Saturday, July 17, 2010

FEG and PUJI Capital form partnership, plan UFC faceoff

Fighting Entertainment Group (FEG), the parent company of Japanese promotions K-1 and Dream, has formed a partnership with Chinese investment bank PUJI Capital. 

FEG's financial status has been in question for months now. A PUJI partnership may be the financial security blanket that the Dream and K-1 promotions need to stay afloat. The FEG-PUJI partnership plans to initiate a global expansion campaign that will challenge the UFC's footing in the MMA world.

But, the partnership announcement should come as no surprise as Zuffa announced their own expansion plans just over week ago with their latest project in China. The UFC has already hired staff, posted a UFC-China webstite (UFC.cn), and plans to hold shows there as well. This appears to be the third step in the UFC's global development.

Back in January the UFC conducted a move very similar to that of FEG when it garnered a deal with Flash Entertainment, a government subsidiary of the United Arab Emirates. The deal was highlighted by UFC's 112: 'Invincible' event being held in Abu Dhabi. Then, in May the UFC committed their support for the deep MMA fan base in Canada by announcing the opening of a Toronto office.

FEG obviously has a lot of ground to cover to engage in a full scale war with the UFC. Nonetheless, their retaliation efforts still came with threatening words:

"This is a declaration of war against the WWE and UFC. From Asia, we will take the world. Mr. Ishii is completely supporting us. We won’t stand a chance in the American market so we will spread to the rest of the world.”

When K-1 and PRIDE were competing against each other, 80-percent of the martial arts market was in Japan. It is now the opposite and Japan is only 20-percent. We were worried that Japan would be left behind if we let this continue, it is unacceptable. We needed to change our business model."

Hotwire Opinion & Questions
The UFC's decision to establish itself in Asia was a risky but necessary maneuver, but now they're playing on foreign soil. The UFC has the funding and the dedicated support of fans in the West, but can they make the cultural transition that a move to China will require?

FEG's counter move, rallying PUJI, was an intelligent one. Dream and K-1 are both reputable promotions. However, their financial stability has more recently become questionable. Now that FEG has support from an established financial institution, a global expansion campaign may actually work.  If they realize that they have the home field advantage, a few more intelligent chess moves could place FEG in the winners bracket.

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