After years of promises to break into the market, the UFC is set to venture into the Russian Federation for the first time in the promotion’s history. The long-awaited debut is scheduled to take place on Saturday, September 15 at the Olympic Stadium in Moscow, and will feature a host of homegrown talent, including Aleksei Oleinik, who will face Mark Hunt in the evening’s main event.
While the UFC’s inaugural event in Russia is a modest fight card devoid of superstar fighters such as lightweight champion Khabib Nurmagomedov, the event will take place amidst an interesting shift in the Russian MMA landscape. Several of the Russian promotions that dominated the scene have begun to lose their share of the market, while the rise of fresh, well-funded promotions has brought about significant change over the past few months.
The UFC has also taken active steps to prepare itself for its upcoming venture. This included a newfound partnership with M-1 Global, which will see the oldest Russian MMA promotion become a farming system for Russian fighters hoping to gain entry into the UFC. Despite the decade of hostility between UFC president Dana White and M-1 Global founder Vadim Finkelchtein — a longstanding conflict that helped keep MMA legend Fedor Emelianenko from ever competing in the UFC — the two promotions will now work together to redefine the MMA landscape in the world’s largest country.
Understanding the complex changes taking place within Russian MMA begins by analyzing the founders and financial backers of these various promotions.
The Oligarch’s Downfall
On March 31, 2018, Russia’s Ministry of Internal Affairs announced that Ziyavudin Magomedov, the owner of Summa Group, was arrested and charged with embezzling over 2 billion rubles ($32 million +).
Magomedov, whose wealth is estimated at $1.4 billion, was also charged with fraud and masterminding a criminal organization to steal budget funds. According to Russia’s Ministry of Internal Affairs, Magomedov has been under investigation for several months to determine whether he embezzled money during the construction of a World Cup stadium in Kaliningrad, which his Summa Group company won the rights to build in 2014. Given the serious charges, the oligarch was denied bail and held for two months until a court hearing on May 8, at which point the Moscow City Court extended his detention until August 5.
Prior to Magomedov’s arrest, the Dagestani native owned a controlling share of Fight Nights Global, one of the leading MMA promotions in Russia. A hobbyist and recreational practitioner of the sport, Magomedov invested heavily in the promotion, which allowed it to sign expensive fighters such as Fedor Emelianenko, as well as foreign talent and ex-UFC fighters fresh off a stint with the world’s leading promotion. By 2016, Fight Night had signed a deal with UFC Fight Pass to broadcast its events on the streaming service, expanded its schedule to fit a growing roster of fighters, and was competing with M-1 Global. In short, they seemed unstoppable.
In April 2017, Magomedov revealed his plan to invest “50-70 [million dollars] over three-four years” in his Fight Nights promotion. He embarked on a wide-scale project that involved building new fight clubs and expanding the promotion’s reach and market share.
“This is a business project that is not commercially successful in today’s Russia because the television channels in the US pay huge money for contracts with companies such as the UFC, and the consumer pays $65 for the event (pay-per-view),” Magomedov explained in the interview. “Russian consumers themselves will not do that now. But within two or three years, I think the situation will change.”
Given Fight Nights’ promotional success, Magomedov decided to expand his investments within MMA. The oligarch founded the Eagles MMA fight club, a training facility that is home to some of Russia’s top talent. UFC lightweight champion Khabib Nurmagomedov is the incumbent president of Eagles MMA.
Magomedov also financially supported several fighters, including Nurmagomedov. Magomedov reportedly paid for the UFC champ’s back surgery in 2017, which was done in Germany, and funded the majority of Nurmagomedov’s expenses during training camps. Given his pivotal contributions to the development of the sport in the region, his potential incarceration could bring about significant long-term change in the sport.
While Fight Nights continues to host events across Russia, the promotion was forced to cancel its international expansion, which included shows in Brazil. Since then, promotional mainstays such as former Bellator heavyweight champ Vitaly Minakov and Sergey Pavlovich have become free agents;light-heavyweight champ Nikita Krylov resigned with the UFC; and Rasul Mirzaiev — long considered the promotion’s poster boy — stirred up controversy by leaving Fight Nights for ACB, a direct competitor.
As Fight Nights continues to struggle through its financial crisis, owner Kamil Gadzhiev remains optimistic about the promotion’s future.
“The company has existed for a long time, and, I believe, gained good form, and will continue to work, develop and delight the audience,” Gadzhiev said when asked in April about the impact Magomedov’s arrest will have on Fight Nights. “They tried to bury us, but as you can see, we are alive. I was at a tournament in Moscow the day before yesterday. Excellent fighting turned out. Let’s just say, new blood appeared – young promising guys, the champion was replaced in the middleweight. Now I am in Kazakhstan, where today is also our tournament. Life goes on.”
Though the lose of its primary stakeholder was a significant blow to Fight Nights, it is not the only MMA organization that has reeled in its ambitious schedule or canceled its international expansion.
Cancelations and Controversy
Back in 2014, Absolute Championship Berkut (ACB) made headlines by announcing plans to challenge the UFC’s dominance on the global market. Mairkeb Khasiev, the founder of the upstart Chechen promotion, stated that he is “an ambitious person” with a “goal to fight with the UFC as a mixed martial arts leader at the global level.”
While the news was met with skepticism, ACB spent the next four years developing into one of the top regional promotions in Russia, as well as one of the most popular promotions within the sport on an international scale. They cultivated impressive talent, many of whom later signed with the UFC, and showcased enthralling fights that captured the imagination. By 2017, ACB expanded into the international market, hosting events in the United States, Austria, Poland, Belarus, Canada, Germany, Slovakia, and Dubai.
When Fight Nights lost its primary stakeholder in Ziyavudin Magomedov, ACB seemed poised to become the top promotion in the Russian Federation. Yet despite losing its main competitor, ACB became embroiled in its own financial problems and also began to cancel shows around the world.
In July 2018, the promotion cancelled four events just weeks before their scheduled dates. The first cancellation was ACB 89 in Cyprus on July 21st, followed by ACB 90 in Kazan, which was scheduled for the following week. Soon afterwards, ACB announced on their Facebook page that the ACB 91 show in London had also been dropped due to “technical issues.”
On Sunday, July 29, ACB released an official statement clarifying the recent cancelations.
“Three events, Cyprus, Kazan and Sweden, were cancelled this year due to organizational and financial problems. In Sha Allah (God willing), the league will continue it’s activities from September. In 2018 there will be two events: in Krasnodar and in Moscow. In this time the league will go through restructuring process to work more efficiently from a financial standpoint. The league is already working on a 2019 plan and schedule, which will be revealed in the near future.
“All the money from ticket sales for the cancelled events will be returned in full to the people who bought tickets for the cancelled shows.
“Dear friends, don’t believe the gossips. The league has had some difficulties, which will only make us stronger and wiser! There’s no progress without challenges!”
Though the extent of ACB’s problems remain unclear, it appears to have something to do with the promotion’s financial expenditures. Their “restructuring process” could involve scaling down the size of the promotion, which would mean keeping less fighters under contract and potentially parting ways with some of their staff. Another possibility would be for the promotion to find new funding sources outside of their founder and primary benefactor, Mairbek Khasiev.
ACB is almost entirely dependent on the funds provided by Khasiev. While they host a fair number of shows during the year, the promotion has reportedly failed to make a profit and their reliance on a wealthy businessman’s investments only serves to make them more vulnerable to financial concerns such as the ones the promotion is reportedly facing. While this will not necessarily lead to ACB’s decline, it does raise important questions about how Russian promotions are expected to stay afloat without benefactors and investors.
As for Khasiev, there has been no transparency as to the amounts he invested or where they originated from. Ahead of ACB 57 in Moscow, Khasiev was asked about ACB’s income stream, to which he responded: “Everything is from God. Allah gives. And he has the money that does not end.”
The mysterious source of Khasiev’s wealth is hardly the most controversial aspect of the Chechen promoter. At ACB 52 in Vienna, Khasiev unilaterally overturned the results of two fights. One of those overturned fights favoured a fighter training out of the Berkut Fight Club that Khasiev owns. The promoter’s actions led to notable officials from the United Kingdom boycott future ACB events. Months later, ahead of ACB 59 in North Ossetia, Khasiev referred to Ossetians as “Iranian Jews” — comments that stirred ethnic tension between Chechens and North Ossetians and caused the cancelation of ACB 59. Most significant of all, however, was Khasiev’s homophobic tirade on social media.
”‘Women were created for men and men for women. Do you see animals mating with the same sex? If we allow gay marriage, a man worse than an animal.’ – Manny Pacquiao said. After these words, Nike broke a contract with Manny!!!” Khasiev said (H/T @bayginavukat). “Friends, for a few months we have had negotiations for a Nike sponsorship with ACB but after such a demarche on the part of well-known company, I consider it beneath our dignity to have any relationship with them! I add to all this one expression – “Sometimes the devil is afraid of the thoughts within a f****t’s head.”
Khasiev’s comments have since been removed from social media. However, if ACB is to overcome its current financial concerns, it will need to reel in its controversial founder.
The Copper Tycoon’s Newfound Hobby
While Fight Nights and ACB have cancelled events over the past few months, another promotion has risen to the opportunity to fill the vacuum. Dubbed Russian Cagefighting Championships (RCC), the promotion is based in Yekaterinburg, Russia and showcases a variety of combat sports.
The man behind RCC Boxing is Igor Altushkin, one of the richest men in the Russian Federation. The oligarch began his career as a scrap metal trader in the early 1990’s before founding the Russian Copper Company (RMK), an organization that would go on to become Russia’s third-largest copper producer.
Altushkin, a native of Yekaterinburg, Russia, took an interest in combat sports in 2016. The oligarch’s RMK company co-founded the RCC Boxing Promotions (formerly known as Titov Boxing Promotion), which continues to host events across a variety of combat sports. Their first significant championship fight took place in November 2016 when renowned Russian light-heavyweight Sergei Kovalev won his WBA, IBF, and WBO titles against Isaac Chilemba. The event aired live on HBO.
Following the Kovalev fight, RCC Boxing brought in the likes of former UFC fighters Jeff Monson, Antonio Silva, and Gabriel Gonzaga to headline their shows. Silva was reportedly paid $500,000 for his one-off fight in 2017. UFC lightweight champion Khabib Nurmagomedov was even in attendance at their most recent event.
While RCC has only existed for a couple of years, it has already attracted its fair share of controversy, whether due to the signing of convicted rapist and sexual abuser Aleksander Emelianenko or to their questionable business practices during Monson’s time with the promotion in 2016.
On May 5th, 2018, RCC Boxing Promotion hosted a main event between former UFC fighter Gabriel Gonzaga and Aleksander Emelianenko, who also fights for Chechen dictator Ramzan Kadyrov’s personal MMA promotion (Akhmat MMA). The event not only showcased one of Kadyrov’s top fighters in an event funded by Altushkin, but it also emphasized how Altushkin and Kadyrov are two of the most influential financial backers in Russian MMA.
While Kadyrov has already positioned himself as a significant figure in Russian MMA after founding the Akhmat MMA fight club and the World Fight Championships of Akhmat (WFCA) promotion in 2015, Altushkin is trying to become the latest wealthy figure to involve himself in combat sports.
The Unexpected Partnership
On July 18, 2018, M-1 Global announced a partnership that saw the longtime Russian promotion become a farming system for Russian fighters looking to join the UFC, as well as to help promote UFC shows in Russia.
According to a statement released by M-1, the joint venture will also include teaming up with the Mubadala Investment Company and the Russia-China Investment Fund (RCIF) to establish “UFC Russia” and to organize new shows in Russia. This in effect means that the UFC will work with sovereign wealth funds from Russia, China, and the United Arab Emirates (UAE) to strengthen their position in the Russian market.
“We are looking forward to further cooperation with the UFC and the (Russia-China Investment Fund) working on developing young Russian talent, and this will benefit our sports very much,” M-1 Global President, Vadim Finkelchtein, said. “MMA is a very popular kind of sport, and cooperation of the UFC, investment fund and M-1 Global can take MMA in Russia to new level. Competition in M-1 Global is going to be even tougher, and that means we are going to see even more excellent and spectacular fights.”
RCIF is a private equity fund created to invest in projects that “advance bilateral economic cooperation between Russia and China.” The fund is backed by the Russian Direct Investment Fund (RDIF) and the China Investment Corporation (CIC), who both raised a combined $2 billion in equal shares.
“This partnership will be a tremendous boost to the sport of MMA in Russia and the CIS,” UFC Senior Vice President of International and Content David Shaw stated in a press release. “We’re excited to collaborate with (RCIF CEO) Kirill Dmitriev and his team to grow UFC’s brand in these key markets and serve the millions of MMA fans in this part of the world.”
On the other hand, the Mubadala Investment Company is a state-owned enterprise that operates as Abu Dhabi’s leading strategic investment company. The primary shareholder is Sheikh Mohamed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi. Given his legislative and economic duties, the Crown Prince has not been a prominent figure in his country’s sports development. However, his younger brother, Sheikh Tahnoon bin Zayed Al Nahyan, founded the Abu Dhabi Combat Club (ADCC) and popularized Brazilian jiu-jitsu in the UAE by adding it to the official government program.
Sheikh Tahnoon’s plans for combat sports didn’t end with his investment in BJJ. He later helped establish the UAE Wrestling, Judo, Jiu-Jitsu and Kickboxing Federation, which he now heads as the Honorary President. He was also reportedly instrumental in the UFC’s partnership with Flash Entertainment, a state-owned entertainment company in the UAE that holds a 10 percent stake in the UFC.
Given the support from investment funds and the oldest MMA promotion in the Russian Federation, the UFC’s venture into Russia appears to be a serious attempt to penetrate the Russian market. Without a local partner with experience promoting combat sports events in Russia, the UFC would have faced a series of obstacles, including media rights, marketing strategies, and government bureaucracy. However, by partnering with M-1 Global, the UFC can avoid such concerns by allowing its local partners to run those aspects of the business.
The deal is mutually beneficial for M-1 Global, as well. While the promotion has existed for more than 20 years, it has lost a significant percentage of its market share to ACB and Fight Nights over the past couple of years. Instead of attempting to match ACB and Fight Nights’ financial investments, M-1 continued to promote modest shows in comparison and primarily stayed within the Russian Federation.
M-1 Global is also the only MMA promotion in Russia with its own stadium, dubbed the ‘M-1 Arena.’ While many assumed that the competition between regional MMA promotions would continue to weaken M-1’s position in the Russian MMA landscape, few expected the promotion to secure a pivotal deal with the UFC and propel itself to the frontlines of MMA’s development in Russia.