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8B10A12
Teaching Note
THE ULTIMATE FIGHTING CHAMPIONSHIPS (UFC): THE EVOLUTION
OF A SPORT
Jesse Baker wrote this teaching note under the supervision of Matthew Thomson as an aid to instructors in the classroom use of the
case The Ultimate Fighting Championships (UFC): The Evolution Of A Sport, No. 9B10A012. This teaching note should not be used
in any way that would prejudice the future use of the case.
Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of
this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to
CASE SYNOPSIS
evaluate the company’s sponsorship relationships and develop a strategy to cope with increasing
competition in both domestic and international markets.
TEACHING LEVELS
Undergraduate: Less Senior Courses
Marketing
Strategic Analysis & Action
Undergraduate: More Senior Courses
Strategic Analysis & Action II
Entrepreneurship
• Managing Rapidly Growing Businesses
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Marketing
• Advertising & Promotions
• Marketing Planning
• Brand Management
• Negotiations
ISSUES AND DECISIONS
1. Should the UFC be marketed as a “sport” or as a “show”? That is, does the company want its events to
be perceived as sport? Is the promotion of the events as shows more in line with how the company is
running its business?
2. How does the UFC use publicity and the chief executive officer (CEO), Dana White, to promote
events in new international markets? How will the UFC manage the brand through expansion?
3. How will the UFC continue (1) to develop new talent in the league and (2) to maintain its dominant
market position? How will the UFC maintain a competitive advantage against increasing competition?
4. How will the UFC solve sponsorship issues and develop strategic marketing partnerships? Does the
UFC need these partnerships? How will sponsorship royalties affect the UFC? Has the UFC targeted
the appropriate sponsors? What sponsors will the UFC target for partners in new markets?
5. As the sport grows, how will fighter compensation change to better match that of other major sports
leagues?
CURRENT MARKETING SITUATION
Industry, Market, Environment Analysis
How has the UFC’s historical development defined the way the organization markets the league?
In the past, controversy has defined the growth of the league. Since the beginning, the issues surrounding
ratification by state athletic commissions and conflict with high-profile Senator John McCain restricted the
How does the UFC need to change to adapt to a growing market?
The growth of the MMA market in the United States means that consumers are becoming more educated
and increasingly interested in the all aspects of the sport. Both core fan segments, boxing and WWE, are
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develop a strategy that accurately reaches both market segments. As a result, the UFC could be left either
stuck between two divided markets or pushed out completely.
How should the UFC approach new international markets given these markets’ vast differences
from the North American market?
The international market for MMA is far more developed than the North American market. The UFC has
been able to use a wide range of free publicity outlets and cable television programming to promote events
markets that the company does not fully understand.
In early 2010, the league sold a 10 per cent stake to the Abu Dhabi government. The UFC is currently in
the process of building a new 10,000-seat arena to launch UFC events in the cultural mecca of the United
Company
What are the biggest factors contributing to the UFC’s early success? What has the UFC done
well to align its business so closely with the sport of MMA in the United States? Is this approach
sustainable through the UFC’s international expansion
Regardless of sporting category, the UFC is among the best in the world at generating publicity across all
One of the biggest factors contributing to the success of the UFC is the organization’s management team.
This team has pursued a unique strategy in which company president, Dana White, has been the main link
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The Fertitta brothers have a background in gambling and boxing. They are known for taking risks, many of
which have led to the success of the UFC today. However, as the organization matures, the ambitions of
The UFC has been able to promote its events with relatively low marketing expenses because of its cable
television programming, such as The Ultimate Fighter and UFC Fight Night. This arrangement has
allowed the UFC to develop rivalries between popular fighters for the purpose of fueling disputes and
driving buys for pay-per-view events that follow. This approach will not be possible in many new markets
How well has the UFC managed its sponsors? What strategy will the UFC need if it wishes to
develop strategic sponsors in international markets?
reflects a mutually beneficial relationship. The UFC also needs to establish a metric for evaluating the
success of these initiatives. The UFC should reconsider whether the Harley-Davidson sponsorship fits the
criterion of being a mutually beneficial relationship, given the target market for Harley-Davidsons.
On an international scale, the UFC needs to re-evaluate the type of sponsors it chooses and how it develops
these relationships. This process will require an in-depth knowledge of UFC’s local fan base to identify the
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connections between their targeted fan base and the consumers of the companies they are looking to
partner with.
Competition
Who are the UFC’s main competitors? Domestically? Internationally
Affliction Entertainment
Affliction Entertainment is a promotions company created by Affliction Clothing. The company was
looking to challenge the UFC in the United States after running into disputes with UFC over royalties.
Strikeforce
Strikeforce is a California-based fight league that airs live fights on cable television network CBS. After
Elite XC
Elite XC is also looking to challenge the UFC for market share in the United States. However, Elite XC
HDNet
HDNet is a cable network created by Mark Cuban, entrepreneur and owner of the National Basketball
International Fight League (IFL)
The IFL is a well-established fight league with a huge presence overseas. The IFL has yet to challenge the
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DREAM
What is the UFC doing to protect its market share?
Within the United States, the UFC was facing increasing competition from emerging organizations, such as
bought the league, closed its doors and forced its fighters to compete in the UFC.
Were the right decisions made with regards to competitors and fighters? How will they need to
In the domestic market, if the UFC wishes to operate as a “spectacle” that develops characters and rivalries
The UFC’s strategy with PRIDE has essentially eliminated a huge pool of new talented fighters in Asia
that could have been developed to eventually fight in the UFC. Going forward, the UFC will need to
consider the long-term implications of such decisions. If new acquisition opportunities present themselves
Other international organizations, such as the International Fight League, have already established
themselves in many of these markets. Due to the UFC’s huge success in the United States, it may believe
that it can control all the fight content being offered worldwide. However, the UFC would benefit from
developing partnerships with other fight leagues so that it first establishes its presence in specific markets.
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protect the UFC from losing its fighters to other leagues and could also give priority to UFC events to
overcome potential conflicts.
An important component of this proposed strategy, and for any sustainable long-term growth strategy for
the UFC, is to increase the attractiveness of the UFC to fighters by offering the best employment
opportunities. If the league wants to continue to be considered “the number-one league for the world’s best
fighters,” it will need to compensate athletes to better reflect this reputation. Currently, the UFC’s market
Who is the UFC’s biggest competition?
Going forward, if the UFC wishes to protect its market share, it will need to take both domestic and
international competitors seriously. Given the current, aggressive expansion strategy, the UCF should be
focusing on the threat that international, established competitors will pose in each new market. For
to develop effective foreign marketing strategies.
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Customers
Who has the UFC identified as its main customer segments?
The UFC has targeted a male audience aged 18 to 36. This target audience can be divided into two main
customer segments. First are World Wresting Entertainment (WWE) fans, who are drawn to MMA for its
entertainment value. These fans are more concerned with the show that surrounds the event, including the
development of rivalries between fighters. The other segment consists of boxing fans who are interested in
initiatives.
Is the UFC targeting the right customer segments
establish relationships with in the future. If the UFC is able to convey the value of the league’s female fan
base to potential sponsors, then the organization will be able to generate a wide range of new sponsorship
opportunities.
primary fan bases.
Other competition is also emerging, and, depending on how these competitors choose to market their
respective organizations, the relative perception of the UFC may also change. As a result, fans’ original
How does the UFC both retain its core fan base and manage its international fan base?
The UFC can most effectively retain the league’s core fan base in the United States by continuing to offer
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needs to ensure it has a large enough pool of talent to continually improve the quality of the events in the
United States, as it has done in the past.
The UFC also needs to consider foreign perceptions of the league in new markets, such as the perception
that UFC-style MMA has “Americanized” the sport, which may limit the league’s appeal in certain
geographic areas, such as Japan. This perception of UFC can be overcome by partnering with local
Can you think of any other potential customer segments that have not been considered?
Although not mentioned in the case, another specific fan segment has been identified within the existing
unprofessional comments and behavior.
Also, as the UFC continues to expand internationally, it will need to pay attention to specific niche fan
DECISION CRITERIA AND OBJECTIVES
alienating the core fan base
IDENTIFICATION OF ALTERNATIVES
American market
• Increase international expansion opportunities to reach as many new markets as possible
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KEY TAKEAWAYS
reflects the goals of the organization.
provide value in different areas and at different stages of the organization’s development. The full
value of strategic marketing partnerships can only be achieved when the goals of both organizations
are full known and are aligned for the purpose of the working relationship.