Published November 03, 2011
By Peter Rutherford
LAS VEGAS, Nevada (Reuters) - The Ultimate Fighting Championship comes crashing into the homes of mainstream America next week when its TV network deal kicks into life and, while U.S. revenues remain the UFC's lifeblood, CEO Lorenzo Fertitta is banking on global growth to secure the long-term future of the organization.
"We've really been doing a lot of work in China and that's going to be a longer-term investment but we are going to dip our toe in the water with an event in Macau," said Fertitta, who with his brother Frank co-owns the Las Vegas-based Station Casinos.
"It's just a matter of finding the right date that works with our television deals around the world. That should be happening in 2012.
"Singapore is another market that we have been focusing on. We know it's a growing market .... so a UFC event there probably in 2013," he said, adding that the Marina Bay Sands casino-resort was being eyed as the venue.
Once banished to broadcasting backwaters, the UFC now beams to more than 130 countries worldwide, while the seven-year multi-media deal with Fox signed in August will net it between $90-100 million in rights annually.
Crucially, the landmark deal represents an opportunity for the UFC to show the 'extreme makeover' it has undergone since the Fertitta brothers bought the struggling company for $2 million in 2001.
For some, mixed martial arts still evokes negative images of bloodlust and unfettered violence thanks to the early events, which the previous owners had marketed as more spectacle than sport, said Fertitta.
"Tune in to see someone get hurt" was how he described their approach. Several U.S. states, including New York, still refuse to sanction MMA.
"When we bought the UFC in 2001 it was basically a broken business, on the verge of going away," he said. "It was probably one of the most tainted brands out there and when we bought the company all of our advisers thought we were crazy.
"But while it was tarnished, there was still a broad awareness of what the UFC was and we thought it was still a very valuable brand."
Ten years on, the belief shown in the UFC by the Fertittas and its effusive president Dana White appears to have been justified.
"When we started the company back in 2001 we had four employees. Now we have close to 300 in offices in Las Vegas, Toronto, Beijing and London and we're looking to add offices in Sao Paolo and potentially Mumbai over the next year," said Fertitta.
"We were doing 30,000-40,000 pay per views annually when we bought the UFC, now we're the biggest PPV provider in the world, we'll do around closer to seven million now.
"So obviously the business has grown exponentially."
While Fertitta rates the 55,000-sellout at Toronto's Rogers Center and their Rio de Janeiro debut this year as the UFC's most successful international events, he said Asia had the potential to deliver similar success.
"Our goal is to have revenues split 50-50 between North America and the rest of the world in the next five years," he said. "We have explosive growth in Brazil, and that has now become our number three market, but we are looking to Asia to have that same explosive growth."
Cracking China's complicated market could prove difficult, despite the country's long history of martial arts.
"In China I think that is going to be the spark that we need to move that market," said Fertitta, adding that the UFC was working to foster talent there.
"One of the things we're doing is bringing a handful of Chinese fighters over here for a month to train in Las Vegas, giving them access to the gyms and other resources here.
"Among a population of a billion people there's got to be someone that can fight," he added with a laugh. "And it's our job to find him."
(Editing by Nick Mulvenney)