Welcome to another edition of Payout Perspective! This week we’ll be taking a look at the UFC’s first event in Australia, UFC 110, held on Sunday, February 21st from the Acer Arena in Sydney (but shown live on PPV in North America on Saturday). The event featured a heavyweight contender’s match between Antonio Rodrigo Nogueira and Cain Velasquez, in addition to a middleweight showdown between Wanderlei Silva and Michael Bisping.
UFC 110 by the Numbers
Attendance/Gate
The announced attendance for the fight was 17,431, which drew a live gate of approximately $2.2 million US ($2.5m AUD).
Disclosed Payouts
Unlikely to be released.
Disclosed Bonuses
Fight of the Night: George Sortiropoul0s vs. Joe Stevenson ($50,000 each)
Knockout of the Night: Cain Velasquez ($50,000)
Submission of the Night: Chris Lytle ($50,000)
Total Disclosed Bonuses: $200,000
PPV Buyrate Prediction:
The numbers for UFC 110 are again pretty strong with the live gate generating approximately $2.2 million US and Countdown to UFC 110 drawing 635,000 viewers. However, the countdown viewership has been skewing unusually high lately as the result of Spike’s new strategy to schedule the show immediately following large demographical lead-ins from other related content like other MMA or wrestling programs. Thus, I’ve decided to weight the prediction with a 75-25 skew towards the gate (traditionally a less volatile indicator than the countdown ratings).
When you plug the figures into the linear equation derived from a regression analysis you’re left with the following range:
- UFC 110 gate prediction: 412,000
- UFC 110 countdown prediction: 570,000
- Weighted average: 452,000
The expectations for this card weren’t superb in terms of its ability to sell. Indeed, 450,000 seems to be the ceiling for a card of this caliber and hype. However, let’s take a look at some of the factors that may have influenced the buyrate one way or another.
+ Strongest card on paper since UFC 107
+ The UFC did a very good job of promoting the fact it was taking its show on the road; may have drawn a part of that casual crowd, curious to see what all the international fuss is about.
+ Nogueira isn’t the tremendously weak draw that everyone believes him to be; he’s co-headlined two shows that surpassed 600k, and was last seen in a candidate for 2009 fight of the year when he beat Randy Couture at UFC 102. Also don’t forget he did TUF with Mir.
— On the other hand, there was again no title match on the card. These make all the difference in the world where buyrates are concerned.
— The live gate may be inflated by the fact that it was the UFC’s first-ever time in Australia. If you discount the gate by 20% you’re looking at a new weighted average of 390,000.
Greg Saks of Tapology.com has predicted 355,000 buys using his online buzz indicators.
Business Story Lines
Velasquez dominant, heavyweight division looking tough
Velasquez has officially jumped the chasm from being touted prospect to legitimate title contender. He keeps getting better with each and every fight, and to dismantle a legend like Nogeuira the way he did was very impressive. Granted, Nogueira’s chin threshold has lowered substantially – the man that used to be able to take a beating, no longer can – but he’s still a formidable top 10 opponent.
Now things are looking very interesting in the heavyweight division. Velasquez will likely get a crack at Lesnar (or whomever the champion happens to be) at some point this year. He also joins a slew of capable threats at the top of the division (including Mir, Carwin, and Dos Santos), which gives the UFC heavyweights a look and feel that it’s probably never had before – depth.
If Lesnar’s ability to draw is any indication, the public is very much interested in seeing these gargantuan men collide in the cage. Thus, while the growth of the UFC and MMA has yet to be paced by the success of the heavyweight division, the big men will likely play an increasingly critical role in driving interest and sales in the future.
Velasquez has immense potential to help draw Hispanic audience into MMA
Velasquez claims Salinas, CA to be home, but he’s very proud and in-tune with his Mexican heritage. The importance of this fact should not be understated, because the UFC is trying to attract the hispanic demographic (traditionally a very strong supporter of boxing) and possibly expand into Mexico with a live show in the next few years.
The marketing study performed by Damon et al talked about vicarious achievement, which is essentially a fan experiencing a degree of perceived achievement just by watching his/her favorite fighter succeed. The study suggested this was a strong motivator for the consumption of MMA, but I propose – strictly through my own observations – that the effects of vicarious achievement are even stronger within MMA’s minority demographics. The Hispanic audience doesn’t just like boxing, it likes cheering for Hispanic boxers.
Thus, perhaps the key to success in terms of attracting the Hispanic demographic is to utilize fighters like Cain Velasquez and Efrain Escudero to help build that market. Similarly, judging by the reaction that George Sortiropoulos was given by his hometown crowd (or even what GSP receives in Canada) the effects of this vicarious achievement may become even more important for the growth of MMA as it increasingly becomes an international sport.
Mixed reviews from Australian media
The Good: Dan Koch, The Australian, Ultimate Fighting Championship Takes Center Stage
The Bad: Peter Fitzsimons, Sydney Morning Herald, ‘Smell the blood!’ The Sickening Roar for Gore
UFC breaks Acer Arena records
According to Dana White, the UFC broke arena records for highest grossing event and highest merchandise sales. UFC 110 was also the second fastest sellout in UFC history when tickets vanished in little over an hour (Montreal owns the top spot with something like six minutes).
UFC plans annual event in Australia
The UFC’s debut in Australia was so successful that the organization is hoping to hold an event in the country on an annual basis. This is something we’d heard talk of before the event, but White confirmed as much at the post-fight press conference. Melbourne is the target destination, but the market has yet to be sanctioned. Perth is the other location being discussed.
Not only was the show a success in terms of the tremendous response the UFC received from the fans in Australia, but the event performed so well in terms of entertainment value that it’s hard to believe the UFC didn’t make a host of new fans watching the event on TV throughout the country. It helps, of course, that the fight of the night came from the performance of an Aussie.
Prospect Watch
UFC 110 showcased a plethora of young fighting prospects, so understandably the results weren’t all positive. Cain Velasquez obviously stepped up and shed his prospect status, becoming a bona fide title contender at 265lbs. Further success was had by Sortiropoulos, Bader, and Dollaway – the former two are now ready to face top ten fighters, while the latter secured a much needed victory to remain in the UFC. Unfortunately, the night wasn’t as positive for Goran Reljic and Brian Foster; each man will look to re-group but neither is likely in danger of being cut loose.
Sponsorship Watch
The UFC’s approach to sponsorship understandably changes when it ventures internationally, so we saw a slightly different approach to cage mat sponsorship at the event. Gamefly.com took the center octagon sponsorship, but was joined by a host of smaller logo sponsorships on the periphery (including new comers USAToday.com and SI.com). The event was sponsored by a new television series on the FX network, Justified, set to debut in March.
Something to keep an eye on as the UFC continues to expand internationally is the exclusivity of its sponsorship contracts. MMAPayout.com talked about the emerging technologies that might allow the UFC to offer unique sponsorship packages to different broadcasts throughout the world, which would obviously boost revenues. If the organization can pair down its contracts to exclusivity by region, it may have an opportunity to utilize green screen technology to give, for example, English, Hispanic, Arabic, Korean, and Japanese feeds different title sponsors.
I wonder if the USA Today & SI.com placements were bartered? UFC had a full page ad in the USA Today for the event on Friday.
Also interesting to see FX buy time to push its new series.
Maybe I haven’t been paying attention recently – but it also looked like there were a few productions tweaks.
New/better slow mo replay angle from the jib above the cage provided some really nice shots. Plus the pre-fight video pieces for the main events have been jazzed up from the old format of just the black and white back and forth to include some b-roll and effects. They looked more like what CBS/Showtime has been doing for MMA recently.
Its interesting that with a tweak here, a new graphics package there, the look of the broadcasts have changed fairly substantially since the 05-08 time frame when most elements were static. In the last year (I would date it back to 100 when I think the new graphic package debuted), they’ve done a really nice job of evolving/growing while maintaining the core identity of there broadcasts (like the gladiator open).
I noticed the same.
We often talk about the larger, macro-effects, if you will, of competition in the MMA industry, but it’s interesting to see the more subtle effects – the small things.
Is the live gate of a new location for a UFC event not in this country really that accurate of an indicator of how well PPVs sell in North America? The problem i have with the gate is its based on price not attendance. Some cities cant support high ticket prices. For example UFC 100 at its ticket prices would not have sold well in say Columbus where UFC 68 had 19,000 but the gate was only 3 mill. But that same example shows why you cant use a new city attendance because they are always popular and sell out fast. 68 being the biggest attendance at the time didnt pake it a HUGE PPV sell.
I expect 110 to be lower than the numbers predict because this was the forst event in that city.
350K buy rates would be good for a card like that. What’s the numbers from UFC 109 already? I’ve heard they were dismal.
A few unique aspects to 110 gate that probably are not shown in general stats. Australia is an island about the physical size of continental USA but has only 4 real metro populations comparable w/ North America. The swift sellout although not as quick as Montreal drew from a dramatically smaller demographic.
The large number of interstate ticket sales (I read 40% on Aus website) that pump the local economy w/ airline tickets, hotels & other hospitality spends. Meet & Greet AfterParty on UFC site 110.00aud. Merchandise-Add to Zuffa take.
Sydney, Australia has world class infrastructure from being an Olympic City but what is truly impressive is the Machine that Dana built (he a few short years ago was a doorman @ The Boston Harbor Hotel) is able to land in a far off country and roll out the show w/ all the goodies and leave the fans sceaming for more(wallets open)! We are witnessing quite an amazing sports entertainment shift. IMHO in the future many will try to copy this creation in other arenas(not MMA) globally.