Issue 155

June 2017

Has the UFC cooled its ambitions for world domination? Not a chance. According to its head of international operations, the Octagon is set to collect a lot more stamps in its passport...

Not too long ago, the UFC seemed to be hitting a new market every other week. In 2014, there 46 Octagon events, including 22 outside the US in 13 different countries across five continents.

Fans around the globe were lapping it up. Arenas were selling out and millions of dollars were being generated. But as the second half of this decade began, things seemed to scale back a little. The once- booming markets of Brazil, Canada and the UK weren’t getting as much love as they once did. Some fans were getting frustrated at the lack of prestige in the events that visited their shores.

When WME-IMG cut a check for $4 billion and took over the UFC, the promotion’s teams in Sao Paulo, London and Singapore started to shrink, too. Regional bosses were replaced by just one man, Joe Carr, to oversee international operations. It looked like world domination might be off the agenda.

But look a little closer, past the complaints and talking points, and you’ll see the UFC has continued its march across the globe. Its flag has been planted in an increasing number of new territories including South Korea, the Philippines, Poland, the Netherlands and Croatia. Australia and Brazil played host to two of the three biggest shows in the organization’s history.

Carr – the UFC head of international and content, to give him his official title– says the organization will continue ramping up its international efforts. Extra resources from the new owners, including a higher head count in all corners of the globe, mean more new ground and records will continue to be broken.

First, a caveat. the UFC has moved on from 10 years ago when it returned head-first back into the foreign market, pouring huge resources into establishing itself in the UK. The first Fight Night show in a new nation is still likely to sell out, regardless of who’s fighting, but new pressures from above mean the approach into the unknown has to be more considered.

“I actually think we need to be more strategic,” says Carr. “Yes, it was a $4 billion purchase but obviously, we have investors now, new investors, we’ve obviously taken on some debt, so we have to be really conscious of our resources. We’re not going to rush headlong into anything foolish.”

Consider Russia, the most talked about nation for the UFC to invade next. It seems like an obvious target. It’s a country with a rich history of combat and a ready- made star in Khabib Nurmagomedov to prop up a card. But a quick look at the logistics suggests rumors of a McGregor- Nurmagomedov pay-per-view in Moscow may be a little farfetched.

There’s a big time difference. If you thought a 3am main-card start time to cater for the United States pay-per-view market when Michael Bisping took on Dan Henderson was crazy, what would you make of 5am for the Russian capital?

Then there’s the economy. The nation is only just escaping from a hard recession, which means the UFC’s bottom line is likely to be a lot lower than if a fight like that was in Vegas.

But even that will not stop the spread of the Octagon. It merely means Russia is a location that demands a different approach. “We see Russia strategically as a massive long-term opportunity and somewhere we want to go, but, again, Russia is one of those markets that has its challenges,” says Carr. “Politically, it’s not as easy to go into Russia as it is to go into the Netherlands or Sweden, but that’s something that we’re focused on.

“The beauty of the new ownership is that we’re taking a long-term horizon. If it was just about making money in the short- term, we’d just do three events in London a year, but that’s not how we’re built. We’re prepared to invest and hopefully grow the fanbase across the board – not just in one market for short-term revenue.

“For sure we’ll be in Russia – I don’t think we’ll be there this year, but the full expectation is that we’ll be there in 2018 with a live event. Same thing with Poland. The pricing power isn’t the same as it is in some of these other markets, but we have a good TV partner there, we have a lot of talent there, so we’re investing for the long term.”

Russia is not the only nation that’s primed for the UFC long game. When any business is scouting future lucrative markets, it’s inevitable they’ll look at the nations with the most potential consumers: India and China. A combined population of more than 2.5 billion with increasing spending power means the economic opportunities are gargantuan.

A lack of talent means a show in Delhi or Mumbai is still three to five years away, but Chinese expansion is definitely in the near future. Though a casino show in the special administrative haven of Macau has been checked off the list already, it’s the mainland megacities that promise even greater opportunities and a route into the mainstream market in the home of martial arts.

“It’s a lot different going to an American-owned casino in Macau and putting on a show with partners that we have in Vegas with The Venetian. That’s a lot easier than going into Shanghai or Beijing with your first event, whether it’s the regulatory or political landscape, or even the operational forces on the ground.

“But now we feel the time is right for us. A: because there’s real opportunity there, financially, and B: we now have WME- IMG China in Shanghai with an office of 60 people. We have resources on the ground where before we were trying to do it with six people from Singapore. It will probably be one of the more challenging markets we’ve gone into but we’ve done this all over the world.

“Brazil was no walk in the park the first time we went there. Korea wasn’t the easiest – we had a local promoting partner there. We do this all over the world, it’s kind of what we do and China will be no different when the time is right.”

He adds it’s not just a market he, his team and Dana White are keen to have a presence. The UFC’s new parent company is also enthused about entry into the People’s Republic, so it might happen even sooner than you might think.

Carr explains: “We’ve looked at all the venues. We’ve looked at the Mercedes- Benz Arena in Shanghai and at the venue in Beijing. My expectation is that we’ll start with one a year and we’ll scale up one, two, three. But it will be sooner rather than later. We’re doing three events in Asia this year, two have been announced, one has not, so we’ll see where that ends up...”

The only continent that has been untouched so far by major MMA is Africa. Live events there are not highest on the UFC list of priorities due to the infrastructural and economic challenges, but entry into South Africa is not out of the question.

The Rainbow Nation already has a developing domestic MMA scene and offers the platform for the first step into waters that are uncharted, but are home to hundreds of millions of potential new mixed martial arts fans.

“We’ve always talked about South Africa being in our plans at some point for an event,” Carr explains. “While it’s on the list it’s maybe two or three years away. We want to be in Russia before. We have some regulatory hurdles, but we want to be in France. I think EFC (Extreme Fighting Championship) has done a good job down there of doing the sport. The purchasing power in South Africa is obviously not as strong, but like anything, you make the investment and play the long game. I think Fight Pass mobile consumption is an opportunity. Longer term, Fight Pass will be on a continent-wide basis.”

Other new destinations are also in the offing in a part of the world that the UFC has been to before, but not for a few years. Abu Dhabi looked to be a huge part of its plans a few years ago when it took Anderson Silva, BJ Penn and Matt Hughes for a pay-per-view in 2010, but it has only hosted one event since – a Fight Night headlined by Roy Nelson and ‘Minotauro’ Nogueira.

But Flash Entertainment, which is owned by Abu Dhabi’s government, has retained its 10% stake in the company, and the affluent city is still a valued market.

“We just did a massive TV deal with what we think is the best broadcaster in that region,” Carr says. “From a distribution perspective, it’s only going to get stronger and from a fanbase perspective, we’re going to be on the right channel with the right programming. 

I think we’re due. We haven’t done Abu Dhabi in a couple of years but there’s an opportunity.”

But it’s not just Abu Dhabi. Dubai is another of the wealthy United Arab Emirates that could easily welcome some of the world’s best combat athletes. Qatar is also in the mix. It wouldn’t be out of the question to include Bahrain either.

“Because we know there’s a fixed number of events, it’s starting to get competitive between cities, between governments, between tourism hubs who want UFC events. The long-term hope is to get to something like Formula One (auto racing), but on a smaller scale.” Mega-rich states bidding for events could enable some incredible shows on a scale that are rarely seen anywhere in the world. There’s no doubt that the whole world would stand up and take notice, too.

The final step, once the MMA flag has been planted in every possible location, is to multiply everything and go from arenas to stadiums. In Poland, KSW booked the national 60,000-seater stadium in Warsaw – the biggest in Eastern Europe – for its May 27th show. If it can do that for an event headlined by World’s Strongest Man record holder, Mariusz Pudzianowski, is it absurd to think Joanna Jedrzejczyk could do that, too?

“That’s the expectation: you get a Polish champion you’re able to do that and you bring a title fight there and that’s what we’ve seen,” Carr says. “Whether it’s Georges St-Pierre in Toronto when we did the stadium or Curitiba, Brazil, with a loaded Brazilian card. Australia was a little unique because it was Ronda (Rousey) and Holly (Holm), not an Australian, but Mark Hunt was on that card and a bunch of Australians. But if you have the champion in the right fight, I think you can do that and replicate that, and I don’t think we’re too far off. If you have the right local fighter I think you can be successful.”

That could be the key to making up for any lost revenue the promotion would face by taking its big shows abroad. Due to time differences and the absence of the biggest American media outlets like ESPN, the number of PPV buys, and therefore the UFC’s bottom line takes a haircut when events are exported from North America.

The solution? Pay-per-views in other markets and the stars to carry them. The latter may not be possible right now, but it could be in the near future – as a direct consequence of Octagonal globetrotting.

“I think what you’re seeing if we decide as a company to come to the UK, we spent a lot of money in a few years and then it faded away and then we came back. You feel like that was a 10-year cycle from a talent perspective where probably, that first event, you had kids like Arnold Allen, Brett Johns and Tom Breese that were probably teenagers. Conor (McGregor) was later. I always think back to that picture of him with Chuck Liddell as a teenager.

“These are investments we made seven to 10 years ago and now we’re finally starting to see the return on that investment with the talent base in these markets. Some of these other markets were 2013-14, so what’s it going to look like in 2020 from a talent perspective?”

By the middle of the next decade, UFC might not just be running events on every continent, there may be a champion from each of them, too.