Strikeforce Acquisition a Key Cog in the Global Expansion Plans of the UFC [Updated]

Dana White officially announces the purchase of Strikeforce by Zuffa

 

This is great news for MMA fans! It may take some time, but this acquisition should eventually lead to some interesting match ups and, more importantly, help to ensure that the best fighters in the world will always be able to fight one another.

Time will tell, but from a business standpoint I see this acquisition as exactly what the UFC needs in order to make a push into new global markets. Zuffa has been faced with a very common problem for successful businesses: how do we grow without eroding the success that we currently enjoy? With two separate promotions at their disposal, Zuffa can now push forward into new markets with Strikeforce while maintaining their strong hold with the UFC in North America.

 ESPN Contributor John Gross fills in some of the details of the acquisition

Below, I've attempted to capture the current state of Zuffa, llc (including Flash Entertainment who owns a 10% slice of the pie)  within a single graphic. The key takeaway is that there is not much in the way of major competition out there for the UFC anymore.  More importantly, Zuffa appears to be positioning themselves for an aggressive global expansion. With two major promotional brands, key cross promotional relationships, and a growing MMA fight library I like their chances for success. 

Click Image for Full Size Version

From Fighting Legend to Business Executive

It's official...Liddell's fighting career is over. To many of us hardcore MMA fans, and even those who began their MMA journey with the original season of The Ultimate Fighter reality series, this news is bitter-sweet. Liddell was an amazing talent, one of the most recognizable stars in the sport, and perhaps the greatest Light Heavyweight champion of all-time. But, as good as he looked early on in his final fight against Rich Franklin, the end result was an increasingly common and down-right disturbing sight of the 'Ice Man' unconscious on the octagon floor. It was time.

But as one career ends, another begins. Dana White announced in a press conference (video after the jump) that Chuck Liddell has accepted a position as the new UFC executive vice president of business development. It's hard to say what this means in terms of job responsibility, but I would argue that these details really don't matter very much. I love this move for a number of reasons, none of which depend on Chuck's roles and responsibilities. 

First, this ensures that the Hall of Famer ends his career in the UFC. The same cannot be said for other legends of the Octagon like Ken Shamrock and Jens Pulver.  Instead, they waste away on lackluster cards of small-time promotions, fighting, one gets the feeling, because they have to. From a business perspective, keeping Liddell's name off of the main event of a competing promotion is also important. The UFC already suffers a bit from being the "Kleenex" of MMA and releasing The Iceman  - their most recognizable star - to go elsewhere would just add to the confusion.

Second, it sets a strong precedent that successful UFC fighters can have a future with the organization after their fighting days are over. This sport is unique in that it is so young that many of the original stars are still active as fighters; many of them because they simply did not make the kind of money in the early days of the sport that they can make fighting now. The UFC needs to step up where ever possible and find ways to reward these fighters who helped to make this sport what it is today.

Lastly, Chuck is a great guy and an excellent spokesman for the sport. He is college educated, has a background in traditional martial arts, and has successfully crossed over into mainstream popularity with his unique look and laid back personality. He will represent the UFC well.

Check out a short article by Ariel Helwani and a video of the press conference after the jump.

UFC to absorb WEC

"UFC absorbs WEC, adds lighter weight classes"
Neil Davidson, The Canadian Press

Looking to expand its brand, the UFC is absorbing its sister World Extreme Cagefighting circuit.

The consolidation immediately gives the mixed martial arts juggernaut two more weight classes — featherweight (145 pounds) and bantamweight (135 pounds) — while the WEC lightweights will be rolled into the UFC's existing 155-pound division.

The merger adds some 60 to 70 new fighters to the UFC ranks, swelling the roster to 260.

Those extra resources will help make it easier for the UFC to continue spreading its tentacles round the globe. And given the UFC has bigger name value than the WEC, it will get more bang for its buck from the WEC fighting alumni.

Authentic Brands Group Acquires TAPOUT and Silver Star Casting Company

Big news for major brands in Mixed Martial Arts today as Authentic Brands Group, LLC announces the acquistion of TapouT and Silver Star with the press release below.

Personally, I see this as a move that TapouT had to make in order to reach that next level of acceptance into the mainstream retail market, especially after the passing of their emotional leader Charles "Mask" Lewis, who truly defined the brand for most hardcore MMA fans.  However, it will be interesting to see if there will be any backlash from these hardcore fans.  Much of the appeal of TapouT was the grassroots nature of their creation, from selling t-shirts out of the back of their car to a television show on the Versus Network about being crazy fans of the sport of Mixed Martial Arts.

  

Interestingly, as a hardcore fan myself, I've never personally identified with the "in your face" style of most MMA brands. But, I've always digged the message that "Mask" and TapouT represents, which to me has been this notion that they don't seek out champions to represent their brand, and they wouldn't even cut a fighter for losing 10 straight fights.  Rather, it's a recognition of the incredible courage, determination, and willingess to put it all on the line as an athlete competing in this sport of MMA...win or lose.  Let's hope the Authentic Brands Group can keep that original message alive.   

NY/LA/Toronto – September 6, 2010 – Authentic Brands Group, LLC, with offices in New York, Los Angeles, and Toronto, is proud to announce the acquisition of TapouT and Silver Star Casting Company (Silver Star), two of the biggest names in the mixed martial arts (MMA) industry. MMA is the world's fastest growing sport with billions of dollars in annual revenue and global appeal. Authentic Brands Group acquired TapouT and Silver Star as part of its multi-branded distribution strategy designed to protect brand integrity.

Authentic Brands Group has global brand building experience in apparel, action sports, consumer electronics, home and celebrity brands. The company's innovative marketing strategies include traditional and social media, and securing partnerships with high profile athletes and celebrities.

Authentic Brands Group's Chairman & CEO Jamie Salter said, "This sport is still in its infancy. We strategically chose these acquisitions as our first big move because we're getting into the right business at the right time. We're looking forward to working with the best brands and the best athletes in the world as we transition these two companies into global lifestyle brands with our retail and licensing partners."

With the acquisition of TapouT, Authentic Brands Group now owns the number one MMA lifestyle brand in the world, a brand name that has become synonymous with the sport itself. TapouT has global brand awareness that has grown alongside the MMA over the last 15 years by staying focused on the athletes and the fans. Built by three impassioned men who trained in MMA, the late Charles "Mask" Lewis, Dan "Punkass" Caldwell and Timm "Skyskrape" Katz, TapouT has maintained its authenticity through its rapid growth by staying deeply rooted in the MMA culture.

The rest of the official press release after the jump.

Ratner Earns Another Victory; Ontario Sanctions Mixed Martial Arts

UFC Vice President of Regulatory Affairs, Marc Ratner (Sherdog.com)

Not enough has been written about the importance of Marc Ratner's role with the UFC.  He is a man with a mission - an ambassador for the sport worldwide.  The interesting thing about Ratner's efforts is that they do not exclusively benefit the UFC.  In fact, it is more common for the first event in a newly sanctioned city to be from a competing promotion.  But, the UFC shouldn't want it any other way.  I have heard many making the argument that the WEC should be repurposed as a "farm system" for the UFC.  I couldn't disagree more.  The UFC has farm systems all around them.  While some may view these promotions as the Competition, in a 5 Cs Marketing analysis, I would define them as Collaborators.  The Competition is all the other things that fans can do with their Saturday night besides buying a UFC pay per view.  Maybe I'll develop these ideas futher in a separate post...I'm getting off track.

My point about Ratner is that he fights a battle for Mixed Martial Arts, not just the Ultimate Fighting Championship.  The genius of this is the UFC's realization that they don't have to play within the constraints they've been given.  So much of strategy in business is about analyzing and disecting industries with tools like Porter's 5-Forces framework.  Afterwards, we step back and make judgments about the relative attractiveness of said industry.  In a similar way, we might size the market opportunity and decide whether an investment is warranted.  I'm not saying the UFC hasn't done a similar analysis of the industry and market potential, I'm sure that they have; they just view this information as a starting point from which to build.  If you don't like the size of the pie, just make it bigger.  Of course, as the opportunties get bigger, so too does the list of promotions eager to collect on the fruits of their labor.  But these promotions bring with them more opportunities for first time trial/viewing of the sport by new audiences, new practice grounds for the develpment of talent, and the want of something more from the fans in attendance...for the world class version: The UFC.        

Joe Myers with Sherdog.com explains the details of Ratners victory in Canada:

The sport of mixed martial arts has taken another step towards legitimacy, as the Canadian province of Ontario announced it will sanction MMA beginning in 2011. “We’re thrilled [MMA is being sanctioned],” said UFC Vice President of Regulatory Affairs Marc Ratner. “Ontario and Toronto, in particular, are hotbeds for MMA and not to have it there didn’t make sense. In the past, it wasn’t that the government was against sanctioning MMA; it’s just that it wasn’t the right time for it. Now, it’s the right time, and we're excited about it.”

Ratner has said previously that Toronto is one of the UFC’s top markets in terms of pay-per-view buys and viewers on a per-capita basis. The UFC’s Canadian office, which opened about three months ago, is based in Toronto. At that time of the opening, UFC CEO Lorenzo Fertitta said Canada was the promotion’s second biggest market outside of the United States, accounting for 17 percent of its overall business.

Sophia Aggelonitis, the Minister of Consumer Affairs for Ontario, said the decision to sanction MMA in the province was one that has been a long time in coming.

Full article after the jump.