UFC 177: Payout Perspective

September 1, 2014

Welcome to another edition of Payout Perspective  This time we take a look at UFC 177 which took place at the Sleep Train Arena in Sacramento, California where T.J. Dillashaw defeated his bantamweight title against Joe Soto.

Dillashaw KO’s Soto in 5th round

It was not Renan Barao, but T.J. Dillashaw was able to end the fight in the 5th round again as he disposed of a game Joe Soto.  Dillashaw described himself as a “company man” and there was no issue about whether he’d take the new opponent on a day’s notice.  For Soto, it was a solid effort in his debut fight in the UFC.  Both fighters are likely in the good graces of the UFC.  Who is not on the UFC’s good side?   Renan Barao for not making weight.  The former champ, who just this past May was praised by Dana White, is now on the outs with the organization for not making the 135 pound limit.  White’s distaste toward Barao may be fueled by the already anticipated lack of buzz in this event.

UFC 177

Attendance and gate

Although the initial thought was that this event would pull a small attendance and gate, it actually exceeded the amount of fans that saw Dillashaw-Barao this past Memorial Day weekend.  The secondary market reflected the fact that demand was low.  But, the amount off walkups and discounted tickets helped with the attendance and gate figure.

Bonuses

As reported, bonuses of $50K each went to Dillashaw, Yancy Medeiros, Carlos Diego Fierra and Ramsey Nijem with the last two awarded Fight of the Night.  Despite a slick first round sub on the first fight of the UFC Prelims on FS1, Chris Wade was shut out from reported bonuses.

Sponsorships

Sponsors in the Octagon tonight were Las Vegas.com, video game Assassin’s Creed Unity, Fram, Musclepharm, Harley Davidson, Toyo Tires, Corn Nuts, Alienware, MetroPCS, Xyience and Bud Light had the center.

MetroPCS and Harley Davidson were the most notable sponsors with activation surrounding the event.  MetroPCS did its usual social media promotion including its “Tale of the Tweet” app. Harley Davidson  launched the Hometown Throwdown III promotion in which fans could win the opportunity to have the UFC come to their town as well as throw a tailgate party before the event.  The fighters that won their fights on the main card of 177 received a Harley Davidson.

Promotion of T.J. DIllashaw

While many have criticized the card, the one thing that may be overlooked is the great job the UFC did in building the T.J. Dillashaw brand.  It’s understandable for the cynical UFC fan to say if the UFC was doing such a great job, this would not be “overlooked.”  But, regardless of the fights on the card, the UFC’s shoulder programming has done a great job in building Dillashaw.

In watching the Countdown show and the Embedded vlogs the UFC has introduced people to Dillashaw and you get to see someone deal with all of the responsibilities of being champion.  The one plus from my perspective is that Urijah Faber was not used as the bridge to introduce Dillashaw.  This may seem absurd, but since Faber is a name and trains with Dillashaw it would make sense for Faber to be the one to introduce him.

Can Dillashaw be a draw? As it currently stands, fans are underwhelmed with the lighter weight divisions.  Despite being one of the best in the business, Demetrious Johnson has not sparked the interests of the UFC universe.  Jose Aldo has not been healthy enough for anyone to remember how vicious he once was and despite banking blue chip sponsors; Anthony Pettis has not been in the Octagon in ages.  If Dillashaw can string some wins together and defeat a guy like Dominick Cruz, I could envision the UFC marketing him much more.

Odds and ends

While I just praised the shoulder programming in the previous section, one of the scenes in the Embedded vlogs was Team Alpha Male doing a ticket giveaway for UFC 177 which foreshadowed the issues with selling this event.

If you were watching the Embedded episodes, Dillashaw did a lot of post-workout work in a hyperbaric chamber and dreamed of having one in his home.  I’m sure Dillashaw got his Hyperbaric chamber in his home after this event.

Barao and Cejudo were not paid per Heidi Fang’s tweet and Jorgenson and Anthony Birchak (who was scheduled to face Joe Soto)  were given show and win purses despite not fighting per MMA Junkie.  Tough time for Birchak who found his home robbed after coming back from Sacramento.

Bethe Corriea’s quest to run through the Horsewomen continues.  Really, if the four ladies are going to go through with this gimmick, someone else has to be good in the group aside from Flair.  The good news for Corriea, this “Horsewomen” thing has Rousey wanting to fight her.  So, yes, pro wrestling is seeping into your pure MMA sport.

Bellator decided to release Soto’s fight against Joe Warren prior to Saturday night.

Just a thought, but as a way to entice or say thank you to those that ordered UFC 177, it could offer them a month’s free use of UFC Fight Pass.  I understand that it tacitly admits that the card was not PPV-worthy but if you were to offer something like that, it would build a lot of good will with a loyal fan base.  If they have Fight Pass, they tack an extra month for free and if you don’t it gives them a chance to try it for free.  I know, probably a lot of administrative headaches with deciphering who ordered the PPV, but it still seems like a good PR move.

Expect a low number for the prelims on FS1.  There was one fight in the first hour and lots of filler due to a first round sub.  Also, with Henry Cejudo pulling out of his fight with Scotty Jorgensen, there were only three fights set for the two hour time block.

With the first full weekend of college football coupled with the multiple problems with the card, it was the perfect storm for folks to actually “boycott” this card.

Earlier in the week, Dana White landed on a list by GQ naming him one of the sleaziest people in sports.  Let’s be honest, any combat sports promoter could be found on this list.

Conclusion

It was likely that if UFC 176 was not cancelled, this event would not have gone forward.  But, the UFC could not take the PR hit of cancelling two events in a row.  Most importantly, the UFC does not want to confirm what most fans and pundits know; there are too many events.  Also, at such a late time for Barao pulling out, it was too late to pull out of the PPV and/or cancel the event.  This buy rate will rival that of UFC 174 and maybe even do worse.  As an interesting and random note, the first UFC did slightly over 86,000 PPV buys.  It would not be surprising that the actual buy rate would rival this number.  My take is that we’ll never receive an official number for this event although a range will be given around 90-110K PPV buys.

UFC 175 draws 500K-545K PPV buys

August 8, 2014

MMA Fighting’s Dave Meltzer reports that UFC 175 did between 500,000 – 545,000 PPV buys according to various cable sources.  It’s the best showing on PPV since UFC 168.

UFC 175 featured Ronda Rousey defending her title against Alexis Davis and Chris Weidman defending his against Lyoto Machida.  Interesting enough, UFC 168 featured Rousey and Weidman although in higher profile matchups: Miesha Tate and Anderson Silva.

The 500-545K PPV buy rate is the highest for 2014 which saw its lowest PPV buy rate in 10 years in UFC 174.

UFC 2014 PPVs

Payout Perspective:

Initial reports of this PPV hitting 500K buys appeared to hold up.  It should be considered a positive and reflects the successful duo of Rousey and Weidman.  The obvious difference from 168 is that the opponents were higher profile.  It’s expected that we should get them again in December with Weidman-Belfort and the possibility of Rousey-Carano.

Showtime halts releasing PPV buy rates

July 21, 2014

Showtime’s Stephen Espinoza has announced that it will withhold upcoming PPV buy rates due to the controversy surrounding the Floyd Mayweather-Marcos Maidana PPV.  Espinoza told BoxingScene.com that the buy rates will only be released if the event sets a PPV record.

The Mayweather-Maidana PPV reportedly received 900,000 PPV buys although ESPN’s Dan Rafael reported it sold between 800K-900K PPV buys.  It should be noted that Espinoza and Rafael have had twitter beef in the past but that does not necessarily mean that Rafael’s report is off.

Espinoza explained his rationale in saying that the PPV buy rate speculation seemed to become “bigger than the event itself.”  Basically, Espinoza believes withholding the numbers would reduce misrepresentations about the PPV performance and that certain figures would indicate some sort of failure for the event.

At a time when boxing is starting to feel the PPV strain, it’s an interesting move on the part of Showtime.

Payout Perspective:

Imagine the outrage if Dana White were to tell media that they would not release PPV buy rates or even talk about that speculation.  What do you think of the move by Showtime?  Does it stop talk about PPV buys?  While the move helps control the message, it also doesn’t end speculation.  Certainly, not releasing information allows the blanket “you’re wrong” when it comes to any reports of PPV buys.  Yet, this tact seems like the company is hiding something as well.

Boxing asks what UFC fan has been for a while: are there too many PPVs?

July 14, 2014

Boxing writer Steve Kim of the new Undisputed Champion Network web site wrote an article on whether boxing has too many PPVs on the eve of Canelo Alvarez’s third appearance on PPV within 12 months.  The question is not new to UFC fan as they have been asking the question for some time.

For the UFC fan, UFC 174 exemplified the thesis that there are too many PPVs.  Preliminary reports have that PPV featuring Flyweight champ Demetrious Johnson anywhere between 95,000 to 125,000 PPV buys.  Regardless of where that number ended, it was the lowest output for a UFC PPV since 2006.  It reflects the new market for PPV in the UFC.  Fans will pick and choose which cards they want to purchase and it’s unlikely we’ll see 1 million PPV buy main events in the near future.

Kim talked to Showtime’s Stephen Espinoza prior to Canelo-Lara:

“I think we’re having a confluence of pay-per-views really, simply because we have three or four fighters who can legitimately carry a pay-per-view and they’ve decided to make the decision to go there,” said Stephen Espinoza, Executive VP and GM for Showtime Sports and Event Programming, whose company is distributing this weekend’s event. “As for the network, we’d always prefer to have everything on the network. There’s certain realities which make that unrealistic but ultimately, it’s the fighter and the promoter that make that decision of when they want to go pay-per-view, when they don’t.

Kim also questioned whether boxing can go down the UFC road:

Still, a pay-per-view a month? What is this, the UFC? Does boxing really have that many fights worthy of such a designation?

The cynical MMA fan would say that the UFC doesn’t have that many PPV-worthy cards yet the UFC offers monthly cards on PPV for $55 per event.

Payout Perspective:

For those that follow us, we touched on boxing beefing up its PPVs back in April.  If you were to replace boxing with MMA in the article, the issues would be the same with the exception that Espinoza comments place the issue on the fighter/promoter rather than the network.  In the UFC, the decision is all on the company whether it runs a PPV event and who will be on the card.  In my opinion, a reason for more PPVs in boxing is a trickle-down theory in combat sports. Fighter/promoter payouts can be mitigated if a fight is put on PPV.  Essentially profit margins are wider if you charge fans $60 for a fight rather than put it on subscription based television.  It seems like this is the strategy rather than the previous strategy of waiting for a big fight with two top names.  Certainly fighters have fought on HBO and Showtime in hopes that their career would ascend to a PPV.  In recent weeks, boxing has put on some exciting fights on both premium subscription networks.  So, the question is whether boxing fan will shell out $60-$75 for a fight that used to be on the networks.

 

Report: UFC 174 lowest buy rate since 2005

July 10, 2014

MMA Fighting reports that last month’s UFC 174 from Vancouver received a lowly PPV buy rate between 95,000 to 115,000 buys.  The buy rate is the lowest

Yahoo! Sports reported that the show featuring Demetrious Johnson and Ali Baugitinov received 125,000 PPV buys. Regardless, the PPV buy rate is the lowest in the “modern era” of the UFC.  You would have to go back to June 2005 and UFC 53 to find the last UFC PPV with such a low buy rate.  UFC 53 which featured Andre Arlovski in the main event drew just 90,000 PPV buys.

Via MMA Fighting:

On Saturday night after UFC 175, Dana White talked about how UFC business is changing to being a worldwide promotion, and that people are going to not be watching every show and he’s accepting of that. He said that the Johnson vs. Bagautinov fight did exactly what they projected and they were not unhappy with the number, saying that the featherweight division is new, praising Johnson as champion and saying he would have no qualms about headlining another pay-per-view show with him.

It marks the third straight June that a UFC PPV has drawn the lowest buy rate of the year.

If not this was bad news for the company, Johnson’s challenger, Bagautinov was found to have taken EPO by the BC Athletic Commission today.

Payout Perspective:

The overarching issue here is that the UFC appears to have resigned itself that there will be PPVs like this.  While it’s not ideal for the company, with its strategy for growth, there will be low PPV buy events.

As the MMA Fighting article points out, the UFC has given every chance for Johnson to become a star.  He’s been featured on 3 different cards on Fox as well as its shoulder programming to promote the card.  Not only did Johnson win those fights, he was dominant in each.  Yet, if we are to go by strict PPV returns, Johnson’s in-Octagon success is not translating to a PPV attraction.   This goes back to the fact that not one fighter below 170 pounds is a PPV draw (maybe we Rousey is but the point is most are not).  It’s not clear what can be done for fighters like Johnson as he’s one of the top fighters in the company but he lacks the following.

PPV History – Looking at UFC 175 headliners Weidman and Rousey

July 4, 2014

As we await Saturday’s UFC 175, let’s take a look at the headliners and their PPV history.

Chris Weidman

Despite Ronda Rousey’s popularity, it’s Weidman that is on top of the marquee Saturday when he faces Lyoto Machida.  Weidman’s PPV and gate numbers have been impressive in his last two outings.  Of course, those two fights were against Anderson Silva.  Still, the advance appears to be strong and could be one of the biggest of not just this year, but of all time.

UFC        175        v. Lyoto Machida – ?

UFC        168        v. Anderson Silva – 1,025,000 PPV buys

UFC        162        v. Anderson Silva – 550,000 PPV buys

There’s quite a difference between 162 and 168.  Obviously, 168 had a better card but it was the rematch versus Silva that everyone was interested in seeing.  At 162, many believed that Weidman did not have a chance against Silva.  No one knew that Silva would act like he did.  Still, Weidman took advantage and the championship.  This card may help in determining how big a star he is.  While Rousey may help some, Weidman is the main attraction here.

Ronda Rousey

UFC 175               v. Alexis Davis – ?

UFC 170               v. Sarah McMann – 340,000 PPV buys

UFC 168               v. Miesha Tate – 1,025,000 PPV buys

UFC 157               v. Liz Carmouche – 450,000 PPV buys

UFC 170 was disappointing for Rousey as the PPV numbers were lower than her previous two events and the gate at the Mandalay Bay was less than expected.  It’s likely that 175 will outshine 170 in PPV buys and gate.  But, no one believes that she will lose against Davis.  Will the fact that she is an overwhelming favorite hurt buys?

Payout Perspective:

Weidman and Rousey are two of the biggest active UFC stars today.  Certainly, having Sonnen-Silva (or Belfort) would have helped this card.  How many more buys would it have pulled?  Who knows, but it would have brought a lot more buzz to the card.  Still, with all of the hype surrounding International Fight Week and the main and co-main event for 175, it’s likely that this card will produce a respectable buy rate.  Will it do as well as last July’s event where Weidman won the title?  Are the lower PPV buy rates with its bigger stars a concern for the UFC?  With tickets being the most expensive this year the UFC should be happy with the attendance and gate.  But, it’s the PPV buy rate that most look to when it comes to the success of an event.  The PPV business has been down and if the reports that UFC 174 did 125,000 PPVs at best, one would think the expectation for 175 have been reined in.

Cotto-Martinez: 300-315K PPV buys

June 26, 2014

SI.com is reporting that the Miguel Cotto-Sergio Martinez Top Rank PPV event that took place on June 7th only drew between 300-315K PPV buys which is well under the expected 500K anticipated.

After putting Martinez down three times in the first round, Cotto scored a 10th round KO of Martinez.  It was a much anticipated fight fans and well promoted on HBO.

SI’s Chris Mannix writes that multiple sources working with the promotion confirmed the number.  Mannix goes on to attribute the disappointing buy rate to a multiple of factors including the Belmont Stakes and the Stanley Cup which went into double overtime that night and well into the PPV.

In addition, UFC Fight Night 42 from New Mexico took place that night as well with Benson Henderson taking on Rustam Khabilov in the main event.  It was the third most-watched Fight Night on FS1 so far.

Bob Arum admitted to ESPN’s Dan Rafael that, “[t]he numbers were not great.”  He attributed this to “too many” PPVs.

Via ESPN:

“Pay-per-view was always designed, as was closed circuit back in the day, for true super fights, not just very good fights. There have been pay-per-views every month and people resent the fact that they’re asked to pay extra for anything halfway decent. Boxing pay-per-view numbers are down. Look at the (recent) numbers for the (Floyd) Mayweather and (Manny) Pacquiao fights. The UFC pay-per-view numbers are also down.”

Despite the rough numbers for PPV, Arum told ESPN that the gate drew $4.7 million.

Payout Perspective:

Arum essentially blames the low numbers on MMA fans’ favorite word when it comes to ratings: oversaturation.  In fact, Yahoo! Sports Kevin Iole wrote a controversial piece on whether saturation is good for the UFC.  With Canelo Alvarez facing Erislandy Lara in a couple weeks, boxing will have another PPV this year that caters to the steady boxing fan.  Alvarez is still not a top draw and Lara is not known to anyone that does not follow boxing. So, are there too many boxing PPVs at this point?  There will definitely be more this year than last and at a price point between $60-$75, its likely fans will be picking and choosing which to buy.  Perhaps, many combat sports fans will implement a “one week rule,” which is to wait a week for the PPV fight to air on HBO/Showtime.  Even if you were to pay for HBO-Showtime, your cable bill for those premium channels could rival that of you purchasing all the boxing PPVs.  Plus, you would get all of the boxing shows on the networks…and of course the rest of what those premium shows have to offer.

Looking at the fight specifically, it was an under the radar good fight on paper.  Certainly, the Puerto Rican fan base came out for Cotto.   The same for the Argentinian fans of Martinez.  But, was it something that the broader, casual fan would purchase, or wait to see on HBO a week later?

Bellator 120 to air on Spike TV

June 25, 2014

Bellator MMA officially announced that it will replay its inaugural PPV from May on Friday, July 18th according to a press release.

Via Bellator press release:

Spike TV will telecast an encore presentation of one of MMA’s most memorable events of 2014, “BELLATOR MMA: RAMPAGE vs KING MO” on Friday, July 18 at 9:00pm ET/PT.

For the first time on free television, fans that missed Bellator’s first-ever pay-per-view event can witness the highly-anticipated grudge match between Rampage Jackson and King Mo plus epic upset victories for Will Brooks and Tito Ortiz.

Fans can also decide for themselves whether the judges had it right in the controversial decision victories that went to Rampage and Brooks. Also featured will be the Russian heavyweight clash between Alexander Volkov and Blagoi Ivanov and an exciting and entertaining performance from rising star Michael Page.

Payout Perspective:

Commercials for the replay aired during the Glory prelim on Spike TV Saturday night.  The replay gives those that passed on the PPV a chance to see it and it sells the product in time for the following week’s event on July 25th.

UFC 173: 200K-215K PPV buys

June 18, 2014

MMA Fighting reports the PPV buys for UFC 173 is in the 200K to 215K range.  UFC 173 was the Memorial Day weekend show which saw TJ Dillashaw upset Renan Barao.

According to Dave Meltzer’s report, the PPV buy rates are based on independent sources.

Last 5 Memorial Day Weekend UFC PPVs

5/29/10 – UFC 114: Evans vs. Rampage 1,000,000

5/28/11 – UFC 130: Rampage vs. Hamill 325,000

5/26/12 – UFC 146: Dos Santos vs. Mir 560,000

5/25/13 – UFC 160: Cain vs. Bigfoot II 380,000

5/24/14 – UFC 173: Dillashaw vs. Barao 200,00-215,000

PPV buys via MMA Payout Blue Book

Payout Perspective:

The UFC 173 PPV buy rate number was to be expected.  A combination of factors contributed to this number but the lack of star power and the fact that weight classes under 155 do not draw PPV buys are the two main reasons.  Obviously a lot has changed since 2010 in the UFC.  There are a lot more cards and a lot more MMA on television.  Fans can pick and choose when they want to pay $55 for fights.  But, the PPV buy trend reflects the decreasing buy rates.  Not only was this year low, but UFC 160 did less than the prior year.

Alvarez-Lara PPV also in theaters July 12

June 16, 2014

The July 12th PPV between Canelo Alvarez and Erislandy Lara will be shown in movie theaters as well as on Showtime PPV.  In conjunction with Fathom Events, the Showtime/Golden Boy card will be in over 200 theaters across the country.

Fathom Events is the company that has worked with putting UFC PPV events in theaters in the past.  Tickets in my area are going for $18 per ticket.  It provides fans another option to ordering another $60 PPV.

Canelo-Lara

Payout Perspective:

The move to put this PPV in theaters reflects an effort to promote Canelo Alvarez as the top star in its stable.  Alvarez-Lara does not sound like a huge selling PPV event to the casual boxing fan despite the popularity of Alvarez.  However, giving Alvarez as much exposure as possible is the likely reason for the extra investment.  With more boxing PPVs this year, the theater option gives some fans an option in watching this fight.

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