The UFC has maximized site fees as a key factor when deciding which cities, states, or countries are going to host events with Azerbaijan serving as one of the latest locations willing to pay up for a fight card.
A site fee is basically a financial component paid by the local government to the UFC to bring in an event. The UFC negotiated a handsome fee to begin holding events in Saudi Arabia after already striking previous long term deals with cities like Abu Dhabi in the past.
While the exact fee paid to the UFC to bring a card to Baku, Azerbaijan, wasn’t revealed, TKO Group Holdings president and chief operating officer Mark Shapiro touted that the small nation that borders Georgia definitely footed an expensive bill to land the June 21 event.
“We’re looking under every stone,” Shapiro said Tuesday at the JP Morgan Global Technology, Media and Communications Conference about pursuing site fees. “When you’re doing Royal Rumble in Indianapolis for two days for a meaningful site fee, when you’re going to New Jersey this summer for SummerSlam and they’re paying us $7 million. Meaningful opportunities here. Perth, Australia, where we’re committed to doing multiple events over the next two years with the Western Tourism Australia.
“Then off course in June, we’re going for multi-millions to Baku, Azerbaijan. So these aren’t just run-of-the-mill, around-the-corner Kansas City.”
The conversation started with comments about the recent “TKO takeover” in Kansas City, Mo., where the UFC held an event there during the same weekend as WWE and Professional Bull Riders, which are all owned under the TKO umbrella.
Ever since TKO was formed in a merger with UFC and WWE, executives like Shapiro have spoken about opportunities to hold multiple events in the same city to drive even bigger interest for local governments to pay a premium price in site fees.
While Shapiro said he hopes the recent Kansas City takeover serves as a “template” for future events, the overall financial gain is what matters most.
“We’ll keep looking into that and pursuing [more events like those in Kansas City] but make no mistake about it, we are driven by the financial return,” Shapiro said. “It was great earned media. It was a solid return on the site fees and the in kind services. It worked with our schedule. Terrific arena. Great fan base for all the sports. One plus one did equal five but site fees are what is the priority driver.”
Just recently, WWE traveled to the UFC’s backyard in Las Vegas for the two-night WrestleMania 41 event and apparently earned a hefty fee to go there, but Shapiro says the city was definitely paid back.
“You talk specifically about site fees … look at WrestleMania 41,” Shapiro said. “We had a meaningful site fee and in kind from Las Vegas and I would tell you we’ve just finished our economic impact study or we’re just putting the finishing touches on it, and that study is showing we drove $320 million to the city of Las Vegas for WrestleMania 41.”
Site fees have become such big business for UFC and WWE that Shapiro noted an entire team is dedicated just to that one particular resource, which means Azerbaijan is certainly not the last surprising location to land a major event.
“We’ve got an entire team dedicated, not just on the government relations side, because you need to have these relationships,” Shapiro said. “But boots on the ground in these difference cities to uncover who wants to pay to play.”
