One of last week’s biggest winners on the OTC was B2Digital Inc (OTCMKTS:BTDG). This is very much a developing story with some big upside potential by our read. The company is basically the leading platform for developing new fighters headed for MMA superstardom down the line. Think of as the farm leagues for the UFC.
Last week’s action was powered by a resurfacing of formal communications from the company – letting us know they still existed and had something important to say. Actually, it was quite a bit more than that because we got a taste of what’s to come from BTDG, including new catalysts, fresh growth, and the idea that this is a company that is likely to emerge stronger than ever as the world turns the chapter from the virus to the post-virus world ahead over coming months.
One of the big factors in that analysis is simply that one Chinese word that means both Crisis and Opportunity. Never before has that little gem of wisdom been more applicable than it is right now. This is especially true in the live sports space, where companies often got by on razor thin margins from event to event. The total shutdown of that revenue stream has taken many similar companies down to the mat for good.
But B2Digital Inc (OTCMKTS:BTDG) appears to be on the right side of that equation, able to pick up a number of productive assets on the cheap and get them ready to be mobilized for powerful ROI in coming quarters.
However, among those moves, one of the most interesting we see is the company’s announcement of new business model to leverage its recruitment network to drive its new “B2 Grappling Series” of LIVE Tournament Events.
To better understand this new revenue machine, the company released a video podcast here.
The New Opportunity: Grappling Series Events
The beauty of this new move – which should be seen as an expansion rather than a pivot – is that it doesn’t need crowds to be successful.
As the company notes in its release, “Management believes the B2 Grappling Series represents a powerful new source of future revenues because it leverages demand untethered to in-person crowd attendance through a full slate of new events with unbounded growth potential. New revenues will be booked by the Company when participants submit fee payments in advance of competition in each B2 Grappling Series Tournament event. The marketplace for Grappling tournament events already exists. Grappling tournaments have been held around the world over recent years. The Company’s research suggests the Grappling tournament market is a $10 million market in the US alone.”
The model thrives based on aspiring athletes, who pay a participation fee. A recent tournament of this style held in Chicago brought in 750 participants, each laying down nearly $50 to enter.
The process demands very little overhead and deepens relationships with aspiring fighters who may also then participated in the company’s other future events as well as its development resources, including its ONE MORE gym network.
There’s a tremendous amount of synergy built into this move that should pay off for the company’s shareholders, which is no doubt part of the explanation for the stock’s sharp bolt higher last week.
This synergy not only involves the company’s gym network and its ability to bring in new contestants. But it also works the other way around. Just as it can use its resources for development to bring in contestants, so can use its events to bring in new gym members and customers for its development resources.
In addition, during this virus-driven period, the company’s first-rate live event streaming media resources have been mostly dormant. Here is a great way to put them back to work. Just because the majority of monetization here is coming from participant entry fees doesn’t mean a company with a very well-established ability to bring in a live streaming audience won’t find a way to add a ton of value for fans.
“The current environment for any LIVE Event company has been challenging, and the addition of the B2 Grappling Series has always been our long-range plan for B2, so this is the perfect opportunity to launch,” said Greg P. Bell, Chairman & CEO of B2Digital. “As we continue to successfully develop fighters who move on to the UFC and the major leagues of MMA, the current environment represents an ideal opportunity for the Company to add the Tournament model to our business. I look forward to working with Grappling Tournament participants and developing our new B2 Grappling Series business while we continue to create future MMA stars along with world-class Grappling Athletes.”
The future of MMA appears to be in good hands while B2Digital Inc (OTCMKTS:BTDG).
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