A mysterious Dagestani billionaire wanted to buy a stake in the UFC

Amidst rumours that the UFC is in talks to sell the promotion to China Media Capital, a private equity and venture capital firm based in…

By: Karim Zidan | 7 years ago
A mysterious Dagestani billionaire wanted to buy a stake in the UFC
Bloody Elbow 2.0 | Anton Tabuena

Amidst rumours that the UFC is in talks to sell the promotion to China Media Capital, a private equity and venture capital firm based in Shanghai, a Russian oligarch revealed that he was close to purchasing a stake of the promotion himself.

Ziyavudin Magomedov, a Dagestani billionaire who is a major investor in Fight Nights Global, appeared to be interested in “UFC shares.” Negotiations took place but eventually fizzled, according to Fight Nights promoter Kamil Gadzhiev.

“Indeed, the desire was there,” Gadzhiev told MatchTV.ru. “I’m not talking about the amount of the package, but the negotiations were conducted. But this is a case of days gone by. Today we have a new interesting task: to develop Fight Nights to the level of the highest international requirements.”

2011 finance magazine labeled Magomedov the 41st richest man in Russia with an estimated value of $3 billion USD. According to Forbes, he is the chairman of Summa Group, a “conglomerate invested in port logistics, engineering, construction, telecommunications, and oil and gas. It constructs and operates trade ports for cargo turnover, operates an oil terminal, constructs theatres and sports stadiums, and provides transportation and logistics services.” Magomedov is renowned for renovating the Bolshoi Theater in Moscow. His older brother and junior partner, Magomed Magomedov, is a former member of the Federation Council, the upper house of Russia’s parliament, and helped Ziyavudin found the private investment company.

Magomedov rose to prominence and became a billionaire with the help of state contracts during the ascent of former Russian President Dmitry Medvedev. Between 2009-13, Magomedov’s fortune rose sharply to $2.1 billion, which coincided with the start of Medvedev’s first year as president. This was also partially due to Medvedev’s strategic approach to development in the North Caucasus. The former Russian president believed that a steady stream of investments in the war-torn North Caucasus could eventually transform it into a touristic region, and he directed significant funds towards the region. Many North Caucasus natives rose to prominence and owed their wealth to Medvedev. It also didn’t hurt that Medvedev’s Deputy Prime Minister, Arkady Dvorkovich, was Magomedov’s old friend from university.

However, once Putin regained the Russian presidency in 2012, much of Magomedov’s influence began to wane.

Putin began by removing three of Medvedev’s ministers from their positions in a move that was believed to be an attempt to weaken Medvedev’s political resources should he seek re-election once Putin’s third term as president is complete in 2018. Bloomberg reported that Putin stripped Magomedov of his position as a representative on the 21-nation Asia-Pacific Economic Cooperation group’s business advisory council – a position Medvedev had appointed him to in 2010.

Magomedov’s Summa Group continued to experience political weakening over the following few years. According to Forbes magazine (h/t Institute of Modern Russia), “the Federal Service for Supervision of Natural Resources Usage carried out an unscheduled inspection of Primorsk trade port, which is controlled by the Summa Group, and decided that the port did not comply with Russia’s environmental legislation.” They then pressured Magomedov to nationalize it by changing the management to that of Russia’s state pipeline company.

Putin also reprimanded Magomedov’s cousin, Akhmed Bilalov, the vice president of the Russian Olympic Committee (ROC) and board chairman of the North Caucasus Resorts Company, for budget overspending on one of the projects ahead of the Sochi Olympics. Bilalov was one of the Dagestani businessmen who benefited greatly from Medvedev’s expansion and investment in the North Caucasus, as he was made one of the managers of the resort projects. However, Putin later blamed him for delays in the construction process and an increase in the expenditure.

Putin kept on asking. “Where does Bilalov work?” “He is the vice president of the Olympic Committee,” the head of state was told. “He is your vice president, is he?” retorted Putin. “So a vice president of the Olympic Committee is slowing down the entire construction?” “He owns a construction company of some sort,” explained Kozak. “Have there been increases in the cost of the facility’s construction?” inquired Putin. “There has been a rise in the cost, but since it is being constructed with his own money…” answered the deputy prime minister, with a shrug of his shoulders. The cost of the ski jump had soared from 1.2 billion rubles ($40 million) to 8 billion rubles ($265 million). “Well done! You are doing a good job,” Putin said sarcastically. (h/t Modern Institute of Russia)

Bilalov was removed from his post as the vice president of the Russian Olympic Committee the following day and an investigation was launched to determine whether his company had embezzled budget funds. It was a reminder of the conflicts that arise between private entities and governments.

Last year, Alexey Navalny Anti-Corruption Foundation (FBK) accused Putin’s spokesman, Dmitry Peskov, of accepting a bribe to pay for a luxurious yacht. It appears Peskov rented the “Maltese Falcon,” a 260-foot yacht that costs $426,000 per week. Navalny claims the money to pay this fee came from Magomedov.

Nevertheless, Magomedov always maintained that he was a self-made businessman who never used favoritism or nepotism to gain advantages in contract negotiations.

“In business, I’m helping myself,” he told vedomosti.ru. “For my business intuition: it’s a combination of factors like an understanding of strategy, and ability to communicate and to find the right partners. I am familiar with many [influential politicians] but to speak of it as a success factor will be at least an exaggeration.”

Since his loss of influence in the Russian political scene, Magomedov invested in sports organizations like Fight Nights Global, which is headed by fellow Dagestani Kamil Gadzhiev. He is also the chairman of board of trustees of the Russian Tennis Federation. He even bought Khabib Nurmagomedov a brand new Mercedes Benz following his latest victory against Darrel Horcher. His attempt to purchase shares in the UFC was one of his latest ventures into the sporting world.

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About the author
Karim Zidan
Karim Zidan

Karim Zidan is a investigative reporter and feature writer focusing on the intersection of sports and politics. He has written for BloodyElbow since 2014 and has served as an associate editor since 2016. He also writes for The New York Times and The Guardian. Karim has been invited to speak about his work at numerous universities, including Princeton, and was a panelist at the South by Southwest (SXSW) film festival and the Oslo Freedom Forum. He also participated in the United Nations counter-terrorism conference in 2021. His reporting on Ramzan Kadyrov’s involvement in MMA, much of which was done for Bloody Elbow, has led to numerous award nominations, and was the basis of an award-winning HBO Real Sports documentary.

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