After nearly two decades at the helm of an international MMA promotion, Vadim Finkelchtein considers himself a savvy businessman capable of managing expenses and steering his company through turbulent times in a volatile and ever-changing industry.
As the founder, owner and President of M-1 Global, Russia'a premier MMA promotion for the past 17 years, Finkelchtein also sees himself as an expert when it comes to scrutinizing the Russian market and attempting to stay afloat during challenging economic turmoil. It is the reason why he chose to lay out the potential obstacles facing the Ultimate Fighting Championship if they follow through on their reported schedule in the coming year and produce a Fight Night show in Russia.
"It is very difficult, if not impossible to make a profit out of Russian events," Vadim told BloodyElbow through a translator while in St. Petersburg. "When people keep talking about the UFC possibly coming to Russia, I would personally like to see it happen but it won't be easy. This is because the Russian market here is so specific, so I doubt that someone (foreign) can understand it and make a profit here. That is probably why the UFC is just talking about this and has not taken the steps to do an event in Russia."
However, recent reports suggested that the UFC would likely debut in the Russian market in 2015, a decision that is long overdue considering head honcho Dana White initially suggested the trip back in 2012.
While Vadim is perfectly content with the UFC's potential decision to enter his local market, he does foresee considerable obstacles in their quest for profit.
"The main problem that the UFC would face here is that most Russian fans are not used to paying for watching some events; either paying for Pay-Per-View or even paying for tickets," Vadim explained. "They are simply not used to that. If there are some ‘super-celebrities' or businessmen, they don't buy the tickets. They just call and say they want a ticket for this or that. You need to understand how to work with them. The whole structure of this here is different than in the UFC."
It may be a matter of economies of scale, as the UFC would be hard-pressed to find reasonable deals to minimize expenses during their initial trips. It can also extend to concerns with live gate revenue, which, according to Vadim, are pitiful at times.
"For example, I have some relations here with local venues where I can get some discounts and things for free because I have longstanding relations with them, which allows me to minimize my expenses. The UFC's budget is higher than the one we have, so when they come here, they are going to spend a lot of money and when it comes time to (calculate) revenue on ticket sales, I can guarantee that they will not make more than (approx.) $100,000-$200-000. For sure, this will not be profitable. I can even bet that this will be the case.
"So it doesn't matter who they bring here; it is not up to the big names (on the roster). It is just a whole different mentality here and I think they are not used to that."
Another notable concern is the causal fan base's limited knowledge on the UFC and its fighters. Apart from the true enthusiasts and hardcore fans, few will recognize the majority of the names promoted on the card.
"Here, there are so many casual fans who only know the fighters that they saw on TV in Russia. If we compare Jon Jones or Fabricio Werdum to somebody like Stephan Puetz (M-1 light-heavyweight champion), they know Stephan more because they saw him on national TV. Of course, true enthusiasts will know (about them) but not the causals."
While the majority of the international audience tunes in for M-1 Challenge series events on the promotion's official website, their main viewership is derived from the audience they accumulate on national television.
"On national TV, we range from a minimum of 900,000 viewers to around 1.5million on average per event, just in Russia. For example, Jeff Monson may have passed his time in North America, but he is (very) popular here. It is the ratings of the TV channels; we show it on channel four, which is a national channel - easily accessible."
For Vadim, the key to a successful business in Russia is consistency and scrutinized cost-benefit analyses; other promotions in the region have come and gone over the years due to over-ambitious expectations, a lack of business knowledge and financial savvy. While the UFC may not suffer from such amateur miscalculations, they would certainly struggle to turn a profit in the Russian market on a consistent basis.
"I understand what I am doing, unlike some of the other organizations in Russia. The important thing is the systematic organization of events. The problem with other promotions like Legend is that they did a couple of events with a very big budget that was up to $2.5 million each, yet their last event was last November in Moscow and it has been over a year since they did anything - one small event and that was it. Now, they are silent and no one hears about them, even though they declared their goals and ambitions loudly in 2013.
"We add some events every year and the key is to maintain a system - not to blow the budget on two expensive events and go bankrupt."