Currency Movement Threatens UFC Expansion

One of the major reasons the UFC was able to quickly move into the black in the UK was the strength of the pound against the dollar.  They were able to charge (relatively) reasonable prices for tickets and still do well thanks to the exchange rate, which was close to 2 to 1 not long ago.

Over the past few weeks, the pound and euro have slid significantly against the dollar, largely as a result of bank exposure to emerging market loans.

Seeing as this is an MMA blog, I am not going to go into explaining that issue, though the article linked does a good job explaining the basics and notes that the U.S. mostly stayed out of the emerging market loan game.

Anyway, the point is that as of this afternoon, the Euro is at $1.24 and the pound is at $1.56.  A £100 ticket that would have netted nearly 200 pretax dollars just a year ago will only net 156 now, and most analysts believe the slide will continue.  The UFC has to make one of two bad choices:  Either raise prices for UK shows while the UK is in a rough recession, or accept lower gates.  The prospect of raising prices during tough economic times has proven itself to be a disaster for UFC 91, so my guess is they'll either choose the latter or run more shows at home.

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