Upcoming UFC Advances & Secondary Marketplace Strategy

March 26, 2008

Dave Meltzer reported in this week’s Wrestling Observer Newsletter that the advance for UFC 83 in Montreal is over $4.5 million. The event is officially a sellout, but in a somewhat controversial move, company is auctioning off some additional seats. The company also frequently auctions off fighter memorabilia from its events for-profit.

The secondary ticket market is an emerging force in sports business, however, it is usually seller to seller with the sports entity as the go between, keeping the transaction fee. In the game worn industry, when items are auctioned by the entity it is usually for charity with most for-profit deals done through licensing companies such as Steiner Sports. That allows companies to reap the benefit without attracting potential negative publicity.

Zuffa’s decision to handle these transactions itself appear to be consistent with the company’s standard operating procedures which seek to maximize profits by keeping things in house whenever possible. The practices are not illegal and would be considered by many to be sound business, cutting out the middle man and thus maximizing profits. However, you have to wonder if the potential damage to the company’s image/reputation is worth the extra financial reward.

Meltzer also reported that the advance for the company’s 5/24 show in Las Vegas is off to a strong start at $2.3 million. With two months to go, that figure is only 8% off the total gate ($2.5 million) UFC 81 drew in February. The event features a strong card that includes the last fight on Tito Ortiz’s contract. Ortiz has to be happy with the fast start as a strong gate and pay-per-view number, to go with a victory, would solidify his status as a top draw heading into the open market.

The company’s 6/7 return to London is also off to a good start with an over $2 million advance. Ticket prices for the event are up $50 across the board from the first show with the cheapest seats going for $90. There is a lot of attention being paid to the gate by industry observers as the company has historically had a tougher time the second time into markets other than Las Vegas.

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