UFC officially raises its PPV prices

January 29, 2015

MMA Junkie reports that the UFC has permanently raised its pay-per-view prices $5 due to what the company calls “rising costs in producing live events.”  For most, the usual $54.99 HD PPV fans have been accustomed to pay will increase to $59.99.

For those that purchase their PPVs in SD, the price will increase from $44.99 to $49.99.

Prior to this official statement to Junkie, it was thought that the first three UFC PPVs of this year would be $59.99 due to the special nature of the events.  In December 2013, UFC 168 increased its PPV price point by $5 as well.

Payout Perspective:

As we discussed earlier in the year, White had previously stated that PPV prices would never go up.  The UFC then raised the price for UFC 168.  With the relative success of UFC 182, one had to know that the price increase was going to stay permanent.  While it may be true that rising production costs may have forced the company to pass along those costs to its fans, the way it has introduced the new prices seems a little disappointing.  It’s not that the prices were raised (at least in my opinion), but how it was done.  The issue of raising PPV prices had been thought to be happening and there had been no answer from the company, until now, that the UFC would raise prices.  Instead, it appeared that the prices would be raised for special events – a form of dynamic pricing.  It now will permanently keep the price adjustment and consumers are now upset.  While boxing has seen its PPV prices rise as well, there are fewer events to choose from.  Still, charging $65 and $75 for Manny Pacquiao and Floyd Mayweather still has fight consumers upset.

From the UFC perspective, the slight increase in pricing helps its bottom line.  A part of the reason why Standard & Poor’s lowered its credit rating and financial outlook were due to 2014’s poor PPV numbers.  The additional revenue it may receive from the price increase should mitigate its increasing production costs and help with its overall financial outlook in 2015.

UFC Increases PPV Price in 2015

January 13, 2015

As MMAPayout previously reported, the UFC started to charge consumers an estimated $59.99 HD/$49.99 SD for all PPVs scheduled in 2015, which  at the time included UFC 182: Jones vs Cormier, UFC 183: Silva vs Diaz and UFC 184: Weidman vs Belfort.

UFC185_60usd

There was some talk that this increase was just for “The Time Is Now” promoted events and that the price point would be lowered to what it was before.  That assumption looks to have been an incorrect one, as it appears the UFC will permanently increase their PPV price point this year to $59.99 HD/$49.99 SD as shown on UFC.TV.

 

Payout Perspective:

Why is the PPV price increase to UFC 185 such a big deal compared to UFC 182-184? Well, for starters, this event is being headlined by Anthony Pettis vs Rafael Dos Anjos for the lightweight title. Neither are what you would consider PPV draws. In fact, you could make an argument that the UFC could get away with that price hike for UFC 182-184 due to 182’s big grudge match, 183’s big fight between Silva vs Diaz, and 183’s big fights between Weidman vs Belfort and Rousey vs Zingano.  All those cards include UFC’s biggest stars who have done their biggest PPV numbers in the past couple of years.  Well, that’s just not the case looking at how UFC 185 is shaping up.  UFC 185’s co-main event will now be Johny Hendricks vs Matt Brown, which should be a really good fight, but are those two fights in addition to Nelson vs Overeem good enough to justify it? That’s a question consumers will answer on March 14th with their wallets.  What this really means is that the UFC has permanently increased the PPV price in 2015 since lowering their price would only make certain cards stand out as being lesser in value.

As we stated before:

UFC President Dana White went on record (MMAFighting) years ago, stating that PPV prices would never be raised and would stay at their regular price of $54.95/$44.95 SD. That tune changed for UFC 168 in December of 2013, when the PPV price was raised to $59.95 HD/$49.95 SD. Dana White went on the record once again and stated that the PPV price hike was “just for UFC 168″, since it was justified by placing some of UFC’s biggest stars in highly anticipated match-ups (Weidman, Silva, Rousey, Tate).  White stated PPV prices would go back down to their regular price after UFC 168’s one-off price adjustment.

Essentially, the UFC is applying ad-hoc variable PPV pricing to their product, which is something the UFC has criticized and has tried to stay away from since their parent company, Zuffa, took over.  Fans have demanded variable PPV pricing for years as justification for not purchasing cards that were not as “stacked” as others yet cost the same amount. The UFC’s belief, however, has always been that consumers are buying the UFC experience via PPV, regardless of who is fighting on the card for the most part.  The UFC never wanted to admit in the past that some cards have less worth than others, which is a perception that has been shattered the past few years.  If the UFC wants to keep that perception that all PPV events have the same value, a uniform PPV price hike may be the next logical step in this experiment, but for a company who has struggled so much recently with their PPV business model, increasing the price on a product that many fans feel is over-saturated and watered-downed may prove to be quite the risky move.

UFC 182: Payout Perspective

January 5, 2015

Welcome to another edition of Payout Perspective.  This time we take a look at the much anticipated fight between Jon Jones and Daniel Cormier.

HQ_UFC_182

Jones dominates Cormier

In one of the most anticipated fights in some time, Jon Jones dominated Daniel Cormier.  It was clear that as the fight progressed, Cormier looked like he lost confidence and Jones had broke his will.  Say what you want about the crotch chop at the end, Jones is the best there is right now and he knows it.

This guy may be next for Jones:

Then again, there are rumblings that Jones may face Cormier’s training partner and friend Cain Velasquez. Although Cain is a heavyweight, Jones looked huge compared to Cormier.

Cerrone decisions Jury

One might have thought that this fight would have been a great lead-in to the main event.  Cerrone is a guaranteed “bonus” of the night, right?  Well, not so much tonight.  Except for a bunch of meaningless kicks by Cerrone to Jury, this was a forgettable fight.  Cerrone was disappointed despite winning.

Attendance and Gate

MMA junkie reports the attendance at the MGM Grand at 11,575 for a gate of $3.7 million.  There was no news on comps although the UFC were giving away tickets for the event. The gate failed to crack the top 5 of UFC events at the MGM Grand.  Notably, UFC 168, which occurred at about the same time last year, drew 15,650 for a gate of over $6.2 million.

Despite the low attendance, Dana White was bullish about the PPV buys as he indicated that the 750K PPV buys he predicted pre-event were trending to exceed his expectations at the post-fight press conference.  Although this cannot be confirmed, there were multiple reports that movie theaters and sports bars were full or near capacity.  This will not help contribute to the PPV buys but shows the amount of interest.

Bonuses

Bonuses for UFC 182 went to Paul Felder, Shawn Jordan, Jon Jones and Daniel Cormier.  Arguably, Felder was the most impressive fighter of the night (next to Jones of course) with his spinning back fist KO of Danny Castillo.

For you gamblers, Felder was the biggest underdog to win at +190 according to the MGM Grand.

Cody Garbrandt was shut out of receiving a bonus despite a strong UFC debut against Marcus Brimage.  Garbrandt was a +130 underdog.

Pre-Fight Promotion

While it was not as expected, the media day brawl back in August was the best thing to promote this fight.  Perhaps it would have picked up more steam if the fight actually happened in September than now.  Still, the promos for this fight were outstanding.  It centered on Jones and Cormier’s brawl and the subsequent ESPN dust-up caught on camera.

The UFC Embedded episodes included Jones attending a high school wrestling practice and Cerrone’s action sports (snowmobiling, car racing and flying).  It also included a backstage altercation between Jones and Cormier.

Tyson Griffin also captured the animosity on his Instagram as the two camps passed each other here and here.

The UFC special Bad Blood featured the Jones-Cormier feud.  Although this episode which aired on FS1 and replayed FX drew praise and hype from MMA folks, in my opinion, it amounted to a regular HBO 24/7 episode.  There was also a countdown show and an “All Angles” show featuring Cerrone.  Essentially, the episode was a “getting to know” Donald Cerrone show.

In addition to the television commercials, there were extensive radio buys which do not usually occur for a standard UFC PPV.

UFC 182 was shown in movie theatres across the country. From surveying social media, it appears that many people actually went to see the event at theatres. 

Also, bars across the country seemed to be packed for this event.

Sponsorships

The octagon had UFC sponsors, MusclePharm, Fram, MetroPCS, Harley Davidson, Cimemax’s Banshee, Toyo Tires and Bud Light in the center.  There was also signage for UFC 183 featuring an image of Anderson Silva sitting in a “spider” position.  Banshee also had the fighter prep point. There was also a commercial on the Cinemax show during the event.   

Cerrone was sponsored by Budweiser and attempted to giveaway beer on the Las Vegas Strip on New Year’s Eve until the UFC stopped the promotion.  Prior to the fight, it was announced that he had signed a sponsorship with Fram.  

Cormier had “Break Bones” t-shirts for the event which were made by his sponsor, CageFighter.

Jones sported his new Reebok sponsorship.  Jones’ trunks appear to be what his official uniform may be. He also has his own share of shirts from UFC.com.

Odds and Ends

  • To the dismay of some people, the UFC increased prices of its PPVs to $59.99 HD for the first three events of 2015.
  • The PPV was short on time which is odd since there have been at least two times in recent memory where a UFC PPV has exceeded 3 hours. UFC 181 had five hours squared away instead of the normal four hour block on PPV.  One would think if people were going to pay $5 more, the UFC would pay for an overrun to get some in-ring interviews of the co-main and main eventers.  Regardless, look for big ratings for the FS1 post-fight wrapup.
  • CM Punk was on the FS1 pre-fight show and did a Q&A before the weigh-ins. The company is getting the most out of Punk already and putting him out there for 182 made sense.  How much will they use him before he actually fights?
  • The commission threatened the fight purses of Jones and Cormier if there was any dustup at the weigh-ins. Thus, the awkward weigh-in staredown.
  • Steven Seagal was in attendance and “aided” Daniel Cormier prior to the fight as shown in an “Embedded” episode. Doesn’t look like it helped.
  • UFC Heavyweight newcomer Jared Cannonier utilized crowdfunding site GoFundMe to raise money for his training camp. He exceeded his goal of $5,000 by raising $6,100.  Unfortunately, he was KO’d by Shawn Jordan.
  • Speaking of training camps, Cerrone indicated he paid $20,000 to bring in fighters to spar with him. He is set to make slightly over $100,000 for the fight.
  • The UFC announced big additions to its Fight Library with the acquisition of libraries from several promotions.
  • We already know, but Conor McGregor is getting a huge promotional push by the company.
  • Is the UFC using the “boxing strategy” as many suggest that they highlight one fight to sell for its PPV? This can be done if there is a heated feud, but probably hard to sell as frequent as its PPVs are due to lack of build.

Conclusion

After the event, Dana White indicated that PPV buys were above the 750,000 he predicted pre-event.  There were 500,000 Google searches as of Friday which would indicate a big PPV buy rate.  However, the cautionary tale of relying on Google searches is that Pacquiao-Algieri fight in November drew 500,000 searches yet only drew a reported 300,000-400,000 PPV buys.  But, the promotion of the Jones-Cormier feud alone seemed to create the kind of buzz that got fans that pick and choose purchasing PPV events to buy this one.  Any buy rate number hitting 600,000 (or above) will be a great start for 2015 for the UFC.

UFC Increases PPV price for announced 2015 events

January 3, 2015

According to UFC.TV and multiple PPV providers such as DirecTV and Time Warner, the UFC will charge consumers an estimated $59.99 HD/$49.99 SD for all PPVs scheduled in 2015 so far, which include UFC 182: Jones vs Cormier, UFC 183: Silva vs Diaz and UFC 184: Weidman vs Belfort.

UFC_182_price_incr

 

Payout Perspective:

UFC President Dana White went on record (MMAFighting) years ago, stating that PPV prices would never be raised and would stay at their regular price of $54.95/$44.95 SD. That tune changed for UFC 168 in December of 2013, when the PPV price was raised to $59.95 HD/$49.95 SD. Dana White went on the record once again and stated that the PPV price hike was “just for UFC 168″, since it was justified by placing some of UFC’s biggest stars in highly anticipated match-ups (Weidman, Silva, Rousey, Tate).  White stated PPV prices would go back down to their regular price after UFC 168’s one-off price adjustment.

That brings us to 2015, which is just over a year after the UFC 168 PPV price hike experiment took place. To kick-off the new year, the UFC has scheduled it’s first three events of the year (UFC 182, UFC 183, and UFC 184) with an increased PPV price of  $59.99 HD/$49.99 SD ($64.95 HD/$54.95 SD for Verizon customers). Another one-off experiment cannot be the culprit this time around. So, what could have caused the PPV price hike this time around? Well, you don’t have to look any further than how mightily the UFC struggled in 2014 on the PPV front, which may seem a bit counter intuitive.

Last year’s down PPV business forced Standard & Poors to lower Zuffa’s outlook and threatened to lower their credit rating if things didn’t turn around by the end of Q1 2015.  Now having said that, it makes sense as to why Q1 2015 has been scheduled with some of UFC’s biggest stars and match-ups. As for the price hike, looking back at UFC 168, it did an estimated 1.025M PPV buys with the hiked PPV price, so it doesn’t appear to have been much of a deterrent. It’s pretty much a safe bet to say that the UFC’s takeaway from the UF 168 experiment was that their customers have no problem paying extra for a major event.  In 2015, it looks like they are taking that experiment a bit further by scheduling the first three events of the year with the price hike.

Essentially, the UFC is applying ad-hoc variable PPV pricing to their product, which is something the UFC has criticized and has tried to stay away from since their parent company, Zuffa, took over.  Fans have demanded variable PPV pricing for years as justification for not purchasing cards that were not as “stacked” as others yet cost the same amount. The UFC’s belief, however, has always been that consumers are buying the UFC experience via PPV, regardless of who is fighting on the card for the most part.  The UFC never wanted to admit in the past that some cards have less worth than others, which is a perception that has been shattered the past few years.  If the UFC wants to keep that perception that all PPV events have the same value, a uniform PPV price hike may be the next logical step in this experiment, but for a company who has struggled so much recently with their PPV business model, increasing the price on a product that many fans feel is over-saturated and watered-downed may prove to be quite the risky move.

White predicts 750K PPV buys for UFC 182

January 2, 2015

MMA Fighting reports that Dana White predicts Saturday’s UFC 182 to hit 750,000 PPV buys.  White’s proclamation comes despite word that the event is yet to sell out as of Friday night.

It appears that White is shrugging off last year’s bad PPV year with this prediction.  If UFC 182 hits 750,000 PPV buys it would be the biggest event since December 2013 when UFC 168 drew an estimated 1,025,000 PPV buys.

Last year, UFC buys drew an average of only 256,000 buys per event.  It also had to cancel an event which made it the second time in history the UFC had to scrap a PPV.  Notably, UFC 175 was the biggest draw (540,000 PPV buys) but no other PPV in 2014 drew over 400,000 buys.

There are an abundance of tickets in various areas on Ticketmaster as of 6:00 p.m. on Friday night on the west coast.

The MMA Fighting article provided a couple reasons for the sluggish ticket sales including three fights in Vegas in such a short time span and Phoenix having its own event last month

Payout Perspective:

We should all remember that White is a promoter.  Maybe he has some information we do not have that projects the buy rate.  Or, its wishful thinking.  Certainly, the UFC has spent a lot of money in the promotion of this fight and are banking that the Jones-Cormier feud will propel this card.  But, Jones’ PPV buy rate average hovers around 480,000 buys and it is the first time that Cormier is in the main event of a UFC PPV.  It will be asking a lot for the PPV to hit 750,000 buys as the Jones-Cormier main is supported by an ok fight between Donald Cerrone and Myles Jury.  If the PPV hits north of 500,000 buys it will be a testament to the promotion of the feud between Jones and Cormier and gain some momentum for the company to start 2015.

14 for 14: No. 9 UFC PPVs down

December 27, 2014

UFC PPV buy rates are down from 2013 as an increase in the number of events, injuries and lack of star power have contributed to find the company’s prime business in decline.  This year’s average is at a lowly 256,000.

Standard & Poor’s downgraded Zuffa’s credit rating and its financial outlook this past fall citing in part the PPV business decline as a reason.  Dana White acknowledged the decline of PPV business in 2014 at the NeuLion Sports Media Technology Conference in November.  While the PPV model is a big part of the UFC business model, White stressed in November that the UFC was “much more” than PPV.  The promoter that he is, White stated that when “big events happen, the pay-per-view numbers will come back.”

As all of the PPVs for 2014 have occurred, the biggest event this year was UFC 175 in July which drew 540,000 PPV buys.  There were 4 events in 2013 that exceeded 540,000 PPV buys.  The previous high was UFC 168 in December 2013 with 1,025,000 PPV buys.  Outside of UFC 175, no 2014 PPV drew over 400,000 PPV buys.  It also had to cancel UFC 176 in August due to injuries.  Although there is a lot of hope for UFC 182 in January, it’s unlikely that event would eclipse UFC 168’s number or even UFC 175.

UFC PPVs in 2014 (main event in parentheses)

UFC 169 (Barao vs. Faber II) 230,000

UFC 170 (Rousey vs. McMann) 340,000

UFC 171 (Hendricks vs. Lawler) 300,000

UFC 172 (Jones vs. Teixeira) 350,000

UFC 173 (Barao vs. Dillashaw) 215,000

UFC 174 (Johnson vs. Bagautinov) 115,000

UFC 175 (Weidman vs. Machida) 545,000

UFC 177 (Dillashaw vs. Soto) 125,000

UFC 178 (Johnson vs. Cariaso) 205,000

UFC 179 (Also vs. Mendes II) 160,000

UFC 180 (Werdum vs. Hunt) 185,000

UFC 181 (Hendricks vs. Lawler II) 380,000

UFC 2014 PPVs

UFC PPVs averaged 256,000 PPV buys which is off from 2013’s PPV buy rate average of 468,000.  2013 did see two appearances by UFC PPV bell cow Georges St. Pierre.  It also benefited from UFC 168 which featured the dual main event of Rousey-Tate and Silva-Weidman II.  2013 had one more PPV due to the cancelled one this year.

UFC 2013 PPVs

2014 did not do as well as 2012 (448K PPV avg over 13 events) or 2011 (413K PPV avg over 14 events).

Payout Perspective:

 One may argue what’s been the cause for the poor PPV buy rates this past year.  On the one hand, there is the amount of UFC events which allows the fight fan to pick and choose which PPV events to purchase.  On the other, there are the many injuries which cause fighters and fights to be re-shuffled.  Then, there’s the lack of star power (i.e. GSP).  There’s not an easy answer to the PPV issues unless the UFC decides to pull back on the number of PPV events (which does not look likely).   With three big PPV events in 2015, we will see if the PPV buy rates increase from 2014’s dismal average.

UFC 181 estimated between 375K-400K PPV buys

December 18, 2014

MMA Fighting reports that UFC 181 held on December 6th drew between 375,000-400,000.  In addition, Dave Meltzer in his latest Wrestling Observer (subscription recommended) revealed the PPV numbers from UFC 178-180.

UFC PPV estimates UFC 178-181 and its respective main events

UFC 181:  ~375K-400K (Hendricks-Lawler/Pettis-Melendez)

UFC 180:  ~185K-200K (Werdum-Hunt)

UFC 179:  ~160K-200K (Aldo-Mendes)

UFC 178:  205K (Mighty Mouse-Cariaso)

UFC 181 was the highest output in terms of PPV buys since July’s UFC 175.  It had a strong card which included two title fights:  Hendricks-Lawler and Pettis-Melendez.  The other notable PPV number was UFC 180 which suffered from multiple issues including the injury to Cain Velasquez which changed the main event and the fact Bellator had a show on Spike TV.

Payout Perspective:

To show how far UFC PPVs have dropped in 2014, UFC 181 was the second largest PPV buy this year coming in second to UFC 175 (540,000).  UFC 181 is likely the most-watched PPV since UFC 175 as this card was also available in movie theatres.  Certainly, one would have thought this card could have done more but in a year where UFC PPVs have been off, this was a good (not great) result.  These numbers might also temper expectations for January 3rd’s UFC 182 between Jones-Cormier.

UFC 181: Payout Perspective

December 9, 2014

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 181 which took place at the Mandaly Bay Events Center in Las Vegas, Nevada

CM Punk signs with UFC

Usually we start off with the main events, and there were two very good ones, but the big news coming out of the PPV was the announcement that Phil Brooks (the artist formerly known as CM Punk – the WWE owns the trademark and we’re not sure if terms of his settlement included continued use of the name) has signed with the UFC.  Brooks is 36 and has no formal experience in MMA unless you count his training in BJJ and Kempo.  Recently, Brooks talked about a variety of health issues he had while in the WWE as well as the indication he has had a lot of concussions (12 or 13 per the Cabana podcast).  The concussions do not even count the ones that were not medically recorded.  We will definitely talk about this more but as it relates to business, this is a calculated risk for the UFC.  It should bolster a UFC for the sheer curiosity from former WWE fans.

Lawler edges Hendricks for UFC title

Robbie Lawler started and finished the second fight with Johny Hendricks in a flurry.  And it might have been the last flurry in the end that solidified the win for Lawler.  Maybe Hendricks fell into the same trap of confidence as he did when it appeared that he had defeated GSP.  Hendricks had turtled up in at least two rounds allowing Lawler to seemingly pound away at him.  Even if the blows did not hurt, the appearance made it seem that Lawler had the advantage.  In the end,  Matt Hughes had the opportunity to put on the belt for the new champion.

Although a third fight would make sense, Rory MacDonald was in attendance and should be the next in line to challenge for the belt.

Showtime crisp in title defense

Anthony Pettis is good.  That’s an understatement.  Despite a shaky first round against Gilbert Melendez, Pettis took advantage of a shot from Gil and quickly secured a guillotine.  He’s now subbed Benson Henderson and Gilbert Melendez with ease.  It’s clear that Pettis is the tops of this division.  Pettis is athletic and quick and if he avoids significant injuries (wrote this before news of his hand), he can be a force in the UFC.

Up next for Pettis should be Khabib Nurmogomedov who showed up at the press conference to ensure Showtime knew who he was.

Attendance and gate

MMA Junkie reports the attendance and gate at the Mandalay Bay Events Center in Las Vegas. The attendance announced post-event was 9,617 for a gate of $2.488 million.  The last event at the Mandalay Bay was UFC 170 in February 2014 for Ronda Rousey-Sara McMann.  That event drew 10, 217 for a gate of $1,555,870.

Promotion for the Fight

UFC Embedded was the main driver once again and offered some good background on Hendricks-Lawler and Pettis- Gil.  It also covered the Pettis Wheaties box cover announcement and the Reebok uniform announcement.  Hendricks’ sponsor, Bass Pro Shops, received some exposure as Johny was seen shopping for a rifle at the outdoor sporting goods store.

The UFC released Hendricks-Lawler I online which one must consider was one of the best fights of the year.

UFC 181 sported a comic book theme with the fight poster.  A nice change from the usual face offs.

ufc 181

UFC 181 was slated for movie theaters once again.

Sponsorships

In the Octagon were Wargaming.net, Alienware, Matefit.me, Fram, Musclepharm, Metro PCS, Harley Davidson, Air Force Reserve (a Robbie Lawler associated sponsor), Toyo Tires and Bud Light in the center.

Johny Hendricks had a new sponsor for the fight, Zak Products, an official NASCAR sponsor.

Hendricks and Pettis, already sponsored by Reebok, wore the brand into the Octagon.  Perhaps the Pettis walkout shirt is a glimpse of what to expect from the brand in July.

Dynamic Fastener made its presence known in the Octagon.  Hopefully, viewers will figure out what it does before it goes away in July.

Harley Davidson had a promotion where the winner of the Travis Browne-Brendan Schaub fight won a Harley.  For those that didn’t watch, Browne won the motorcycle.

Odds and ends

Raquel Pennington-Ashlee Evans Smith ending was a cliffhanger of sorts since FS1 cut to commercial as Pennington had the choke on Smith and it was not clear what had happened.  I recall the same thing happening with Dan Henderson-Shogun Rua.

Great wins for Todd Duffee and Josh Samman, the latter with a great headkick KO of Eddie Gordon. Gordon wore a legalize MMA shirt into the Octagon as he fights out of Matt Serra’s gym in New York.

There was some foreshadowing about 181 by Dana White on the Jim Rome Show.

Another interesting question in light of the Reebok deal.

Urijah Faber took what is becoming a normal spot as the final bout on the UFC Prelims.  It’s interesting that he’s becoming a mainstay in this position but according to Dave Meltzer he chooses to be on FS1 rather than PPV because more people watch.  It makes sense considering he is a name, can draw viewers to the FS1 prelims and is a good bridge to the PPV telecast.

Interesting that they dropped the lights for Pettis-Gil but not for Hendricks-Lawler.

The production for the promos for UFC 182 and UFC 183 were great and showed more of a entertainment edge to them.

A good read on referee Mark Smith, who is a retired Air Force pilot.  Only coincidence that Air Force Reserves was a sponsor on the Octagon mat.

Conclusion

UFC 181 was one of the best cards of the year.  From the Prelims to the main event, it came through with action fights, KOs, submissions and a surprise announcement.  Does that mean it will cash in with PPV buys?  Google searches were high on the search terms UFC and CM Punk in the U.S. as both were trending 3rd and 6th respectively with over 100K searches each.  While this does not necessarily equate to buys (e.g. Manny Pacquiao registered over 500K searches yet scored a reported 300K PPV buys), we should see UFC 181 doing well and above this year’s PPV average.  Look for somewhere between the 400-500K range.

With Pacquiao fight Saturday, ongoing question of whether PPVs are sustainable

November 22, 2014

With Manny Pacquiao returning to PPV Saturday night, the standard question of whether PPVs are worth it surfaced.

In a Newsday column published this week, there are quotes from both boxing and UFC executives which address the question of PPV as a viable platform. The conclusion appears to be that it takes a big event for people to purchase PPV.  This is something most of us already knew.  The column acknowledges that with the internet and social media, there are more ways to follow a PPV card without purchasing it.  Also, more people are content with highlights they may be able to obtain legally online.

UFC exec Marshall Zelaznik is quoted in the piece and stated that it’s up to the UFC to “figure out how to create and develop content that will make people not want to miss it.”  He went on to say that the UFC has to do “the right job to respect the consumer, to give them something that’s valuable and worth paying for.”

Dana White recently acknowledged this year’s PPV buy rates have been low and Floyd Mayweather’s PPV reputation has been affected with the underwhelming business done under the Showtime banner (except of course for The One).  Still, one big PPV event can mean a major windfall for the company.

On Saturday night, Manny Pacquiao is on PPV once again against an unknown in Chris Algieri.  Conspicuously, there has been little done in terms of promoting the fight.  Unless it has gone under the radar, there are no Tecate promotions and $25 rebates this time around.  The usual three rounds of HBO 24/7 has been limited to just one.  Even the replays of past Pacquiao fights have been limited on HBO and the Audience Network as Bradley-Pacquiao II is replayed.  Additionally, Algieri-Provodnikov has been replayed.

Payout Perspective:

There’s nothing new in the column related to the current state of PPV except the quotes from the execs.  It’s clear that the challenges of getting fans to buy PPVs are getting harder considering the amount of content out there, social media and the ability to see highlights that will satisfy one’s need to watch the event.  Are there too many PPVs?  Boxing has added several PPVs to the mix this year which may sway your mind about that question.  Certainly, many MMA fans have their opinion on the UFC PPVs.  As for Saturday’s event featuring Pacquiao, it will be interesting to see how many Pacquiao die hards will pay the $70 to watch.

UFC 180: Payout Perspective

November 17, 2014

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 180 from the Mexico City Arena in Mexico City.

Werdum wins interim Heavyweight title

It was to be Cain Velasquez fighting in Mexico City against Fabricio Werdum.  However, an injury to Cain allowed Mark Hunt the chance to step in and seize the title.  Hunt looked good until a well-timed knee spelled the beginning of the end for Hunt.

Werdum wins the title and will eventually get to face Cain Velasquez to unify the titles.

UFC 180

Gastelum ascends while Ellenberger descends

Kelvin Gastelum defeated Jake Ellenberger with a rear naked choke in the first round.  The win should propel the former TUF winner into the top 10 of the welterweight division while it showed the Ellenberger maybe a broken fighter.  Gastelum secured a rear-naked choke with ease as it appeared that Ellenberger did not defend his neck despite his back being taken.  The win should mean a step up in fights for Gastelum while Ellenberger is teetering on the cusp of being cut.

Attendance

Initial reports in August had UFC 180 a sell out in just 8 hours after the announcement of Velasquez-Werdum and the launch of TUF in Mexico (which drew 7 million viewers on Televisia according to Yahoo! Sports).  The announcement made post-fight had the attendance at 21,000 although no official gate was given.

Bonuses

The bonuses of $50K were given to Werdum, Gastelum, Henry Biones and Guido Cannetti.  Briones and Canetti put on the Fight of the Night.  White indicated that Ricardo Lamas would also be given a bonus although that was unofficial.

Promotion of Fight

Once again one of the main drivers of the promotion was the UFC Embedded series which followed the fighters on the main card.  It caught the best moment of the pre-fight hype with Werdum-Hunt singing together.

The UFC also did a photo op with the NBA as the Houston Rockets and Minnesota Timberwolves played a game in Mexico City earlier in the week.

The UFC and Fathom Events put the event on movie screens across the country hoping that the event would gain more eyes.  Unfortunately, if we look at the tweet from Mike Bohn, it did not.

Sponsorships

The Octagon sponsors were without UltimatePoker.com, the Stations Casinos online poker site which was closed down last week.  Notably, one of the Octagon sponsors for UFC 180 was Costa Rican online gaming company, BetCris.  The sponsors included the UFC Network, UFCStore.com, UFC Fit, MateFit.me, MusclePharm, Toyo Tires, video game FarCry 4, the aforementioned BetCris and Bud Lite in the center of the Octagon.

Gastelum wore the UFC Network logo as did Werdum during pre-fight activities and but wore Bad Boy to the Octagon.

Hunt wore his own clothing brand Juggernaut on his shorts.  It’s interesting that Hunt does not have more sponsors.  You may recall he had zero as a fill-in when he fought Junior dos Santos at UFC 160.  Werdum most prominent sponsor was clothing brand Torque.

Doritos was a prominent sponsor for this event as it banked heavily on the Werdum-Velasquez matchup including producing in-store placement of 2.5 million bags with the fighter likenesses on them.  It was described as a “360 degree activation” around UFC 180.  With Cain falling out, the campaign likely fell short of its goal.

Post-UFC 180 Headline

Werdum-Velasquez should be next although White indicated that if Cain were to have another injury that forces him from action, he could be stripped of the title.

Odds and Ends

  • The WWE collaborated with the UFC during the UFC Prelims on FS1. To be exact, a 2K Sports commercial for the WWE video game, WWE2K15, infused images of the video game and UFC action.
  • The main event ended at 8:50 pm on the west coast. Only about an hour and a half of fights before the UFC showed the prelims to fill the time.
  • Bellator used the footage of Melvin Manhoef knocking out Mark Hunt from 2008 during its pre-fight hype package to put over Manhoef.
  • Jessica Eye almost took Leslie Smith’s ear off but Smith still wanted to fight.
  • Google Trends revealed that the top countries searching for UFC 180 were Mexico, Canada, Brazil and the United States in that order.
  • The Sports Business Journal (subscription required) ran a story on the Fertittas and Dana White and their ties to Las Vegas’ Bishop Gorman High School in last week’s Sports Business Journal. It was placed “below the fold.”  Prominent placement for a rather evergreen story during UFC 180 week.
  • Chael Sonnen began his duties with ESPN as an analyst.

Conclusion

It was a good night of fights but the lack of brand-name power was one of the detracting factors about this event.  When the Werdum-Velasquez fight was initially announced and the two were TUF coaches, there was much hope that UFC 180 would be one of the bigger PPVs of this year.  Entering a new market and the quick sell out appeared to be good signs for the PPV.  But, Velasquez’s injury was a significant blow to any hopes that this PPV would do well.  Without a good undercard, the UFC was placing its hopes on Cain’s drawing power.  Based on Google Trends, we are looking at a buy rate comparable to UFC 174 or 177 which drew between115-125K PPV buys.

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