White whittles down distributors draw on PPVs

November 12, 2018

This week’s Sports Business Journal features several articles on combat sports.  An interesting article on Dana White reveals that he’s negotiated down the PPV cut that many distributors receive for its PPVs.

According to the article, many outside distributors such as Comcast, Cox or DirecTV receive 50 percent of the PPV revenue from the UFC.  The distributors agree to air the PPVs and also advertise it through their specific means (i.e., digital, commercial ads) in addition to the UFC’s marketing.  In return, the industry standard was for the satellite and cable companies to receive half of the revenues for each event.

But, according to the SBJ article, White has negotiated this down “closer to 30 percent.” The deal is a coup for the UFC since it already receives 100% of the PPV rentals when customers purchase it on the UFC web site or UFC Fight Pass.

Payout Perspective:

The article, found in this week’s Sports Business Journal, talks about the UFC’s move to ESPN this January.  It also speaks about the Vegas headquarters expansion which will include a TV production facility and a min-arena to host fights.  The mini-arena will serve as home to White’s “Tuesday Night Contenders” series and “TUF” episodes.  He also hopes to add other combat sports to air on Fight Pass.  The move by White shows the company’s new business strategy where its attempting to do everything internally to save on costs.  With the UFC airing its own PPV, forging a deal with Amazon for PPVs, driving down the take for traditional distributors seemed imminent.  For the distributors, conceding to the UFC was likely due to the competition within the marketplace from the likes of Amazon and the UFC’s digital platform.  While the PPV buys are down, it still is a revenue stream for the distributors and its clear that there’s nothing that could replace it at this time.

One Response to “White whittles down distributors draw on PPVs”

  1. Report: UFC 230 does below average buys on pay-per-view, UFC cuts new deal with PPV distributors - MMATorch on November 13th, 2018 10:26 AM

    […] pay-per-view numbers are suffering without Conor McGregor, UFC stands to earn more from those buys. A report from Sports Business Journal says that Dana White was able to negotiate a new deal with pay-per-view distributors that would […]

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