The business of fighting has already made huge strides early on in 2010, with organizations such as the Ultimate Fighting Championships (UFC) claiming their highest profit margins in history.
In January, Zuffa, LLC – the parent company of the UFC – announced that it had sold a 10 percent equity stake in the company for $150 million, to Flash Entertainment, an investment arm of the Abu Dhabi government. It was the first transfer of rights by Zuffa since the company was first purchased from Semaphore Entertainment Group in 2001.
This lucrative deal is just one sign of the meteoric rise of mixed martial arts (MMA), the fastest-growing sport in the U.S. and one of the world’s most lucrative new sports/entertainment industries.
Since 2005, the worldwide growth of mixed martial arts has been tied to the UFC. But, in 2009, Bellator Fighting Championships established its position as the industry’s second mover through an exclusive television distribution alliance with ESPN. Then, in October, 2009, Bellator announced that it would televise back-to-back seasons (24 total events) airing on NBC, Fox Sports Net and the Spanish language Telemundo.
This historic agreement is the largest in fighting sports history, bringing Bellator to more than 250 million U.S. households every week. The UFC’s television alliance with the Spike Network, by comparison, reaches 90 million households.
Sources close to the negotiations confirm that because of this momentum, Bellator is receiving substantial interest from a foreign investment group based in Saudi Arabia.
The group is eyeing Bellator as an opportunity to invest in the American sports/entertainment market and to distribute Bellator programming throughout the Middle East, generating substantial licensing fees in the region.
As evidenced by the recent $150 million-plus UFC acquisition, investment groups believe that Bellator is now positioned as a viable option for foreign investors looking to stake their claim in this lucrative American sport.
Bellator first emerged onto the mixed martial arts scene in 2009 as the first promotion to have secured an exclusive alliance with ESPN network.
The company found further acclaim thanks to its strategic social media campaign. Bellator earned its big break after a series of jaw-dropping fights that set the online community on fire. In response to the escalating online chatter, Bellator has been hailed by mainstream media as a star-producing promotion that is delivering what mixed martial arts fans want. America’s leading sports magazine, Sports Illustrated, recently called Bellator “MMA’s success story of the year”
Yet another twist occurred in December when news broke that the American cable giant Comcast had NBC, putting Bellator at the center of a massive new media conglomerate. As former NBC Sports columnist Mike Chiapetta wrote recently: “A legitimate content war between the goliath ESPN and the suddenly deep-pocketed Versus would have the two vying for top properties across the sports landscape because NBC/Comcast's channels will feature Bellator.”
As Bellator prepares to launch its second and third tournament seasons, it will be interesting to see what direction the organization takes when it considers potential investors and partners and how far the organization’s reach extends.
We could very well be witnessing the birth of worldwide mainstream MMA and, if these rumors are true, it might not be long until MMA is a staple of the Saturday night primetime programming in every household in America, across the Middle East and around the world.
By Mike Clip
February 3, 2010
