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UFC Russia: A case study on entering a new market

UFC Russia: A case study on entering a new market

  • The UFC attempts to gain a foothold in the lucrative Russian market with its newest alliance
  • UFC and M-1 Planning combine to develop the Russian market through events, UFC Gym, and television deal
Islam Makhachev defeats Arman Tsarukyan at UFC Fight Night 149 in Russia

After UFC 236 delivered one of the greatest tandem main and co-main events of all time, the largest mixed martial arts promotion in the world traveled to the other side of the globe for UFC Fight Night 149 in St. Petersburg, Russia, albeit with less fanfare.

Headlined by a heavyweight tilt between Alistair Overeem and Alexey Olenik, the card was thin in the way of ranked opponents but delivered some exciting finishes and solid entertainment on a Saturday morning for fight fans. Though it certainly lacked the star power of a pay-per-view, it brought into focus an important part of the UFC’s business dealings which has made very little noise since its inception—UFC Russia.

In July of last year, the UFC surprised fans and pundits alike when it announced that it had reached an arrangement for co-promotion with longtime rival M-1 Global. The joint venture between the Ultimate Fighting Championship, the Russian-Chinese Investment fund, and Mubadala Investment Company dubbed UFC Russia, allows for champions of M-1 to compete in both organizations, as well as gives select Russian fighters a chance to earn a UFC contract. The deal will give the Russian MMA group added exposure and funding while giving the UFC an equivalent of a farming system for Russian athletes, as well as a stronger foothold in the region’s market. After over a decade of failed talks and friction between the UFC and M-1, the change in UFC ownership as a result of its sale to Endeavor acted as a catalyst for renewed negotiations between the two promotions, leading to the current agreement.

The group has been making moves outside the octagon as well. Last week it was revealed that the Russian Fitness Group had signed a 10-year deal with UFC Gym, a subsidiary to the UFC, to begin development of some 55 UFC Gyms throughout Russia over the next decade. Around $86 million could be invested in the project, with the first gym set to be opened in Moscow sometime later this year. UFC St. Petersburg also marked the first event to be shown on UFC TV, a new dedicated linear channel launched earlier this month in conjunction with Media Telecom, that will broadcast content 24 hours a day throughout Russia and the Commonwealth of Independent States (CIS).

“Russia has been a market that we have been thinking about devoting more energy and resources to for quite some time. Frankly, in the past, we simply didn’t have enough bandwidth,” said UFC COO Lawrence Epstein in an interview with the Las Vegas Review-Journal last September, “Russia has all the characteristics of a major market for the UFC. We have a lot of athletes that come from that market.”

It certainly seems like bandwidth is no longer an issue, with the UFC looking to hold at least two events each year in the world’s largest nation and hoping to build a slew of new stars to cater to the reported 17 million people who identify themselves as UFC fans within the country.

The biggest star from the region, however, believes that UFC Russia needs to do a better job at promoting their athletes. Speaking at an M-1 Apeha Q&A event in St. Petersburg prior to UFC Fight Night 149, UFC lightweight champion Khabib Nurmagomedov criticized the organization for not doing enough to market Russian and CIS athletes, suggesting that the “UFC should have a different policy,” when it comes to advertising fighters from the area.

“I think I’d probably respectfully disagree with Khabib on that one,” UFC Senior Vice President David Shaw said during the UFC Fight Night 149 post-fight press conference.

“The amount of promotion and marketing that went in, the thoughtfulness that went into creating the card… we’re trying to get a good representation of the whole area. And you know, three hours on ESPN 2 today in the US, plus a five-fight main card… in addition to all the marketing we put in, I think we’ve done a pretty good job so far.”

Exactly how good a job the UFC has done with the event will be hard to measure due to the main card being shown on ESPN+, but ratings for the aforementioned ESPN 2 prelims may give some indication. The company did manage to secure a sellout for the Yubileyney arena, although at a capacity of just 7,236, it’s certainly not going to break any gate or attendance records.

Regardless of whether or not the ratings end up in the UFC’s favor, the organization is committed to continuing its expansion into the Russian market and building the UFC Russia brand.

“We’re in it for the long run.” Shaw said, “[UFC Russia] is in this region, we’re investing heavily, we’ve opened up an office, we’re establishing the partnerships…we’re here to make sure that over the long run we can bring all sorts of cards to Russia, and indeed we will.”

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