100 Annual UFC Shows Possible?

John Morgan of MMAJunkie reports that the UFC has already begun the preliminary research necessary to determine whether an office in China is feasible and worthwhile. The goal of the UFC is to begin expanding its reach with localized versions of TUF in several different markets and eventually to begin promoting 100 shows per year.

The growth prospects for the UFC are astounding. As recently as 2007, the UFC held just 19 events. White said he envisions a day in the not-too-distant future when the company could hold as many as 100 events annually including single nights with multiple events on multiple continents.

“This is is a work in progress,” White told MMAjunkie.com (www.mmajunkie.com). “We bought this company, and we were doing five fights a year. If you would have told me six or seven years ago that we’d be doing 34 fights a year, I would have said, ‘That’s impossible. It’ll never happen. That’s crazy.’ We’re probably going to end up doing 100 fights a year.

“We could have a show [in the U.S.] on Saturday night and five more going on in five other countries. That’s what’s going to eventually happen. It’s figuring this thing out, putting the pieces together, and like I said, it’s a work in progress. But I’m telling you guys, I said it years ago, and I’ve been saying it – how big this thing is going to be. I think people are now really starting to realize how big this thing is really going to be.”

Payout Perspective:

To promote 100 events, the UFC assumes the following will be in place:

• Fighter availability (quantity and quality)
• Worldwide legalization and acceptance
• Access to substantial distribution in each market

I tend to think that 100 shows per year is a possibility, but the time frame for such an accomplishment is absolutely up in the air and certainly isn’t something that will happen within the next 5 years.

Fighter availability (quantity and quality)

The UFC currently does 30+ shows per year with a roster of ~220 fighters and that number is closer to 260 when you consider the number of guys that are signed and then cut after one or two fights in any given year. The UFC would probably need 900-1000 fighters to do 100 shows and that’s conservative considering the global nature of its 100 show ambitions would strain the ability of fighters to compete more than 2-3 times per year.

The surge in the sport’s popularity is driving a lot of new interest in participation among elite athletes, but it’s going to take a great deal of time to develop the talent necessary to host 100 UFC events a year. This, unless the UFC is willing to sacrifice product quality — especially with its undercards. Yet, I wouldn’t suggest that, seeing as top-to-bottom fight quality is a key point of differentiation between MMA and boxing. The overall strength and entertainment value of a UFC card in its entirety is very much a part of the value proposition which it has used to build the sport.

Moreover, promoting 100 shows in a year would almost necessitate the inclusion of further weight classes at 125, 135, 145, and possibly 225 to give the UFC a chance to fill all of these cards. What does that mean for the WEC? What does that mean for other promotions? I suppose part of the assumption here is that, if the UFC gets to this point, its size and scale afford it so many advantages that it really does become the NFL of MMA (meaning you’re not going to have Fedor with Strikeforce or Aoki/Kawajiri in Dream).

Worldwide legalization

Despite the success of MMA in North America over the last five years, the sport is still not legalized in major markets like New York and Ontario — the UFC’s road to worldwide legalization will be no less tumultuous. I fully expect that history will repeat itself; and, when you take into account the cultural differences that exist between North America and other regions of the world, the road to legalization could be an even longer haul for the UFC in certain international markets.

In Germany, Austria, and France the thought of hitting a downed opponent is near sacrilegious to the mainstream sports fan. More than that, their consumer population is far more sensitive to violence, in general, which will very much make the sport a long-term proposition.

China is a very attractive market, but also one that can be unpredictable and very difficult to do business. The WWE have had a very difficult time penetrating the market (as have bigger companies like Google), because its conservative culture governed by a semi-communist state that operates under an “our way or the highway” policy. Although, the addition of Flash Entertainment (the Abu Dhabi state-owned company that bought 10% of Zuffa in 2009) will certainly help, because they have the connections and clout to get meetings with the key decision makers.

Moreover, I tend to think that people often over-estimate the future size and purchasing power of markets like China and India based solely upon what they’ve heard (much of which is exaggeration on the part of the American political and media bodies fearfully looking over their shoulders at the next challengers to American superiority). Many have suggested that China’s GDP will soon exceed that of the US (and possibly triple the US by 2050), but the country has its own economic and political challenges ahead. For example, the combination of nearly ubiquitous cigarette smoking, airborne pollutants, water contamination (nearly 33% of their fresh water is undrinkable), and the one-child policy will soon put a strain on China’s already questionable health care infrastructure and force a relatively small and proportionately shrinking middle class to support a very large and very sick group of elderly. None of which bodes well for China’s economy in the long-term.

The UFC and Dana White may very well come to realize that “getting the US done” was easier than expanding globally.

Access to distribution

The future of television might be the internet (sometimes I think Dana reads the site), but it’s not going to happen overnight and its not going to happen easily. There are many powerful people earning a lot of money through the status quo (i.e., television networks and cable/satellite providers) that really don’t have much incentive or desire to change the existing model. It’s going to be a tooth-and-nail fight to switch the medium.

Thus, I’m betting on a rather slow change and proliferation of internet-based television, which suggests that the distribution necessary for 100 shows a year will necessitate a hybrid system. Not everyone is going to switch at once, which means the UFC still wants to be on traditional television for now (but it will take internet-based distribution in markets like China or Germany where it can’t get to television, in the mean time).

What does the UFC need to do next?

Be patient.

I understand the temptation — the potential of MMA is huge — but it would be unwise to rush global expansion beyond the current capabilities of the firm. The UFC risks stretching everyone and everything too thin, which would utterly kill product quality in the long-term.

Therefore:

• Let the localized versions of TUF do their magic: develop regional talents, build regional fan bases, and encourage grassroots development.
• Give the UFC programming time to develop a following in the over 150+ markets it now resides.
• Further push merchandise and collectibles into these foreign markets to give the UFC additional presence.

In the mean time, concentrate on dominance within existing markets and work to develop further competencies in marketing, public relations, and digital media. The UFC is good in these areas, but it could also definitely improve. There’s no such thing as perfect; and if there were, it wouldn’t be good enough.