UFC International Expansion In-Depth

May 26, 2008

Dana White has recently spoke about ongoing efforts to branch out into the international market with live events. Brazil, Germany, The Philippines, and Brazil are some of the areas mentioned by Dana as possible sites for future UFC cards. Each area has it’s pluses and minuses but one tool at the UFC’s disposal – international television distribution – will be vital to the long term success of these efforts.

Television is Key

One key ingredient to international expansion will be getting strong television in a country before expending the resources to put on live cards there. The UFC has drawn strong crowds in England, with help from a constant TV presence over the past few years on Bravo UK. The UFC business/promotional model has taken several pages out of the WWE playbook, and that would be true in this case as well.

The WWE is drawing significant portions of overall revenues from int’l ppv and touring. They are able to do this because they have had a strong int’l television network in place for years before trying to do live events overseas. Strong UFC television prior to launching these live shows will help to ensure success and make the markets viable long term as opposed to just being a one-off.

Germany: A Continental Play

Dana White has mentioned Germany as one possible area for expansion. I see this as more of a continental play rather than seeing Germany as a market in and of itself. Establishing a base in Germany will draw other folks from the region, a Pan-European market if you will. France with it’s Savate scene, the former Eastern Bloc with players like Goran Reljic, and MMA holy ground Holland are some of the areas from which they can draw upon for local talent to drive strong gates.

The German/EU market is attractive as an expansion target because it’s a mature and stable economy with a high standard of living, which isn’t the case with some other expansion candidates mentioned by Dana White. Germany itself doesn’t have a big MMA scene but serves as a regional mecca for those in the Euro Boxing scene, as home to many an expat fighter (Dariusz Michalczewski, many of the Russian heavyweights). Having strong local talent (Cheick Kongo, Reljic, Holland Resident Heath Herring) will aide in converting some of those boxing fans over to MMA.

The Philippines

Dana’s mentioning of The Philippines as a possible area of expansion is a bit perplexing. The country has shown overwhelming support for favorite son Manny Pacquio and is very much a boxing country. I think Zuffa may be reaching a bit, though, if they are banking on a boxing-hungry culture equating to a wide ranging combat sport culture. There would need to be a significant time period of cultivating that market before it could become viable for live events. Without a homegrown fighter to use as the face of the promotion, I have to think that the UFC would be facing an uphill battle in making money in this market. One also has to wonder about the economic viability of The Philippines as a market.

Brazil

Brazil would be a very enticing market for UFC to make moves in. They have a bevy of Brazilian talent that can be marketed easily and would be substantial draws. Superstars like Shogun Rua, Wanderlei Silva, Anderson Silva, and Antonio Rodrigo Nogueira would provide for excellent gates. The UFC also has a nice crop of Brazilian prospects – Rousimar Palhares, Demian Maia, Thiago Silva, Thiago Alves, Thales Leites – that could be built into future draws in the country. Brazil is very much a combat sport embracing culture, also, essentially giving birth to the modern MMA scene. There wouldn’t be the up hill battle in Brazil that they would face in other international markets, saving both time and money.

The one drawback I would see to the Brazilian market would be the sometimes uneven economy. The Brazilian economy has a history of hyper-inflationary spikes, though that has been reigned in recently. The per capita income is still low but if Zuffa sticks to the larger Metros like Rio and Brasilia, they should have a large enough group of favorable demographics to support their product.

Mexico

Dana has also mentioned Mexico as another area for expansion. Dana seems to be making the right moves here, launching Hispanic-specific programming in order to generate interest and foster the entry of more Hispanics into the sport. The UFC is launching “El Octagono,” an hour long Saturday night series on Galavision and currently have Guerreros Del UFC every week on Fox Sports en Español.

Launching these shows is a two pronged approach – helping to reach a growing Hispanic demo in the US while at the same time cultivating Mexico and Latin America as a future market for fighters and shows. They certainly get more bang for their buck by expanding in this area as opposed to others. The company does have a few marketable stars to push – Roger Huerta in the UFC, Miguel Torres in the WEC – until there is a larger influx of Hispanic fighters to the sport.

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