UFC In Talks to Buy Stake in G4 Channel

June 8, 2011

The Wall Street Journal’s Jessica Vascellaro is reporting that the UFC is in talks to buy control of NBC Universal’s struggling G4 network.

 

The G4 gaming network has been struggling for years, which lead to being dropped by DirecTV and losing 20 million satellite households due to being one of the lowest rated networks on cable according to the satellite provider.  Currently, G4 reaches 60 million cable and satellite homes nationwide, and is likely interested in attaining UFC content as a bargaining chip to get back on DirecTV and increase their viewership and subscriber fees.  Another mutual-beneficial bonus here is that G4 and the UFC have similar target demographics, young males, which could make the transition of getting MMA’s 18-34 male demographic to switch from Spike TV to G4 a smooth one.  The UFC has always been in search for a partner who would support them and push their product as much as possible, and G4’s low viewership numbers and lack of quality programming fits the bill quite well for the MMA promotion.

According to the WSJ article, the price and size of the stake is still unclear.  The talks between both parties are described as being serious by one source, while another source states that they are in the early stages while also engaging in talks with other networks and outlets.  These stake-sale discussions mark’s one of the first since Comcast took control of NBCU earlier this year.  Along with trying to salvage G4, plans are underway to transform Versus network into NBC Sports.  Already in the plans for Versus (NBC Sports) is playing a big role in the Olympics coverage which NBC just secured for $4.38 billion dollars and airing the NHL, which they also secured earlier this year for $2 billion.

Comcast’s “hope is to use the Olympics as a way to raise” Versus’ number of subscribers and the “monthly fees they pay.”…  In N.Y., Claire Atkinson reports Comcast Chair & CEO Brian Roberts is “expected to use the Olympics, beginning in 2014, to ramp up advertising and increase subscriber fees for NBCU’s broadcast and cable networks.” The Olympics win may have the “most direct benefit” on Versus, which according to SNL Kagan commands $0.30 a subscriber per month (N.Y. POST, 6/8)

Update: According to Brian Stelter of the New York Times, a source has informed him that Comcast is meeting with the UFC today about the possible stake sale of G4. Stelter’s sources with knowledge also point out that the UFC “could take ownership of 60% or more of G4”.

UFC current deal with Spike for The Ultimate Fighter and live events is a $170 million-a-year deal according to NYT for $35 million-a-year according to MMAPayout sources (expiring 3 year/100 million deal according to F4WOnline).  The negotiations between Spike TV and the UFC broke down when the UFC proposed a $325 million-a-year fee according to NYT which has yet to be disclosed, which was too steep for Spike TV.  To see how the UFC TV fees compare to other sport properties, MMAPayout compiled a list recently.

As for Spike TV, their TV deal with the UFC ends in 2011, and according to sources, the UFC is demanding a large pay bump in order to renew, which is why many expect that Spike TV has been in preparations of a possible departure during the last few months.  In fact, Spike TV personnel have been spotted attending Bellator MMA events, which air on MTV 2, for the past 2 months.  Spike TV and the UFC are coming off one of the lowest rated season’s of The Ultimate Fighter, despite having the UFC’s biggest PPV draw and pro-wrestler cross-over star Brock Lesnar featured during the season as a coach.  They are looking for the the ratings to pick back up in the upcoming and last season under contract of TUF which airs in the last quarter of 2011. Controversial British fighter Michael Bisping and the former host of MTV’s Bully Beatdown, Jason “Mayhem” Miller will be the TUF coaches for next season.  Two controversial and colorful fighters that both Spike TV and the UFC appointed directly to draw better viewership numbers for the upcoming season.

After the UFC acquired the WEC, it strategically decided to re-sign with Comcast sports network Versus for 2011 to better-position themselves in order to benefit from an NBC-Comcast merger.  With both Comcast Corp owned Versus (NBC Sports) and G4 emerging as players to land UFC content, it looks like things are going according to plan for the ever-expanding Mixed Martial Arts promotion.

24 Responses to “UFC In Talks to Buy Stake in G4 Channel”

  1. el chango on June 8th, 2011 4:09 PM

    People forget that Zuffa is owned by two billionaire brothers, an oil rich arab country, and Dana White. They have cash to throw around.

  2. Jose Mendoza on June 8th, 2011 4:46 PM

    UPDATE: Jason Chambers, who used to work for G4 and was associated with Shine Fights recently just tweeted:

    “My sources at G4 say they are VERY far from a UFC deal.”

  3. Rich on June 8th, 2011 7:59 PM

    Maybe one of you can explain how G-4 does ANYTHING for the UFC. I don’t see any positives. If your cable company even carries it, a study I read today says only 53% of those who get the channel even know it exists.

    And even if they are re-branded the UFC Network, I don’t see an upside. And still, they would be so far down on the channel list, sandwiched between some Mexican channel and the NASA channel.

    What am I missing here?

  4. Jose Mendoza on June 8th, 2011 8:27 PM

    Rich,

    The Comcast/NBC factor. They could be sweetening the deal with this and possibly a spot on NBC Sports, but you are correct, it seems quite odd at first. They are in talks with other outlets as well.

  5. Rich on June 8th, 2011 8:45 PM

    So you are saying that if they buy a crappy channel, put a bunch of UFC content on it, average 500k viewers per live Fight Night and 330k per TUF, then it is worth it to maybe get an event on NBC in the future twice a year?

    Really?

  6. Jose Mendoza on June 8th, 2011 9:03 PM

    Rich,

    That’s what we don’t know yet, but the move fits with UFC’s motto. Think of where they have aired fights. 1) Spike TV was not a great channel at all until it grew along with the UFC and increased viewership. 2) Ion TV, who they flirted with showing a few prelim fights, is one of the lowest rated nationally broadcasted network nationwide. 3) Versus is a channel that got WEC and eventually UFC content to try and boost viewership 4) Airing prelims on Facebook/Youtube is another alternative they are currently exercising … it could just be that they don’t have enough on their end to get something better that would give them full control and push their programming like they want. It’s one reason why buying a stake in a channel or making their own channel is something they are going for.

    I think many are expecting the UFC to announce these blockbuster TV deals but that may not be the case at all at this moment.

    I agree with you though, this would require a ton of work to make it seem as good as it was with Spike. I think more will come from these negotiations, tune in, we will keep you updated 🙂

  7. Rich on June 8th, 2011 9:03 PM

    …….or even worse, NBC Sports/Verses, which sounds like a flop out of the gate considering they are putting all their eggs on selling ads for the 2014 Olympic games.

  8. Rich on June 8th, 2011 9:07 PM

    Thanks for the feedback. It doesn’t make alot of sense to me, but hopefully whatever they envision out of this will pan out as they hope.

  9. Jose Mendoza on June 8th, 2011 9:11 PM

    Rich,

    Yes, most predict just like their last Olympic bid, that NBC will not be profitable with this Olympics bid as well. They have spent $6.38 billion out of the gate in securing the NHL and Olympics for the next few years. Obviously, ESPN, Fox, and others who placed bids for both properties thought those bids were too high.

    Definitely will be interesting to see how NBC will try to make both investments profitable in the next 10 years or so.

    From what I hear, NBC Sports will mainly focus on NHL, Olympics, and Notre Dame football for the time being. Will they spend billions more acquiring more sport content? Should be interesting to see…

  10. Random Dude on June 8th, 2011 9:13 PM

    I agree with Rich, a move to G4TV will be the death of the UFC. This is a terrible idea. Spike is a much better channel. UFC can’t get good ratings on Versus as it is, how would they get ratings on G4TV?

    Also a lot of people don’t get G4TV in HD. SD is not a good way of showing sports at all.

  11. Rich on June 8th, 2011 9:19 PM

    “From what I hear, NBC Sports will mainly focus on NHL, Olympics, and Notre Dame football for the time being. Will they spend billions more acquiring more sport content? Should be interesting to see…”

    I’m hoping against hope that this a veiled attempt on your part to hide what one of your sources told you—that NBC/Verses could conceivably offer that kind of $$$ to the UFC.

    Wink, wink?

  12. Jose Mendoza on June 8th, 2011 9:57 PM

    Rich,

    I think that’s what the UFC is hoping for. How much and where the money is going to go is up to NBC/Comcast. Not everything is ironed out just yet.

  13. Machiel Van on June 9th, 2011 7:08 AM

    “They are looking for the the ratings to pick back up in the upcoming and last season under contract of TUF which airs in the last quarter of 2011.”

    If Spike cares about the ratings of TUF at all they will allow it to air in its previous 10 pm time-slot. They didn’t this past season, which is a big part of the reason the ratings were terrible. Spike made that decision for a reason…

  14. Jose Mendoza on June 9th, 2011 11:23 AM

    Machiel Van,

    That is true, but it also wanted to use TUF to increase the ratings on some of their other programming, which apparently did not work. Not sure if that was just a one time experiment with TUF.

  15. Jack Frost on June 9th, 2011 12:06 PM

    A UFC channel would be sweet. I will watch it 24/7.

  16. Machiel Van on June 9th, 2011 12:49 PM

    Thanks Jose, I had not thought of that as a possible strategy.

  17. Jared on June 9th, 2011 12:50 PM

    people are going to go find G4 if the UFC is on the channel. Plain and simple. They are gonna want to watch TUF and Prelims.

    Also im sure many cable providers will put G4 on HD knowing the UFC is gonna be on G4.

    It definitely will not be the death of the UFC, The hardcore fans will follow. But it will take the casual fans a while to get use to not seeing the UFC on Spike. THe UFC made spike a much more attractive channel. They can do the same with G4.

    Spike did the UFC wrong. They barely promoted TUF and moved them to a different time slot knowing that the UFC was looking elsewhere. They are not stupid.

    I persoanly dont care what channel the UFC is on. As long as i can watch TUF and the prelims.

    But, a UFC event on NBC would be awesome

  18. Random Dude on June 9th, 2011 8:08 PM

    “people are going to go find G4 if the UFC is on the channel. Plain and simple. They are gonna want to watch TUF and Prelims.”

    Oprah is more popular than the UFC and her channel’s ratings are shit. It has been a disaster and her channel had big support from not only Discovery but from advertisers who paid a lot of guaranteed money before the channel even aired its first show.

    “Also im sure many cable providers will put G4 on HD knowing the UFC is gonna be on G4.”

    Most providers will probably wait for ratings before initiating such a move unless UFC/NBC/Comcast are willing to heavily discount the channel upfront.

    “It definitely will not be the death of the UFC, The hardcore fans will follow. But it will take the casual fans a while to get use to not seeing the UFC on Spike. THe UFC made spike a much more attractive channel. They can do the same with G4.”

    You have so called hardcore fans who find it difficult to keep up with Bellator coming on at 7pm instead of 9pm on MTV2. Casuals are going to find a channel that is on a premium tier (if they get the channel at all), in SD for the majority of subscribers, and not advertised on any of the channels they usually watch?

    Spike needs UFC and UFC needs Spike. They are both too stupid to realize it, but time will prove it to be true. They would be better off coming to a settlement that works for both parties and leaves UFC on Spike.

    Bad move for both parties.

  19. BrainSmasher on June 10th, 2011 6:06 PM

    I agree with Random Dude. It will be a huge step back for the UFC(everyone involved) to move to G4. Lets forget about UFC, TUF, unleashed, etc rantings for a moment. I think those are the least of the UFC worries as they dont make much more money on a few hundred thousand people from the tv networks. What will really hurt the UFC is they lose a way to reach the millions of people who are buying their PPV. The constant PPV ads that run on Spike all day long. Not nearly as many will see the ads on G4. So there is less eyes on anything UFC related. They will take a big hit on the buy rates because of this. The UFC success has always depended on them building characters (real life story lines.). Lots of people are going to get left out of the loop.

    Getting on the new Verses would be fine. Relying on G4 is a mistake.

  20. marty michaels on June 11th, 2011 8:00 AM

    agree with Brain Smasher….g4 is in 40 million fewer homes than spike and that’s a lot of missing promotional power for ppv’s…and versus is going to be devoted to hockey, college football, olympics etc…it will be tough to have any sort of regular schedule there…for those who intimate that direct tv or other cable affiliates will come running back to distribute g4 just because the ufc is there…guess again…they will want to extract plenty of value in return and it will be a long hard negotiation with no guarantee of a positive outcome for the ufc without both the ufc and comcast making significant concessons….

  21. B L on June 12th, 2011 9:52 AM

    i think that the people in charge at zuffa have a much better idea if they can make this work than anyone here. 3 owners are billionairs and the other is pretty close. They have a production company already and very close contacts to the biggest reality show producers in the business, the ones that do american chopper, deadliest catch etc etc etc.

    Who says it will only be ufc on the channel?? They will be looking at a few years down the road. They will have strike force, TUF, ufc events, once they control the channel, they dont have to do something big with it right away. They make most of their money on PPV. They can use G4, as a promotional channel, throw some other content on there and be ok.

    They can hold PPV type events, and if their viewers follow from spike, they will have 1-2 million subs out of the box.

    in another year or two, they will have UFC china, ufc canada, ufc australia, ufc mexico, ufc………………. At some point your promotional expenses get pretty high, its possible to consolidate some of that with your own international TV channel.

    my guess is they have a very clear view of what they want to do and know that more than likely it will work, or they would keep on keeping on with making hundreds of millions a year via what they are doing now.

  22. BrainSmasher on June 12th, 2011 11:35 AM

    Good point Marty. Verses got kicked off DTV and even with the UFC programming they had to beg their way back on with a crappy tiered package with a channel up in the 600’s. We saw how their ratigns were effect. G4 is not even a blip compared to what Verses is. If Verses cant get a deal with the UFC then G4 will have no chance even with the UFC. More so considering the UFC ratings will take a hit from the move.

  23. rose on June 16th, 2011 7:59 PM

    I definitely don’t think that UFC will take a hit if they buy G$. Maybe they will get that channel more viewers with the content they put on there. There is so many UFC fans I think it would be a good move for G4. I will be bad for DIRECTV if that does help the channel since they dropped them. As a subscriber/employer of DISH Network I am very interested in watching what they do to the channel.

  24. William Hardiek on June 19th, 2011 12:09 PM

    Rich! I think you and everyone else may be over looking an obvious motive the UFC are trying to play out. The UFC have elevated Spike TV, Versus, Ion and will elevate G4 if this goes thru. The UFC will be able to show evidence to NBC of the increases in the ratings of Spike TV, Ion and Versus as a result of UFC content. Also, UFC would be able to generate subscription rate revenue as a result of G4 subscription increases. This goes along with Big Ten Network, NFL, NBA etc. Advertisement fees would then follow for Zuffa. This is a win win for Zuffa. They get to prove to NBC that they would be a viable partner for a future network tv contract. And it would be a new avenue to generate more money, while preserving the current PPV model. This could be looked at in two ways. 1) Zuffa are overly confident about their ability to grow their product and risk a major collapse. Or. 2) Zuffa know exactly what they need too do in order to grow their brand into what Dana has been saying for years. This is a low risk/ High reward scenerio overall.

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