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All Business - Carter ALL BUSINESS: The UFC's 10 Year Expansion Plan - Step 4 - The Acquisition of Strikeforce - Global Expansion Needs A Strong Home Base
Mar 13, 2011 - 10:31:17 AM
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By Alvin Benjamin Carter III, MMA Torch Specialist
Two thoughts immediately came to mind when the news broke that Zuffa, LLC bought Strikeforce. All the fights we thought we might not get to see could potentially start happening in the next year, and this could be the end of the line for the women fighters of Strikeforce if the brand is dismantled after all contracts run their course. While those items are intriguing to me, I do realize the real story is the UFC has taken yet another step in their quest to make the UFC (and MMA) the bigggest sport in the world by 2020.
As the UFC continues to take massive steps to mimic their stateside success in various corners of the world, they have surpassed their most recent move in expansion (the WEC/UFC merger) with the purchase of Strikeforce.
Most great companies that have successfully entered into global markets have a superior hold on the competition in their home country. A firm home base is a key factor in global expansion, acquiring Strikeforce's resources (talent, video library, and television deals) and allowing them to still run somewhat independent is a possible blue print for how the UFC's foreign markets will run. We have already seen this a bit with the UFC's expansion into Canada and China. There is a separate head of operations for each region the UFC has formally expanded in as Dana White and Lorenzo Fertitta cannot possibly make every decision in every market as the company expands. In the case of Strikeforce, everything will run as normal and Dana White will not be dealing with Scott Coker any differently than he has in the past.
Theoretically, this "business as usual" stance allows for the UFC to capitalize on the second largest MMA promotion's steam and then fully absorb the brand when the time is right. The problem, as MMA Torch Supervising Editor Wade Keller already alluded to, is that this laissez-faire attitude might not last for long. While making money from a newly purchased machine is a great idea, I find it hard to believe that the UFC won't find a way to take the parts they need from it and discard the rest sooner rather than later.
The new talent pool stands out as the most important part of this deal, as there are now even more well known fighters to help populate cards in various countries. As the UFC grows even larger, Cain Velasquez, Anderson Silva, and Jon Jones cannot fight every other month just so every continent gets a similar UFC experience/product. Now, there is a possibility that fighters like Alistair Overeem, Nick Diaz and Gilbert Melendez can headline cards in the US or anywhere in the world. The UFC has acquired stars that have everything except for the all important UFC brand and hype machine behind them. I find it hard to believe that this new pool of talent will not get swallowed up quicker than suggested. And, let's face it, everyone loves a great unification title bout.
Now there is still Bellator which will eventually be considered the number two promotion providing the Strikeforce brand is dissolved or re-purposed at some point. The distance between the number one and number two MMA promotions will be staggering if this takes place. White claims it is unlikely that they purchase Bellator as well, and I kind of believe that as there really is not any threat from the tournament based promotion to date. The only pressing talents of interest would most likely be Eddie Alvarez and maybe Hector Lombard, and that is not reason enough to buy another company.
Zuffa, LLC/UFC keeps reaffirming their place as an elite business, not just a great MMA promotion. Dana White's reference to the Viacom split should allude to that fact that these are not fight promoters that have a good business going. These are adept businessmen who have decided to make their mark in global fight promotion. There is a difference, and I believe that is what has separated the UFC and most other fight promotions all along.
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