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Volume 21 No. 34
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Endeavor’s connections are opening doors for UFC

Editor’s note: This story is revised from the print edition.

When the UFC decided to split with longtime global sponsor Anheuser-Busch earlier this year, it found its U.S. replacement through parent company WME-IMG, which had brokered a University of Texas sponsorship with beer, wine and spirits distributor Constellation Brands.

While that deal was with Corona, Constellation’s beer portfolio also includes Modelo, a brand that positions itself as the beer with the “fighting spirit.”

It didn’t take long for both Constellation and WME-IMG — which recently rebranded itself under the single name Endeavor — to recognize the potential of the combination.

All that was required to put the brand and property together was a quick conversation between Andrew Judelson, who runs national sales for Endeavor’s college division, and Lou Koskovolis, senior vice president of partnerships for Endeavor’s global marketing group.

“We sit right next to each other,” said Koskovolis, who previously held senior sponsorship roles at MLB, ESPN and Six Flags Entertainment. “And we’re in the market every single day.”

This is one of the benefits that UFC executives anticipated from the moment that the MMA promotion was acquired by the company now known as Endeavor. Between an event business that bridges sports, entertainment and fashion, its college division and its corporate consulting division, Endeavor pitches and services a broad array of brands, both established and emerging.

The UFC hopes that will open doors to companies that weren’t considering it before.

“What we get now with Endeavor is just resources, resources and more resources,” said Lawrence Epstein, UFC chief operating officer. “What that means is that we have a global network of people selling all around the world. And a plethora of new relationships. IMG is working with Rolex on one end and with beers and automotives on the other. It’s a complete portfolio of consumer products and other businesses.”

In its role, Endeavor operates much as an agency would for a team or property that needed more expertise than it had on staff, studying demos and consumption patterns to match properties with sponsors in each category.

Modelo’s UFC deal fits in with the brand’s positioning as the beer with the “fighting spirit.”

“To me, this all starts with the research,” Koskovolis said. “So when we’re analyzing categories and properties, to me, we have the best research team in the business. We’ll sit down and say, ‘Which of the categories and brands are UFC consumers consuming most?’ And then we’ll go crazy on that particular category.”

Rolling most of the responsibility for sponsorship sales over to Endeavor meant deep cuts in UFC’s partnership marketing division, which came as part of a staff reduction of about 15 percent implemented in October 2016, three months after the acquisition closed.

Among those who departed was Mike Mossholder, who served as executive vice president of global marketing partnerships. Hired in 2011 after stints with Las Vegas Motor Speedway, Churchill Downs and the Miami Dolphins, Mossholder professionalized the UFC’s sponsorship operation.

While cuts came in Las Vegas, the UFC recently made a significant addition in New York, where it long had lacked a presence. Last month, it hired the vice president of venue business development for Fanatics, Paul Asencio, as senior vice president of global partnerships. A former head of sponsorships with the New York Mets, Asencio will split his time between New York and Las Vegas.

It’s reminiscent of a move that NASCAR made 20 years ago, when it pushed toward the sports mainstream by opening a Park Avenue office, placing it in the company of the leagues then commonly known as the “Big Four,” as well as the advertising community and TV networks.

“When I looked at the UFC as a competitor, whether it was when I was at [MLB] or ESPN, I loved that they were out in the Vegas desert and they didn’t have a presence in any of the major markets,” Koskovolis said. “I thought it was a disadvantage for them.”

Along with the connections that Endeavor brings, Epstein said the UFC has benefited from the company’s content-oriented approach to sponsorships.

“We were very good at selling spots and dots and integrating sponsors into the production of our events,” Epstein said. “[Endeavor] has opened our eyes to the opportunity to infuse and integrate sponsors into our actual content. It’s not just a mark or a spot. It’s integration into our content.

“It’s a different skill set, a different mindset. I don’t think we were as effective as you would like to be before the acquisition. We’re able to learn from the experiences they’ve had with so many other brands around the world.”

Both of the larger deals that the UFC has signed in the last few months came with content plays that will boost exposure for the sport. While details are still in the works, expect to see UFC fighters featured in Modelo’s “Fighting for” series of commercials. The UFC’s deal with 7-Eleven includes placement of UFC fighters on the convenience store’s Big Gulp cups, tied to a national peel-and-win promotion.

“Yeah, we’re making money [on the convenience store deal],” Epstein said. “But having our athletes on hundreds of thousands of cups is pretty important, too. You hop into your buddy’s car and you see that 7-Eleven cup. Whether they’re spitting tobacco into it or whatever, those things hang around for a while.”

Even before the acquisition, the UFC had begun to make strides to upgrade its sponsor roster. Current sponsor Monster is the No. 2 energy drink, while predecessor Xyience had only a sliver of the market. Reebok was a step up from MMA-centric Tapout.

But the UFC still is lacking in some key categories. Insurers Geico and Progressive have advertised on FS1 telecasts, but neither has taken official status. The fast-food category remains vacant, though Epstein said he is confident it soon will be filled. He said he views the many brands that regularly buy spots on UFC shows on FS1 as a segment of the sport’s “ecosystem” that ultimately will convert to deeper relationships.

One area that has outperformed expectations is the performance center that the UFC opened this year as the cornerstone of its new Las Vegas headquarters, which allowed it to land Hospital for Special Surgery for a category it had not previously sold. Barely six months after opening the facility, UFC has tripled the sponsorship revenue that it expected to bring in based on pro formas, landing brands such as sports drink Body Armor and nutritional supplement Performance Inspired. It didn’t hurt that WME clients Kobe Bryant and Mark Wahlberg are investors in those two respective companies.

“This [performance institute] is turning into a new door into the UFC ecosystem,” Epstein said. “There are a lot of brands that get our demo, that understand it, but that still say ‘combat sports are not for me.’ Now there’s an opportunity to be part of a performance institute that’s not focused on guys and girls fighting, but training and recovery and injury prevention.”