Update on the UFC’s 2012 PPV Business
September 4, 2012
It’s no secret that the UFC has been struggling of late in the Pay-per-view department. 2011 was the first year parent company Zuffa saw a decrease in Pay-per-view buy rates—the primary source of revenue for the company.
Some attributed the decline to a rash of injuries causing havoc on fight cards, while others complained about product saturation having an adverse effect on the fan base. Whatever the reasons or combination thereof, the Pay-per-view business was down and the brass at Zuffa couldn’t be very happy.
So how big was the decline in the business from 2010 to 2011? Let’s take a look at the numbers:
There was an overall 27% drop in business between 2010 and 2011. Average Buys dipped 157,500 from 579,375 to 421,875. Total Buys were down a significant 2.5 million which translates to about a $63 million dollar hit on Pay-per-view profits (profit calculations are based on income after costs to distributors/networks).
So what about 2012? Well, the injury bug continues to be a big problem for the promotion. Mike Chiappetta reported that 78 fights have been canceled this year due to injury and five of the cancelled main events were Pay-per-view headliners. Brock Lesnar, the UFC’s biggest Pay-per-view draw has retired from MMA and returned to professional wrestling.
Surprisingly, through the first eight months of the year the Average Buys are up slightly over last year (YTD). This success comes off the back of UFC 148 Silva vs. Sonnen II which reportedly did 1 million buys (the first UFC event to score that many buys since UFC 121 in October 2010). However, Total Buys and Estimated Profits have decreased simply due to the fact of their being one less event this year versus last.
The UFC still has four scheduled Pay-per-views remaining in 2012. But with the cancellation of UFC 151 there will be 2 less events than previous years. In order to finish 2012 with similar results as last year the promotion would need to make up approximately 2.9 million total buys over the remaining 4 events, or approximately 750,000 buys per event. This is something that’s unlikely to happen. On the other hand, Average Buys could hold on and finish stronger in 2012 than in 2011. The end of the year will add some substantial numbers (baring any injuries) as bigger draws such as Jon Jones, Georges St. Pierre and Heavyweights Junior Dos Santos and Cain Velasquez are all scheduled to fight by years end. If the Average Buys finish up over last year it’ll indicate a bit of a turnaround for the UFC. Finally some good news in the Pay-per-view department. Perhaps having less Pay-per-view events a year is helping drive a slight increase in the Average Buys per event. We’ll have to wait and see what happens. Only time will tell.