The fight game

Southeast Asia Globe - - Contents - By Euan Black

Two mixed mar­tial arts pro­mo­tions are af­ter the same prize: au­di­ences in Asia

One Cham­pi­onship claims to be Asia’s top mixed mar­tial arts pro­moter, build­ing its brand around lo­cal fight­ers and re­gional events. In the other cor­ner is the Ul­ti­mate Fight­ing Cham­pi­onship, a global be­he­moth with its own plans for east­ward ex­pan­sion

The hopes of 8,000 peo­ple re­ver­ber­ate around Yan­gon’s Thuwunna In­door Sta­dium in a blar­ing cho­rus of shrieks and screams. In uni­son, the crowd chants the name of their countryman, Aung La N Sang, as he trades blows with the for­mi­da­ble Vi­taly Big­dash, a Rus­sian rein­car­na­tion of Michelan­gelo’s David.

The two are fight­ing in a mixed mar­tial arts (MMA) con­test, one that Sang and his many fans in Myan­mar hope will end in him be­ing crowned the coun­try’s first ever ‘world cham­pion’ in any ma­jor sport – as far as any­one can re­call.

Min­utes into the con­test, Sang stuns the un­de­feated Rus­sian with a sav­age up­per­cut be­fore floor­ing with him a light­ning­fast hook. The wall of sound em­a­nat­ing from the sweaty fans grows louder still. Big­dash con­torts his body into a se­ries of un­nat­u­ral po­si­tions, writhing around the mat in an at­tempt to avoid the avalanche of punches and el­bows rain­ing down on him. Some­how, he man­ages to weather the storm and the crowd is de­prived of the firstround knock­out it so des­per­ately de­sires. But their sup­port and Sang’s per­se­ver­ance are soon re­warded.

Af­ter five five-minute rounds, all three judges de­cide that Sang has in­flicted the greater dam­age on his op­po­nent. As the ring an­nouncer bel­lows “your win­ner and new One Mid­dleweight World Cham­pion”, the ‘Burmese Python’ drapes him­self in the Myan­mar flag and raises a clenched fist in cel­e­bra­tion, tears of ju­bi­la­tion stream­ing down his face.

“I’m not tal­ented, I’m not good, I’m not fast, but with you,” Sang says while point­ing to the crowd, “I have courage, I have strength, I have what I need to win a world ti­tle.”

It is a hum­ble vic­tory speech from a new hero of One Cham­pi­onship, a “world cham­pion that clearly rep­re­sents all of [the] great val­ues of mar­tial arts”, says Vic­tor Cui, one of the or­gan­i­sa­tion’s CEOs, in a post-fight press con­fer­ence. As with many sport­ing world cham­pi­ons, how­ever, he is the cham­pion of just one or­gan­i­sa­tion – one that is locked in its own fight for Asia’s rapidly ex­pand­ing au­di­ence for this sport.

Along with its com­mit­ment to show­cas­ing lo­cal tal­ent, One’s brand is built around rev­er­ence for val­ues such as hon­our, re­spect and hu­mil­ity, a mar­ket­ing strat­egy that has helped the Sin­ga­pore-based pro­moter be­come the lead­ing MMA out­fit op­er­at­ing out of Asia. But with the US-based Ul­ti­mate Fight­ing Cham­pi­onship (UFC) re­cently an­nounc­ing its first-ever event in main­land China and demon­strat­ing re­newed re­gional am­bi­tions since its $4.4 bil­lion sale to a mix of Amer­i­can and Chi­nese in­vestors last July, the fight to woo fans and the ac­com­pa­ny­ing cash they bring in has only just be­gun.

Two weeks prior to Sang’s his­toric ti­tle fight, Sin­ga­pore’s In­door Sta­dium is play­ing host to a UFC event. By 3pm, the fan zone out­side the venue is alive with an­tic­i­pa­tion. A di­verse mix of ex­pats and lo­cals line up to get their hands on a $110 signed event poster or a $140 UFC jumper, while oth­ers test their punch­ing speed, take note of com­pany mile­stones on a lengthy ex­hi­bi­tion wall or gawk at state-of-the-art Har­leyDavid­sons while sip­ping on free sam­ples of Mon­ster En­ergy drinks.

The main fight of the night pits the Brazil­ian brawler Bethe Cor­reia against Holly Holm, an Amer­i­can who rose to fame af­ter de­feat­ing house­hold name and for­mer Women’s UFC ban­tamweight cham­pion Ronda Rousey in Mel­bourne in 2015. Af­ter the bell rings, two min­utes pass be­fore the pair make con­tact – a com­ing to­gether that’s met by a wave of sar­donic ap­plause that just about man­ages to drown out the ca­coph­ony of boos swirling around a crowd hun­gry for ac­tion. One minute into the third round, just as peo­ple are be­gin­ning to write the event off as a cer­ti­fied anti-cli­max, Holm re­acts to Cor­reira’s taunts in spec­tac­u­lar fash­ion: shin con­nects with skull, and the Brazil­ian slumps to the ground. It’s a breath-tak­ing fin­ish to a night that rarely got the crowd on its feet.

The events typ­ify the vastly dif­fer­ent ap­proaches taken by the two pro­mo­tions: where One prefers to groom lo­cal tal­ent and tai­lor its events to lo­cal mar­kets, UFC stages its top tal­ent wher­ever it goes, trust­ing that a global au­di­ence will ap­pre­ci­ate good fights even with­out lo­cal al­le­giances. De­spite

their dif­fer­ences, they are both fight­ing for the same prize: me­dia rights and spon­sor­ships in a con­ti­nent home to three out of the world’s top five coun­tries most in­ter­ested in MMA, ac­cord­ing to mar­ket re­search firm Nielsen.

Joe Carr, speak­ing as UFC’s head of in­ter­na­tional and con­tent be­fore de­part­ing for a po­si­tion with the World Surf League in mid-Au­gust, told South­east Asia Globe that me­dia rights make up 75-80% of UFC’s to­tal rev­enue, a fig­ure that jumps to 90% in the Asia-Pa­cific due to the low num­ber of events staged in the re­gion. “If you look at our Asia busi­ness, we’re mak­ing $40m-plus a year in me­dia rights be­tween Asia and Aus­tralia with lim­ited over­heads. We make small losses [putting on events] in Asia and we have a cou­ple events a year, so all that money is go­ing to the bot­tom line,” Carr said in a tele­phone in­ter­view from Las Ve­gas.

Me­dia rights are the ba­sis of One’s rev­enue and busi­ness strat­egy too, Cha­tri Si­ty­o­d­tong, One’s CEO and founder, told South­east Asia Globe. He said the com­pany bases its busi­ness model on the NFL, which earns $7 bil­lion a year in me­dia rights, a deal that equates to $200m per team. “Of course, we do look at tick­et­ing, spon­sor­ship rev­enue and mer­chan­dise also. But those are less of a fo­cus,” he said.

In purely busi­ness terms, putting on events is es­sen­tially a means to an end. They are ef­fec­tive mar­ket­ing tools for build­ing a loyal fan base and in­creas­ing view­er­ship, but they are also ex­pen­sive.

“It doesn’t mat­ter what pro­mo­tion you look at, whether it’s UFC, One Cham­pi­onship, Bel­la­tor, what­ever – the ticket rev­enue is never cov­er­ing the costs as­so­ci­ated with that event. You’re mak­ing money on the broad­cast,” said Carr. “We’ve al­ways used in­ter­na­tional events… to give fans a chance to ex­pe­ri­ence the brand in per­son. We get more cov­er­age in the me­dia when we come with a live event than we would do oth­er­wise. It’s just a way of putting the brand and the sport on the map in dif­fer­ent mar­kets.”

As it stands, UFC’s rev­enue is large enough to with­stand losses made by putting on shows in Asia, but One, de­spite record­ing rev­enues that are in “eight fig­ures and grow­ing very rapidly”, is only “very close to prof­itabil­ity”, ac­cord­ing to an in­ter­view Si­ty­o­d­tong gave to the Fi­nan­cial Times in June.

The Sin­ga­pore-based com­pany keeps a tight lid on its fi­nances, and it is, there­fore, dif­fi­cult to ac­cu­rately as­sess why it’s not turn­ing a profit. How­ever, given me­dia rights are its main source of rev­enue, it would seem that it is not mak­ing enough money from these deals to cover the losses as­so­ci­ated with putting on events. The catch-22 for One is that the most ef­fec­tive way of in­creas­ing the value of those deals is by putting on more events in or­der to in­crease its fan base and, hope­fully by ex­ten­sion, its view­er­ship.

Fore­casts based on data gath­ered by Nielsen, Face­book and Repu­com sug­gest that it cer­tainly stands a chance of be­com­ing prof­itable in the near fu­ture. Ac­cord­ing to that dataset, One ex­panded its broad­cast reach from 60 coun­tries in 2014 to 118 coun­tries in 2017, as well as in­creas­ing its so­cial me­dia video views from 312,000 to 600 mil­lion and its so­cial me­dia im­pres­sions from 352 mil­lion to 4.8 bil­lion dur­ing the same pe­riod.

As with a pair of trash-talk­ing MMA fight­ers, how­ever, both pro­mo­tions claim to rule the roost when it comes to TV view­er­ship sta­tis­tics in Asia, which ul­ti­mately de­ter­mine the value of the re­gional ca­ble and free-to-air broad­cast deals that make up the bulk of their rev­enue.

“UFC has done a won­der­ful job in the Western hemi­sphere, and I have noth­ing but re­spect for the UFC and what they have achieved there. But the re­al­ity to­day is there’s a global du­op­oly, right?” said Si­ty­o­d­tong. “We’re both mar­ket lead­ers in our re­spec­tive ter­ri­to­ries. Whether it’s sta­dium at­ten­dance, pen­e­tra­tion, fan­base, what­ever – One Cham­pi­onship is sig­nif­i­cantly larger than UFC here in Asia.”

The idea of a global MMA du­op­oly has been ac­cepted into con­ven­tional wis­dom across South­east Asia, and scrupu­lously ped­dled by One’s slick PR ma­chine, which points to the data sup­port­ing its claim of re­gional hege­mony.

A dif­fer­ent Nielsen dataset made pub­lic by One shows that the live view­er­ship sta­tis­tics of its high­est-rated shows in 2017

have eclipsed those of UFC’s most-watched shows in three out of four key South­east Asian mar­kets. In In­done­sia, for ex­am­ple, One’s most suc­cess­ful event was watched on TV by 909,385 peo­ple, while the UFC’s reached 246,872. It was a sim­i­lar story in Malaysia and the Philip­pines, while the UFC marginally edged out One in Thailand with 572,559 view­ers to One’s 513,880.

How­ever, three days prior to the UFC’s most re­cent Sin­ga­pore event, the com­pany pub­lished a re­port by the Aus­tralian con­sul­tancy firm Fu­ture Sports + En­ter­tain­ment, which said that, in Asia, “the to­tal hours viewed of UFC con­tent [on TV] was 26 times more than the to­tal hours viewed of the next-largest MMA pro­mo­tion”, a fig­ure that Carr said re­flected the sim­ple fact that the UFC puts on more events than One. Si­ty­o­d­tong called the re­port “ho­cus po­cus”, and was not alone in not­ing the con­sul­tancy firm’s rel­a­tive ob­scu­rity.

Gab Pan­galan­gan, the edi­tor in chief of the Philip­pine MMA web­site Dojo Drifter, said that the UFC, which he de­scribed as “the con­sen­sus cream of the crop of MMA”, had a much larger fol­low­ing in the Philip­pines de­spite One’s “bevy of lo­cal fight­ers”.

“Ca­sual MMA fans would know about the UFC, while only the more hard­core fan would know about One. The sim­ple fact that boot­leg­gers are ped­dling fake UFC gear and not One gear means that the UFC brand­ing bears more weight or is more well-known, even to ca­sual fans,” he said. “UFC doesn’t have that many lo­cal fight­ers and still has a mas­sive fol­low­ing in the Philip­pines; imag­ine how much that would in­crease if they were able to sign more tal­ent and po­ten­tial stars from the Philip­pines.”

While ad­mit­ting the UFC would love to have an Asian cham­pion, Carr said that the re­gion suf­fered from a lack of MMA tal­ent and the pro­mo­tion would never put on lo­cal fight­ers for the sake of boost­ing at­ten­dances.

“In a per­fect world, we’d have had a Sin­ga­porean fighter [on the Sin­ga­pore card], but what we’ll never do is com­pro­mise the qual­ity and put some­one in there that shouldn’t be in there,” he said. “Part of [One’s] strat­egy is to have lo­cal fight­ers, and that works for them from a mar­ket­ing per­spec­tive. But we pride our­selves on the qual­ity of our com­pe­ti­tions… if you watch some­thing, you want to watch the best, right?”

How­ever, ac­cord­ing to James Goy­der, a jour­nal­ist who has cov­ered com­bat sports in Asia for a decade, Carr’s ex­pla­na­tion for the UFC’s lim­ited num­ber of top South­east Asian fight­ers doesn’t stand up to scru­tiny. In his eyes, One sim­ply got there first.

“If you look at the Filipinos UFC have signed – Roldan Sangcha-an, Mark Ed­diva, Jenel Lausa – Roldan is not even the best light­weight on his team, he’s the 4th- or 5th-best light­weight. The three or four best guys all signed with One. The op­por­tu­nity was there for [the UFC] in 2011/2012 when One was just start­ing up, but they didn’t [take it], and One signed them on long-term con­tracts” he said.

One has done “very, very well”, es­pe­cially given its short life­span, Goy­der added. The up­start or­gan­i­sa­tion also has the back­ing of a num­ber of pow­er­ful in­vestors. In July, the com­pany said it se­cured a “sig­nif­i­cant” in­vest­ment from Se­quoia In­dia and Mis­sion Hold­ings, bring­ing its to­tal cap­i­tal raised to $100m. The in­vest­ment came a year af­ter the com­pany had raised an “eight­fig­ure” in­vest­ment from Heli­co­nia Cap­i­tal Man­age­ment, a wholly owned sub­sidiary of Te­masek Hold­ings, Sin­ga­pore’s sov­er­eign wealth fund – an un­de­ni­ably pow­er­ful ally.

Si­ty­o­d­tong also plans to ex­pand into Ja­pan and Korea within the next year and to take the com­pany pub­lic within three years – a move he be­lieves will help him re­alise his grandiose goals for One.

“I want all of Asia – its 4.4 bil­lion peo­ple – to rally around One Cham­pi­onship as the first truly pan-Asian sports me­dia prop­erty. And I think an IPO [ini­tial pub­lic of­fer­ing] will only fur­ther that cause,” said Si­ty­o­d­tong. “We want to hold 52 live events in ev­ery iconic ma­jor city across Asia. That’s the ul­ti­mate dream for me, the ul­ti­mate vi­sion, where we truly be­come Asia’s first multi­bil­lion-dol­lar sports me­dia prop­erty and part of ev­ery­day life.”

Ul­ti­mately, in the world of busi­ness, the numbers that mat­ter are those on a com­pany’s profit and loss state­ment. In this re­gard, at least, both the global su­per­star and the re­gional chal­lenger are still try­ing to land the knock­out blow in Asia.

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