UFC 104: Payout Perspective

Welcome to another edition of Payout Perspective.

This week, we’ll be taking at look at UFC 104 held this past Saturday, October 24th from the Staples Center in Los Angeles, California. The card featured a light heavyweight championship bout between Lyoto Machida and Mauricio “Shogun” Rua, and was co-headlined by Cain Velasquez vs. Ben Rothwell.

UFC 104 by the Numbers:

Attendance/Gate Figures

Dana White announced that UFC 104 drew nearly 16,000 fans to the Staples Center, which generated a live gate of approximately $1.9 million.

The attendance in this case was quite inflated by the estimated 3,300 tickets that White and the UFC gave away via Twitter in the weeks leading up to the fight – this in addition to what they’d probably comp to business and VIPs for any regular fight.

Fighter Payouts

-Lyoto Machida $200,000 (no win bonus) def. Mauricio “Shogun” Rua $155,000
-Cain Velasquez $70,000 (includes $35,000 win bonus) def. Ben Rothwell $50,000
-Gleison Tibau $38,000 (includes $19,000 win bonus) def. Josh Neer $14,000
-Joe Stevenson $94,000 (includes $47,000 win bonus) def. Spencer Fisher $26,000
-Anthony Johnson $30,000 (includes $15,000 win bonus) def. Yoshiyuki Yoshida $12,000
*Johnson forfeited 20-percent of his $15,000 show money for missing weight
-Ryan Bader $30,000 (includes $15,000 win bonus) def. Eric Schafer $13,000
-Pat Barry $14,000 (includes $7,000 win bonus) def. Antoni Hardonk $16,000
-Chael Sonnen $54,000 (includes $27,000 win bonus) def. Yushin Okami $18,000
-Jorge Rivera $36,000 (includes $18,000 win bonus) def. Rob Kimmons $9,000
-Kyle Kingsbury $16,000 (includes $8,000 win bonus) def. Razak Al-Hassan $3,000
-Stefan Struve $14,000 (includes $7,000 win bonus) def. Chase Gormley $10,000

UFC 104 Total Disclosed Payroll: $922,000

Fight Bonuses

• Fight of the Night: Pat Barry vs. Antoni Hardonk ($60,000 each)
• Knockout of the Night: Pat Barry ($60,000)
• Submission of the Night: Stefan Struve ($60,000)

Projected PPV Buyrate

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 104’s respective Countdown (524,000) and live gate ($1.9 million) values in order to determine an expected buyrate figure for the event:

• 398,000 buys

The regression analysis is somewhat comprehensive because the variables it uses capture a great deal of the historical factors that have been known to influence buyrates in the past. The difference between title and non-title fights, the momentum that the UFC has built over the last year, and the peaks and valleys that the organization has experienced in its buyrates are accounted for in the numbers.

However, there still remain a number of factors not represented in the buyrate predictor that could influence the final figure north or south of the baseline estimate of 398,000:

+ Spike TV lead-in. Only the second time that the UFC and Spike have teamed up to use a set of live preliminary matches to help generate interest and push viewers to the immediately followingn PPV. The program drew nearly 1.5 million viewers for a 1.0 HH underneath UFC 103. It’ll be interesting to see if they beat that figure with 104 – and whether the buyrate is subsequently higher than expected – because this time they didn’t have a huge boxing fight to compete with (Mayweather-Marquez).  

+ TUF 10: Heavyweights is the most successful season of the television show to date. The UFC’s reality TV series has averaged a 2.55 HH and over 2.5 million viewers over each of the last six weeks. Was the UFC able to convert those ratings into new PPV viewership? All of that UFC 104 promotional material had to count for something.

— Machida vs. Shogun, while a title fight, wasn’t exactly the most compelling headliner for the UFC to use coming off a string of shows that have all lacked compelling headline fights. Was it enough to bring casual fans back to their television set or local bar, or will they all wait another month for Brock?

MMAPayout.com will follow-up this prediction with a more in-depth regression analysis post that fully explains the process and how we have come to an estimate of 398,000.

Business Storylines:

– Machida vs. Rua II a must for UFC: Machida was probably one decisive/devastating win away from becoming a legitimate draw for the organization, but his performance against Rua left something to be desired. Does the UFC have any choice other than to rematch these two immediately?

Perhaps it’s a little too soon, but the organization may have finally found a sellable main event or co-main event for the New Year’s card in January. If not then, the Super Bowl weekend card would be a prime spot.

More interesting is the possibility of a rubber match somewhere down the line. Machida vs. Rua III in Rio or Sao Paolo would be a perfect way to break into the Brazilian market.

– Velasquez improving by leaps and bounds, now a contender: At what point does a fighter cease to be a prospect and become a legitimate player in his division? For Cain Velasquez that transformation was completed at UFC 104. He demonstrated a plethora of skills and displayed a well-rounded approach that is going to make him a threat in the heavyweight division for a long time to come.

Furthermore, the reception that Velasquez receives within the Mexican community is an asset for the UFC moving forward – especially their expansion plans into Mexico. He could be the man to ignite the passion for combat sport that exists within that culture.

– Prospect watch: Anthony Johnson, Ryan Bader, Pat Barry, and Stefan Struve continued to demonstrate their potential as they each stepped up to stiff tests and passed. Johnson, all weight-cut issues aside, is a marketers dream in terms of his fighting ability and articulate nature. Barry and Struve showed enough promise that the future of the heavyweight division is looking increasingly better every month. Lastly, while Bader’s showing was perhaps least impressive, he did demonstrate improved stand-up which was hampered somewhat by conditioning. The TUF 8 winner will continue to get better over time.

– Return of the Dana White Vlog: Dana said it best, “I’ve come in and out of retirement more than Brett Favre.” You have to wonder if the lagging buyrates – relative to earlier in the year – influenced the UFC’s decision to bring the popular vlog back. It’s another marketing tool for the organization to reach the notoriously hard to reach and affect 18-34 demo.

– Los Angeles economy takes its toll on UFC 104 live gate: The local economy is still hurting in the wake of the collapsed housing market and credit crunch that have kept unemployment rates above the national average. The situation in LA isn’t all that dissimilar to that of Portland, but at least the UFC learned from its mistake in that market and priced the tickets a little more fairly.

– UFC giving away a tremendous number of tickets for 104: Perhaps an indicator of that bad economy (or perhaps just a general lack of interest in the fight) the UFC and Dana White handed out more than 3,300 tickets to fans through interactions set-up on the social networking site, Twitter. Dave Meltzer of the Wrestling Observer also mentioned this week that the organization has been giving away tickets for 106 (whose initial sales have proven to be lacklustre considering its the biggest UFC event of the second half of 2009).

– Big John McCarthy not allowed to officiate at UFC 104 by CSAC: On a night where officiating was again called into question with an early stoppage in the Velasquez-Rothwell fight, you have to wonder why the sport’s best referee was told to stay home.

Politics are always going to play a role in the governing and operation of any sport or business. However, if Dana and the UFC are serious about clearing up the officiating issues that exist in the sport, Big John should be playing an integral part in the process.

– UFC 104 provides solid entertainment value: The great thing about MMA is that you still feel as though you got your money’s worth, even if the headline bout failed to deliver on your expectations. UFC 104 offered a solid combination of decisions, stoppages, and submissions.