With Setanta Sports collapsing, UFC’s European plans hit a snag
Published by Zach Arnold on June 6th, 2009 in Current Events

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As UFC struggles to put together a solid front for their upcoming Germany event headlined by Rich Franklin vs. Wanderlei Silva, the organization is facing an even bigger challenge to their European expansion plans — the financial collapse of broadcasting partner Setanta Sports.

Setanta Sports is the Irish-based sports premium channel that has been airing UFC programming exclusively in the UK. Setanta offered big money contracts to the Scottish Premier League (soccer) and has now found itself over-leveraged to the point that they are in a dangerous position of not being able to raise enough capital to make payments owed to their business partners.

The Herald newspaper in the UK sums up the situation this way for the SPL:

The worst-case scenario is that the broadcaster is allowed to go bust and its contracts put out for tender, leaving an ambivalent Sky and a non-committal BBC Scotland in a position to drive down the price and leave Scottish football with only a fraction of the deal that had been agreed.

Currently, it is reported that Setanta Sports has 1.2 million subscribers and needs to nearly double that total in order to make the business numbers add up. In other words, there is no magical tooth fairy coming to save the deal for UFC’s UK broadcasting network.

Which now puts UFC in a very interesting, yet precarious position. There is no doubt that the company has spent a lot of money and energy in trying to expand MMA into Europe, only to encounter one business roadblock after enough — and some of those roadblocks are political, as well.

Several European newspapers have reported that if Setanta Sports has to sell off their television contracts, then ESPN might become one of the major players to buy the deals out. Is there a possibility that ESPN would be willing to buy out UFC’s UK contract and make money off of it? Numerous UK newspapers have reported that Sky has rejected any sort of overtures by Setanta Sports for financial help, which means that ESPN has an opening to buy all sorts of Setanta Sports TV contracts.

If nobody picks up Setanta’s contract with UFC on the cheap, where will UFC head next in terms of a UK network platform?

The first option would be Bravo, which is a UK network that airs TNA pro-wrestling. There is Bravo and Bravo2, which airs replays of TNA shows. It would be a step down in terms of UFC as far as their current deal with Setanta Sports is concerned. The second option would be BSkyB, which airs WWE weekly and would be a step-up for UFC in the UK marketplace. Adding further intrigue to the landscape is the fact that BSkyB has made an offer to Virgin Media, which is the owner of Bravo & Bravo 2, to buy them out. Given WWE’s strong presence in the European marketplace, the company will no doubt be paying very close attention to what happens to UFC in terms of their television deal. UFC is the type of company that could definitely take away some of WWE’s business in the European marketplace, just as the company has already done in North America by converted disgruntled pro-wrestling fans and converting them into UFC fans.

Unlike recent moves into Canada (with the help of Rogers Sportnet), UFC is finding it to be a grinding process in terms of their European expansion. Their debut event in Germany has been effected by political campaigns to stop the show from taking place, let alone having anyone under the age of 18 attend the live event. It seems much more likely that UFC will be expanding heavily into Canada before they make significant strides in the European marketplace.

Credit should be given to Zuffa LLC management for putting their money where their mouth is with the European expansion plans. Despite some tough luck the organization has had in the last year, the company is hoping that their sweat and cash equity efforts to get MMA more accepted on the worldwide stage will pay dividends. The organization also focused their latest season of The Ultimate Fighter around a USA vs. UK team theme. In addition to UFC European expansion roadblocks, the organization also is wondering how much time and effort it will take the company to help broaden the talent pool of skilled MMA fighters that currently exist in the United Kingdom. The company’s two UK aces currently are Michael Bisping and Dan Hardy.