UFC is expanding its presence in Mexico, the MMA giant’s latest targeted push to train more elite fighters, and therefore grow its commercial presence, in new markets.
On Tuesday, the Endeavor-owned company announced the construction of a new performance center in Mexico City that is set to open by the end of year. These training facilities are the vanguard of UFC’s international strategy, which emphasizes the development of more elite fighters in markets where it already has many fans.
The playbook in Mexico may look similar to what UFC has done in China. In 2019, the company spent $13 million to build a 93,000-square-foot performance institute in Shanghai. It then partnered with the Chinese Olympic committee and signed a new media deal that doubled the value of its rights in the world’s most populous country. UFC currently has a number of competitive Chinese fighters, including women’s strawweight champion Zhang Weili, and ranked men Yadong Song and Su Mudaerji.
Endeavor (NYSE: EDR) is hoping to resolve a long-running anachronism of UFC’s business, wherein the vast majority of revenue comes from inside the U.S., while most of its fans are outside the country.
“We see continued strong growth and upside [internationally],” Endeavor CEO Ari Emanuel said on an earnings call last year. “As I’ve said in the past, 90% of our audience is outside the United States, and 10% of our revenues come from international rights.”
UFC isn’t starting from scratch in Mexico City. There are already 28 male and female UFC fighters from Mexico, a number that makes up less than 5% of the group’s total roster. They include men’s flyweight champion Brandon Moreno, who was born in Tijuana.
It’s not as notable, however, as the country’s storied history in boxing. And UFC knows that more elite Mexican MMA fighters would almost certainly impact the group’s commercial opportunity in the country, and possibly more broadly across Central and South America.
“We know that by making the resources and training available in the country, Mexico can become one of the greatest sources of MMA talent in the world,” UFC president Dana White said in a statement. “This is a massive opportunity for the sport of MMA and for athletes throughout Latin America.”
The performance institute in Mexico will be 32,000 square feet, which is smaller than what UFC built in Shanghai. While that facility also has the capacity to host small events, the one in Mexico will be entirely focused on training elite fighters. It will include a full coaching staff, plus the organization of grassroots events where up-and-coming fighters can gain notice.
While UFC’s main international growth seems to run through these performance centers, it is also utilizing new media to expand into critical foreign markets. Last month, the group shifted its media strategy in Brazil by ditching pay-TV in favor of its own Fight Pass product. UFC anticipates the shift could bring in five times more revenue than its prior set-up in the country.
Endeavor was part of a group that purchased UFC in 2016 for $4 billion. It agreed to purchase the nearly 50% that it didn’t own in 2021 in advance of the company going public. Endeavor’s stock is down about 32% in the past 12 months.