UFC's latest multi-million dollar deal involves huge venue fees to take fight cards to new locations

A big part of the UFC's latest business strategy revolves around venue fees and incentives paid by cities, states or countries to host major events through the promotion.

The upcoming UFC card in Saudi Arabia on June 22 is a perfect example. The Middle Eastern country reportedly paid around $20 million to bring the UFC here for the first time. Weeks before the event, Saudi Arabian Entertainment General Authority chairman Turki Alalshikh announced a new deal with the UFC to stage another event in Saudi Arabia in 2025, announcing Riyadh Season – an annual sports festival of music, arts and sporting events – will sponsor the upcoming UFC 306 card at the Sphere in Las Vegas in September.

While no financial figures were disclosed, TKO Group Holdings president Mark Shapiro provided some insight into the UFC's lucrative business of venue fees and how this could become a central focus for the promotion going forward.

“This is a huge opportunity and an important part of our strategy,” Shapiro said at the J.P. Morgan Technology, Media and Communications Conference. “I said before [about] The main KPIs (key performance indicators) we are working on are attendance, pricing and venue fees.

“Listen, if we're going to bring the show to town, we're going to be looking for an incentive package. It doesn't always have to be straight cash, but it has to be a significant incentive package. Because once again, demand exceeds supply.

Venue fees essentially boil down to the funding and incentives a city, state or country needs to get a major UFC card.

Cash upfront can certainly come into play, such as Saudi Arabia investing $20 million just to get the UFC here for an event. Elsewhere, it could mean a city or state covering marketing and advertising costs, or perhaps offering tax incentives to get a UFC fight card.

Shapiro did not disclose the exact amount paid to the UFC when it came to the latest deal with Saudi Arabia, but based on the initial venue fee, the funding for a single event could end up being closer to $40 million.

“You've seen us monetize it through fees from Saudi Arabian sites like WWE,” Shapiro explained. “You can expect us to expand our current deals over the next six to 12 months. Very pleased with MBS (Mohammed bin Salman) and the partnership we have there. We have two events a year but we have There are discussions – and Nick Khan is leading that for us – to expand that to more events and we also have a fantastic deal with the UFC in Abu Dhabi where we're getting a lot of venue fees and incentives packages and. We have now expanded our partnership with them to do other ancillary activities, if you will, in the Middle East where they are involved as we sell them to different countries.

“We have now expanded our relationship with Saudi Arabia and not only are hosting a UFC event this June, but we have also announced that we will host another event next year at almost double the cost. I want to tell you that if we have hosted One event, we're going to have a long-term deal with Saudi Arabia. So that's another way of saying that as long as everything goes well in June, as we anticipate, I think Dana White will be very willing to do it in Saudi Arabia. Long term agreement.

Shapiro said demand for the UFC is higher than ever, so charging venue fees to venues looking to get fight cards makes sense for the business.

Cities and countries around the world have invested heavily in bringing UFC pay-per-view to town, with the promotion heading to Newark, New Jersey in June and Manchester, England, in July, among other places.

Ultimately, Shapiro expects even a UFC Fight Night card to command hefty fees, and he won't need anything more than the recent event in St. Louis to prove demand exists.

“We charge pay-per-view venue fees in the UFC – which is important in the U.S. and internationally, especially in the U.S. – and we're going to start asking for the same incentive package that brings [WWE] raw To the city, take [WWE] smack down Come to town, bring our fight night to town,” Shapiro said. “So we just had a UFC Fight Night in St. Louis a week ago, and our fight night in St. Louis had the highest gross revenue in the history of the UFC. Highest ever.

“We're just talking about a regular card. I was actually there. Budweiser is our partner, that's their home, it's a huge event, and that's something that hasn't been there since pre-pandemic.” The demand and desire are so insatiable that audiences are ready to pay record prices for tickets.

As part of a plan to pursue venue fees and incentive packages, TKO announced Thursday that the live events groups of UFC and WWE will merge under the leadership of Peter Dropick, the UFC's longtime Senior executive, currently executive vice president.

The directive to the newly merged live events group seeks to “drive revenue growth strategies for UFC and WWE across key areas, including live event development and programming, travel incentive programs, ticketing and fan experience.”

“The demand for live sports and entertainment has never been stronger, and we believe our event portfolio will continue to drive the growth of our business,” TKO chief financial officer Andrew Schleimer said in the release. “The newly integrated TKO live events strategy team will focus on to improve operational efficiencies and develop strategies to capitalize on the wider economic benefits we bring to host cities, including working with local governments and maximizing venue fee revenue opportunities.”

Conor McGregor returns to UFC 303 at T-Mobile Arena in Las Vegas on June 29. UFC CEO Dana White recently revealed that ticket sales for the event have exceeded $20 million, setting a record for the event.

Shapiro expects UFC ticket sales to continue to be successful in the future, with the event bringing in huge amounts of money for the tourism industry and local businesses. The UFC is now expected to charge venue fees for the Fight Night card, which could determine how many events end up taking place outside of UFC APEX while the promotion controls costs and handles production in-house.

That's why the message to any city, state or country is clear: If you want the UFC to come to town, you better be prepared to pay the price.

“We'd like to see incentive packages so that we can bring these fights to town,” Shapiro said. “I think there's tremendous upside. We have a team working on this around the clock and we have high expectations for management, Frankly, there is also a strong imperative for us to implement this strategy.

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