The Promotional Value of the Pettis Kick
December 17, 2010
Anthony Pettis became a worldwide trending topic on Twitter on Thursday, December 16 when in the 5th round of his WEC lightweight championship fight he leapt from the ground, pushed off the cage, and delivered a roundhouse kick to the face of a stunned Ben Henderson and dropped him to the floor.
Naturally, my reaction was “Nice kick. I wonder how much it’s worth?”.
I’ll point out that the promotional value of the Pettis kick depends on the assumptions made. It’s nearly impossible to come up with an accurate number because there are so many factors that influence a UFC PPV event purchase decision. Yet, I always enjoy estimating the value of fights and performances simply as an exercise to further my understanding of how the fight game works. So, let’s have some fun and play with it a little:
The promotional value of this kick to the UFC will be determined by a number of things: increased interest in the UFC, its PPVs, its live events, it’s television events, and its merchandise. However, for simplicity’s sake let’s just look at the number of people influenced by Pettis to watch his next fight. In this case the short term is far easier to estimate than the long term (just know that the more success Pettis comes to have, the more this kick will continue to add value to the UFC in the future).
I’ll start with asking a simple question: how many people were watching the fight last night? We’ll know in a few days, but the peak viewership was likely in the 500,000 to 750,000 range. Now let’s make two assumptions:
1. Nearly everyone that saw last night’s event has been motivated to watch Pettis his next fight.
2. The UFC will get 1 PPV buy from every 10 of those fans (this is consistent with the notion of 10 fans per viewing party)
This gives us 50,000 to 75,000 PPV buys as the result of Pettis’ performance (the kick being the last thing that most fans remember is very influential here). The calculations then are as follows:
– 50,000 x $49.99/2 = $1.25 million
– 75,000 x $49.99/2 = $1.9 million
*Note: under the terms of the UFC’s agreement with PPV companies, it receives approximately half of that $49.99 (although I understand that the UFC is starting to earn a more favorable term here).
Now, it’s here that we need to adjust our estimate based on the likelihood that those watching the WEC show are the types that buy UFC cards every time out. In other words, how do we know those 500,000-750,000 fans watching WEC (most likely semi to hardcore fans) aren’t the types that buy every PPV anyway? It’s a valid consideration. So, let’s assume that 50% of those watching the WEC card would have been on the fence as to whether to buy Pettis’ next fight. The new estimated value of the kick is then probably closer to $625,000-$950,000.
MMAPayout.com’s Jason Cruz rightly points out that the UFC will use this kick in a host of future promotional videos, Spike TV Countdown Shows, ESPN SportsCenter, and other PR efforts in order to convince casual fans that missed the fight that Pettis is a dynamic and exciting fighter worthy of challenging for the belt. It’s plausible, depending on how much they push Pettis’ kick and dynamic abilities that this could translate into as few as 25,000 PPV buys or as many as 50,000 more. This adds an $625,000 to $1.9 million to the value pie.
Thus, we arrive at an estimated short term promotional value of the kick at between $1.25 million and $2.85 million.
The value to Pettis is harder to determine. Immediately he received a $10, 000 bonus for fight of the night. I’d also venture to guess he’ll be given a sizable discretionary bonus from Zuffa (anywhere between $10,000 and $50,000). However, in moving to the UFC, we have to be careful to separate the extra value Pettis will receive as the result of that kick from what he would have received just because of the move itself.
The easiest way to estimate this is perhaps to just take a percentage of the UFC’s value. The UFC typically pays out ~20% of its gross revenue to the fighters and this translates to anywhere between $250,000 to $570,000 over the medium term. I say medium term because there’s going to be a lag between what the UFC earns due to Pettis and what Pettis earns due to himself (as the result of contracts that lock him into a certain compensation set for a period of time).
Don’t forget sponsorship value too. Pettis will be a hot commodity for his fight with the winner of Edgar vs. Maynard.
The kick was incredibly impressive. It’s moments like that which make this sport so incredible. It’s also more support for the idea that the key to developing PPV draws is finding those with immense and entertaining fighting ability. All the charisma and good looks in the world cannot match the selling effect of a beautifully timed jumping roundhouse kick off the fence. It all starts and ends with fighting ability. Everything else comes second.
Perhaps the only thing I would have changed is the fact that it happened in the WEC. Imagine the value of that kick if it happens in the UFC (or even for the WEC in an earlier show). I also think this kick (and the card as a whole) is demonstrative of the value the WEC’s divisions will add to the UFC.