Blogger Zach Arnold discusses UFC PPVs

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UFC scoffed at WWE’s PPV abandonment strategy but will they end up doing the same thing?

By Zach Arnold | October 8, 2014

It turns out that the Rory MacDonald fight that aired on Fox Sports 1 after the marathon baseball game between the Giants & Nationals drew around 800,000 viewers. Not bad. I’m not sure if this should be celebrated, but everyone seems to be grading on a curve these days given the oversaturation of Zuffa’s TV product.

There was the recent report that the ill-fated UFC 177 Arco Arena show in Sacramento with TJ Dillashaw vs. Joe Soto drew 125,000 PPV buys.

As for the fate of UFC 178 Las Vegas PPV buys…

MMA Supremacy @MMASupremacy

If you were wondering, the projected PPV buys based on trends for UFC 178 had it doing around 180K-230K PPV buys.

 

No matter how you spin the numbers, UFC is falling off a cliff on PPV right now. Sure, they can pop 500k for a Chris Weidman/Ronda Rousey dual event. That appears to be the ceiling. Without GSP & Anderson Silva, it’s a rough go of things. Johny Hendricks is really their best hope at this point in time.

As WWE got overexposed on PPV and stunk up the joint, they cut the cord on PPV and gambled with their online WWE Network. UFC is headed down the same path. They may not give up entirely on PPV but their own business practices are ensuring a one-way outcome for their PPV future.

A series of news items from the estimable Adam Swift indicates what the future looks like for UFC:

Adam Swift @AdamMSwift

Combination of declining PPV and increasing TV pushed PPV rev as a % of total UFC revenue from 45% in 2009 to 30% in 2013 per SBJ. 1/2

 

What this means is that fighters who find themselves tied to PPV points as their main means of revenue are not getting a good cut of the overall TV revenue pie at all. When you have #1 contenders like Cat Zingano making $9,000 to show and $9,000 to win, you have to start asking yourself what the future negotiating strategy will be for agents & managers in dealing with Zuffa. The UFC has accelerated their McDonaldification process by pushing entirely a volume-based global plan. They are obviously making substantive money internationally. The problem is that they are leaving themselves vulnerable domestically and that’s where Bellator & Spike can take advantage of overall UFC fatigue.

If you’re a hardcore MMA fan, there’s a lot of pressure in trying to keep up with all of the different events. It does feel like a job obligation. If you pick and choose events, then your loyalty is questioned in being down with the cause. If you watch all of the events and complain about fatigue, then you get needled for trying to keep up with every event because not every event is supposedly meant to be marketed towards you.

As the UFC declines on PPV and draws most of their money from television deals, the next question is how much can UFC expect to get from Fox or other suitors when their United States TV deal expires. Sports leagues are thrilled with the massive rights fee increases the NBA was able to get from both ESPN & TNT. The downside, of course, is that it means pay TV bills are going to rise further for customers. As long as people are willing to pay and are willing to consume lots of the product, it’s a gamble the networks will take with sports programming.

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I agree the UFC will eventually move away from PPV, but it will be over a very long timeline. There's also some weird shit in this article that I don't agree with:

1) Johny Hendricks is absolutely not their "best hope" for a new major PPV star. Nobody seems to like him at all and MacDonald would probably draw more as champ. Pettis probably has more star potential as well.

2) Bellator & Spike can take advantage of UFC fatigue? No, not really. People who can't keep up with all the UFC cards are not going to add more Bellator cards to their viewing schedule. That makes no sense. The vast majority of Bellator viewers are ultra-hardcore fans who watch it in addition to the UFC.

3) PPV sales tanked this year because the cards were shit, not because of some nebulous "fatigue". The roster was way too injury plagued to support 14 PPVs this year, and it didn't help that the LW and HW titles got shelved for TUF either. If Jones/Cormier had happened I guarantee it would have been extremely successful.

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Sub Phone Post 3.0

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It is crazy that people are trying to give projections on numbers not publicly disclosed.

No one except Zuffa and the fighters involved in the PPV points really know how many buys happen.

I think part of the potentially lower per event PPV numbers is due to the increased frequency of PPV's, the lack of PPV draws and the economy. The pace of the PPV's could put the hardcore fans in debt.

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Ingrained Media - It is crazy that people are trying to give projections on numbers not publicly disclosed.

No one except Zuffa and the fighters involved in the PPV points really know how many buys happen.

I think part of the potentially lower per event PPV numbers is due to the increased frequency of PPV's, the lack of PPV draws and the economy. The pace of the PPV's could put the hardcore fans in debt.
Not true, people who work for the PPV companies do and there are people with legit insiders whether you want to believe it or not. The shit isn't top secret confidential information, it can be obtained Phone Post 3.0

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Ingrained Media - It is crazy that people are trying to give projections on numbers not publicly disclosed.

No one except Zuffa and the fighters involved in the PPV points really know how many buys happen.

I think part of the potentially lower per event PPV numbers is due to the increased frequency of PPV's, the lack of PPV draws and the economy. The pace of the PPV's could put the hardcore fans in debt.

You're sort of right.

DOZENS of people at Zuffa know
DOZENS of fighters know (Each event)
and hundreds of people at Cable companies know.

You think there can't be leaks?

Everyone in accounting knows, everyones manager knows, every fighter knows, etc...

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12SixElbow - 
Ingrained Media - It is crazy that people are trying to give projections on numbers not publicly disclosed.

No one except Zuffa and the fighters involved in the PPV points really know how many buys happen.

I think part of the potentially lower per event PPV numbers is due to the increased frequency of PPV's, the lack of PPV draws and the economy. The pace of the PPV's could put the hardcore fans in debt.

You're sort of right.

DOZENS of people at Zuffa know
DOZENS of fighters know (Each event)
and hundreds of people at Cable companies know.

You think there can't be leaks?

Everyone in accounting knows, everyones manager knows, every fighter knows, etc...


There has never been a card with Dozens of fighters getting points, that is a PPV that would sell.

I know there are "leaks" MMA as a sport reminds me of middle school, tons of rumors. I have yet to see any rumor or PPV sales leak be substantiated. I have seen locker room checks that match up with estimates but have no way to verify any of that as fact. I surely would not be putting projections together based on rumors.

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Ingrained Media - 
12SixElbow - 
Ingrained Media - It is crazy that people are trying to give projections on numbers not publicly disclosed.

No one except Zuffa and the fighters involved in the PPV points really know how many buys happen.

I think part of the potentially lower per event PPV numbers is due to the increased frequency of PPV's, the lack of PPV draws and the economy. The pace of the PPV's could put the hardcore fans in debt.

You're sort of right.

DOZENS of people at Zuffa know
DOZENS of fighters know (Each event)
and hundreds of people at Cable companies know.

You think there can't be leaks?

Everyone in accounting knows, everyones manager knows, every fighter knows, etc...


There has never been a card with Dozens of fighters getting points, that is a PPV that would sell.

I know there are "leaks" MMA as a sport reminds me of middle school, tons of rumors. I have yet to see any rumor or PPV sales leak be substantiated. I have seen locker room checks that match up with estimates but have no way to verify any of that as fact. I surely would not be putting projections together based on rumors.

You're probably right about dozens on each card

But still, over 400 UFC fighters, how many you think get points? 20? 50? plus managers, accountants, etc...

My point being, a lot of people know

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"THis aint going to stop, its only going to get worse you watch. Injuries are literally going to be the downfall of this sport. There was a time where we didnt see half of the injuries we do now. "

Just imagine how much worse it's going to get now that they are being blood tested randomly. Dudes will be wrecked by training, injuries won't heal.

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orcus - "THis aint going to stop, its only going to get worse you watch. Injuries are literally going to be the downfall of this sport. There was a time where we didnt see half of the injuries we do now. "

Just imagine how much worse it's going to get now that they are being blood tested randomly. Dudes will be wrecked by training, injuries won't heal.
Holy fuck... Orcus and i agreeing? Wow Phone Post 3.0

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12SixElbow - 
Ingrained Media - 
12SixElbow - 
Ingrained Media - It is crazy that people are trying to give projections on numbers not publicly disclosed.

No one except Zuffa and the fighters involved in the PPV points really know how many buys happen.

I think part of the potentially lower per event PPV numbers is due to the increased frequency of PPV's, the lack of PPV draws and the economy. The pace of the PPV's could put the hardcore fans in debt.

You're sort of right.

DOZENS of people at Zuffa know
DOZENS of fighters know (Each event)
and hundreds of people at Cable companies know.

You think there can't be leaks?

Everyone in accounting knows, everyones manager knows, every fighter knows, etc...


There has never been a card with Dozens of fighters getting points, that is a PPV that would sell.

I know there are "leaks" MMA as a sport reminds me of middle school, tons of rumors. I have yet to see any rumor or PPV sales leak be substantiated. I have seen locker room checks that match up with estimates but have no way to verify any of that as fact. I surely would not be putting projections together based on rumors.

You're probably right about dozens on each card

But still, over 400 UFC fighters, how many you think get points? 20? 50? plus managers, accountants, etc...

My point being, a lot of people know

Of the a lot of people that now (5% of the roster is my guess) they all have a vested interest in not saying. Zuffa has proven that they will be vindictive if you cross them.

My point was it is hard to invest time into reading on the demise of the Zuffa business model when we really have no clue on how much they make.

If you believe the bloggers then you have to also take into consideration what Zuffa claims (1.65b valuation with only 440m being attributed to the brand value). That indicates they have some solid income sources outside of the dwindling PPV market.

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Tomato Can - I agree the UFC will eventually move away from PPV, but it will be over a very long timeline. There's also some weird shit in this article that I don't agree with:

1) Johny Hendricks is absolutely not their "best hope" for a new major PPV star. Nobody seems to like him at all and MacDonald would probably draw more as champ. Pettis probably has more star potential as well.

2) Bellator & Spike can take advantage of UFC fatigue? No, not really. People who can't keep up with all the UFC cards are not going to add more Bellator cards to their viewing schedule. That makes no sense. The vast majority of Bellator viewers are ultra-hardcore fans who watch it in addition to the UFC.

3) PPV sales tanked this year because the cards were shit, not because of some nebulous "fatigue". The roster was way too injury plagued to support 14 PPVs this year, and it didn't help that the LW and HW titles got shelved for TUF either. If Jones/Cormier had happened I guarantee it would have been extremely successful.

I mostly agree with you.