If you’re an investor or fund manager, you will always be on the lookout for exciting new markets. What’s the next big thing? Which sectors are growing? In its latest market analysis segment, we look at the world of MMA and why it’s fast-becoming an unavoidable opportunity.
By Simon Calton, CEO of the Carlton James Group
If I’d known when I’d started my career in finance and investing over 15 years ago that I’d be sitting here opining on the opportunity to invest in the sport of two grownups beating the living daylights out of each other, I’d have called you crazy.
But here we are. In a world of rising inflation, lowering interest rates, global equities hinging on a government leader’s tweets, and constant uncertainty stemming from trade wars – investing in alternative asset classes is a must for any investor, retail or institutional.
Up is down, down is up, and the strategies your parents and grandparents deployed for the past century need to be reconsidered and sometimes cast aside.
For some of us, this means the consideration of Mixed Martial Arts (MMA) as an attractive and very investable asset class.
POPULARITY OF MMA
The sport of Mixed Martial Arts has skyrocketed over the past decade – whilst originally perceived as organised brawls, MMA is now one of the fastest-growing sports world-wide, gaining notoriety through event organisation such as One Championship, Bellator and of course, the renowned Ultimate Fighting Championship (UFC).
The equality within the sport is another quite unique aspect, with the women’s divisions growing at a fierce rate and headlining Pay-Per-View (PPV) cards.
WHY YOU SHOULD INVEST
Its continued growth lies in part with the popularity of the UFC and its first mainstream programme – ‘The Ultimate Fighter’.
The UFC is the current pinnacle of the MMA world. At the forefront, the UFC was purchased in 2002 for $2m (£1.6m) and later sold in 2016 for over $4bn (£3.2bn), amounting to one of the highest value deals ever in sports
In 2018, UFC alone generated $700m (£570m) in revenue and accumulated a worth of $7bn (£5.7bn) after acquiring a gregarious $1.5bn (£1.2bn) TV contract with ESPN.
Currently, the UFC’s parent company is filing to go public, making investing into MMA much more accessible than it’s ever been before.
SURVIVING ECONOMIC CORRECTION
According to Nielsen Sports DNA, MMA maintains 451 million permeable fans. Quite surprisingly, its global presence is key to surviving the next global recession. 85% of MMA audiences lie outside of the U.S. regardless of the UFC’s presence in the U.S., dominating arguably the most profitable demographic world-wide.
With year-on-year growth, we’ve yet to see the sport mature, making investing into MMA, UFC and even other industries that surround them (such industries like media, clothing, sports nutrition, etc.) highly profitable. MMA is also culturally transformative, especially within the UK.
WHERE DOES MMA GO FROM HERE?
I’ve shared why many are bullish on MMA, but how does one capitalise on this unique and high-growth investment opportunity? The first objective, really for any investment, is to separate the real players from the opportunists. The truth is, MMA has been around for a while, it’s just now really hitting its stride. Industry “professionals” are jumping in and positioning themselves as MMA experts, but they’re likely more just good marketers or someone with deep media and operational experience.
By comparison, there are professionals and true “experts” who have been operating in the space for years, and understand the unique blend of entertainment, sports, media, and financials needed to scale an operation. If MMA is the “horse”, you need to find the right jockey.