Singapore’s blended martial arts promoter One Championship is anticipating to succeed in profitability in a couple of years, its group president informed Nikkei Asia, although he famous that the corporate was nonetheless prioritising investments to cement its international place outdoors Asia.
From eye-catching quick highlights on Facebook to stay broadcasts on streaming companies reminiscent of Amazon’s Prime Video, the fight sports activities model’s fights have turn into ubiquitous throughout many tech platforms, gaining international attain due to extra viewers staying at house through the Covid-19 pandemic.
Even as one of many fastest-growing digital sports activities firms — with as many as 14bn views globally final 12 months throughout social media platforms — One Championship remains to be targeted on investing in abroad expansions in North America, notably the US, the place US promoter the Ultimate Fighting Championship (UFC) has a stronghold.
“We’re not there yet [to break even]. It could take a few years. The clear thing is that we’re on our way,” One Championship group president Teh Hua Fung stated in an interview.
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At a time of market uncertainty, when extra buyers are putting higher scrutiny on profitability, One Championship’s problem highlights whether or not high-growth firms needing heavy investments can show their development tales from the preliminary lossmaking stage.
Teh stated he was assured the group’s enterprise mannequin was “inherently profitable”, including that “revenue will grow very quickly” as soon as the corporate has robust model recognition and the content material to lure viewers in abroad markets.
“It’s like a theme park, or a piece of art — when it’s not done, it’s not worth much,” stated Teh, “but when it’s done, it’s worth a lot.”
“If you try to monetise too early, you actually limit your growth,” he added.
Founded in 2011 by chair and chief government Chatri Sityodtong, a martial arts teacher turned entrepreneur with a Thai father and a Japanese mom, One Championship started primarily as a promoter of stay occasions. Investors embrace Singapore’s Temasek Holdings and America’s Sequoia Capital.
Since the late Nineties, fight sports activities have been via a dramatic rise and fall. In Asia, Japan’s Ok-1 skilled kick-boxing reached its top, adopted by the blended martial arts model Pride, which at one level was one of many largest opponents to UFC.
But One Championship noticed south-east Asia’s potential, with its historically wealthy martial arts tradition, together with muay Thai, silat melayu in Malaysia, the Philippines’ eskrima or Myanmar’s lethwei.
Apart from blended martial arts, the corporate has featured muay Thai, submission grappling and Burmese boxing, making it a much bigger platform than UFC when it comes to the variety of disciplines.
While previous Asian promoters needed to depend on tv broadcasts, One Championship took benefit of the fast penetration of smartphones within the area.
“In the old days, it was all about TV networks and TV stations,” stated Teh. “Digital players are becoming right up there in the game.”
The firm has been increasing its media and digital income sources, reminiscent of media rights and sponsorships, which now account for greater than half of its complete income, in keeping with Teh. In 2018, it grew to become a unicorn, an unlisted firm whose worth tops $1bn, distributing content material to over 150 nations.
“This is an intellectual property business where you have to grow the IP to an appropriate scale before the revenue happens,” stated Teh. “The challenge is building the IP and getting it to a point where you have product and brand leadership and big distribution.”
The years of the Covid-19 pandemic had introduced a mixture of “good and bad”, Teh added. The absence of stay occasions hit ticket gross sales and internet hosting charges, that are a few of its important income sources.
Still, Teh stated, 2021 turned out to be a “record year” for revenues, as the corporate was capable of get wider viewership and license charges.
According to a Nielsen report launched in April, One Championship ranked second total in digital viewership for international sports activities properties, simply after the National Basketball Association of North America.
The fight sports activities firm has travelled throughout platforms and is now venturing abroad with extra partnerships to achieve an viewers past its important Asian markets.
In April, it introduced a five-year distribution take care of Amazon’s Prime Video to broadcast stay occasions to the US and Canadian markets.
“The more people watch us, the more they will know the brand and we get to acquire new fans in the world’s largest sports market, and we’re aiming to have physical live events in the US next year,” stated Teh.
The abroad growth follows its newest $150mn funding in December final 12 months, led by Guggenheim Investments and the Qatar Investment Authority. The spherical is reported to have given the group a valuation of $1.35bn.
Whether the corporate can achieve traction within the US, nonetheless, might be essential to proving its development story forward of its much-anticipated preliminary public providing. Parent firm Group One Holdings has reportedly chosen the US for an IPO.
“A potential IPO is one of several options we are considering to raise capital in the long term. We want the company to be ready because you never know when markets will turn. But there’s no immediate [plan],” stated Teh.
“What we are focused on now is being good stewards of the money that we raised.”
A model of this text was first revealed by Nikkei Asia on September 26 2022. ©2022 Nikkei Inc. All rights reserved.