UFC 110: Payout Perspective
February 22, 2010
Welcome to another edition of Payout Perspective! This week we’ll be taking a look at the UFC’s first event in Australia, UFC 110, held on Sunday, February 21st from the Acer Arena in Sydney (but shown live on PPV in North America on Saturday). The event featured a heavyweight contender’s match between Antonio Rodrigo Nogueira and Cain Velasquez, in addition to a middleweight showdown between Wanderlei Silva and Michael Bisping.
UFC 110 by the Numbers
Attendance/Gate
The announced attendance for the fight was 17,431, which drew a live gate of approximately $2.2 million US ($2.5m AUD).
Disclosed Payouts
Unlikely to be released.
Disclosed Bonuses
Fight of the Night: George Sortiropoul0s vs. Joe Stevenson ($50,000 each)
Knockout of the Night: Cain Velasquez ($50,000)
Submission of the Night: Chris Lytle ($50,000)
Total Disclosed Bonuses: $200,000
PPV Buyrate Prediction:
The numbers for UFC 110 are again pretty strong with the live gate generating approximately $2.2 million US and Countdown to UFC 110 drawing 635,000 viewers. However, the countdown viewership has been skewing unusually high lately as the result of Spike’s new strategy to schedule the show immediately following large demographical lead-ins from other related content like other MMA or wrestling programs. Thus, I’ve decided to weight the prediction with a 75-25 skew towards the gate (traditionally a less volatile indicator than the countdown ratings).
When you plug the figures into the linear equation derived from a regression analysis you’re left with the following range:
- UFC 110 gate prediction: 412,000
- UFC 110 countdown prediction: 570,000
- Weighted average: 452,000
The expectations for this card weren’t superb in terms of its ability to sell. Indeed, 450,000 seems to be the ceiling for a card of this caliber and hype. However, let’s take a look at some of the factors that may have influenced the buyrate one way or another.
+ Strongest card on paper since UFC 107
+ The UFC did a very good job of promoting the fact it was taking its show on the road; may have drawn a part of that casual crowd, curious to see what all the international fuss is about.
+ Nogueira isn’t the tremendously weak draw that everyone believes him to be; he’s co-headlined two shows that surpassed 600k, and was last seen in a candidate for 2009 fight of the year when he beat Randy Couture at UFC 102. Also don’t forget he did TUF with Mir.
– On the other hand, there was again no title match on the card. These make all the difference in the world where buyrates are concerned.
– The live gate may be inflated by the fact that it was the UFC’s first-ever time in Australia. If you discount the gate by 20% you’re looking at a new weighted average of 390,000.
Greg Saks of Tapology.com has predicted 355,000 buys using his online buzz indicators.
Business Story Lines
Velasquez dominant, heavyweight division looking tough
Velasquez has officially jumped the chasm from being touted prospect to legitimate title contender. He keeps getting better with each and every fight, and to dismantle a legend like Nogeuira the way he did was very impressive. Granted, Nogueira’s chin threshold has lowered substantially – the man that used to be able to take a beating, no longer can – but he’s still a formidable top 10 opponent.
Now things are looking very interesting in the heavyweight division. Velasquez will likely get a crack at Lesnar (or whomever the champion happens to be) at some point this year. He also joins a slew of capable threats at the top of the division (including Mir, Carwin, and Dos Santos), which gives the UFC heavyweights a look and feel that it’s probably never had before – depth.
If Lesnar’s ability to draw is any indication, the public is very much interested in seeing these gargantuan men collide in the cage. Thus, while the growth of the UFC and MMA has yet to be paced by the success of the heavyweight division, the big men will likely play an increasingly critical role in driving interest and sales in the future.
Velasquez has immense potential to help draw Hispanic audience into MMA
Velasquez claims Salinas, CA to be home, but he’s very proud and in-tune with his Mexican heritage. The importance of this fact should not be understated, because the UFC is trying to attract the hispanic demographic (traditionally a very strong supporter of boxing) and possibly expand into Mexico with a live show in the next few years.
The marketing study performed by Damon et al talked about vicarious achievement, which is essentially a fan experiencing a degree of perceived achievement just by watching his/her favorite fighter succeed. The study suggested this was a strong motivator for the consumption of MMA, but I propose – strictly through my own observations – that the effects of vicarious achievement are even stronger within MMA’s minority demographics. The Hispanic audience doesn’t just like boxing, it likes cheering for Hispanic boxers.
Thus, perhaps the key to success in terms of attracting the Hispanic demographic is to utilize fighters like Cain Velasquez and Efrain Escudero to help build that market. Similarly, judging by the reaction that George Sortiropoulos was given by his hometown crowd (or even what GSP receives in Canada) the effects of this vicarious achievement may become even more important for the growth of MMA as it increasingly becomes an international sport.
Mixed reviews from Australian media
The Good: Dan Koch, The Australian, Ultimate Fighting Championship Takes Center Stage
The Bad: Peter Fitzsimons, Sydney Morning Herald, ‘Smell the blood!’ The Sickening Roar for Gore
UFC breaks Acer Arena records
According to Dana White, the UFC broke arena records for highest grossing event and highest merchandise sales. UFC 110 was also the second fastest sellout in UFC history when tickets vanished in little over an hour (Montreal owns the top spot with something like six minutes).
UFC plans annual event in Australia
The UFC’s debut in Australia was so successful that the organization is hoping to hold an event in the country on an annual basis. This is something we’d heard talk of before the event, but White confirmed as much at the post-fight press conference. Melbourne is the target destination, but the market has yet to be sanctioned. Perth is the other location being discussed.
Not only was the show a success in terms of the tremendous response the UFC received from the fans in Australia, but the event performed so well in terms of entertainment value that it’s hard to believe the UFC didn’t make a host of new fans watching the event on TV throughout the country. It helps, of course, that the fight of the night came from the performance of an Aussie.
Prospect Watch
UFC 110 showcased a plethora of young fighting prospects, so understandably the results weren’t all positive. Cain Velasquez obviously stepped up and shed his prospect status, becoming a bona fide title contender at 265lbs. Further success was had by Sortiropoulos, Bader, and Dollaway – the former two are now ready to face top ten fighters, while the latter secured a much needed victory to remain in the UFC. Unfortunately, the night wasn’t as positive for Goran Reljic and Brian Foster; each man will look to re-group but neither is likely in danger of being cut loose.
Sponsorship Watch
The UFC’s approach to sponsorship understandably changes when it ventures internationally, so we saw a slightly different approach to cage mat sponsorship at the event. Gamefly.com took the center octagon sponsorship, but was joined by a host of smaller logo sponsorships on the periphery (including new comers USAToday.com and SI.com). The event was sponsored by a new television series on the FX network, Justified, set to debut in March.
Something to keep an eye on as the UFC continues to expand internationally is the exclusivity of its sponsorship contracts. MMAPayout.com talked about the emerging technologies that might allow the UFC to offer unique sponsorship packages to different broadcasts throughout the world, which would obviously boost revenues. If the organization can pair down its contracts to exclusivity by region, it may have an opportunity to utilize green screen technology to give, for example, English, Hispanic, Arabic, Korean, and Japanese feeds different title sponsors.
UFC 108: Payout Perspective
January 3, 2010
Welcome to another edition of Payout Perspective!
This week we take a look at UFC 108 which was held at the MGM Grand in Las Vegas, Nevada on Saturday, January 2nd. The first major card of the new calendar year featured a bout between light heavyweight contenders Rashad Evans and Thiago Silva as well as the appearances of Paul Daley, Junior Dos Santos, and Joe Lauzon.
UFC 108 by the Numbers:
Attendance
Tickets sold: 8,004
Gate: $1,969,670
Tickets Comped: 4,373
Value of Comped: $1,005,000.00
Total attendance: 12,377
Disclosed Fighter Payouts
Main Event:
Rashad Evans: $375,000 ($175,000 win bonus) def. Thiago Silva: $55,000
Main Card:
Paul Daley: $34,200* ($18,000 win bonus) def. Dustin Hazelett: $19,800*
Sam Stout: $24,000 ($12,000 win bonus) def. Joe Lauzon: $12,000
Jim Miller: $30,000 ($15,000 win bonus) def. Duane “Bang” Ludwig: $12,000
Junior Dos Santos: $60,000 ($30,000 win bonus) def. Gilbert Yvel: $30,000
Under Card:
Martin Kampmann: $46,000 ($23,000 win bonus) def. Jacob Volkmann: $6,000
Cole Miller: $24,000 ($12,000 win bonus) def. Dan Lauzon: $15,000
Mark Munoz: $32,000 (16,000 win bonus) def. Ryan Jensen: $6,000
Jake Ellenberger: $20,000 ($10,000 win bonus) def. Mike Pyle: $17,000
Rafaello Oliveira: $20,000 ($10,000 win bonus) def. John Gunderson: $5,000
Total Disclosed Payouts: $843,000
Disclosed Fighter Bonuses
Fight of the Night: Joe Lauzon vs. Sam Stout ($50,000 each)
KO of the Night: Paul Daley ($50,000)
Submission of the Night: Cole Miller ($50,000)
MMAPayout.com Buyrate Prediction
A weighted average statistical regression analysis of two different variables - viewership in Countdown to UFC and live gate revenue across 30-40 events – was used to derive a linear equation that allows us to input UFC 108’s respective Countdown viewership (559,000) and live gate revenue ($2 million) in order to determine an expected buyrate figure for the event:
- Countdown Prediction: 488,000
- Live Gate: 400,000
- Weighted average: 444,000 buys
The range is a pretty good estimate of where the PPV is expected to land – even Dana White has commented that he expects the show to do 400-500k. You may remember the range was pretty large last time, but that was seemingly the result of the company’s lowest North American gate in nearly two years skewing the real interest for the show.
As always, this is just an estimate. The weighted average prediction could fluctuate up or down depending on any number of the following factors:
+ The feel-good holiday buzz where consumers spend less conservatively than at other points in the year.
+ Rashad Evans certainly gained more awareness as the result of his stint on TUF, but it would have had even more of an effect on the PPV had he fought Rampage.
– The “cursed” nature of the card may have led some to avoid the purchase altogether – considering what it was meant to be versus what it actually became.
– The event didn’t feature a title fight.
– Disclosed fight bonuses have been a proxy for the UFC’s expectations of what an event will do, and it might be telling that these bonuses are lower than normal ($50,000 compared to $65,000 or $70,000 in previous events like 107 and 106 respectively).
Business Story Lines
- Rampage-Rashad likely for May:
Dana White will tell you that he’s unbiased – and he probably is – but when Silva had Rashad hurt in the dying minutes of the third round on Saturday, there was surely a part of White that felt as though he was watching money evaporate before his very eyes. Then the Greg Jackson product dug deep and returned to his wrestling roots to stave off the onslaught and preserve the victory.
Rashad’s victory is very important for the UFC because it now sets up the Rampage-Rashad that many fans thought they were getting in December. Moreover, the winner of that bout has a credible claim to a title shot against the winner of Machida-Shogun II, which will also take place in May.
The UFC has planned two events in May: Machida-Shogun II in Montreal on May 1st and the Memorial Day Weekend card (that will coincide with the UFC Expo) in Las Vegas. You could make a strong case for Rampage-Rashad as a solid co-main event on either of these cards. The May 1st card would give fans a look at a contender bout followed by a title bout in the same weight class. However, Rampage-Rashad would draw a lot of attention for Memorial Day / UFC Expo card.
- Daley earns a shot at stiffer competition:
Daley’s power is very impressive, as is his ability to absorb one. He’s probably got the heaviest hands at 170 lbs, but the UFC will look to test his ground game before they even think of giving him a shot at GSP. Daley hasn’t looked good against great wrestlers in the past – Nick Thompson comes to mind – and thus he’ll be tested to improve his take down defense.
Regardless of whom he faces, Fitch or Koscheck, a legitimate contender will be created. My own guess is that it will be Koscheck because he’s a more marketable personality than Fitch and is the last fighter to win a round over GSP.
- Bayonetta the mystery sponsor of UFC 108:
Anyone wondering about the mystery sponsor for UFC 108 (pictured on the poster below Evans vs. Silva) wasn’t alone – the logo is more or less illegible. Moreover, it didn’t help that throughout the broadcast the vague references made by Goldberg weren’t enough to really tell what the thing was (the UFC is provided with this material, so it’s not really their problem).
A quick google search reveals that it’s a video game.
- UFC signs Takanori Gomi:
The UFC has signed the Fireball Kid, and he will now look to regain his former top two lightweight form in North America. ESPN Live’s Jon Anik broke the news yesterday that Kenny Florian is a likely first opponent. It’s a fight that makes a lot of sense for the UFC, because if Florian wins he’s got two solid victories in the wake of his 4th round defeat to Penn last year and it would justify a title shot that could possibly take place in Boston next summer. If Gomi wins, he’s come into the UFC and essentially knocked off the 2nd best lightweight in the division, and he would be close to a shot as well.
- UFC 108 Exceeds Expectations
UFC 108 provided another example of how important a role expectations play in the perception of quality. A card of this entertainment value would have been considered a good card regardless of event hype, but the fact that it had been called “the cursed card” by many led to some pretty low expectations. The action way over-delivered in this one, and it was probably the best set of fights since UFC 102 last August.
UFC 107: Payout Perspective
December 14, 2009
Welcome to another edition of Payout Perspective. This week we’ll be taking a look at the business side of UFC 107 which was held this past Saturday, December 12th from the FedExForum in Memphis, Tennessee.
The event featured a lightweight championship bout between BJ Penn and Diego Sanchez as well as appearances from Frank Mir, Kenny Florian, and Jon Fitch.
UFC 107 by the Numbers:
Attendance and Gate Figures
The announced attendance for the fight was 13,896, which drew a live gate of approximately $1.5 million.
Disclosed Fighter Payouts
TBA
Disclosed Fighter Bonuses
- Fight of the Night: Alan Belcher vs. Wilson Gouveia ($65,000 each)
- Knockout of the Night: TJ Grant ($65,000)
- Submission of the Night: Demarques Johnson ($65,000)
MMAPayout.com PPV Buyrate Prediction
A weighted average statistical regression analysis of two different variables - viewership in Countdown to UFC and live gate revenue across 30-40 events – was used to derive a linear equation that allows us to input UFC 107’s respective Countdown (618,000) and live gate ($1.5 million) values in order to determine an expected buyrate figure for the event:
- Countdown Prediction: 562,000
- Live Gate: 302,000
- Weighted average: 432,000 buys
The range in this case is pretty dramatic, but the bulk of the pre-fight indicators would seem to indicate that the buyrate will be significantly higher than 300k:
+ Countdown to UFC 107 drew a greater viewership than anything since UFC 101 (August)
+ UFC 107 was arguably the UFC’s best card since UFC 100.
+ UFC title fights have typically averaged around 600k, where as non-title events have only averaged 350k.
+ Google search activity around Diego and BJ Penn was fairly strong
Taking into consideration the above factors, the buyrate is likely to trend closer to the 500k mark.
Business Story Lines:
- Has BJ Penn cleaned out the lightweight division?
Names like Maynard, Griffin, and Edgar have been tossed around, but none are seen as legitimate contenders at this point. It’s a situation that nearly parallels the extent to which GSP and Anderson have wiped out their divisions.
What would you rather have in a weight class: parity or dominance? There are ways to sell both, but they also have their own drawbacks. An abundance of parity keeps the fans on their toes, because “anything can happen in MMA.” Yet, a great deal of parity can also make the sport look like a coin toss (e.g., the light heavyweight division of 2008 and 2009). A dominant champion, on the other hand, can be built as an indestructible, must-see attraction for the masses (even casual fans – it’s that “this guy is so good, you have to see him!” viral marketing). However, there’s a risk that the fans simply stop caring, because there’s a lack of competition.
Personally, I’d much rather have the dominant champion. The average fight fan doesn’t care about competition as long as the champ is a wrecking ball that crushes people at will. Moreover, it’s that consistency at the top of a weight class that is conducive to star and brand building.
- Frank Mir wants his rubber match:
Mir’s impressive win over Kongo has likely forced the UFC into reconsidering who is going to face Brock Lesnar next for the heavyweight belt. The appeal of a rubber match is very real, and could be a very large draw if promoted properly. The UFC now has two legitimate options (both contingent on Lesnar being ready for the summer):
1. The UFC books Lesnar-Carwin, as planned, for the summer. Then it schedules a contender bout in the same time frame between Mir and Nogueira/Velasquez. If both fights are held sometime in the summer, it would set the UFC up for a heavyweight headline for the 2010 NYE card, which is particularly enticing if it involves Lesnar (even more so if it involves both Lesnar and Mir in the rubber match).
2. The UFC could book Lesnar-Mir for the summer by citing Mir’s impressive performance, and try to capitalize on the momentum of summer fight madness and the UFC 2010 video game release. Then it could match-up Carwin against Nogueira/Velasquez for a contender match-up. Both fights, if held in the summer, would again give the UFC a heavyweight option for late in the year (possibly NYE 2010).
- UFC 107 the weakest live gate since 99, 73:
The show had sold 10,000 tickets for an estimated live gate total of $1.4 million just one week prior to the event, but last minute sales seemingly did not materialize as they normally do. If accurate, the result of approximately $1.5 million would make it the UFC’s weakest live gate total since its German debut in June 2009 (UFC 99, $1.3 million). It would also become the UFC’s weakest North American live gate total since July 2007 in Sacramento, California (UFC 73, $1.55 million).
What does this tell us? It would seem to be a contradiction of the generally higher levels of interest that this card received in the media and in lead-up shows like Countdown. Moreover, it’s a little surprising in the sense that the Memphis economy hasn’t been hit nearly as bad as other markets the UFC has visited lately (namely Portland). The fact that Rampage was taken off the card may have influenced ticket sales, but it could also be the case that the market simply isn’t as well-developed of an MMA state as many claim it to be (after all it was just sanctioned not too long ago).
Perhaps some readers from Memphis might be able to share their thoughts. Just to give you an example of the types of things that can happen to impact a gate: the UFC picked perhaps the worst week to hold UFC 102 in Portland last August, because the LPGA and Hood to Coast Relay were also being held simultaneously. This, of course, was in addition to pricing the tickets incorrectly, etc.
- UFC, Stubhub take partnership to next level:
Stubhub has long prominently featured UFC tickets on its marketplace website, and the two have shared links between websites in the past. However, the UFC and Stubhub took their partnership to the next level with a series of activation points during the broadcast including “presented by” segments, dressing room banners, and cage mat logos.
The UFC has also increased its reliance on the social networking site, Twitter. The site has been used as a touchpoint by the UFC to break news or spread the word of free ticket giveaways, but this was the first event that UFC fan tweets were broadcast during the PPV. It’s a smart way to interact with the fans – especially the UFC’s core demo – and something that’s definitely beneficial for Twitter. (Now, if they could only find a workable business model to fulfill on its tremendous appeal…)
- Overall, the event provided a good night of entertainment: The fans were able to witness a variety of decisions and stoppages, and the card was more or less devoid of any apparent judging flaws (when was the last time we were able to say that?).
Countdown to UFC 104 Ratings
October 22, 2009
Monday night’s Countdown to UFC 104 drew an average viewership of 524,000 on Spike TV, which is below the yearly average of 676,000 and also below last year’s average of 613,000.
Interestingly, the program has experienced a material drop in its ratings over the past three months:
| 2009 | |
| 95 | 632,000 |
| 96 | 703,000 |
| 97 | 774,000 |
| 98 | 774,000 |
| 99 | 552,000 |
| 100 | 1,720,000 |
| 101 | 805,000 |
| 102 | 523,000 |
| 103 | 382,000 |
| 104 | 524,000 |
Payout Perspective:
There seems to be some concern around the MMA community that the UFC won’t be able to sustain the torrid pace that it set earlier in the year with some extremely solid programming and PPV events. UFC 102 and 103 were underwhelming both in terms of buyrate and live gate, and the Countdown shows have also failed to knock everyone’s socks off.
Additionally, Dave Meltzer pointed out last week that the UFC has been offering a lot of free tickets lately - which is a nice gesture – but also a possible symptom of a general lack of interest in up-coming shows.
On The Ultimate Fighter on 10/7, there was commercial after commercial plugging the 10/24 PPV with the tag line about following Dana White on Twitter to get free tickets for the Staples Center show. We went from Montreal and Las Vegas shows advertising no tickets available to going on the national TV commercial talking about free tickets. They are papering heavily in the market. Last week when White made a public appearance, at first they were going to give away one ticket to everyone who came to see White. UFC gave away the tickets and got contact info and have offered those who came to see White two free tickets. Right now they’ve sold more than 8,000 tickets for $1.6 million, but that’s less than half the place.
However, the truth of the matter is that the UFC could have never expected to maintain the pace it had set earlier in the year.
Not only has much of the UFC’s early-year momentum faded away – momentum due to the video game and centennial event – but the events themselves aren’t nearly as attractive in terms of headliners.
There are so many factors that feed into the success or relative “failure” of an event, but it all starts with the calibre of your headline events and what’s on the line: it’s cards like GSP-Penn II (800k) that sell relative to Rampage-Jardine (350k ) or Penn-Florian and Griffin-Silva (850k) that sell relative to Franklin-Belfort (375k).
The challenge for the UFC moving forward is to not only put those types of match-ups together, but ensure that it has the capability to do so with an adequate number of talented and popular fighters.
—-
Lyoto Machida has a good shot at becoming that next popular fighter if he can defeat Shogun Rua this weekend; and, given the response he received in Brazil after returning home last May, he could be even more valuable to the UFC internationally than domestically.
Countdown to UFC 102 Rating, Viewership Increasing
August 28, 2009
Last night’s Countdown to UFC 102 on Spike TV did 523,000 viewers.
The UFC has averaged just over 732,000 viewers this year for it’s Countdown program on Spike, which represents a 19.53% increase over last year’s average of 613,000.
This year’s average doesn’t include UFC 94′s Primetime show for St-Pierre vs. Penn II, which was basically like Countdown to UFC on steroids; the three episodes cost Zuffa $1.7 million to produce and brought in total, original viewership of over 2.3 million (880k, 825k, 662k).
Payout Perspective:
This week’s result, while not spectacular, isn’t terrible. I don’t think anyone expected the interest to be as high for 102 as 101 or 100; this card comes on the heels of a long summer, it lacks a title fight, and the news of slow ticket sales have already kind of perked everyone’s ears.
Just to add a little bit of context here: Countdown to UFC 88 did 423,000 (with 480k PPV), Countdown to UFC 91 with Lesnar vs. Couture did 537,000 (with 900k PPV), and UFC 97 did 774,000 (with 650k PPV).
What does that tell us? The correlation between Countdown’s and PPV figures isn’t exactly perfect.
What should we expect from UFC 102 then? I look at UFC 88 as an example of the type of event we might see out in Portland: a non-title event featuring a UFC legend on the back nine of his career; just an average gate of $2-2.5 million (UFC 88 did 2.6 million); and PPV buys in the range of 450-600k (UFC 88 did 480k PPV).
I’d be extremely shocked if the event was any better thank 600k, but these are unpredictable times. This is definitely an event, though, that’s going to give us more information about how many fans the UFC has managed to convert the past six months because there’s been little hype relative to the series of fights its following.
