MMA Fighting reports that UFC 165 and UFC 166 PPV buys are lower than expected. The poor showings are disappointing as the UFC expected to finish strong to end the year.
According to Dave Meltzer of MMA Fighting, UFC 165 did somewhere between 300,000 and 325,000 PPV buys. Numbers have not been released for UFC 166 but indications according to MMA Fighting are slightly higher than UFC 165. This would mean that two (Jon Jones, Cain Velasquez) of the company’s biggest stars presumably failed to draw at least 400,000 PPV buys.
UFC 166 went up against an HBO Boxing event which featured a replay of the Marquez-Bradley PPV, MLB Playoffs and college football. The prelims ratings scored only 628,000 viewers which did not bode well for the main card.
The MMA Fighting article indicates that a possible reason for UFC 165’s buy rate is due to the Mayweather-Canelo fight the week before. That PPV was priced at $75 and was heavily, heavily promoted. For the casual PPV buyer, paying another $45-$55 on top of the $75 is pretty steep for a month on a cable bill. Realistically, if there was a choice, many would go with the Mayweather fight.
Payout Perspective:
Is it a trend or bad luck that two of the biggest draws for the UFC did their lowest PPV number as a headliner in consecutive months?
The UFC had hoped to close out 2013 with four consecutive strong PPVs with its biggest stars starting with UFC 165 (Jones), UFC 166 (Cain-JDS), UFC 167 (GSP) and UFC 168 (Silva-Weidman, Rousey-Tate). It had hyped these PPVs with a worldwide tour but based on the first two PPVs, the UFC may have to rethink its expectations on buy rates. Certainly, the tickets are moving for the last two events and 167 and 168 will end in sellouts. But this does not necessarily equate to buys.
There is an argument that the promotional vehicles (or lack thereof) for these PPVs have contributed to the low PPV buy rates. It’s a plausible argument. FS1 is still in its infancy stages. This can be reflected by the low ratings for the UFC 165 Primetime shows which had its highest viewer output at 158K viewers. But that does not address the fact that the UFC is still getting a lot of time on Fox’s NFL broadcasts. The question is whether there should be more done to promote these events through Fox and/or elsewhere.
I think the bigger disappointment for the UFC compared to these events coming in lower than expected is both events were EPIC! They can live with low sales of the 2 PPVs. But knowing not as many people saw Jones/Gust and then missed Diego/Gilbert and Cain/Santos. That’s the worst part. That goes on to effect the hype of all those fighters next fights and the hype of the UFC. Bigger crowds for these events would have meant bigger buzz after the events. Not to mention the feeling of satisfaction for fans who may have felt cheated or not got their monies worth in other events. These was the events we all hope for. Some fans checked out early and never got the pay off.
Something else that could have effected PPV sales for these events is knowing ahead of time the mega events of 167 and 168. I think many people are pumped about those events and they have been promoted so far out, more so than usual, people could plan ahead to buy them and maybe decided to ship events until then.
The big hype push may be something the UFC will look to avoid. I don’t know how far out they were promoting it. But it has been a long time. Maybe if they don’t start so far out. People buy Jones PPV and Cains PPV then all of a sudden they realize 167 and 168 are to big to pass up.
Hahahaha…it’s going down……the world tour was not effective at all…ive said this many times UFC brand has peaked and it’s on the decline……the tag fastest growing sport cannot be used anymore it’s 20 years already….
Unfortunately (or fortunately) I would have to agree with Tops. It definitely seems to be on the decline and hopefully the dust will settle in the next 2 to 3 years. Lots of excuses going on for declining PPV buys and the blame is often shifted to what “else” is on. Conveniently there is always a football game or boxing match to act as scape-goat. I doubt this was an issue when they were on the rise.
The expectations for 167 and 168 are sky-high so we’ll see if this is a trend or not.
Possibly some over saturation going on as well. These days there seems to be a decent amount of free events from the UFC on fox. On top of that you can now get PPV’s on netflix a few months after the event. All in all, we will need to adjust our expectations regarding the PPV business model going forward. Unless the UFC decides to reduce the number of PPV events to about 8 a year, the chances of hitting that magical 1 million buy rate number will be difficult.
Agree with BrianSmasher, both events were most see for MMA fans. The cards had some really good fights on them.
In 2009 they had 13 PPVs totaling 8.2 M buys.
In 2013 they will have 13 PPVs and be lucky to total 5.8 M buys (which was 2012).
That’s a 30 % drop. There’s a lot that has changed in 4 years but yes, I think a little “too much” MMA has flooded the market to keep viewers interested enough to pay top dollar for PPV. However, what UFC has lost through PPV they’ve picked up through FOX $. I doubt SPIKE was paying 100 M year.
I think Spike was paying about 30 million per year.
Fox is paying $90 million a year, not $100 million.
Worldwide tour vs. PPV numbers only in the USA.
WTF? Brainsmasher makes incredibly coherent and well thought out points. For the first time I can remember he is 100% on point. I have nothing else to add except maybe it is the business model of PPV that is broken.
Starting in 2011, PPV Buys:
Less than 500k: 27
500k-749k: 8 (Silva 2x, Jones 3x, Heavyweights 3x, GSP 1x)
750k-999K: 3 (GSP 2x, Silva 1x)
$1MM+ 0 times
Those are some pretty poor numbers. And surprising coming off 2010 5<500k, 6 of 500K-749k, 3 750k-999k and 2 1MM+ buys.
Random Dude,
I think it’s $100M, but either way it’s a lot.
http://www.nytimes.com/2011/08/19/sports/ufc-lands-a-seven-year-deal-with-fox-sports.html?_r=0
The UFC has been on the decline for years. Eventually even the hardcore fans will accept this. Using other sports or even big movie releases as excuses for its failures is just tired.
It simply can’t create big stars anymore no matter how hard it tries. The old fans are just not getting behind these guys.
Looks like The Ultimate Fighter episode this week is not in the top 100 for tv ratings. Last week’s pointless recap episode killed the ratings for the show. All of the episodes before the recap episode made the cable top 100 list for wednesday. FOX is helping destroy the UFC fanbase.
They’re also getting around $60 million a year from Globo in Brazil.
http://www.bloodyelbow.com/2013/10/31/5051454/ufc-brazilian-tv-deals-booming-business-millions-mma-news
It would be really interesting to see the total payout for all their TV deals worldwide.
I have been really disappointed with the UFC. There are too many PPVs for the casual fan to follow. With guys like gsp fighting maybe twice a year theres not much emotional buy-in from the fan. No one really cares whether or not X fighter wins or loses at this point.
Machiel Van: Exactly. We know US numbers, we somewhat know Brazil numbers – but what about 60 or so another countries they have TV deals in…
I ask that question a lot (how much is a TV deal in some random European country), but noone knows the answer.
Is it in hundreds of thousands, is it in millions or what?
The move to FS1 has been a killer for promotional ratings. However, they are getting big-time money off FOX, sot it probably works out. If the TV money is there, they will move off of PPV, but as long as they make big-time money on PPV, they will stay on PPV.
UFC should be ashamed to feature an open racist like Cain “Brown Pride” Velasquez. Disgusting racists like Cain have no place in modern society.
How will Dana and Lorenzo pay back the $500 million loan they took out which is due next year?
JOse
How is Cain a racist? I hope you know what racist means and actually have an example of him discriminating again other races or something that shows he believes other races are inferior to his own. Having Pride is ones race is not racist. Being Politically incorrect isn’t racist either. I do believe there is a double standard that allows other races to say what Cains Tattoo says. But that doesn’t mean Cain is responsible for that double standard.
“How will Dana and Lorenzo pay back the $500 million loan they took out which is due next year?”
The Fertittas have a lot of experience with bankruptcy and getting out of upholding their end of a contract so I am sure they will figure something out.
Cain is a racist. Brown Pride is racist.
UFC supports racists like Cain. These are facts.
It’s called the double standard. In America only the white man can be racist. Dana White is a hypocrite.
Samspon,
The loan is what is typically called a Term Loan B which means it pays back 1% of principal per year with the remainder due in whole (a bullet) at maturity. These loans are always refinanced, with terms dependent upon the performance of the borrower (ie worse performance equates to a higher margin applied to Libor and tightening of some financial covenants prior to permitting distributions), The way to evaluate these loans is to project their Free Cash Flow before dividend distribution and see if they can pay back 50% of the debt over the next 7 years.
Unfortunately I do not have any current Zuffa financials to compare, but I would think they are capable of paying back the $30+ million per year (note they do not have to pay that level back, jut show they could for analytical purposes). If there are any finance Geeks I can put in what the actual formulaic approach most likely is for analytical purposes. The bigger question becomes what is the valuation of Zuffa; ie not just the pro-forma EBITDA but what are the correct comparable industry companies to compare and the big driver is what EBITDA multiple do you use to determine value. The last valuation I saw was when the 10% was sold resulting in a value of $1.2 billion but I would doubt it is that high anymore.
“How will Dana and Lorenzo pay back the $500 million loan they took out which is due next year?”
They’ve refinanced and the loans are now due in 2020.
Unfortunate numbers but I am not surprised. Dozens of reasons, very few legitimate excuses. For one thing the UFC never grew as a sport naturally one step at a time, they spent way too much money to promote and unnaturally try to push the sport, bad move! The UFC never had any real time to grow at a natural rate, I would compare it to someone on a serious cycle of steroids and now the juice is wearing off. And I am sure everyone at Zuffa has been working their butts off, unfortunately to the wrong dance. Way too many PPV and the cost is un affordable for most. I think the bit off way more than they can chew. The St Pierre fight will be a good gage as to the immediate future.
I think the UFC at its current state is very successful. Even if it never grows past this point. Everyone always knew the limited nature of combat sports. Going mainstream will take a very long time of constant promotion like the NFL has done to bring in a female fan base. But currently the UFC has blew up and become trendy and has now settled in at a pretty high level in the US. They are blowing up in Brazil and will settle in there after the boom as well. The same for Canada. They are doing this all over the world. They don’t have to be the biggest sport in the country if they are at a decent level in every place on earth. IF they do this. Then they are the biggest sport in the world behind soccer.
I think it is a smart business move. It would be great if the UFC was always growing in the US. But that requires a lot of luck and maybe a lot of time. The perfect storm if fighter and publicity and situation has to come together. So might as well hedge your bets and build a market in other countries to create security. This is what Pride failed to do until it was to late. With the expansion of the UFC outside of the US. They will assure they can be around a long long time until that perfect storm comes together.
the ufc is on the down slide 360 000 cain n junior n 350 000 jones n gus haha,,supposed to be the sports biggest ppv salesfighters ,,,,,n it makes mr laf wen ufc fans say boxings dead thats why bradley marquez done nearly 400 k n earned 4 mil n 6 mil… plus a gate ov over 2 500 000mil,,lets see if gsp pulls the ufc out the crap n do maybye 600 000 haha ,,if the lucky 500 000 at the most ,,,broner n maidana hav never beem in a ppv fite n watch them do about 300 000 to 350 000 n there not even ppv fighters,,dont get ne wrong ufc is a great sport a luv condit mcdonald cain the diaz bros n barao , n plenty others but it makres me laff wen ufc mma fans say boxings dead ,,2 200 000 buys 20 mil at the gate 150 in ppv sales ,,lol dont even make me laff wen ufc does them kind ov numbers then ya can say crap but that will never happen,,,,,,,boxing all the wayyyyyyyyyyyy,lol
in there peak they did 350 ppv buys up against a mayweather fight, as there key demographic has got older they have left the sport and have not been replaced. anyone else remember when the entire neibourhood played texas hold em on a Saturday night or gathered around to watch stone cold,