Ziyavudin Magomedov's Fight Club: how to earn on ultimate fighting

Ziyavudin Magomedov, co-owner of Summa Group, goes in for martial arts and hopes to do business on them: he became co-owner of the club and promotion company Eurasia Fight Nights. Will it be possible to make money on it?
Origin source
The hall Fight Nights club on Kutuzovsky Prospekt echo rolled out coach: «Push-ups! More! ! Again »With large glossy posters on the walls watching the main stars of the club - Vladimir Mineev, world champion in kickboxing versions World Kickboxing Association (WKA) and the World Association of Kickboxing Organizations (WAKO-PRO), and Vitaly Minakov, the current world champion in mixed martial arts version Bellator. Sami mine and Minakov warm up immediately: in life they appear more severe than on posters with artistic retouching.

In the midst of Ziyavudin Magomedov workout appears in the club - without a jacket and tie, but in black and red tracksuit. Security remains waiting in the lobby, and a businessman walks into a gym. With him several members of the "Amount", as well as founder and CEO producers Fight Nights and Kamil Gadzhiev Sangadzhi Tarbaev. Magomedov is clearly not the first time - it is of particular interest, it seems, only the photographer RBC, athletes calmly continue training.

Magomedov joins the group to warm up: with all the running around, pushed, somersaults and squats, then about half an hour Negated percussion techniques with a partner, and then goes to the top of the bar bench press. On the camera, or in the framework of the ordinary training, but 100 kg Magomedov shakes quietly. With the coach of the club, the huge tattooed Kamel, in English, he discusses further exercises, explaining afterward that the Frenchman has been his personal workouts.

For working off of wrestling techniques Magomedov already watching from the side: the men are desperately trying to squeeze each other to the floor. This is the essence of mixed martial arts, gained popularity in the 1990s: the fighters in any direction, the school and the style can meet in the ring and find out who is stronger.

Business of childhood

"Of course, the roots of this passion come from childhood. Grow in the streets of Makhachkala, was itself a kind of sport. Conflicts are often settled on a man, sometimes these clashes there were several times a day - says in an interview with RBC Magomedov - but it is better to show their fighting skills in the ring. " This is a direct reference to the motto of Fight Nights «Do you want to fight - Fight in the ring", which is everywhere, from posters to t-shirts branded.

Forbes magazinein 2015, he estimated the state Ziyavudin Magomedov at $ 800 million. It owns a group of "Sum", which owns 25% of Novorossiysk Commercial Sea Port, 49.99% Fesco transport group, engineering company "Transinzhiniring" gas production Yakutsk Fuel and Energy Company, as well as 50% minus one share unification grain company. In a number of the "sum" of assets, for example, NCSP and engineering business, has a share of Magomed Magomedov, brother Ziyavudin.

Eurasia Fight Nights (FN) clearly stands out of the rest of Magomedov's assets. Its owner was the businessman a few months ago. The club was founded in 2010, the absolute world champion in kickboxing Batu Hasikov, vice-president of the Moscow Federation of mixed martial arts MMA Kamil Gadzhiev and captain of KVN team "Team PFUR" Sangadzhi Tarbaev. Later, one of the co-owners of the club included the managing director of the Moscow office of the investment bank Goldman Sachs Sergei Arsenyev and designer Sergei Shanovich.

What is a mixed martial arts

Mixed Martial Arts (English Mixed Martial Arts, MMA.) - Form of martial arts, which is aimbioz different combat techniques and schools of interest and answering a lot of questions: "If you meet a boxer and a wrestler - who will win?"

Fights in MMA are conducted in full contact, fighters can be used as a shock, and wrestling techniques. Standard battle lasts three rounds of five minutes, with breaks for one minute, the title fight - five rounds. Battles take place in the "cage" - on-site 8x8 m with a fence, which does not allow fighters to go beyond the ring.

At the initial stage tournaments in MMA is sometimes promoted as "fighting without rules", which was the advertising slogan and does not correspond to reality. According to a 2015 report of the American Association of Ringside Physicians (ARP) in professional boxing for the past 25 years, died in the ring in an average of 4.8 per year athlete in the UFC (the main American organization MMA) - 0,28 athlete per year over 15 years.

Russia recognized mixed martial arts as an official sport in 2012.

What was Club Fight Nights as a business to deal with Magomedov, is unclear. According to Kamil Gadzhiev, the annual turnover of FN & mdash; 350 million rubles. and another to deal with the business Magomedov came to self-sufficiency. But check out his words can not. The database "SPARK-Interfax" the financial performance of "Fight Knights", the founders of which are registered and Hasikov Hajiyev, in 2013 and 2014 are identical: revenue - 9,517,000 rubles, net loss - 18.7 million rubles.. Other companies associated with Fight Nights by founders - "Fight Knights Jim," "Fight Knights Global", "Fight Knights Interteynment", "Eurasia Sport" and "Sport Sum" - do not publish financial statements. Moreover, most of them created in 2013-2014.

What exactly is bought Magomedov, also not clear how the deal is framed legally, neither the Magomedov nor his representatives have not commented. In view of previous investment in the club - a club fighters sponsorship, assistance in organizing events and advertising - the amount of the transaction amounted to "several tens of millions of dollars," said RBC Kamil Gadzhiev, words which confirm the representative Magomedov.

"Sum" is the first in the list of "general partners" in the club's website. Group, for example, sponsored the opening of a sports club in Makhachkala FN: Magomedov was personally present at the tournament Fight Nights Dagestan. The businessman says that is engaged in several times a week, often in the Moscow club Fight Nights.

Fighting profit

In addition to the club on Kutuzovsky Prospekt in FN, there are three - in Elista, Makhachkala, and Bryansk. The Moscow club are not only training in mixed martial arts, and boxing, cross-Fitou and even yoga and Pilates. In the corporate online store can be ordered with delivery clothing and sports accessories with logos FN and autographs of the stars. But the main business Fight Nights - the organization of fights in mixed martial arts: in 2014 FN fighters participated in five fights in 2015 - nine (including St. Petersburg, Sochi and the Caspian Sea). Fight Nights also conducted its own club championship in Moscow.

Basic income, according to Hajiyev, the club brought ticket sales, television broadcasting and advertising. Tickets for the final event the FN "Battle 20" in the "Luzhniki" on December 11 cost of 1 thousand. To 70 thousand. Rub. It places in the stalls at the price of 5 thousand. Rub. Efforts were also"Two master classes with the champion." According to Hajiyev, the preceding events of this level could attract 6-7 thousand. Viewers, ie FN tickets can earn about 15-20 million rubles. But the costs of organizing the event is not a cover - it costs no less than 30 million rubles, recognizes Hajiyev..

On organized Fight Nights battle Russian Mikhail Mohnatkina the Brazilian Ednaldo Oliveira on October 23 in St. Petersburg Ice Palace was sold 6 thousand. Tickets, said Hajiyev. Income from ticket sales barely cover 30% of total expenditure, the rest should theoretically cover television broadcasting and advertising. In addition to broadcasts on the "Match TV" all the top fights FN charge broadcast on the Internet, at the joint with the Ultimate Fighting Championship (UFC) channel UFC Fight Pass - of the cost of an average of $ 10 per night. On what conditions the channel broadcasts the fights in "Match TV" does not comment.

The world's largest promoter of MMA UFC US annually spends about 40 fights, not only in North America and Latin America, but also in Europe, Australia and the United Arab Emirates. For the audience it is not cheap entertainment: for example, to fightAldo vs. McGregor December 12 at MGM Grand Garden Arena in Las Vegas at the time of preparation of this material could buy tickets cost from $ 505 to $ 6900. In this UFC can not boast of high-yield business.

UFC above all

Ultimate Fighting Championship (UFC) - the promotion company in the US, the world's largest organizer of MMA fighting. Initially, it was an experimental, one-time championship. But the success of the first tournament in Denver in 1993, inspired by Art Davie businessman and a teacher of the school of Brazilian Jiu-Jitsu Rorion Gracie to create his own company. In 2001, the company purchased for $ 2 million Fertitta brothers, owners of Station Casinos casino network. General producer and president of the UFC was the promoter of boxing matches Dana White (pictured).

Fertitta brothers bought and merged with the UFC, most global competitors, including the Pride Fighting Championships. The annual turnover of Zuffa, the UFC parent company, is, according to various estimates, from $ 250 million to $ 350 million. According to Forbes magazine, is 90% of the global revenues of MMA in the field.

According to the agency S & P, up to 75% of the company's revenue accounted for the sale of television rights. agreementbut the report Zuffa in 2014 the company's revenue was $ 554 million. According to S & P, the company, EBITDA decreased from 2010 due to the high cost of buying competitors and foreign events. Debt Zuffa - about $ 450 million in early 2015 the first S & P forecasted decline in EBITDA by 40% and lowered its rating to BB- Zuffa..

If the world's largest promoter of fights in mixed martial arts business is not too smooth, it can count on a very small club on the background of UFC Fight Nights? Magomedov's investment will "contribute to the expansion of business» FN, said Hajiyev. In addition to raising the level of activities and broadcast FN wants to focus its efforts on marketing and building an audience. This means more advertising, including the outer one. Hajiyev said that "it perfectly shows itself in the regions."

But this commercial success of sports events need not only spectators in the stadiums, but also in screens, while the audience becomes interested in large advertisers and TV channels are willing to pay for the rights to broadcast. UFC TV audience reaches 800 million people inyear - watch the fights can be not only on TV but also on the Internet (monthly subscription costs € 7,99). In 2011, the UFC signed a seven-year contract to broadcast from Fox Sports. Its value, according to the newspaper The Telegraph, $ 700 million.

Stars and money

In Russia, he began to broadcast "TV Game" top UFC fights in the autumn, before their show "Russia 2" channel. "The format of the UFC, of ​​course, claimed, in MMA has a steadily growing audience in our country", - said the representative of "Match TV". Duel sixfold champion Ronda Rousey UFC contender for the title with Holly Holm November 16 to "Match TV" viewers watched 5.8% of men aged 25-59 years. "The figures clearly demonstrated the potential of such a product," - said the representative of the channel, but to talk about the possible prospects broadcasts fights Fight Nights, he does not want to.

The main Russian competitor FN - promotional company M-1 Global. Its founder and co-owner of the largest Vadim Finkelstein said in an interview with RBC that'm not sure that the translation of mixed martial arts in the Russian TV this source of income, but not morecosts. According to him, TV channels or do not pay for the right to broadcast at all, or pay very little. And for viewers image of mixed martial arts is blurred due to the fact that in themselves MMA in Russia there is no clear patterns of sports and almost everyone can open their federation. "The viewer is no longer remembers its heroes, and not willing to pay per view", - says Finkelstein.

But FN believe that a world-class event with the participation of Russian athletes and spectators will be interesting and federal channels. "Ideally, the regions will hurt everyone for their fighters, the audience there is a very open and interested. Yes, you will need advertising, but it will be our stars, "- says Hajiyev.

On the promotion of the athlete to the level of media persons, for which "the audience will", takes an average of three years and $ 1.2 million, said Hajiyev. For large Event such fighters should not be less than four. FN in the tournament grid is not so that a top event - it's one or two-star headliner fight several bouts midrange and entertaining show with singers, actorsand dancing. "Recapture" their only selling broadcasting rights will be difficult, says the analyst of a large agency specializing in sports advertising. "If a federal channel broadcast will buy this, even for a top fight more than 3 million rubles. no one will pay, "- he said.

Fighting economy

$ 5 million - a record fee in the UFC, Dana White, according to (the recipient is unknown)

$ 180 000 - fee Holly Hill for victory over Ronda Rousey, November 2015

$ 24 500 - the average fee fighter in the UFC for a fight

$ 50 - the price paid subscription to the broadcast of a top fight

Sources: The Economist, UFC

The only chance to at least recoup the costs of organizing the show - to sell sponsorship and advertising packages. In this sense, the MMA good prospects, says the managing director of an advertising agency OMD Fuse Anton Efimov: "Their main target audience - men who watch them on TV, men with high income - a core audience, attending the competition and a stable marketing platform for brands that want to build an association with power and thsets. " With this in mind the cost of the proposal at this show may be 10 million rubles. or higher in a single evening Efimov counts. But there is another problem, he says: "In the martial arts there is no permanent schedule as in football or hockey, and make a map of the Partnership even a year is very difficult."

The representative of another large advertising agency even this modest optimism is not shared: "In Russia, even in the football broadcast audience is not always large enough to give it publicity. And MMA is unlikely to attract serious money. " According to him, the FN, the UFC and other similar organizations are not open its financial statements because it is all will be clear - "no income, there is only momentum." Only in this sense, a chance for the promoter - a major sponsorship deal, in which the advertiser is important not only to the size of the audience, but also the fashion element of the sport adds the representative of an advertising agency.

UFC has signed the largest in its 21-year history of the sponsorship deal in 2015: for the right to become an official Supplies andcom equipment Reebok will pay $ 70 million over six years. In this year's list of sponsors -. Motorcycle Harley-Davidson, Bud Light beer, Toyo tires, etc. Ideally, such a contract must be signed Fight Nights, but is in the FN mulling the previous stage of development of the UFC - the launch of their own reality show.

The show The Ultimate Fighter on American TV began in 2005. In the first series of the show compete with each other 16 fighters of the two teams, spectators can follow their training and the details of everyday life. Losing eliminated in the season finale, the two fighters are fighting for the title of The Ultimate Fighter and a major contract in the UFC. Start the new season in September 2015, of seeing 745 thousand. Spectators. Show UFC allowed not only to expand the television audience, but also to change it, said the head of the UFC Dana White: "When we bought this company, our main audience were men between 18 and 34 years. After the screens The Ultimate Fighter <...> women make up 45% of our audience. "

"If we really want to gain a critical mass of viewers, our battles have become a family spectacle, including for women," - agrees Hajiyev. Specific launch datesshow at FN yet. The representative of "Match TV" comment refused this idea.

"Images of the characters"

Home Russian star of mixed martial arts Fedor Emelianenko was unable to agree on the performances in the UFC. But in the American organization has fighters from Russia, such as Habib Nurmagomedov and Rustam Habil. Preparing fighters this level, too, the form of income, which is calculated on the co-owners of the FN.

"We have not only the promotion company, but also a base, a kind of incubator sport's top fighters, who prepares the stars of world-class MMA," - said Hajiyev. While not supplying FN fighters in the UFC, but the same Minakov, who won the championship belt for the US version of MMA Bellator, the first candidate. "In the UFC in the leading roles, our lightweight Ali Bagautinov. I think that a couple of years and our other athletes, such as Volodya mine and Sergey, could act with success in the UFC, and they will strive for this ", - said Magomedov.

The last Emperor

The most titled Russian mixed martial arts fighter - 39-year-old resident of Stary Oskol Fedor EmelEHKO nicknamed The Last Emperor. On account of his titles four times world champion in MMA Heavyweight Pride FC, twice - RINGS version and version WAMMA. Attempts talks about speech Fedor in the UFC failed.

In the summer of 2015 Emelianenko announced his return to the ring after a three-year pause, the first battle will take place on December 31 at Japan, it will hold a local organization MMA Rizin Fighting Federation. Rival Fedor will be 28-year-old Jaideep Singh.

Fighting Fedor Emelianenko

34 wins (ten - by knockout, 18 - voluntary surrender)

4 defeats (three - by knockout, one - voluntary surrender)

Source: Sherdog.com

In theory, the club can earn on their fighters, mediating between the high-level athletes and promoters, who shared with them the fees and sponsorship contracts. But the seats in the UFC just enough, and the high cost of flights, coaches, medical support, promotion and maintenance of a fighter in a few years make these investments very risky. Vadim Finkelstein said the idea unfeasible - in his words, such precedents nm.

Magomedov said that Fight Nights will be "to create images of the heroes of Russian" and distribute "standards of a healthy lifestyle, philosophy, fortitude, perseverance and skill." But it says it hopes to also make these investments. The sports component Fight Nights already comparable with the UFC, he said: "This is a long term investment. Three to five years will need to continue to build an audience, although it is already big enough. But the most important - and even teach the audience to pay for entertainment. "

In the list of 50 highest-grossing cultural events in Russia, published in the RBC magazine in July, relative to the "sport" were only ice show and race "Formula 1". At the top were not even football matches, and earn martial arts in Russia - the problem is much more complex than the education of strong and skillful fighters. M-1 Global, Russia's first promotional organization in the field of mixed martial arts, already gave up trying to make money in the country, focusing on the markets of Asia and Eastern Europe. "With the Russian audience to take in ethat regard, it is nothing "- sums up sullenly Vadim Finkelstein.