UFC Establishes New Mark for PPV Buys in 2009

December 28, 2009

The UFC sold an estimated 8 million PPVs in 2009, which is a mark that breaks the organization’s previous record of 6.2 million that was set in the calendar year of 2008. Not only did the UFC enjoy an increase in popularity due to – among other things – the release of its newest video game and more media coverage, but it also found new stars with which to push its product even further. The likes of Lesnar, St-Pierre, Penn, Griffin, and Machida have all become solid draws for the company.

The following information is a summary of the UFC’s PPV buyrate history over the last four years:

UFC

2006

 

2007

 

2008

 

2009

57

400000

67

400,000

80

225,000

93

350,000

58

290000

68

540,000

81

600,000

94

800,000

59

425000

69

400,000

82

325,000

96

350,000

60

620000

71

675,000

83

530,000

97

650,000

61

775000

72

200,000

84

475,000

98

635,000

62

500000

73

425,000

85

215,000

99

365,000

63

400000

74

520,000

86

540,000

100

1,600,000

64

300000

76

475,000

87

625,000

101

900,000

65

500000

77

325,000

88

480,000

102

435,000

66

1050000

78

325,000

90

300,000

103

375,000

   

79

700,000

91

900,000

104

500,000

       

92

1,050,000

106

375,000

           

107

620,000

               
 

2006

 

2007

 

2008

 

2009

Number

10

 

11

 

12

 

13

Average

526,000

 

453,182

 

522,083

 

611,923

Median

462,500

 

425,000

 

505,000

 

500,000

Total

5,260,000

 

4,985,000

 

6,265,000

 

7,955,000

               
% Increase    

-5.23%

 

25.68%

 

26.98%

 

Payout Perspective:

The above data comparison yields some interesting observations:

1.)The most obvious of observations is that, despite the injury-plagued second half of the year, the UFC still enjoyed a record-breaking 2009. And that’s easy to forget when you consider what might have been had Lesnar been healthy and Rampage not gone to acting.

From an optimistic point of view, one could actually point to the results in the second half of the year, and say not that the UFC was declining, but that the organization is capable of further improvement on just its existing popularity alone (ignoring any future potential gains in popularity). It’s not a stretch to think that the UFC could have done 1 million more buys in 2009 given what we know about Lesnar’s drawing ability and the influence of momentum on PPV viewing habits.

2.) However, if you’re looking for any sort of indication as to how difficult September through November really was for the UFC, the organization’s YOY PPV growth dropped from some 60% in August down to the UFC’s two-year average of around 26%. That increase also includes one extra event in ’09.

3.) Moreover, while the PPV total and event average increased in 2009, the median did not. This suggests the UFC was far more volatile in 2009, which is sort of obvious when you look at UFC 100’s 1.6 million being a clear 600k ahead of anything else the organization did on the year.

The point behind the volatility is that it really underscores the difference that exists between the drawing power of the UFC brand versus the drawing ability of certain fighters within the UFC. The oft-discussed UFC baseline probably hovers around 350k – the number of hardcore UFC fans that tune in regardless of who is fighting. But the higher totals we have seen over the last few years are the result of significant draws on the top end of the card: Lesnar, St-Pierre, Griffin, Penn, Mir, Machida, Silva, etc.  

It’s also important to note that the gap between the brand’s drawing ability and that of the brand’s star fighters has grown considerably over the last few years. As you’ll note in 2006 or 2007 some of the promotion’s top end fighters like Liddell or Penn were doing 400-500k, which was considering excellent. At the same time 200k was considered to be the minimum for any event.

I’ve always maintained that the business strategy that helped the UFC climb to its current popularity won’t be suitable for pushing the organization to the next level, and the numbers would seem to support this. Moving forward, it’s going to be very important for the UFC to push the individual fighters in order to further their own growth. However, that doesn’t mean the UFC should abandon its brand building strategy altogether; there is a way the UFC can build its fighters within a UFC-themed campaign that would accomplish both goals. 

4.) There’s been some criticism of Dave Meltzer’s PPV estimates lately, but he’s always maintained that they’re just estimates and susceptible to inaccuracies – sometimes a number will change by as much as 10%. To his credit, he often follows up to change a number when a better estimate is reported.

Regardless, even if you take +/- 10% range on each of the yearly totals, the lower 2009 estimate is still large enough to beat the upper limit of what 2008 could have possibly done.

  2006   2007   2008   2009
Lower 4,734,000   4,486,500   5,638,500   7,159,500
Upper 5,786,000   5,483,500   6,891,500   8,750,500

 

Kruck Talks MMA Wagering in Vegas

December 28, 2009

HDNet’s Ron Kruck reveals that mixed martial arts accounts for only 1% of the estimated $2.5 billion in legal sports wagers in the United States, but that MMA betting handles are already starting to increase as the result of the sports sizable growth in the last five years.

Payout Perspective:

The potential for the growth of MMA-related wagering is intriguing, because it offers a reason for casual fans to become more interested in the sport.

However, it should also underscore the importance of addressing the issues related to officiating and judging in MMA. Not only will bad officiating and scoring impact the number of future wagers on the sport, but these poor decisions will also bring more public attention to the current inadequacies of the system (which ultimately reflects negatively on the sport’s quest for legitimacy).

Fighters Only Going Global in 2010

December 27, 2009

Chris Knox of NeBusiness.co.uk writes of the Fighters Only success story and what looks to be a very promising 2010 for the MMA magazine founded in the UK.

Rob Hewitt turned his love of competitive fighting into a fully-fledged business in 2005, when he launched Fighters Only magazine in Newcastle with the aim of providing mixed martial arts fans in the UK with a dedicated resource.

 

He is now looking extend its readership to Australia and France next year after establishing the title in 13 different countries and is also hoping to set up an online TV channel to help the company increase its £1.5m turnover.

 

Over the years, the magazine has progressed from focusing mainly on the UK mixed martial arts scene to worldwide coverage of the sport, with contributors in the US, Canada, Europe, Brazil and Japan.

 

It has just established licence deals for the production of German and South African editions of the magazine. It was advised by Newcastle law firm Mincoffs.

 

The publication, which has 12 staff, is also about to host its first televised awards ceremony in Las Vegas, and recently signed an agreement with sportswear firm TapouT to produce a range of Fighters Only-branded clothing.

 

Mr Hewitt said: “Having been involved in MMA from its earliest days I knew that it had the potential to grow from being an underground sport to one of the biggest in the world and that there was a place in the global market for a brand like Fighters Only.

 

“With the guidance of my board of directors and the legal expertise of Mincoffs solicitors I have been able to implement plans and strategies to dominate the world of combat sports media and gain further business success from the growth in popularity of our brand.”

Payout Perspective:

The growth of Fighters Only is great not only for the company itself, but MMA as a whole because it’s another medium to spread the word about the sport. The fact that magazine covers every promotion also means that fans begin to realize that MMA is not exactly synonymous with the UFC.

Also, just a reminder that Fighters Only is hosting the first ever World Mixed Martial Arts Awards later this week in Las Vegas, Nevada.

Pacquiao Planning to Sue Mayweather

December 26, 2009

Dan Rafael of ESPN.com is reporting that Manny Pacquiao is planning to file a defamation lawsuit against Floyd Mayweather Jr., Floyd Mayweather Sr., and Golden Boy Promotions.

What began as an apparent simple disagreement between the camps of Manny Pacquiao and Floyd Mayweather Jr. over how to handle drug testing for their megafight — tentatively scheduled for March 13 at the MGM Grand in Las Vegas — has spiraled so out of control that the potential biggest money fight in boxing history was in serious jeopardy on Christmas Day.

 

Pacquiao, angered by accusations from the Mayweather camp that he uses performance-enhancing drugs, said he would file a defamation lawsuit against Mayweather and Golden Boy Promotions.

 

“Enough is enough. These people, Mayweather Sr., [Mayweather] Jr. and Golden Boy Promotions, think it is a joke and a right to accuse someone wrongly of using steroids or other performance-enhancing drugs,” said Pacquiao, who denied that he has ever used any banned substance and who has passed all of his drug tests. “I have tried to just brush it off as a mere prefight ploy, but I think they have gone overboard.”

Payout Perspective:

Perhaps the skeptics were right, and this fight may never happen. It would be a shame.

Rafael goes on to mention that Arum is now planning a secondary fight against former junior welterweight titlist Paul Malignaggi for March 13th in the event that he cannot come to an agreement with the Mayweather camp in time. That fight doesn’t have nearly the appeal that a Pacquiao-Mayweather bout would, which bodes well for the press coverage of the UFC’s two, rather important, events in late March (the debut on Versus for the 21st and UFC 111 featuring the return of GSP just six days later).

Overeem Committed to K-1 Until Early April

December 24, 2009

Steven Marrocco of MMAWeekly sheds some interesting light on the fighting and contract status of Strikeforce Heavyweight Champion Alistair Overeem:

In January, the promotion secured Overeem to a one-year, three-fight deal, obligating him to a return in lieu of an informal talent-sharing agreement with K-1 that saw him snag the title in November 2007.

 

Overeem, who was forced to pull out of two scheduled Strikeforce events in June and August with a serious hand injury, is scheduled to appear against Kazuyuki Fujita at K-1 Dynamite on New Year’s Eve – his fifth K-1 fight in 2009 – and is planning a sixth in late March/early April 2010.

 

That was grim news to those expecting a showdown between Overeem and Fedor Emelianenko under the CBS eye in April. More confounding was that it was Overeem asking to fight the Russian after sacking James Thompson at Dream 12.

 

“Alistair Overeem wants to fight Fedor in April 2010,” the Dutchman said after the Oct. 25 fight. “So write that down.”

 

And while Strikeforce CEO Scott Coker told MMAWeekly.com he would invite the champion to participate on the promotion’s second CBS card in April, his manager said the K-1 opportunity – the final fight on his contract with the Japanese promotion – is too good to pass up.

 

“I never said he wasn’t fighting in April,” Overeem manager Bas Boon told MMAWeekly.com. “What I said was there will be a fight by the end of March or April in K-1, and actually, he did very well in K-1 and he’s got an extremely good contract. Commercial-wise, it’s better for him, and we agreed to this already on K-1, that we will do that fight. After that fight, he will fight in Strikeforce. Two, three times, whatever is available in May, June, July, we don’t care.”

 

Boon said Overeem could make a late April date if he wasn’t injured, but doubted Coker would agree to promote a fight under those circumstances. He said the hand injuries extended the time on his Strikeforce contract, but did not say for how long.

 

For now, it was time to strike when the iron was hot.

 

“(Golden Glory) has a 10-year relationship with Alistair, and we told him that this is a better way to work for him,” said Boon. “Think about it, man, he’s broadcast in 150 countries (on K-1). Right now, he’s got more sponsors than he ever had before. In his own country, he had a crazy rating during the Grand Prix, but also on EuroSport and also in Thailand. And this is where the UFC isn’t even broadcast. UFC is not even broadcast in Europe. Nobody knows about the UFC. Semmy Schilt and Alistair Overeem are gods there. You’re talking about a continent with 280 million people.

 

“(American fans) have to understand, man, to fight Badr Hari, Remy Bonjasky, Peter Aerts, Texeira, and again, Badr Hari, these are the top strikers in the world. If there would be any Americans wanting to win $400,000 or $500,000 in U.S., which is big money, why are they not there? Why are they not in K-1?”

Payout Perspective:

Herein lies the issue with non-exclusive contracts: not only does Strikeforce have to compete for fighters entering the entertainment business, but it’s also got to compete for the time and booking of its own fighters with other organizations. For as much as the contract type helps the organization secure new talent, it’s also managed to put two of Strikeforce’s divisions on hold for the better part of the last two years.

It’s tough to fault Overeem for taking the money and the exposure in Europe; the latter of which might really pay off for M-1 if and when it comes time to promote a Fedor vs. Overeem fight internationally.

However, given that Overeem only signed a one-year, three-fight contract —  and that it has already been extended — you have to wonder for how many more fights he’ll remain in the organization. Depending on the type of extension that has already been applied to his contract, it’s conceivable that he could leave Strikeforce without defending the belt against Fedor. Worse still, he could beat Fedor and then walk – leaving Strikeforce in a very bad position.

UFC 107: 620,000 Buys

December 23, 2009

Dave Meltzer of the Wrestling Observer writes that UFC 107 beat just about every expectation in selling over 600,000 PPV buys on December 12th.

After four straight disappointing numbers, UFC 107 shocked pretty much everyone, affirming the value of a great pregame show as it did, based on the latest estimates, more than 620,000 buys. That will end up probably tripling Survivor Series’ North American buys that took place the next day.

 

What is curious is that the wide variance between UFC 106 and UFC 107 isn’t notable in looking at non-PPV numbers that you could look at regarding interest in the show, such as amount of clicks on major web site coverage of the shows, web site activity regarding the shows, which almost always directly correlate with buy rates. In looking at these numbers, 107 was ahead of 106, but there was nothing that would indicate 107 doing almost double the buys.

 

Historically, when looking at these types of numbers, you usually can get a good indication of where the PPV numbers are going to fall. For 106, the buys were much lower than those numbers would indicate, but for 107 they were much higher and right now I can’t come up with a reason why this would be. Within the company, the belief is B.J. Penn has become one of the top draws. In the arena at 107, the most popular fighter was Clay Guida. But Guida is your classic example of a guy who gets a great response, probably helps a little with TV ratings but I don’t see him as a PPV draw, and obviously Zuffa doesn’t see him as a big one either since Guida vs. Kenny Florian wasn’t even promoted on the Countdown show.

Payout Perspective:

Going into UFC 107 we had a pretty good idea that it was going to be the best PPV since UFC 101 in August, but I’m not sure anyone expected 620,000 based on the kind of pre-fight indicators that we were seeing. UFC 107 proved to be the first – and probably not the last – event to exceed our PPV prediction range here at MMAPayout.

What explains the result? Like anything else, the result is a combination of things:

  • A believable title fight
  • A solid main card
  • Strong personalities: BJ Penn, Frank Mir, and to a lesser extent Diego Sanchez
  • UFC 107 was the strongest card – by far – in more than 5 months

If you believe that fans have been forced to carefully pick and choose between events – for any number of reasons, but most related to time or monetary constraints – then it makes sense that UFC 107 is the card they chose to purchase more so than any other event this fall. The level of interest in the UFC hasn’t necessarily changed over the last few months, but the willingness of the UFC’s fans to purchase an event understandably fluctuates.

It all comes down to the UFC’s ability to promote and build fight cards that have the perception of being worthy to purchase. Hence, the reason why Frank Mir’s performance on the Countdown show was as effective as it was. The UFC had the attention of all these fans – it never left after UFC 101 – but the organization simply had to convince those people that this card was worthy of the purchase.

It all sounds very basic, but when you look at some of the panic we’ve seen over the last few months it’s a necessary reminder.

TV Ratings: WEC 45, Strikeforce: Evolution

December 23, 2009

The television ratings from the latest WEC and Strikeforce offerings have been released courtesy of Versus and Showtime (brought to us by MMAJunkie):

WEC 45 – 330,000 viewers
Strikeforce: Evolution – 341,000 viewers

Payout Perspective:

The results definitely favor Strikeforce in this latest head-to-head. Not only did Strikeforce outperform the WEC in viewership, but it did so on a network, Showtime, with a significantly smaller subscriber base. However, in the overall picture, 341,000 isn’t exceptional for the organization – it’s about par for the course.

The same cannot be said for the WEC’s 330,000 on Versus. It’s below what it has been doing lately (about 400-500k) and well below their best effort in 2008 (WEC 34, 1.54 million viewers). The non-title headline was likely the greatest influencing factor here, but you could also argue that the greater appeal of the heavier fighters on the Strikeforce card was very much evident in the week leading up to the fight.

It highlights the curious dichotomy that exists within combat sports: despite being arguably more entertaining on the average – largely on account of their speed, endurance, and tenacity – lighter fighters are often not as popular as heavier fighters (holding all else equal…like skill, for example).

Part of the intrigue of the WEC is that it can differentiate itself using the smaller, lighter, and faster fighters. But in order to be successful, the organization will also have to wage a continuous PR and marketing war that fights this very dichotomy in the future.

The Risk and Reward of Ring Entrances

December 23, 2009

Michael Rome of BloodyElbow raises the topic of MMA event production reform with regard to ring or cage entrances in his latest piece on the website:

A big part of promoting mixed martial arts is giving fans a reason to care about the fighters on the screen.  They should have their favorites that they’re rooting for, because if they don’t they’re very unlikely to tune in in large numbers just to see good technique.  They need to care, and in order to care they need to know who fighters are.  Since Strikeforce doesn’t really have any vehicle to promote fighters outside of the cage, allowing for spectacular entrances is the next best thing.  When BJ Penn’s music hits, you who it is.  It’s a spectacular extension of his persona.  Strikeforce has nothing like it.

 

This brings us to King Mo Lawal.  It truly boggles the mind that his entrance wasn’t shown on television, considering the fact that it was the only somewhat special entrance of the night.  Was Showtime embarrassed by it?  Are they averse to star creation?  The entrance wasn’t even anything that special compared to the kinds of entrances stars like Randy Couture, Forrest Griffin, and Georges St. Pierre have, but it was still worth showing.

Payout Perspective:

The issue of fighter entrances ties in well with the topic of story telling that we’ve discussed almost ad nauseam over the last few weeks.

A fighter’s entrance is a small but important part of communicating the personality, the human interest, and the overall story behind the individual that’s about to step into the cage . The fan reaction, the demeanor of the fighter as he approaches the cage, and even the choice of music can go a long way towards communicating a specific and very influential message.

By overlooking fighter entrances, Strikeforce is missing an opportunity to reach the fan in a unique and memorable way, which is ultimately a lost opportunity to drive awareness, interest, and viewership.

However, there’s a fine line between communicating a memorable message and exhibiting too much showmanship. An organization that focuses too much on the pyro, risks losing a bit of the professional sporting feel that is necessary for legitimacy. This is largely the reason why the UFC abandoned the stage entrance model in the earlier part of the decade – they wanted to put the focus on the fights and get away from that professional wrestling type of spectacle.

So, where does that leave the likes of Lawal or Miller? Their entrances do a good job of communicating who they are as individuals and differentiating them from the rest of the pack. But that will only continue to be the case so long as it doesn’t become a trend within the rest of the sport.

If everyone starts walking to the cage with an entourage of six girls, or a ten minute dance routine, then none of it adds any value. At that point there’s no unique message of differentiation – just a bunch of bad dancers.

Jones Loses Hamill Fight Appeal

December 23, 2009

Jeremy Botter of Heavy.com has the latest regarding the Jon Jones appeal with the Nevada State Athletic Commission:

Jon Jones’ appeal to the Nevada State Athletic Commission to overturn referee Steve Mazagatti’s decision in his bout against Matt Hamill earlier this month has been denied. The NSAC stated that they don’t overturn decisions and decided against ruling on the appeal.

 

Heavy.com confirmed the news with Jason Genet, the manager of Jones, Shane Carwin and other fighters.

Payout Perspective:

The appeal was a long shot to begin with, so the result isn’t necessarily a surprise.

It’s a tough way to lose your first fight, but Jones image and reputation won’t be hurt by this in the least. He was impressive; displaying the type of marked improvement in the Hamill fight that you look for in a young fighter. Now he’s staring at a huge fight against Brandon Vera — the main event of the UFC’s debut on Versus — where he’s got the opportunity to put himself on the map.

Not only can Jones become a contender at 205lbs., but he’s widely being viewed as one of the future stars of the UFC: a young and dynamic fighter with the ability to engage fans in and out of the cage. He’s one of that future crop that the UFC is really hoping to develop.

Starz Hires ex-HBO Chief Chris Albrecht

December 23, 2009

Liberty Media, parent company of Starz Entertainment, has hired former HBO CEO Chris Albrecht to be the new President & CEO of Starz. The premium movie service provider is similar to HBO and Showtime; and, its main brands include Starz and Encore, which own 17 and 30 million subscribers, respectively.

Payout Perspective:

The news is worthy of note, because in addition to being the chief content architect at HBO – bringing in shows like Sex and the CityThe Sopranos, and Entourage – Albrecht was also the organization’s main MMA proponent.

Albrecht left the organization in 2007, and the subsequent talks between the UFC and HBO failed to materialize a deal.

Note: This should not be taken as a sign that Starz will become interested in MMA, but rather a reminder that business agreements often succeed or fail on the basis of an entity’s ability to gain support and coalition build within an organization. The loss of a key supporter can often derail an agreement, because it destabilizes the entire support group.

« Previous PageNext Page »