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?).
BJ hasnt cleaned out the division. The UFC still has plenty of options. I have been wanting to see Jamie Varner get his shot. Varner should have never been put in the WEC. His only UFC loss was a close fight with Franca where Varner gassed. Cerrone would also be a good fight with Penn. There are other WEC 155 guys who have value too. I have never been a fan of a WEC merger. But there is no reason not to cherry pick some fighters and some fights for the greater benefit of the fighters exposure, the UFC and eventually the WEC.
Brain Smasher, your logic is flawed. If the UFC began to “cherry pick” the WECs few (very few) star fighters there would be no drawing fighters left in the WEC and a UFC/WEC merger would be mandatory.
If a fighter like Varner went to the UFC and was destroyed by BJ Penn, it would not only hurt the stature of the WECs lightweight title (it would prove to fans that the WEC is indeed second rate to the UFC, which is in my opinion true but shouldn’t ever be marketed as such), it would damage the WEC brand awareness by confusing fans as to who fights for which promotion.
No one at 155 in WEC would last 5 minutes with Penn. Varner is a game fighter, but what does he bring to the table that Diego Sanchez doesn’t? Cerrone is highly-entertaining, but his takedown defense is awful and his wide-open stand-up game leaves him prone to take some serious abuse (see the McCullogh and Varner fights). The MMA talking heads are pondering a BJ – Jose Aldo fight, but Aldo has a long way to go before he cleans out the WEC 145lb division (Gamburian, Faber, Brown rematch, Josh Grispi, etc.).
Another angle to consider RE: BJ is whether or not he can carry a major card largely on his shoulders. Prior to 107, his previous three fights – UFC 84 (475K PPV, $3.72MM gate), UFC 94 (800K / $4.29MM), and UFC 101 (1MM / $3.55MM) – all were big money-makers. However, each of those cards featured other fighters who are big draws themselves – Tito Ortiz (84), GSP (94), and Anderson Silva / Forrest Griffin (101). 101 was also a bit of an outlier because it rode the monster wave of casual fan interest following UFC 100. 107 was the first card that Penn needed to carry largely on his own name. If 107 does 500K in PPV buys, I would view it as a sign that BJ can carry a big card without another big name fighter as an opponent or on the under card.
THe WEC’s days were numbered as soon as Zuffa stripped it of its upper weights. Also Varner has already lost in the UFC. So there goes your theory. Yes WEC can claim he is better now than he was. BUt the fact is Varner on a UFC card makes him a known fighter to draw eyes on WEC. If Varner loses then the WEC takes a short term cred hit. BUt as Varner continues his career. He will lose as all fighters do giving the guy who beats him the same Cred Penn got for beating him and therefore restoring benifit of a doubt to the WEC. There are very few people who watch the WEC. None of them think the WEC is better than the UFC in talent. So you are protecting a myth.
Did Rampage winning the belt hurt the UFC? He give the Pride Nutriders about 30 seconds to brag. But just like everyone in MMA history everyone loses and unless you are protected. It will happen with 18 months. QJ met his fate with Forrest and would have lost to Evans too. Forrest became even more popular after than win and the UFC was better off in the long run.
TOM
I will assume you arent joking by asking what Varner brings to the table Diego didnt. For one he is a very good wrestler from D1 A compared to Diego who wrestling in high school in a small state. Not even a high school power house wrestling state. Varner has Boxing experience. He has legit power and technique. He has also shown a very good level of BJJ. I wouldnt call him a black belt but his MMA BJJ is as good as it needs to be.
Cerrone would be a bad match up for Penn. I was think of him fighting guys like Miller and Florian. Those would be worth watching. But he dont have the footwork, head movement, wrestling, etc to be anything but a punching bag for most. BUt is reach, toughness, striking, and guard game makes him a very tough fight.
I think Rampage vs Rashad not being on this card hurt ticket sales. There was no real build up to BJ vs Diego among casual fans. Rampage really hurt himself in my opinion because this seemed like it would have been a big payday all around in ticket sales and ppv buys.
Brain – Varner has better amateur boxing & wrestling credentials (Lockhaven is not exactly a wrestling powerhouse though), but I’d argue that Diego has better striking and wrestling for MMA. Josh Koscheck and Johnny Hendricks are the two most decorated amateur wrestlers at 170, but do you think either one could hang with GSP on the ground (we saw what happened to Kos)? Diego’s BJJ (though he hasn’t used it much recently) should be superior to Varner’s; Diego rolls with the Ribeiro brothers, two of the best BJJ players ever.
I’m surprised there has not been more talk about the Production issues with UFC 107. The Clay Guida walkin music completely drowned out Rogan/Goldie, and during the Guida/Florian fight, the Guida corner volume was extremely loud, and was disruptive to Rogan/Goldie commentary.
Wonderbrick – and that comes on the heels of the TUF Finale production issues. The grind of expansion appears to be catching up to the UFC, at least with the production staff.