The UFC crosses the event horizon into Saudi Arabia

Is the gravitational pull of Kingdom money an irresistible black hole for combat sports?

Saudi Arabia has become a dominant force in boxing after pulling off a string of heavyweight dream fights and now they’re talking shit about a grand power play in the whole sport.

The MMA Draw’s Zach Arnold recently outlined how a heavy reliance on arbitration clauses could allow the Saudis to get around American boxing’s Ali Act.

Now that the UFC is making its debut in Saudi Arabia — in a rescheduling of an event whose initial card didn’t pass muster with the hosts who are paying a reported $20 million for this event — there’s some speculation that the Saudis might be a likely candidate to acquire the promotion when Ari Emanuel has extracted enough value.

However, John Nash and others have pointed out that there are limits to Saudi cash, if not so much with their credit.

And even the NY Times subtitle about the Saudis points out something crucial, no one has signed the checks yet:

Note the highlighted phrase

We’ll come back to Nash’s reference to NEOM projects because they really show what kinds of colossal money-wasting nonsense the Saudis under MBS are getting up to on other fronts.

This is beyond business strategy and on to geopolitics, because as Karim Zidan said on our podcast last year:

“The world is not centered around the United States.” Karim Zidan

But, nonetheless, there’s a business analysis tool that might be helpful in handicapping the Saudi’s chances of running the boards in combat sports over the next decade.

I’m going to do a SWOT (Strengths, Weaknesses, Opportunities, Threats) after the paywall, to assess whether or not the Saudis can take over boxing, MMA, and pro-wrestling.

Investopedia says this about SWOT: “a framework used to evaluate a company's competitive position and to develop strategic planning. SWOT analysis assesses internal and external factors, as well as current and future potential.”

But back to what Karim had to say about the gravitational pull of Saudi Arabia on combat sports:

I really do believe that between Abu Dhabi and Riyadh in general, we're going to see them sort of eclipse Las Vegas as the combat sports hub. And I know it's difficult for people to imagine, but what made Las Vegas a combat sports hub was hosting the biggest boxing matches you could imagine.

They don't really do that as much anymore, at least not the big heavyweight showdowns. All the most recent big heavyweight fights, whether it be Anthony Joshua or Tyson Fury, we've been seeing those taking place in Saudi Arabia.

Then he pointed out that the UFC’s Western audience or at least the most vocal on the former Twitter and YouTube has yet to realize that many of the biggest future events will be held in the Middle East.

Many, but not all. As the Times reported, the Saudi promotion will soon be holding major boxing cards in Los Angeles and London.

The NYT had a lot more detail on what they’re up to:

Saudi Arabia’s giant sovereign wealth vehicle, the Public Investment Fund, would finance the project. The fund is holding final negotiations about dispersing the initial investment — said to be as much as $2 billion — that the plan would require, according to the two people involved in the planning. Both people declined to be identified because the project does not have final approval.

Under the Saudi proposal, about 200 of the top men’s boxers in the world would be signed and then divided into 12 weight classes in what would amount to a global boxing league.

Each class would include about 15 fighters each, allowing the best talents to regularly face off. The move would effectively create a single boxing entity that would replace the sometimes chaotic and frustrating system of dueling promoters and warring sanctioning bodies. The new entity would have the resources, and the fighters, to stage high-profile cards around the globe.
…
The project has been under discussion for more than a year, talks that were first reported by Reuters on Tuesday night. It was developed with the help of multiple consultancy firms, including Boston Consulting Group, which has helped the P.I.F. on several projects. Should an investment decision be confirmed in the next few weeks, the series could start as early as the first half of next year, according to one of the people involved in the planning.

Let’s talk about some of the other projects the Boston Consulting Group (BCG) has advised them into and why BCG will be appearing in the Weaknesses column.