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The Fertitta Files: The UFC Eyes China as Next Break Through Market

The sale of 10-percent interest in the company to the Abu Dhabi government-owned Flash Entertainment was about more than an influx of cash.  Zuffa's eyes weren't on the Middle East at all-that move was all about China and the billion potential customers there:

"The Abu Dhabi deal was obviously more strategic than it was about money," Zuffa owner Lorenzo Fertitta said. "Not just for the Middle East, but all throughout Asia."

With a television deal in place, expertise in place, and a great product in place, success seems to be a given.  But it isn't. Here are three reasons the UFC will find out what hundreds of American companies have discovered in the last century-conquering China is harder than it looks.

1. Much was made of Sheik Mohammed bin Zayed, Abu Dhabi royalty and long time MMA supporter and expert in the Chinese market. Unfortunately, we've already seen what the Sheik can provide in the Asian market-and it wasn't super impressive. He was the main financial backer of The Art of War.  It's hard to get a clear media report on The Art of War event. All of the media present were flown in by the Sheik and obsequious beyond belief. This much is clear: the promotion was losing a bundle. Journalists called it "the Chinese Pride." That is true in a sense:  the event had all the trappings of Pride, just none of the big money television ratings, big crowds, or tremendous interest in the community. bin Zayed has tried and failed in the market with an MMA event. Why would the same strategies work better with a promotion that even even more foreign than Art of War, which at least was fronted by two Chinese Americans?

The UFC is available on SoHu, kind of the Chinese Yahoo. But unlike Yahoo Sports, which calls their martial arts category "UFC," most of the martial arts content on the Chinese net is Sanda competition. The Sheikh can pay to fly in a crowd, celebrities, and brand name announcers and referees. What he can't do is make Chinese people care.

2. Chinese consumers are hesitant to embrace American culture. The Chinese are distinctly their own people and not easily influenced by American glitz. Even when they do embrace an American product, they do it on their own terms.  The hottest American import in the automobile market?  It's the Buick. That's just China being China.

Like many countries, nationalism is a strong force there. Take basketball as an example. Basketball exploded in China only when Yao Ming became an international sensation. Unfortunately for Zuffa, there are no Chinese stars on the horizon and interest in the area seems minimal. Will a Chinese audience embrace a sport with no history in China and no Chinese competitors at a top level? That's a question the UFC has to ask themselves-and give an honest answer.

3. The UFC proudly announced their television deal with Inner Mongolia Television, a network just as ghetto as it sounds. It's the same network that aired The Art of War, and reaches between 60-80 million homes in a country with more than a billion people.  Worse, the television deal doesn't include the country's largest cities Beijing and Shanghai.

Television deals in China have to be painstakingly negotiated in each city, working with a collection of crooked government organizations that make the fight business seem pristine. A live broadcast of the UFC is also unlikely in China. Censors need to look over all programming, just another in a long line of issues.

The UFC intends to open an office in Beijing by the end year. They expect to be promoting in the country in 18 months. I wish them well, but am skeptical about whether they can sell a proud people a product they have no interest in with a cast of characters that include no Chinese nationals.

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