Owning A MMA Mixed Martial Arts Franchize
Professional sports teams are bought and sold for hundreds of millions of dollars, placing them firmly out of reach for most non-moguls. But National Martial Arts League team franchises when purchased through partnerships can be a more affordable option for investors interested in watching events from their owner’s box.
National Martial Arts League Franchise Teams can be purchased by individuals, but multiple buyers can band together as part of a limited liability company (LLC). The concept of sports investment funds has generally been ill received—most investors want to put their money into specific teams with which they can be involved—but potential owners can put together their own groups to purchase a franchise. In such situations, there is often a majority team owner.
A franchise owner oversees activities and can choose to take a hands-on approach. Investors could also start a new franchise within the National Martial Arts League. “There are all kinds of startup costs [when creating a new team]. If it’s a brand new franchise, you incur costs recruiting people and getting the front office completely set up. There are a lot of startup marketing costs to let people know you’re coming to town. If you’re buying an existing team you’re going to pay more money to the existing owner but you’re not going to have those startup costs.” Starting a new team involves a lengthy application process, meeting the league’s legal requirements and proving one’s ability to financially support the team.
Often team owners function mostly as a chairman or chairperson, overseeing activities without necessarily being involved in the day-to-day operations of the franchise. But owners interested in a more hands-on approach can certainly do so.
Since the purchase of a sports team is primarily a lifestyle investment—done for love of the sport rather than for financial returns—it’s important to have a healthy interest in martial arts if you decide to purchase an NMAL Franchise. But investors might be wise to avoid purchasing teams in which they will become overly emotionally invested. Buyers who are too enamored with their chosen team could end up paying far too much for a team in a less-than-ideal market.
The purchase of a sports franchise involves extensive due diligence, including everything from reviewing contracts, leases and sponsorship agreements to meeting with the senior management team.
Investors should also realize that there are many expenses associated with team ownership beyond the initial purchase price.
Teams for sale don’t tend to be listed in the classifieds. Often the best way for investors to learn about opportunities is by networking with others in the industry.
But, no matter how much they may love sports, investors should not invest in a team if they are not fully aware of the responsibilities placed on a team owner’s shoulders.
“A lot of people think it’s a fairy tale environment and it’s not. If you’re intending to invest and get involved in operations and management it’s a real job, its long hours and it’s hard work,”