Many have blamed the UFC’s failures in fighter relationship management and merchandising on a UFC management team that was simply stretched too thin. Thus, yesterday’s news that Lorenzo Fertita is moving over to the UFC in order to help facilitate the organization’s international expansion can only be seen as a good thing.
In order to avoid stretching itself too thinly in the future, the organization must analyze what it realistically hopes to achieve by expanding internationally and then prioritize its targets accordingly.
The following excerpt from Kevin Iole’s interview with Lorenzo Fertitta is a perfect example of why prioritization needs to happen before the UFC makes any concentrated expansion effort:
Fertitta says the UFC plans to expand outside of the U.S. and U.K. and into mainland Europe, with plans to go to Italy, France and Spain, in addition to Germany. He said he foresees expansion into the Baltic countries, including Russia, and was recently in Dubai working on establishing a foothold for the UFC there.
Asia also is in the plans, he said, citing China, South Korea, Japan and India as prime markets for the company.
“Think about this for a second: India has 350 million men between the ages of 18 and 34, and that’s our key demographic,†Fertitta said. “The magnitude of these markets is staggering. Dana has been doing a phenomenal job with this company, and I’ve been doing what I could given my responsibilities (at Station Casinos).”
While India’s 18-34 demographic might be seen as “staggering,” it would be wise for the UFC to mark that figure with an asterisk. Why? Well, for starters over 800 million people in India live on less than half a US dollar per day – the standard considered to be the poverty line for the country. Latest estimates place the Indian population at just over 1.1 billion, already leaving less than 300 million people total (males and females of all ages) that might be able to spend their money on things other than food, water, and shelter.
Then there are the problems of the future:
- Resource scarcity. The population continues to grow at a feverish pace and is expected to hit 1.6 billion by 2050 – becoming the world’s largest nation in terms of population. Considering the country is already battling food and water shortages, increasing the population isn’t going to help matters.
- Literacy. In 2001, nearly 75% of Indians are literate, however this figure is unevenly distributed across the country and reflects the enormous gap between the rich and the poor. While some districts feature literacy rates near 98%, others are abysmally low at just 39%.
- Widening gap between the rich and poor. Both a growing population and uneven literacy rates will only help increase the difference between the haves and have-nots of the country.
- Political inefficiency and corruption. The country is rife with corruption at all levels of government, including the courts. Combined with the inefficient bureaucracy, it’s almost impossible to get any political or legal matters settled in a timely fashion without paying on the side.
The success of the UFC depends on its ability to cater to a large audience of males between 18-34 that can afford to attend live shows, buy PPVs, purchase merchandise, and support the sport in other ways. None of this seems possible in India, immediately or even over an intermediate time frame.
India as a market for the UFC is overly ambitious and no where near realistic. Imagine the enormous financial and opportunity costs associated with expanding into the country and you’ll begin to see why it is imperative for the UFC to priortize.
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