SBD/Issue 84/Leagues & Governing Bodies

Sale Of UFC Stake To UAE Company Aimed At Boosting Global Growth

(l to r) Frank Fertitta, Dana White And Lorenzo
Fertitta Hoping Deal Boosts UFC's Global Growth
UFC parent Zuffa LLC's sale of 10% of the league to Abu Dhabi-based Flash Entertainment "will permit the UFC to do things unimaginable even five years ago," and the sport "will expand dramatically and that will lead to significantly better athletes opting to become mixed martial artists," according to Kevin Iole of YAHOO SPORTS. The move will make it "significantly easier for the UFC to make headway in countries like China and India, where it has been desperate to grab a foothold but had been doing little more than spinning its wheels." The UFC "has television programming in China, but it is on regional networks," and UFC Chair & CEO Lorenzo Fertitta "expects Flash to be able to help UFC quickly make inroads on the more influential national networks like CCTV." Fertitta: "If they want to go in and have a meeting with CCTV, they're going to get the meeting with the right guy at the right time vs. me going over there and trying to meet with a major broadcaster in China. It's two completely different meetings." Meanwhile, Iole noted the UFC is "expected to hold its first live event in Abu Dhabi on April 10," and the "fan base at that show will be more diverse than any previous UFC card" (SPORTS.YAHOO.com, 1/13).

TALKING POINTS: Fertitta added, "We have been successful growing the brand, growing the business in these other countries so far, but we felt like in order to really accelerate our growth in the Middle East, in parts of Asia, China, where the Abu Dhabi government obviously has tremendous relationships, we felt like that they could help us get along a little faster than we have in the past" ("Power Lunch," CNBC, 1/12). Fertitta: "We feel like we have a product that travels very well and we've grown here domestically ... but now the idea is to export our product all over the world." Bloomberg TV's Greg Miles noted PPV is where the "vast majority" of the UFC's revenue is generated, and asked if the league can "grow pay-per-view as quickly in international markets." Fertitta: "There's not as many markets that are really pay-per-view ready from a technology standpoint. There are a few ... but the model for most international growth is going to more license fee or subscription type of revenue model" (Bloomberg TV, 1/12).

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