A huge part of UFC’s latest business strategy surrounds the site fess and incentives that a city, state, or country pays to land a big-time event from the promotion.
Look no further than the upcoming UFC card in Saudi Arabia on June 22 as the perfect example. The Middle Eastern country reportedly paid around $20 million to bring UFC there for the first time. Weeks before the event takes place, Turki Alalshikh, the chairmen of Saudi Arabia’s General Entertainment Authority, announced that he struck a new deal with UFC to bring another event to his country in 2025, and that Riyadh Season — the annual music, arts, and sports festival — will sponsor the upcoming UFC 306 card in September at Sphere in Las Vegas.
While no financial figures were revealed, TKO Group Holdings President Mark Shapiro offered some insight into the lucrative business of UFC site fees and how that’s become a central focus for the promotion moving forward.
“Big opportunity and a big part of our strategy,” Shapiro said during the JP Morgan Technology, Media and Communications conference. “I spoke up front [about] our major KPIs (key performance indicator) that we’re working, which is attendance and pricing and site fees.
“Look, if we are going to bring the show to town, we are looking for an incentive package. It doesn’t always have to be straight cash, but it has to be a significant incentive package. Because once again, demand is outstripping supply.”
Site fees essentially boil down to the money and incentives it takes from a city, state, or country to land a major UFC card.
Upfront cash can certainly play a part, such as Saudi Arabia putting down $20 million just to get UFC to come there for a single event. In other locations, that could mean a city or state absorbs the cost of marketing and advertising, or perhaps offers tax incentives to land a UFC fight card.
When it comes to this latest deal with Saudi Arabia, Shapiro didn’t reveal exactly how much UFC was paid, but based on the original site fee, the funding could potentially end up near $40 million for a single event.
“You’ve seen us monetize site fees with the likes of Saudi Arabia with WWE,” Shapiro explained. “You can look for us to expand our current deal in the next six to 12 months. Very happy with MBS (Mohammad bin Salman) and the partnership we have there. We have two events a year, but we’re already in discussions — Nick Khan is leading that for us — in expanding that to more events. We also have a phenomenal deal in Abu Dhabi with the UFC where we’re getting significant site fees and incentive packages there, and we’ve now expanded our partnership with them for other affiliate events, if you will, in the Middle East that they would participate in as we sell them to different countries.
“We’ve now expanded our Saudi Arabia relationship by not just having a UFC fight this June, but announcing — for almost double the rights fee — another event next year. I would tell you we would be doing a longer term deal with Saudi Arabia if we already had one event under our belt. So that’s another way of saying as long as everything goes well in June, which we anticipate, I think Dana White would be very amenable to doing a much longer term deal in Saudi Arabia.”
Shapiro said the demand for UFC is higher than ever, so seeking site fees from locations hoping to land a fight card just makes sense for the business.
Cities and countries from around the world are already forking over a lot of money to get a UFC pay-per-view to come to town, with the promotion traveling to locations like Newark, N.J., in June, Manchester, England, in July, and Perth, Australia, in August.
Eventually, Shapiro anticipates that even UFC Fight Night cards will command a hefty fee, and he didn’t need to look any further than the recent event in St. Louis to prove the demand is there.
“We’re getting site fees for our pay-per-views in the UFC — significant by the way here in the U.S. and internationally, but specifically here in the U.S. — and we’re going to starting to ask for those same incentive packages to bring [WWE] Raw to town, to bring [WWE] Smackdown to town, to bring our Fight Nights to town,” Shapiro said. “So we just had a UFC Fight Night a week ago in St. Louis, we did the highest gross for a Fight Night in the history of the UFC in St. Louis. Highest ever.
“We’re just talking a regular card. I was actually there. Budweiser’s our partner, that’s their home, tremendous event, and that’s what happens when you haven’t had the UFC there since pre-pandemic. The demand and thirst is so insatiable that the audience is ready to come out and spend record sums on tickets.”
As part of the initiative to seek out site fees and incentive packages, TKO announced Thursday that the live events group in UFC and WWE are merging together under the leadership of Peter Dropick, a longtime executive with UFC who now holds the title of executive vice president for event development and operations at TKO.
The directive for the new combined live events group is seeking to “drive revenue growth strategies across key areas, including live event development and scheduling, tourism incentive programs, ticketing, and fan experiences” for UFC and WWE.
“Demand for live sports and entertainment has never been stronger, and we believe our portfolio of events will continue to drive the growth of our business,” TKO CFO Andrew Schleimer said in a press release. “The newly integrated TKO Live Events Strategy Team will focus on creating operational efficiencies and developing strategies to leverage the broader economic benefits we bring to host cities, including partnering with local governments and maximizing revenue opportunities from site fees.”
On June 29, Conor McGregor returns for UFC 303 at T-Mobile Arena in Las Vegas. UFC CEO Dana White revealed recently that the gate for the event has already crossed $20 million, which is a record for the promotion.
Shapiro anticipates continued success for UFC ticket sales in the future, with events driving huge money towards tourism and local businesses. With UFC now expected to seek site fees for Fight Night cards, that could determine how many events end up happening outside of the UFC APEX, where the promotion controls costs and handles production in-house.
That’s why the message is clear to any city, state, or country out there: If you want UFC to come to town, you better get ready to pay for it.
“We want to see incentive packages in order for us to bring those fights to town,” Shapiro said. “I think there’s tremendous upside. We’ve got a team working on this around the clock and we have high hopes and frankly strong demands from management to see that we execute on this strategy.”
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : MMAFighting – https://www.mmafighting.com/2024/5/23/24161927/ufc-latest-multi-million-dollar-business-involves-massive-site-fees-take-fight-cards-new-locations
