UFC's aggressive strategy is smart, but it comes at a cost

Jayne Russell

The UFC has embarked on a strategy of rapid growth and has significantly increased the number of events they put on, but that strategy comes at a price.

The UFC has adopted a strategy for international growth that has a downside for hardcore fans; oversaturation. There were 6 events in a 4 week period from the end of May to the end of June, that's something along the lines of 40 hours of MMA in a month. About 10 hours a week. That's just from official UFC fight cards, not including The Ultimate Fighter.

The truth is that to expand into new and emerging markets the UFC has to adopt a strategy like this. They have to give European and Asian fans cards that feature local fighters and take place at suitable local times, not 6am. The UFC knows that long term, relying on the Americas as the sole source of revenue will hinder their growth and leave them more financially vulnerable than is desirable. Expanding into Europe and Asia is an important strategy, and one that requires building up local talent and hosting local events.

The long term goal with these markets is to convert them into fans of the "core" product: UFC pay-per-views. This is where we see a weakness in the UFC's strategy. Currently, they don't have the roster to support rapid expansion like this, because to maintain it they need to ensure their numbered pay-per-views - the events fans are supposed to aspire to watch - are of the highest quality. That's not happening.

What we're seeing is the UFC cannibalizing the main card fights of pay-per-views to provide headliners for these smaller fight night and fight pass level shows. Gegard Mousasi vs. Mark Munoz isn't a great headliner, but it's a perfect main card fight for a pay-per-view.

For example, here's the current top 6 fights on the UFC 176 card according to Wikipedia:

Gegard Mousasi vs. Ronaldo Souza
Gray Maynard vs. Fabricio Camoes
Bethe Correia vs. Shayna Baszler
Jussier Formiga vs. Zach Makovsky
James Vick vs, Walmir Lazaro
Lorenz Larkin vs. Derek Brunson

That's barely a Fight Night level card right now. There is a damn good chance that card gets cancelled. Now lets imagine the UFC wasn't putting on 8 cards in under 40 days, here's the fights we could have instead:

Frankie Edgar vs. BJ Penn
Robbie Lawler vs. Matt Brown
Urijah Faber vs. Cub Swanson
Gegard Mousasi vs. Ronaldo Souza
Conor McGregor vs. Diego Brandao
Anthony Johnson vs. Lil Nog

That's a damn good card, right? Sure, the main event is pretty light, but it's absolutely stacked with talent. It's also a card that would be completely possible just using the fighters from non-PPV events in the month or so leading up to UFC 176. That's the quality of main card the UFC is losing through this saturation. By holding 4+ smaller events a month, the UFC needs 8 reasonable main event and co-main event matchups. Those 8 matchups would previously be filling the main card of a PPV. When fans from these new markets take the step up to watching pay-per-views, they're not seeing something worth $60 more than the event they just saw for free. They're seeing something very comparable.

The UFC's saturation within the US makes financial sense; the Fox deal was great, and it really helps to stabilize the UFC's accounts and give it some mainstream credibility. From the standpoint of product quality it's a huge burden. The UFC could pull off a PPV and two international events a month with the current roster, it can't pull off a PPV, two international events and two domestic events per month, which appears to be the aim by the end of 2014.

Worst of all, this fragmentation is making the UFC's toughest job - creating new stars - even harder. It used to be the case that the vast majority of the fans would see exciting young talent develop, moving from the undercard to the main card to main events. Most fans, or at least most hardcore fans, watched almost event event. Now a fighter could be developing into a monster, but only fighting on Brazilian Fight Night cards. Or international Fight Night cards. Or Fight Pass events. By the time he gets to a pay-per-view main card, most of the PPV viewers have never even heard of him. How is that guy supposed to draw money, when your core audience has never even seen him fight? It takes time and familiarity for most fighters to become draws and the UFC is hindering that process.

There's no easy solution to this. International expansion is vital to the UFC's fortunes going forward. The Fox events are vital to the UFC's financial health. They have no choice but to put so many events on, despite the negative side effects. The UFC isn't only drawing less pay-per-view buys per event, they're drawing less buys per year as fans are turned off by the sheer volume of low-quality events. The ideal solution would be to have international events only use international talent, rather than being headlined by mid-high level UFC fighters, but that makes breaking into the new markets even more difficult... but if the UFC continues to erode their core fanbase, even a successful international expansion won't be a success.

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