The Randy vs Brock Change of Venue

September 4, 2008

One of the curious notes from the Dana-Brock-Randy conference call was the change of venue. The show was originally planned to take place as the debut show for the UFC in the Portland market. Dave Meltzer in the print version of The Wrestling Observer Newsletter details all the varying factors that went in to the decision to move the event to Vegas:

The fight was moved from Portland to Las Vegas at the last minute. Rose Garden officials all weekend were expecting to finalize the deal on 9/2……The hold-up was a tax issue, as there is a 6% athletic commission tax as well as a 6% events tax at the Rose Garden. When they didn’t have a main event, the idea of a 12% tax combined with an uncertainty over the gate, because UFC live events have fallen from their peak of a few months ago and are not instant sellouts in new markets, saw them try to negotiate a tax break. Rose Garden officials thought they had hit paydirt when the expected Lesnar vs. Cheick Kongo fight turned into a possible Lesnar vs. Couture fight, particularly since Couture has area ties, having lived and trained near Portland until 2005. Those who knew about it thought it could turn out to be one of he biggest sporting events in years in the state. But with a fight this big, it is expected to do a $5 million gate in Las Vegas, a number Portland simply couldn’t do

The ability to do a big gate was most likely the largest factor taken into consideration. While the UFC can get sellouts or near sellouts and set venue records in Non-Vegas markets, there is a definitive ceiling on what kind of gate the UFC can pull in these markets. With the exception of a hot Montreal market (which did a $5 million gate), most markets in the US are going to top out around the $2 to $2.5 million mark. By contrast, an average Vegas show will pull in $3 million with the upper ceiling hitting the $5 million mark. While the bulk of the UFC’s money is made in the PPV market, that $3 million dollar swing in some circumstances is a game changer when deciding where to put on a big fight.

As was mentioned earlier, the UFC had looked to take an extended break from the Vegas market, with no cards planned from the Griffin-Jackson fight in early July to the year end show featuring the Mir-Big Nog showdown. With the switch of the Nov 15th show to Vegas, the UFC looks to be having the opposite problem. The UFC will now be putting on three high-profile, big ticket shows in Vegas in the span of two and a half months. It should be interesting to see what affect this might have on the gate receipts. These three shows independent of each other would almost be guaranteed to be in a top 3 spot for gates in Vegas history, but running the shows so closely together brings the danger of lessening the numbers for one or more of the shows. A similar situation was played out with the UFC 79 and 81 shows, both from Vegas. The UFC 79 show did in excess of $5 million at the box office, while UFC 81 did around 7,200 paid with a $2.5 million gate.

The last thing of note from the Meltzer excerpt is the increasing role of state and local taxes when the UFC goes Venue shopping. One of the notes coming out of the UFC 87 show was the UFC brass being unhappy with the high taxes (10%) associated with running a show from The Target Center in Minneapolis. Portland looks to have an even less friendly tax status, with the state and local authorities taking in 12%. Going forward, tax liability may become a higher priority when deciding what new markets for the UFC to visit.

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