UFC's expansion into Europe is the subject of a major story posted today by THE NEW YORK TIMES, which you can read in its entirety HERE .  

 

The story, written by reporter R.M. Schneiderman, states the following:

 

In recent years, the Ultimate Fighting Championship has established itself as the leading brand of mixed martial arts in the United States, Canada and Britain.

 

Now, the U.F.C. hopes to replicate that success through a European expansion, focusing first in Germany and Italy, among others. In doing so, the company not only intends to step into new markets but also to create a fan base largely from scratch in countries that are culturally and linguistically disparate.

 

There is some precedent for success. The U.F.C. has helped legitimize a sport that was once considered by its critics to be little more than human cockfighting. In the United States and Canada combined, 7 of the top 10 pay-per-view events in 2007 in terms of revenue were U.F.C. promotions, according to Dave Meltzer, editor and chief of The Wrestling Observer, a trade publication that covers wrestling and mixed martial arts.

 

In the past 16 months in Europe, the U.F.C. has held five events, all sellouts. Dana White, the organization’s president, said those shows sold more than 60,000 tickets and generated $10 million in revenue.

 

In January, he said publicly that the European market was not profitable. But he and analysts said the company had experienced losses stemming from the costs of building and promoting a brand, not from a lack of fan interest.

The organization appears to be banking on the future.

 

“The U.F.C. sees a lot of potential for growth internationally,” said Adam Swift, the editor of mmapayout.com, a Web site devoted to the business of mixed martial arts. “But right now it’s more about laying the groundwork than fully realizing their gains.”

 

It might seem as if the U.F.C. could more easily expand into Japan or Brazil, where mixed martial arts has a longer history and is immensely popular. Yet some analysts said the sport’s reputation for corruption in Japan and a less affluent populace in Brazil might have made Europe more immediately attractive.

 

In a recent telephone interview, White said the U.F.C. could succeed in Europe because fighting sports have a universal appeal and do not require fans to study rule books. “Fighting is in our DNA,” he said. “We don’t need to know the rules.”

 

About 30 percent of the traffic on the U.F.C.’s Web site comes from outside the United States, White said.

But one challenge facing the organization is competing against established combat sports like boxing in Germany, savate in France and sambo in Russia.

 

Leading the effort will be Lorenzo Fertitta, the chief executive of Zuffa LLC, the privately held parent company of the U.F.C. Last month, Fertitta announced he was resigning as president of Station Casinos to focus full time on establishing the U.F.C.’s global brand. Aside from expanding into Europe, the organization eventually hopes to venture into the Philippines, Australia, India and Brazil, among other countries.

 

In Europe and elsewhere, one issue Fertitta will encounter is the development of local talent.

 

Tim Leidecker, the European correspondent for Sherdog.com, a mixed martial arts Web site, wrote in an e-mail message that many European fighters struggled to compete full time and support themselves financially.

 

Analysts said the U.F.C. might need to find only one local star in each country to make its live events successful. Georges St.-Pierre in Canada and Michael Bisping in Britain are viewed as local stars who make the sport popular in their markets.

 

Other factors for the U.F.C.’s push in Europe include merchandising and television programming.

 

Last month, the U.F.C. announced a four-year agreement with Jakks Pacific to produce action figures at home and abroad starting in 2009.

 

“The people in Europe pay a lot for merchandising,” said Oliver Copp, a writer for Ringside, a German-language magazine that covers mixed martial arts and professional wrestling. “Video games, action figures, magazines, DVDs — that’s where the company stands to profit most.”

 

That revenue could prove important in Europe, where pay-per-view programming is considered less viable than it is in the United States. Much of Ultimate Fighting Championship’s revenue comes from pay-per-view efforts, according to a report by Standard & Poor’s credit division. In November 2007, Standard & Poor’s placed a “negative” outlook on Zuffa, mentioning challenges to the U.F.C.’s international operations.

 

The U.F.C. is already on some sort of television in 130 countries, although most broadcasts amount to highlights from old fights. Some experts said it might take a European version of “The Ultimate Fighter,” the U.F.C.’s reality show on Spike TV, to create a larger fan base.

 

“In the U.S., everything took off with ‘The Ultimate Fighter,’ ” Copp said. “That’s when people understood that these guys are athletes.”