Is China the UFC's next stop in their global expansion efforts? Photo by Getty Images, Life Magazine.
MMAJunkie.com published a very intriguing interview with UFC president Dana White last week talking about the possibility of the UFC ramping up their global expansion efforts. At present-day, the UFC has stepped lightly into the international scene by promoting events in Canada, Eastern & Western Europe, the Middle East, and even "Down Under" in Australia, but there hasn't been a steady presence in those countries as there has been in the North American market with the exception of England. White claimed during the interview that the UFC plans to quicken its efforts at expanding the company internationally by possibly opening a UFC office in China as its next step after its recent opening in Toronto, Canada.
The important quote out of the interview, however, was that White insisted that the UFC/Zuffa could do 100 shows globally, annually. Right now, Zuffa pushes into the 30-40 shows a year with great success, but the quote from White certainly stirred quite a bit of pessimism from fans that it was going to be a tough task, or "impossible" to pull off.
The fact of the matter is that this is a very real, very profitable idea that should be meticulously scrutinized by Zuffa as an option for building a massive empire of wealth. China and India are two highly populous countries that White has mentioned in the past, and pushing the UFC brand into those countries will certainly give him a head start in giving his brand the mass appeal it has in North America.
Moving into these markets will also spread this sport like wildfire. It will become known within those countries, and the benefit that trainers and camps will receive from the influx of requests for seminars will create new streams of revenue to the sport at a grassroots level.
But those are the small benefits to the sport. Overall, the idea gives the UFC a huge edge and almost global monopoly on the sport itself. The UFC could essentially create an international minor league circuit of talent in which multiple shows will be put on simultaneously. While North American fans may not be aware of these events happening in other countries, the UFC could make small profits on the gates of these events while producing an extensive video library if they can maintain the production values we see in the United States.
Countries like China and India are more than likely going to suffer a great deal of hard knocks as their mixed martial arts scene is green at best, but add in the reality show model that has been widely successful in the United States and you've got a formula for mass appeal. Other areas could reap the benefits and provide prospects immediately. Look no further than Eastern & Western Europe as France, Germany, and Poland have become hotbeds for mixed martial arts' action, and the UFC will more than likely look at Brazil as another key market.
Hardcore fans could graduate from an era of watching handi-cam videos on Youtube to watching high-quality footage of up-and-coming fighters battle in UFC-affiliated events in these regions. It also gives accessibility to those casual fans wanting to see more. Not only would the Zuffa be able to bring in talent to the highest level of the UFC from within their own contract terms and organization, but the UFC would now have the footage to be able to hype these fighters appropriately upon their arrival in the States. Weekly recap shows on Spike TV to show the best action from around the world? Yes, please.
Revenue streams could double if the UFC decides to broadcast these events on their website, and it could add some more advertising dollars along with minimal fees for users to watch these events live if they choose. It certainly can't hurt their bottom line, especially if they happen to create some very promising prospects who have a lot of pull within their local markets.
Obviously, there are roadblocks to a major expansion of this magnitude, but opening base operational offices in those different regions is certainly a start. Canada isn't exactly a cultural mismatch in the context of what we know. There are some small cultural differences that may affect advertising in Canada, but China -- China is one of those countries that they teach you in the first day of Marketing 101 that you must find someone in China to run the appropriate marketing campaigns to draw in a completely different type of consumer and culture. Finding the right person will be a major issue for the UFC in any region.
Offices in those respective regions help cut down on the logistics immensely. Instead of hauling around a North American production crew from event to event, murdering your budget for fuel, lodging, etc... equipment could be bought, put together, and readied for broadcast in those respective countries. The Canada office should house its own production unit, cutting down on logistics' costs. Sure, it's a heavy expense up front, but the long-term benefits will make the UFC their money back ten fold.
If the UFC can break into these markets with some relative success and profitable gates, it's realistic to have the UFC making income on international events that are completely separate from the main North American-based events. Not only would the expansion push their brand, make it well-known, and increase revenues for themselves, but it'll also benefit the fighters immensely. Sponsorship dollars, advertising revenue, and the amount of sponsorship options will increase substantially along with the benefits of international television deals that the UFC can leverage.
Some have stated the White will never be able to crack the NFL's mark of $7.6 billion in revenues ever, but internationally over time -- it isn't out of the realm of possibility. The NFL as a league is the most profitable in the world, but as a sport -- football still stands second to the beautiful game of soccer as the English Premier League, one professional league out of many, makes roughly $3-4 billion per year, while Germany's professional league, Bundesliga, popped the $2 billion mark in recent years. And those are only two major leagues in Europe.
The point here is that soccer is an internationally grown sport that covers the world, and the UFC is trying to do the exact same thing as a single entity. The major difference is that the UFC controls salaries and contracts while soccer works under systems we know and understand very well. Teams are their own organizations, and they can spend upwards of 125,000 pounds a week on a player in the English Premier League. The UFC... they'll spend potentially 50k/50k salary to a fighter who draws in fans locally and is a potential UFC prospect, if that, for one fight. Of course, that would rely on an overall increase in salaries worldwide from the expansion.
The only problem with the logic here is that the UFC may never gain the popularity of soccer, and that would obviously short their revenues from the billions that could be expected. The idea, however, has the potential to be explosive and create huge revenues for the UFC while also increasing salaries worldwide for MMA fighters. Sure, they'll never make $125,000 bucks a week to fight, but low-level fighters making $15k-20k while mid-level brawlers can take home $30k-40k is certainly a nice increase on top of sponsorship dollars.
For now, White and company need to go forth with the expansion in order to get some hype brewing in the countries that have less of a following. China and India would be great as their level of skill is quite low right now in comparison to the world, and the talent will only increase with their arrival along with camps trying to teach fighters and promote lucrative mixed martial arts businesses in the regions.
The idea sounds crazy from the outside, but it has the potential to promote the sport to levels that would take us a few decades to attain without this sort of progressive thinking. It won't be an easy task, and the expansion hiccups have certainly hit the UFC in the past -- but hopefully this will be a more successful venture for Zuffa.