Inside USD

Entrepreneurial Alums Breitling, Fertitta Inspire

Monday, March 11, 2013

“Ideas don’t make the world go around; the search for new ideas and the journey toward their implementation, that’s what makes the world go around.” — Tom Breitling ’91, USD alumnus, entrepreneur

Jason Selmier and Garo Atamian entered the Joan B. Kroc Institute for Peace & Justice Theatre Thursday afternoon, perhaps with some knowledge of who Lorenzo Fertitta and Tom Breitling were, but three hours later, it was obvious that the USD students’ time with the latter, both 1991 alumni, won’t soon be forgotten.

“I’d say this was a semester’s worth,” said Selmier, a junior business finance major, of the knowledge he gained through the successful business entrepreneurs. “Seeing and hearing other people who went here talk about what they’ve done and how they did it is something I’ll take notes from and it’ll stick with me for awhile.”

Fertitta, a business finance alumnus, and Breitling, who earned a communications degree and also minored in business administration, met as freshmen at USD in 1987 and they were college roommates. Their friendship has remained strong through their respective and collaborative business pursuits, including Breitling’s latest role as co-founder and chairman of Ultimate Gaming.

“These are two guys who are really great business minds,” said David Pyke, dean of USD’s School of Business Administration during his introduction. “As an educator, I think a lot about educating our students. Their businesses are real fun, but boy are they smart guys. It’s fun to listen to them talk and see the kind of thinking and depth of thinking they put into their businesses.”

Fertitta’s best known as chairman and CEO for Zuffa LLC, a sports promotion company whose big asset is Ultimate Fighting Championship, the leading showcase for the sport of mixed martial arts (MMA) to a global audience. He, along with Fertitta’s brother, Frank, and high school friend Dana White, have consistently, since purchasing the rights in January 2001, employed an entrepreneurial spirit to build and widely expand its business.

“We’ve been able to steer the brand to every demographic, the UFC is accessible to everyone,” said Fertitta, whose product hold more than 30 live events a year, is the largest pay-per-view event provider in the world, broadcasting to 150 countries and territories, in 30 languages and reaching an audience of nearly one billion.

Fertitta’s passion for UFC initially came from his younger days as a boxing fan while growing up in Las Vegas. He attended his first fight at age 9, a title bout between Muhammad Ali and Leon Spinks. While his love for boxing grew, he also grew more curious about the sport’s business model — or seemingly, its lack of one.

“Boxing’s odd,” he said. “I couldn’t think of another industry that had generated millions of dollars, transcended the world and yet had no real brand.”

Once Zuffa acquired the UFC, developing and enhancing the brand is first and foremost.

Breitling’s foray into entrepreneurship began when he and one Fertitta’s friends, Tim Poster, ordered sandwiches at Sardina’s Restaurant, located near the USD campus. The lunch launched a partnership that resulted in two very successful business ventures.

The first was a telephone hotel room reservations company that Poster started with minimal resources. When he gave Breitling 50 percent ownership in 1993, they were off and running. Five years later they were part of the early Internet boom, starting in 1998. Two years later the duo sold it to Expedia for more than $100 million. Breitling and Poster then purchased the Golden Nugget Hotel and Casino in Las Vegas in 2004 for $215 million. Though they were the youngest hotel gaming owners in Las Vegas, the experience turned out to be a critical learning experience. A year later, they cashed out and sold the Golden Nugget for $340 million and a second $100 million-plus profit deal.

Breitling, who wrote a book, Double or Nothing, about those deals, spoke Thursday about Ultimate Gaming, which is a partnership with Poster and Lorenzo and Frank Fertitta. Breitling said he believes it is the next big thing. Fertitta sees it as another way to tap into the UFC’s hearty 18-34 young male demographic and beyond. The business will have online social games, but the biggest potential involves offering real-money online gaming — notably poker — in a safe, secure and regulated manner.

“Gambling is a $350 billion market worldwide and less than 10 percent of that is online today,” Breitling said. “I believe a major shift is going to happen in the next two decades and our company is going to be at the forefront of that shift. A good business is one that fills a need and there are huge needs in this area.”

He’s referring to a U.S. government crackdown in April 2011 that shut down unregulated, offshore gaming websites. Breitling said it’s his hope that once government rules on a more regulated system are in place, Ultimate Gaming and its entrepreneurial ownership can deliver.

“I really do fundamentally believe the timing is right with high-speed everything, the world being connected, the popularity of smartphones, the popularity of casino gaming now in the last 20 years, 40-some states have some kind of casino-style gaming, there’s an acceptance there and all of this stuff is a conversion,” Breitling said. “Add in the regulation and layer that in with marketing, the comprehension of media and television and I think we’ve got a winner.”

Thursday’s appearance by Breitling and Fertitta was a sure winner. They delved into their individual stories and provided insights to USD students, both in the IPJ Theatre talk and in a pair of smaller breakout sessions with undergraduate and graduate business students.

Atamian, a senior business economics and psychology double major, asked Breitling about the timing of launching an idea and about fundraising.

“About execution, you have to go out and sell the idea,” Breitling said. “It’s hard … you have to really think about your plan — and you’ll know if it’s the right idea if you have a well-thought out plan — and address all of the issues. What’s my mission in this business? What problem am I solving? Are there real operating margins in the business? You have to answer all those questions.”

Breitling recommended entering USD’s $25,000 Venture Vetting (V2) competition, which is open to all USD student entrepreneurs interested in pitching their idea to a panel of angel investors. The deadline to enter is March 14. Breitling, who will return to USD to be the keynote speaker for V2’s April 18 final, not only recommended V2 as a funding resource, but also hoped that students won’t be deterred from their idea because of limited funding.

“Think about it in baby steps,” Breitling said. “It could be the big idea, but you don’t need to do it all at once.”

Atamian said gleaning Breitling and Fertitta’s insight was an inspiring experience.

“To have these alums come back a lot of it is reassuring to me that even if I don’t get the big job right out of school, I can build toward where I want to be,” he said. “It humbles me to think they got where they are. It makes me want to work harder.”

— Ryan T. Blystone

Photos on homepage and of Fertitta and Breitling courtesy of Nick Abadilla. All others by Ryan T. Blystone.

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