're gonna get, oh, whatever, 1% interest. It's like nothing, right? So what they said instead was, "Well, what if we pool together everybody's 1% and then we give all that money away to one person as lottery winnings?" So it's a lottery where you don't have to buy tickets, and you put nothing up at risk, but you can win very, very large. This has existed—the same model, this prize-based savings—is what it's called. It has existed for a while. In the U.S., it's very popular in the UK. There, I think they call it premium bonds. In the UK, there are something like 20 million people who do this. They save in premium bonds, and there's like a total of $100 billion saved in these prize-based savings accounts. The way they work is exactly how I described: you put your money in every week, there's a drawing, or every month there's a drawing, something like that. You can win like $25, all the way up to $1 million, and they give that out every so often. So it's a pretty cool model. It's a way to encourage people to save because right now the incentive to save is so small. The more savings you do, the more sort of tickets you have in the raffle. Now, these guys ported this concept to crypto, and there's a thing in the doc—check it out—it's called usage numbers. One great thing about crypto is that everything's on the blockchain. So every app, it's like you can see their Google Analytics, you know? It's all open, so I can go see that these guys...

Sam Parr

have holy shit

Shaan Puri

They have $200,000,000 in assets under management. They have about 9,000 to 10,000 active users who participate in the platform, which is a small number of users. However, for crypto, 10,000 active users is significant; you're one of the top decentralized applications. If you have that many users, most of these platforms are very, very small. It's amazing how much money they have down there. The way that the system works is that they actually give... let's say they have $200,000,000 in assets under management. That means their lottery is going to be of a certain size. I don't know exactly how much it is every week, but it's pretty big. What they do is roll over some of those savings into the next week's jackpot. They ensure that every week they always have a bigger and bigger jackpot by rolling over a percentage of this week's amount into the next.

Sam Parr

So, you'll have to... what can someone Google to look at this? Because these stats, like the growth rate, are just crazy.

Shaan Puri

Yeah, so they could just... The website I used to see how these crypto apps' usages is called Dune Analytics. It's duneanalytics.com, and then you can basically... We could put the whole URL there, but it's: dune.com/[whatever]/pull-together [Note: The specific URL structure has been adjusted based on the current format of Dune Analytics' website]

Sam Parr

Okay, so I'm trying to get out of this "Oh, this is stupid" mindset when I hear about Ethereum. I'm trying not to act like a grumpy old man whenever I hear this stuff, even though I'm only like 30. I'm really trying...

Shaan Puri

I'm so

Sam Parr

I'm gonna try and work hard to default to optimism here. But my question to you is this: when you see this stuff, like when you're explaining it to me, I think to myself, "Is this a gimmick or is this real?" I'm not gonna call it stupid, but when you're explaining this, I wonder if it's a gimmick or if it's something that has longevity and can work. I mean, that's like all these crypto things. Many of them, there's no doubt they're cool, but are they cool like the app Yo is cool, or are they cool like this is a thing that I could see lasting for 10+ years?

Shaan Puri

so I think that this can last this one can last for

Sam Parr

a while a fair assessment

Shaan Puri

I think it's totally the right question to ask when it comes to crypto stuff. First, is there any value to this beyond speculation? That's always the first question with the crypto app. Then, if there is value, is this lasting value or is this a quick fad? Are people going to get tired of the gimmick? In this case, what I think is interesting is that there's a whole parallel financial system being built in crypto. I have my wallet, my real bank account, and then I have my Coinbase account. I have my wallet in my pocket with credit cards in it, and then I have my crypto wallet. I have my MetaMask and whatever else. So now, I participate in two financial systems, similar to how social networking split things up. I had my real-life friends nearby, in my neighborhood and school, and then I had my online friends and my online way to chat with people, of which there's some overlap. The same thing is happening now with finance. What does that mean? It means there are millions of people out there participating in crypto, and crypto keeps going up in price. Now they have substantial holdings. When you have substantial holdings, you have two choices: Are you just going to hold it and earn nothing off of it? Are you going to sell it so that you can cash some of it out? Or are you going to put it to work for you? Are you going to reinvest it? What's happening is that all the people who have won in the first couple of waves of crypto now have those choices, and they're all choosing to reinvest. Why would I sell? I mean, I'm even more bullish on crypto now. I made a bunch of money, but now I think this is the greatest thing ever. Why would I sell and take a big tax hit for selling and be out of the game? No, I think there's still room to go up. So they're not going to sell, and they're not going to hold and just do nothing with it because that seems kind of irresponsible too. Let's say you have six figures, seven figures, or eight figures worth of crypto. Why not earn 5% a year on that money? You can through crypto lending products and things like that.

Shaan Puri

The point I'm trying to get to is that when you have all this money, people need something to do with it. Savings accounts are one option, lending is another, and reinvesting into other projects is yet another. So, that's what you're going to see. You're going to see all the existing financial infrastructure get rebuilt over here in "cryptoland." Additionally, some new opportunities that didn't exist in the real world will be built in "cryptoland." I think that if it works in the UK and 20 million people participate, then there's a good chance that this will exist in the crypto world.

Sam Parr

it's just so hard for me to understand

Shaan Puri

Would you do it? Let's say you have Ethereum or whatever... you have Bitcoin. Would you put it in a savings account here and potentially win the lottery? Play one of these no-loss lotteries?

Sam Parr

yeah yeah yeah yeah yeah yes

Shaan Puri

and it's just a set it and forget it thing you don't have to like actively do anything once you decide that once

Sam Parr

Yes, I would do that and... like all the stuff that I would call silly, I would also do that stuff as well. Like when I buy an NFT that costs a grand. Yeah, but not more than a grand, right? I went... to me, it's like spending a grand on that is just the same fun as going to play blackjack for a grand. Like, I can totally have $1,000 worth of fun over 5 hours.

Shaan Puri

right

Sam Parr

but yes I would use this

Shaan Puri

Okay, I have one other idea I want to throw at you. Did you see this thing that was posted on Wait But Why, the blog? It's called... where he talked about his wife's startup. No? Okay, you should check this out. So the guy who writes Wait But Why, Tim Urban, posted this blog post. He says, "Introducing the Landbeat," and it's about his wife. Have you seen that?

Sam Parr

I was looking at it after you put it on this doc it looks awesome

Shaan Puri

So, you should go to his blog post. I want you to go there for two reasons. One is that I think the idea is kind of interesting; we could talk about that. But the second is the way he tells the story and lays out the case for this product, for this startup, is so good. It's better than 99% of startup pitches you and I hear because this guy's like a master storyteller. If you want to think about how you should explain your startup or pitch your business, go read this blog post.

Sam Parr

alright I shout out everyone who subscribes to the podcast and sends me proof and if you send me proof you can send it to mfn at the hustle.co so that's like my first million m f m at the hustle.co send me proof so ready let's get to some shout outs and by the way everyone makes fun of me because I don't know how to pronounce or I can't pronounce stuff that well but I promise you I'm trying really hard so apologies also I'm like reading people's twitter handles and some of you guys have really silly handles so and I don't think that many people could pronounce it so give a shout out to oh my god just this first one was challenging job hebraken give a shout out to johnny j z v cunning_druger claude laudier hardlybox dave falsky jack washburn lunatech fringe everest brady thad warren demunga roy britz jordan vanderhoof oh jordan vanderhoof I know I think I know that guy preston holland john haggerty tex 8 down david piazza wade for wireless and the podcastician we'll do a couple more generalcom kyle niedrich loft marcus adil mitha and I think that's all oh my gosh am am I just am I the worst these are really hard to pronounce am I right alright someone asked me to give a shout out to genuine genuinely interested podcast that's what it's called genuinely interested podcast so shout out to them shout out to this guy is awesome everest brady has a power washing business called everest power washing dude if he's in austin I'm gonna use him because I need that actually now one rail app is a startup that we are changing logistics and supply chain and democratizing an amazon style logistics and delivery experience to retailers and distributors shout out to my youtube channel called 1 man startup that actually sounds pretty good check out 1 man startup shout out to contemporary idiot it's a substat called contemporary idiot that's a pretty good name and then shout out to broccoli I think they say they're big fans of broccoli and they wanted me to shout out broccoli alright if you wanna give a if you want me to give you a shout out can you please subscribe to the podcast so go to spotify or itunes whatever you use click that blue button that says follow or that purple button on itunes that says subscribe click that take a screenshot and email it to me mfm at thehustle.co send me that please and I will give you a shout out talk soon

Shaan Puri

uh-huh

Sam Parr

yeah I feel like I can rule the world