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Yahoo: UFC’s partial sale will shape MMA landscape
The growth the Ultimate Fighting Championship made in the past nine years was mind boggling, as it went from a marginalized sport on the verge of collapse to a company that was estimated to be worth in excess of $1 billion.
That growth, though, could seem miniscule 10 years from now when analyses are made of the company’s second decade of the 21st century.
The sale of 10 percent of the UFC’s parent company, Zuffa LLC, to Flash Entertainment, a wholly owned subsidiary of the government of the emirate of Abu Dhabi, will permit the UFC to do things unimaginable even five years ago.
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Abu Dhabi controls the world’s largest sovereign wealth fund, which UFC chairman and CEO Lorenzo Fertitta estimated at between $800 billion and $1 trillion. That’s a partner with a lot of influence.
The move will make it significantly easier for the UFC to make headway in countries like China and India, where it has been desperate to grab a foothold but had been doing little more than spinning its wheels. The UFC has television programming in China, but it is on regional networks. Fertitta expects Flash to be able to help UFC quickly make inroads on the more influential national networks like CCTV.
“It’s really dealing at a different level,” Fertitta said. “We go in and we can do a television deal on kind of a regional set of networks, but Flash, which is owned by the government of Abu Dhabi, has a long-standing relationship with the government of China, a long-standing relationship with the governments of India, Korea and all these different countries.
“It’s hard to give specifics, but it’s at a different level. If they want to go in and have a meeting with CCTV, they’re going to get the meeting with the right guy at the right time vs. me going over there and trying to meet with a major broadcaster in China. It’s two completely different meetings.”
The result of Flash’s influence with those entities will be something tangible for fight fans. The sport will expand dramatically and that will lead to significantly better athletes opting to become mixed martial artists.
Eventually, that will lead to a significant increase in the talent of skill of the fighters.
“It’s going to be a huge positive for us [in terms of developing talent],” Fertitta said. “We see what’s happened in the [United Kingdom]. When we first started going over there [in 2002], there were a few U.K. fighters, but the fighters in the early stages didn’t seem to have the updated technology from a ground game standpoint and an overall skill standpoint.
“Compare where we were then in terms of U.K. talent to today, where the guys they have over there coming up are very well-rounded. MMA has exploded in the U.K., and I think you’ll see the same thing in places like China and the Middle East, where you will have talent eventually begin to emerge. That will drive the business in those regions.”
The UFC is expected to hold its first live event in Abu Dhabi on April 10. Fertitta said that because of the short plane trip to Abu Dhabi from Eastern Europe and some parts of Asia, the fan base at that show will be more diverse than any previous UFC card.
One of the formulas the UFC has relied upon in North America is bringing a live card to a particular area and having that serve as an impetus for growth in interest in the sport. It worked exceptionally well in Montreal, which is now one of the company’s prime markets.
Fertitta expects that same thing to occur once the live event, probably UFC 112, will be held in Abu Dhabi. He eventually expects it to expand to the other states in the United Arab Emirates as well as possibly to Qatar and Saudi Arabia, among others.
“[Abu Dhabi] is so close to places like India and parts of Eastern Europe that it’s literally just a couple of hours in an airplane,” Fertitta said. “That’s why Dubai has really taken off from a vacation standpoint. I think we’ll draw people from all over the region who have never had a chance to experience a UFC live event before.”
A vision of what may be to come for the UFC is Flash’s investment in Ferrari. Flash bought five percent of Ferrari in 2005. Now, there is a Formula 1 race in the United Arab Emirates and Ferrari World, the world’s largest indoor theme park, is slated to open sometime this year.
The government of Abu Dhabi is one of the most sought-after capital sources in the world. It has invested in major companies like Ferrari, computer chip manufacturer AMD and General Electric.
Now the UFC has been added to that list and Fertitta is convinced this is going to accelerate the UFC’s 10-year plan exponentially.
“To think we’re in that kind of category [with those other companies they’ve invested in], it’s pretty amazing,” he said. “These guys are making investments all around the world at a massive scale. It puts us in a completely different category being associated with that group.”
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