From fight club to Facebook-emulator is the ambitious journey being embarked upon by mixed martial arts organizer, One Championship. Helping the company to become a major media player is a recent investment by blue chip financier Sequoia Capital.
The company was started less than seven years ago as an organizer of fortnightly martial arts contests that it streams, televises and promotes vigorously. Today its fights are broadcast in 136 countries, and annual revenues of $100 million are imminent. The Sequoia-led, series D, funding round implies a valuation in excess of $1 billion.
While founder Chatri Sityodtong, founder chairman and CEO, and vice chairman Saurabh Mittal, are both muscular, grapple practitioners, as well as martial arts fans, the company is far more than a fanboy convention. Instead, it was born thanks to brains as well as brawn, and from ambitious calculations about Asian culture, new tech, and the nature of media content.
Sityodtong’s conversation is peppered with comparisons and metrics from NFL, Formula One and even Victoria’s Secret runway shows. “We have become as big as Formula One as a sports property,” he says, and has the figures to prove his point. In April, he and some of his fighters held their heads high at APOS, the upscale convention of Asia’s top TV executives.
“Every region in the world had several multi-billion-dollar sports properties but there was nothing on a pan-Asian basis,” Sityodtong says. “Landlocked broadcasters are paying $7 billion a year for a single-country sports property,” he says referencing American Football’s NFL, which has a valuation of $85 billion.
“Asia has had martial arts for 5,000 years and there is a variant in every country. It is part of Asian history, society and values. So why not try to get 4 billion people behind a sports property that is genuinely authentic in its locale, celebrates values, and which creates heroes, who are local heroes on a global stage.”
Part of One Championship’s success may be down to simplicity. “The reason that soccer is the only truly global sport are that its rules are so simple, it can be played by the poorest or the richest people, there are no class or race barriers, or for boys and girls. Martial arts are the same. If I put two guys together, you don’t need to know martial arts to know who won or lost. Everyone gets it.”
That is true of other contests too. But Asian values of respect, humility and family values are elements that Sityodtong uses to differentiate One Championship, from Western fight formats, (such as Endeavor’s Ultimate Fighting Championship) which he says are nastier. “They are promoting violence, hatred, blood sport, controversy, and swearing to sell PPV. We are not selling fights. We are building heroes and telling life stories,” says Sityodtong.
From a business perspective, One Championship sees itself as a growth stage company, still favoring engagement over pumped-up media revenues. But with the whole world as its potential target.
“There is no difference between Facebook’s business model and ours,” says Sityodtong. “In the first few years, all that Facebook cared about was users. Eventually, when their user base was huge, they could go to advertisers. We care about fans. (Eventually) we will go to broadcasters and advertisers.”
“Reach versus monetization is a trade-off. We have had the benefit of our capital and now investors who see the world our way. We aim to create the purity of engagement, get scale, then monetize at scale,” says Mittal. And he argues that in an era of media fragmentation, desperate free-to-air broadcasters will keep coming back for the allure of a live sports property with ratings that are typically 1 to 2 points, but can go as high as 50.
The executives turn a bit hazy when asked about the financial end game. An IPO could be on the cards, but then again they could simply keep expanding.
“We started in MMA, and have already scaled across into Thai kickboxing, submission grappling, and other striking arts,” says Sityodtong “Once you capture an audience there are so many brand applications possible: gyms, protein shakes, video games, esports, or franchising.”
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