Welcome to another edition of Payout Perspective. This time we take a look at UFC 137 coming from the Mandalay Bay in Las Vegas, Nevada. In the main event, Nick Diaz convincingly defeated BJ Penn affirming the need for a showdown with Georges St. Pierre.
Diaz retires Penn; GSP next
So now its obvious why Dana White kept Nick Diaz on the Zuffa roster despite no-showing press conference after press conference. Diaz showed his boxing skills as well as his jiu jitsu proficiency. For Penn, it sounded like he is eyeing retirement. At only 32, it seems like Penn could still make one last run at a title. But, if he were to end his career, he was one of the most dominant fighters in the UFC.
While it appeared Penn acted like it was his last match in the UFC, he may just take some time off and reassess. At 32, he is still fairly young, but his dominant reign in the UFC is over.
Kongo dominates Mitrione
In the “co-main event,” Cheick Kongo defeated Matt Mitrione in a less than exciting match. For as much a personality Mitrione is, he could not handle Kongo. This fight was a main event in name only as a result of GSP’s injury. While it is written that this puts Kongo’s name in the heavyweight title picture, it seems like Kongo may need one or two more fights before he goes up against JDS or Cain.
Nelson defeats Cro-Cop
Nelson’s fat suit at the weigh-ins was pretty funny considering the fact that it initially looked like him. Still Nelson looked sharp. For Cro-Cop, it was his last fight in the UFC ring. He has been on the decline for a while at he gave a very nice post-match interview.
Attendance and Gate
MMA Junkie reports that the attendance of the event was 10,313 for $3.9 million.
Bonuses
MMA Junkie also had the bonuses for UFC. The bonuses were $75K each and were as follows:
Fight of the Night: Diaz and Penn
Submission of the Night: Donald Cerrone
KO of the night: Bart Palaszewski
Cerrone and Palaszewski were featured on the Spike TV Prelims.
Salaries
Salaries were released (via MMA Fighting)
Nick Diaz: $200,000 (no win bonus) def. BJ Penn: $150,000
Cheick Kongo: $70,000 ($70,000 win bonus) def. Matt Mitrione: $10,000
Roy Nelson: $20,000 ($20,000 win bonus) def. Mirko “Cro Cop” Filipovic: $75,000
Scott Jorgensen: $16,500 ($16,500 win bonus) def. Jeff Curran: $8,000
Hatsu Hioki: $15,000 ($15,000 win bonus) def. George Roop: $8,000
Donald Cerrone: $27,000 ($27,000 win bonus) def. Dennis Siver: $27,000
Bart Palaszewski: $18,500 ($10,000 win bonus) def. Tyson Griffin: $25,500*
Brandon Vera: $60,000 ($60,000 win bonus) def. Eliot Marshall: $15,000
Ramsey Nijem: $10,000 ($10,000 win bonus) def. Danny Downes: $4,000
Francis Carmont: $6,000 ($6,000 win bonus) def. Chris Carmozzi: $8,000
Clifford Starks: $6,000 ($6,000 win bonus) def. Dustin Jacoby: $6,000
* Griffin was scheduled to earn $34,000 for his fight against Palaszewski; Palaszewski was scheduled to make $10,000. Griffin missed weight, however, and was penalized 25 percent ($8,500) of his show money, which was added to Palaszewski’s show money total.
Diaz’s salary likely would have been the same if he had fought GSP. Also, I’m wondering how much of a locker room bonus BJ Penn received for fighting Diaz instead of Carlos Condit. Its also interesting that Brandon Vera made $120,000 despite having his fight on Facebook (and almost breaking his arm).
I am in favor of how the UFC penalizes those that don’t make weight. In the case of Tyson Griffin, who missed by 3 pounds, he forfeited his scheduled salary and that amount was given to Palaszewski. Also worked out for Palaszewski considering he picked up a KO bonus as well.
Pre-Fight Promotion
Initially a Primetime series was going to follow GSP and Nick Diaz for their showdown. However, with Diaz being reassigned, the Primetime series was scrapped. The UFC Countdown show for 137 was only 30 minutes as opposed to the normal hour edition. Still, I thought it did a good job in telling the Nick Diaz backstory as well as including his hobby of triathlons.
The re-revised promos for UFC 137 featured the infamous “Don’t be scared homie” quote. It’s weird to think that Bill Goldberg was the interviewer in the middle of Diaz and KJ Noons (the recipient of the Diaz trash talk).
Sponsorships
The UFC Octagon did not have any new sponsors with the exception of signage for UFC Undisputed 3 which was in the Octagon and had the checkpoint area.
When it was announced that Nick Diaz would be facing BJ Penn, Metal Mullisha announced its sponsorship deal with Diaz. Diaz has worn the brand in Strikeforce. In addition, Diaz was to have a sponsor for his walkout music.
The UFC announced that the BJ Penn-UFC branded Gym in Hawaii would be taking memberships about a week before 137.
Jaco ran a deal for Brandon Vera fans with a special coupon code on Vera’s fight gear. Vera also was sponsored by Toyo Tires for his Facebook fight.
Matt Mitrione sported new fight shirt company Traumma. Strikeforce heavyweight Daniel Cormier is also sponsored by the company as he wore the shirt on a recent episode of InsideMMA.
Mitrione also wore a Chris Lytle for Senate shirt at weigh-ins. Its the first political shirt of campaign season.
Donald Cerrone wore SafeAuto and Tapout stickers on his cowboy hat during his post-fight interview. Once again, a great use of the hat by the Cowboy.
Post UFC 137 storylines
GSP-Diaz next. Carlos Condit, meet Anthony Pettis. Although, Dana White stated Condit “stepped aside” for GSP-Diaz. Condit’s manager, Malki Kawa, states otherwise. It would be disappointing if Condit does not get a shot through no fault of his own. But, let’s face it. He will have another fight before his “promised” title shot against the GSP-Diaz winner. If he loses, its almost certain he loses his shot as well. Certainly, GSP-Diaz is the match everyone wants to see. In fact, I think they made it before.
Odds and ends
-Pink gloves by the refs. I understand the intent and the cause, but do we really need it in the octagon. The NFL has jumped on the branding for Breast Cancer Awareness month, but it seems like its overdone.
-Donald Cerrone. I believe “The Cowboy” is one of the best fighters coming out of the WEC merger. I like the personal branding. Wearing jeans, cowboy hat and cowboy boots at the weigh-ins distinguishing him from others. Plus, he’s a pretty good fighter. The Cowboy will be the co-main event on PPV for UFC 141.
-Speaking of personal branding, Ramsey Nijem embracing a Chippendale’s gimmick at weigh-ins with bow-tie and no-shirt. Did we not learn anything from Dennis Hallman?
-Brandon Vera arm was nearly broken by Eliot Marshall but he still won by unanimous decision.
-I really liked Hatsui Haoki’s Dethrone “bird” shirt. FighterxFashion has the rest of the walkout shirts.
-The UFC sent a press release of video of the Penn-Diaz weigh-in which it described as a “scuffle.” Not sure if its done this before or sent to hype the card due to concern about the drawing power.
-Alex Rodriguez was in attendance. Does this help or hurt the UFC’s popularity?
PPV Numbers
The top of this card was hurt first by Diaz’s no-shows, the card reshuffle and GSP’s injury. The UFC first touted UFC 137 as being Champion vs. Champion. Despite the removal of GSP from the main event, the UFC indicated that the show was a sell-out. After GSP’s injury, the card took a big star power hit despite BJ Penn in the main event. The co-main event featured mid-card level talent (Nelson, Mittrione, Kongo and Cro-Cop). Cro-Cop is past his prime while the other 3 are not top of the card caliber. It would be hard to foresee the buys for this card exceeding 350K.
Malki Kawa should have known better. He gave his client bad advice. Dana treats every fight like an audition for a title shot. If you are the #1 contender fighting in a title eliminator and you have a bad performance, you don’t get a title shot. If you decide to sit out for a while, and someone else puts in a great performance, you don’t get a title shot. The only way to get a title shot in the UFC is to keep busy, keep winning and keep the fans wanting more. Managers need to know by now that the UFC doesn’t work on guarantees. They work solely on making the best matchups possible, the matchups fans most want to see. That’s why they are the best fight sport promotion in the world.
Diaz passed his audition with flying colors – he was both aggressive and vulnerable which is an exciting combination for fans. His post fight interview was perfect.
Condit refused his audition and preferred to wait for his “guaranteed” title shot because his manager was blowing smoke up his ass and telling him that he was the #1 contender. Condit didn’t have and hadn’t earned a title shot when this card was first announced, and he doesn’t have and hasn’t earned a title shot now that the dust has settled. He got his title shot on a technicality, and it was pulled just as quickly. A win against Koscheck on even a conservative performance would have kept him in the running. Now he’ll probably have to fight Koscheck or Fitch anyway and they’ll have more than two weeks notice.
I can’t remember who it was, but a fighter once said, “I never let a good training camp go to waste.” That would have been better advice for Condit.
Another PPV card that may not top 300K buys…
No new sponsors, literally none… and the ones that are there are most likely being “bonused” positions…
Better activation out of fighter t-shirt companies and apparel licencees than the UFC’s own marketing teams…
Not how you want to limp into the broadcast on Fox.
The UFC has some real problems in sponsorship and business development… No new companies since May and 1 card that may have topped 450K buys? And with the impending free air Title fight…
They have reached over-saturation in the marketplace and have not shown anything outside of the Edge campaign to say they are a relevant tool in the business of sports marketing.
All this after such a promising run from 2010 and the first half 2011 of adding high profile sponsor after high profile sponsor…
Is the UFC’s business model broke? Or do they just have idiots running it?
Mossman:
Dodge has signed up as a major sponsor for the 11/12 FOX show. I heard there may be other big sponsors, but haven’t heard specifics yet.
Edge is another sponsor that recently signed with the UFC this past summer.
Also, someone had asked the average # of viewers per PPV buy a while back. The Sports Business Journal reports that the average is 8.8 viewers per buy.
Mossman, thanks for the post. It’s nice to see someone else willing to state the obvious with respect to the current decline in MMA business. I’ve said in the past, without the FOX deal, we all might be singing a different tune when talking about the $’s and cents of MMA and the future of the sport.
I don’t see a decline. I agree that MMA is over-saturating the market right now and that’s why PPV buys on a per-event basis are down, but that doesn’t mean the industry is in decline. I think when all is said and done, Zuffa will have made up for the decrease in average PPV buys, with an increase in the amount of PPVs. I’m not sure what the trend is to date, but I expect that the year will finish roughly flat.
I’m willing to cut them some slack for what is going to be a flat year. The sport can’t grow year in and year out like it has been, and there are periods of stagnation in every industry. I think we are reaching the peak of annual PPV buys in North America for MMA. There will be a boost after the move to Fox that will be felt in 2012, but I think that 2012 after 2012 the sport will plateau for a while. There is not much the UFC is going to be able to do about it other than expand internationally.
Which brings me to my last point – the fact that the UFC made the Fox deal. That deal does two things, it gives the UFC a bigger platform to grow, and it opens up Spike, an established carrier of MMA content, for another promotion. That’s true industry growth, even if the UFC isn’t the entity capturing all of it.
As fans of the sport we think that there aren’t non-fans, just people who haven’t seen the sport yet. But the truth is, as stated in a 60 Minutes piece, “A sport with a move called the flying guillotine isn’t going to be for everybody.” I think we pretty much have everybody in North America on board, and they’re buying about as much as they’re going to, T-Shirt, shaving gel and beer companies notwithstanding. My prediction for the industry: one more bump from the move to Fox, and then much slower paced growth in North America but not decline coupled with strong growth in Latin America, and slightly slower growth in Europe and East Asia
Yes, it is oversaturation. Also, SPIKE TV has ban rebroadcasting the ppv matches weeks after they take place.
Jose – Dodge came on board with the UFC at 129. While its a great blue chip advertiser, i would like to see the UFC do more with it. Slapping a logo on the mat doesnt help that much and other than slapping the logo on Facebook Fights… they have done much to activate it. If I was Dodge… I honestly would be pissed, because think of all the cool ideas they could be doing with their new vehicle lineup… its an epic FAIL in sponsorship activation 101 imo.
Jason – Edge is a repeat customer as well. Its great that they signed on for the “Edge Fighter Promo”, but I can’t tell if that thing just fell flat because of a lack of embrace from the brand or because the UFC doesnt truly understand activation outside of their own programming…
Guru – to be honest I think they have been on the decline for at least a year, but because this sport has no cycle… its hard to tell or to understand those numbers because A. its self reported and you know damn well there will be nothing but rainbows and sunshine coming from UFC brass and B. the over-saturation of the marketplace and what will be come to found as a broken model of PPV fights… without the continuing brand development to seek new consumers.
Diego… are you drinking the kool-aid as a fan? Or are you looking at it from the business sense… Over saturation, too many PPV events, no growth in the consumer base. Average buys going from 500-600K per two years ago… to 250-350K per now with 4 or 5 extra PPVs a year? Im not a math whiz… but that doesnt cover all loses.
The entire issue and one that the UFC has never really addressed is the lack of a developing consumer base. They found an inherent base after TUF 1 and used that vehicle till the horse wasnt only beat to death… but its been rolled under the bus, thrown off the mountain and strapped with TNT. Just look at the decline in TUF ratings since the Freakshow season (i.e. Kimbo). one would think that if there was continued growth, that FREE programming would be on the rise in terms of measurables… but sadly it hasnt.
Now for sure the FOX deal will definitely give it a shot in the arm… but for how long? And how fickle will this fan be? You can’t show it to them once and then use the Dana White formula of jamming PPV events down their throat… and then they will also be a fan built out of free programming… so how do you convince them to join the darkside and begin to pay for something that they have been conditioned by the UFC to expect for free… Look at what the UFC has done in terms of 6X MORE FREE PROGRAMMING in the two years…(Facebook, prelims, more Versus shows, More Fight Nights, More TUF programming, now on FOX, ION, SPIKE, YouTube, UFC.com libraries….etc.) and then you say… ok now pay! Why do you think the fans are recoiling? They are becoming more picky, they are waiting, and when you have satiated them with SOOO much free programming… you’ve weened them off the PPV crack and they realize “maybe I don’t need to spend this money”.
Lastly, its blatantly obvious the UFC does nothing but promotes PPVs. They expect broadcast partners to push free programming and only get involved when its the PPV model event and they see an impact their own wallets… however… the problem is, with the saturation of the UFC events in the domestic market, the readily available free content, and the increasing strain on consumers… you have the highest rates of attrition ever for the UFC PPV hardcores…. who the hell wants to buy 14 or 15 fights a year now at $55 a pop??? Where are the new consumers to buy that PPV? What are they doing to find the “next generation of PPV consumers?” The answer… nothing.
Outside of the ESPN rip-off named “Octagon Nation Tour” which… is a t-shirt truck? they have done nothing to advanced the brand. Don’t get me wrong its great to have apparel that is not skulls and crossbones and douch-y silver star shirts… but how does rolling up to…wait for it…. A LIVE UFC EVENT… and selling your own t-shirts help the brand? Once in a while they get smart enough and send the thing to the US Open of Surf… for 2 days of the 200 days tour… to try to engage new fans… but the other 85% of the time this thing is parked in a Hooters promoting a viewing party for 50 rednecks that have been watching at the Hooters in Mobile, AL for 5 years. Thats not brand management. That’s not smart marketing. Hell… that’s not really doing much of anything except showing the UFC’s either apparent lack of desire for new fans or total ineptitude of how to continue to develop the fastest growing sports marketing machine on earth… they are letting it die.
And to be honest… this isnt Dana White. Dana is a promoter, he has always said he doesnt understand any other business than promoting the shit out of a fight. This has to do with whatever knuckleheads they have running marketing operations, sponsorship, and for the love of god activation!!! They sure as hell know how to collect checks… but they sure as hell don’t know how to work for them…
Thank you MMan for taking the time to share your thoughts. It is not often one gets informed comments on the net. You obviously work in marketing.
Where do you feel the opportunities are for the athletes themselves outside the UFC paychecks & bonuses that many times do not cover the true cost of training for an elite event?. As you stated the established Tshirt, short & banner space rental is laughable to even a minor league ball or MLS soccer boy.
Also can you give us more info on the international front and what is going on in places like China for the UFC?
Diego
I dont see how you can say Condit didn’t earn shot at the title. He is more deserving than anyone at the moment. I do agree he was a little rushed. But in this moment you need to contenders for the belt with such a long standing champion. The UFC has many guys now who are deserving but really need another win to solidify their position. The problem is if they force them to fight another fight you could lose all of the contenders you have and have none. Of all the guys like Condit, Ellenburger, Story, Johnson, etc. Diaz is the least deserving. He got his shot by beating the minor league fighters in SF. Then when he fought in the UFC he got a 155 fighter who doesnt have the cardio to beat anyone. While Fresh Penn owned Diaz in the first round. That was the best fight he could ask for. a small, short, lazy fighter he can use his reach and out point for a decision. The fight was a showcase for Diaz. He avoided all wrestlers in SF and in his first UFC fight they refused to give him one of the dozen who would own him. Now this is good match making by the UFC to keep a big money fight on the burner until they capitalize on it. But winning an easy fight that was made for you to win hardly make your deserving of anything. There are easily 10 fighters at 170 who would beat Diaz. Him getting the shot without fighting any of them shows he isnt deserving.
Mossman
You cant take all numbers at face value. The average PPV hasnt dropped like you said. The lowest UFC brand driven no name PPV was always 300K range and still is. The UFC average per PPV is down this year but the success of the UFC and their revenue isnt based on the seccuess of 1 PPV. Dana White has said many times that they dont do PPVs with the expectation of fans having to buy each and every PPV. So they have increased their number of PPV events to get more revenue over the course of the year. With this strategy it is impossible to keep the4 same quality of events when you spread those fights across more events. So there will be events that are not as good and drop the average.
The real problem the UFC has had this year is “injuries” Fighters are making so much money and winning is so important that all the top guys are pulling out of fights. This year the UFC cant get any of their draws on a card and curtainly not twice a year like their past numbers are based on. Some times the stars done align for mega fights. So you get a big draw in a fight no one cares about. Like when Rampage had to fight Jardine and Hamill. This year the UFC has had zero fights out of Brock Lesnar, Cain Valasquez. Anderson Silva whi is now a draw was used in Brazil and those non US events kill PPV buys so he was wasted on that card as far as PPV buys. Also there have been a ton of events overseas. Just as S&P stated in their credit reveiw the first two quarters last year. The UFC takes a hit when it tried to grow the foreign markets. Its a sacrifice the UFC is willing to make. We cant cry the sky is falling when PPV numbers dip and blame it on over saturation.
2010
9,215,000 with 15 PPVs equals 614,333
2011
4,845,000 with 12 PPVs equals 404,153
What would the numbers look like if The UFC got 800K + buys from Brock, capitolized on the huge push Cain got when he won the title. He was good for 2 500K + events instead of zero. They lost a second GSP fight this year that was good for 6-800K. Silva ussually gets 700K + but only got 250K in brazil. There is another 450K loss. The UFC has lost a lot of draws over the last year or so due to retirement like Chuck and Randy and loss’ like Forrest, Penn, Hughes, etc. They are having to replace them with new stars and this year just have not been able to get those stars in the cage due to injuries. This has been the worst year for injuries. Thats said i see nothing that shows decreased demand for the brand. There is just as much demand for the UFC as ever. But this year the main events have not been the same quality. When there is a block buster event it still sells as well as ever. That would not be the case if people were tired of fighting due to being over saturated.
BS – not trying to be a dick… but was most of that english?
You just made a statement that “the average PPV hasnt dropped this year” and then two sentences later say “the average PPV is down this year”. Not to mention your fuzzy math demonstrated that the UFC is…down an average of 200K PPVs per fight… which is what I originally stated. So then you are agreeing with me? Or disagreeing, but trying to support me with everything else you say??? I’m confused.
I’d be careful with the numbers you are using, cause if you are drinking Zuffa’s Kool-aid… you should expect that those numbers can be inflated by as much as 25% when they want them to be… think about it.. .who can fact check and verify that? No one… so why are they going to tell little old you the truth?
I also think you are a little high on your individual assessments… sure Brock is a draw and not having him hurts… but i would doubt that GSP averages more than 550K his last three (in some circles it was said 129 was expected to barely even touch 650K) and Silva doesn’t draw near that high either (126 was superbowl which is historically one of the highest no matter who is on the card) U.S. fans still really don’t care about international champs. And the International PPVs only happened in Australia and Brazil (which was not on tape delay and still live) this year, as Canadian events are considered domestic… with the UFC historically only sees a drop on those tape delays (i.e. UK, Abu Dhabi, Aussie), as consumers get confused as hell when a fight isnt live and who wants to pay 55 bucks to watch what I read about on sherdog 7 hours prior…
Honestly bro, I think you’re sipping too much of the UFC drank and kind of sound like a “boxing purist” arguing that the promoters don’t suck and the sport of boxing isnt fragmented, discombobulated and dying…
The fact of the matter is that the UFC has gone to the well way too many times with the same group of consumers, with no regard to how they are going to fill those shoes… Shit, even the cigarette companies used to find new customers AFTER they told people their product KILLS.
UFC Fans are getting smarter. They have more to choose from. They have more free crack to feed their addiction and all of a sudden…that primo stuff… just aint as high of a priority cause they’ve already had more than their fix. Not to mention fights are getting crappier, which yes is impacted by injuries and has happened in droves since…that’s right… the UFC gave fighters injury insurance (which was extremely warranted and needed) however is a whole nother story.
Lastly… you need to be a REAL dedicated fan to follow the UFC. Why? Cause there is NO rhyme or reason to anything they do in terms of scheduling, live events, dayparts, nothing. One month there could be 3 PPVs and next only 1. There could be 3 free fights in 4 weeks and then none for 3 months. They really need some form of consistency. Half the time, its like they keep fans guessing of when the events are and of course those hardcores are gonna know when, and where, and who is on it… but if they want to grow this sport, they have to do a better job catering to the LARGER number which is all of those “fans” that arent really fans… cause you’re losing them. its too hard to figure out when its on, and what the next event is, and who is in line for the title shots and follow all of the top guys now… and why??? BECAUSE THERE IS TOO MUCH CONTENT NOW! OVER. SATURATION.
Edi…Soares??? lol. I think the fighters grow as the league grows. I mean Dana and the Fertittas are no fools. They know that the fighters honestly dont have anything without those three little letters… U…F…C. But as an advertiser you can’t use the marks unless you have a league deal. So then the fighter has to transcend the sport and be bigger than the league. But… the UFC never allows that to happen and organically as the UFC has grown, no one is above it and the closest person would be only Dana White himself.
I think there definitely are opportunities for fighters outside of the sport for marketing campaigns such as the couple you have seen GSP in. Gatorade, Under Armour, etc. here you have companies who essentially gave the UFC the middle finger and said… I think I can get it cheaper doing the deal with the fighter and not using your marks. Its great for the UFC fans to see their guy in an ad… but the question then becomes, do the other 95% of the population who see that and have no clue who GSP is, give a shit? Speaking as a marketer… I think that answer is probably no. so its a gamble for the advertisers and unfortunately… you’re only talking about 1 guy out of 300+. and he happens to arguably be the most recognizable… but props to CAA who got those deals done because they convinced some heavy brands to take the plunge first.
Which brings up another of the problems with the fighters (outside of the limited inventory and terrible value for an ass logo…really you think that gets that much exposure?). CAA reps one dude. The rest have this decade’s version of the ambulance chaser, as their representation… the “MMA/Lifestyle marketer/agent/t-shirt making douche nozzle”. These blood sucking, scumbags that fake their way through everything and feel like hot shit because they can say they are “agents” and maybe some fat jock sniffer groupie might bang them and they feel cool. These guys like Malki Kawa who has no discernible skills other than apparently running his mouth really fast and bullshitting people into submission so he’ll shut the fuck up, or…MC Fucking Hammer? Come on… it’s like a damn circus show. I’m half expecting Kato Kaelin and Gary Coleman’s half-brother-once removed to show up at the next PPV announcing they are starting a joint venture with “Luke from Silver Star”…cause he sure is an MMA guru…
These idiots couldn’t close the front door, let alone a savvy marketer who understands real value and assessing how they can best utilize the talent, unique content (which can’t be UFC footage or tape), and social media platforms. That’s why you see Stockton Chevy and idiots like the Gun Store (which is a local Las Vegas retail gun range that .000000001% of viewers will ever be in the same zip code as) slapping logos on shorts cause it feels good to see their logo on national TV and it makes them feel like a BSD and helps make up for their um…personal shortcomings…all for the tune of $2,500 a fight.
Its really about finding ways to utilize them outside of the octagon and generating something that the fans/consumers want to associate with. To be honest one of the best at that is actually a UFC Sponsor in SafeAuto. They used Clay Guida in a commercial, create blogs, generate unique promotional videos and content, run sweeps, etc all on their own and then leverage the media they are buying through the UFC, but they still have to pay the fighters for all of that… Its just unfortunate that it makes no sense for their bottom line since its auto insurance, they are only available in 16 states and I dont think the UFC has sold them one iota of insurance based off that program. But we as fans get cool content!
Side note: I have always said that anyone with half a brain, really good marketing contacts, and the sincere desire to develop some cool national promotions and even local activation deals can come in and clean house on the UFC “marketing agents shitshow”. Unfortunately the way it is now, with so and so using his cousin or Roy Nelson’s hillbilly wife as his manager, Its a waste of time and an industry. It makes no sense the way it currently is… for what, so you can call yourself an agent and make your 10 percent. Well guess what 10 percent of shit… is still shit. its like collecting change on the subway to hope you can scrounge together enough for a ticket…meanwhile they are killing our product and bringing the sport we love down because no one wants to deal with them.
Lastly, to answer your Q on China… how the hell should I know? I dont work for the UFC! lol… Seriously… its interesting. Cause obviously they dont even have PPV there, so youre not looking to sell fights. By sheer numbers of viewers, it may be “distribution deals”, rights fees and sponsorship that make the UFC money there. Or potentially all of this knock off under armour gear they are pushing on the UFCstore.com deal? Dana has always talked about how he foresees TUFs in other countries, unique content specific to those markets (i.e. a Chinese UFC Fight Night with local talent), etc. Right now, I think they look to see where they can develop their own programming and then use that talent as a feeder for future UFC PPV events, but as much as they bullshit that its about growing the brand globally… it will always be about the US PPV market cause that is where the money is. Unless they can find some dipshit russian oil magnate who owns 75% of the broadcast channels east of Dubai to pay billions of dollars for free to air programming, so he can feel like hes got a big set of hairy boys that he gets to show it to the Eastern world on his tv channels. I dunno… the optimist in means wants to believe there is some greater plan for the good of the sport… but the cynic is saying… exit strategy, exit strategy, exit strategy and its a hell of a lot harder to valuate a situation as a potential buyer when you are segmented and strewn all over the world. Much like Kim Couture… it all looks good from far… but once you get in there after the deal is done and see how bad the last guy tore it up… its far from good.
Brain,
You don’t get to call yourself the #1 contender because the guy who was supposed to fight the champ pissed off the boss and got pulled from the main event. Condit was a fight away from a title shot when this whole thing started, and he’s still a fight away from a title shot. I stand by my assessment that his manager gave him bad advice. He should have fought on the card, gotten a nice paycheck and if he had won would probably still have a title shot. The current outcome was predictable, and not to pat myself on the back, but I called it. A brilliant agent like Malki Kawa should have been able to call it as well.
I agree with your points about Nick Diaz, but that wasn’t the point I was making. I don’t think Nick is a true #1 contender in the sense that he’s beaten everyone but the champ. Nick was put in because he’s proven his drawing power in SF, and people who draw get title shots in Dana’s book. I don’t necessarily agree with it from a pure sport perspective, but I understand it from a sports entertainment perspective. Regardless, this has to do with Condit and the choice he made.
Mossman,
Good points. A lot to respond to and I’m a strategy and finance guy, not a marketing guy so I’m not the one to debate on your marketing points. The takeaway that I get from all this is that we’ve tapped out (no pun intended) the North American market and I’m not sure better marketing will change that.
I see the future growth opportunities internationally, although you make a good point that it’s a question as to how to monetize those opportunities. The key example of that is the recent card in Brazil; lower PPV than if the card had been held in the US, but apparently watched by a huge number of Brazilians on what I assume is free TV, so how does the UFC offset the decrease in the PPV buys with the viewership on Brazilian TV? I’m not sure.
UPDATE:
EARLY PPV Estimates for UFC 137 are in the range of 255K-300K (~280K) according to Meltzer.
This is pretty simple Mossman. You are claiming the UFC “They have reached over-saturation in the marketplace” and went on to say “Is the UFC’s business model broke? Or do they just have idiots running it?”. That is a clear statement about the braw of the UFC Brand itself. So i assumed when you said average you meant the lowest buys a PPV gets off the UFC brand alone. That is what i meant by the average not changing. Of course the average PPV buys per event have dropped but like i have shown that is based on the headliners and not the brand.
Know it alls like you keep crying over saturation then ignore everything that refutes it and have nothing to base it on. You claim the market is already over saturated. Yet the UFC just had an event 137, they have 138 a week later, FOX event a week after that, then 139 a week after that. Thats 4 events in 4 weeks in a market already tired of MMA in your opinion. So i guess the FOX show will do poorly and Shogun vs Hendo and 139 will get record low PPV buys. IS that what you believe? If not then there is no over saturation point currently in play. Its a BS theory to explain PPV numbers taken at face value.
Anderson Silva had his second highest PPV buy rate ever THIS year vs Vitor second only to his fight with Forrest.
GSP’s fight with Shields was his 3rd highest PPV buy rate of the dozen or more he has headlined.
Brock, when he finally fights, will do as he always has when you factor in he is coming off a long lay off and two poor performances. He will still draw as good as before.
The big fights and big names still sell like always, the UFC brand sells like always. There is not consumer fatigue. Only injures and the nature of a real sport where outcomes are not controlled that keeps the big fights from happening. There are big fights on the horizon. Like GSP/Diaz, GSP/Condit, Brock/Overeem, Santos/Cain, Santos/Overeem, Cain/Overeem, Santos/Brock, Sonnen/Silva, Jon Joness till has a loty of fights out there. There isnt not 1 single person who thinks these will not sell well due to consumer fatigue. That is a myth that has been talked about ever since the UFC increase their number of events since TUF. No one knows what point it can happen if at all. But there has been no proof MMA has ever reached that point.
Sometimes the super bowl gets less ratings than expect. It never means people are tired of football. It means people dont give a shit about the teams in the super bowl. That is what 2011 has been for the UFC. The good thing about so many fights not happening in 2011 for different reasons if 2012 will have tons of them assuming the fighters sack up and quit pulling out of the fights.
Mothman
“I’d be careful with the numbers you are using, cause if you are drinking Zuffa’s Kool-aid… you should expect that those numbers can be inflated by as much as 25% when they want them to be… think about it.. .who can fact check and verify that? No one… so why are they going to tell little old you the truth?”
You really discredit yourself with every word you speak. The UFC has never released the PPV numbers. So they dont inflate anything because these are not their numbers. They are from industry insiders who leak them to the media. Yes they could be off higher and lower than the real numbers. But Zuffa has nothing to do with ti. So you can shove your conspiracy theory up your ass. You cant go some where else and treat the people like they are stupid. I didnt waste my time reading the rest of your BS. Maybe you can call in to Coast to Coast AM and tell them your “views”.
MMan- fantastic stuff. I love the energy. I would pay $ for the reflections you are giving to us for free. The way you actually debate yourself says a lot about your passion for the sport. I hope you never use performance enhancing anything- you will ruin your keyboard.
PS- I am a simple wrestling coach working outside the USA, make no money from Pro MMA- , cant speak Portuguese & work mainly w/ rugby players. My good friend is a “professional” fighter & I ask him over & over why he makes less money than your average semi-pro ball player?- then I stay late into the night – drilling w/ him – helping him chase that dream.
Some people climb mountains.
Diego
you are confusing drawing power with credibility. Based on cred Diaz should have never got a shot. The UFC doesnt always base who gets a shot on popularity but sometimes they do. Just because Tito got to fight Ken Shamrock didnt make Chuck any less the #1 contender. Condit is the number 1 contender. That doesnt change because the UFC wants to grab a big money fight while it is still available and also kind of merge the title of SF.
To be honest the real #1 contender is still Koscheck. Be we know that fight cant happen again. Then after that there is a log jam of guys all promising. But all of them have done nothing to compare to Kos but all of them are more deserving than Diaz.. IMO the UFCF wants to capitalize on Diaz by throwing him in right off the bat because they know he could never work his way to a title shot. I mean every a guy like Rory McDonald who isnt even in the title picture would own him like he did his brother. So why pass up a big fight they should be entertaining? Condit should be before Diaz but it isnt going to kill him to wait. He also was rushed into it. He beat bums in impressive fashion. He didnt really take out Kos or a Fitch to earn his shot.
Conversation about the UFC is funny. It reminds me of talk of the housing market circa 2006-2009. All the numbers and signs pointed to no more growth, but people kept spinning the numbers and situation to say that housing “would never go down, is not going down, and is still going up”.
MMA has hit its peak. It won’t get the ratings it needs on network TV to make a big splash. It will get good numbers, but it won’t get “every network wants to clone this program” ratings. The UFC and MMA in general will become like NASCAR if lucky, like Poker or Bull Riding if not.
BS – No need to go “4th grade school girl” bro. You are blatantly ignoring the numbers in front of your face… THEY ARE SHOWING A DECLINE of not only Average PPV buys, but cumulative for the year… ITS CALLED PLATEAUING!!!
Jesus… even the article on S&P posted right after discuss the draw back of PPV and how there is too much content right now. Along with a great quote in the discussion section from Lorenzo Fertitta discussing the pull back of a few PPVs in ’12… now gee Brain Giver why would you think that would be happening… hmm.. I guess the fertittas just hate making money as you would have us believe there’s nothing but a pot of gold at the end of every PPV Rainbow shooting from Zuffa’s ass. Not to mention Jose gave us an update… DIRECTLY IN FRONT OF YOUR POST of a projected 280K buy for 137???
Lastly, where the heck do you think “industry insiders” come from you dipshit??? The leaks would be made from where… gee i dunno maybe the company that everyone is talking about? Like i said… inflation of up to 25% to put better numbers on the street.
Do yourself a favor… I would go ahead and read the rest of my input and all future insights I happen to provide, you just might learn a thing or two. And remember, not everyone who provides insight is keyboard jockey like yourself sitting in their mom’s basement… you’d be surprised who you might run into on here…
Edi – No worries brotha. No one reaches the top without climbing the mountain first. “The difference between one’s success and failure can only be measured by one’s desire.” – unknown
As for the Portuguese… all you really need to know is:
“Uma mais cerveja por favor” and “Voce tem um boom boom bonita!”
“Jesus… even the article on S&P posted right after discuss the draw back of PPV and how there is too much content right now. ”
The same article that mentions injuries as reason for the decline genius?
“Along with a great quote in the discussion section from Lorenzo Fertitta discussing the pull back of a few PPVs in ’12… now gee Brain Giver why would you think that would be happening…”
Could it be that the UFC has to provide 4 PPV level events for FOX next year and each year after that? You know it alls crack me up. S&P maintains their credit rating because the sky isnt falling like you blab on the internet. FOX execs signed a long term deal with the UFC because the sky isnt falling like you claim. Each headliners PPV buys are the same as they always have been. Yet you want everyone to believe you are the only one in the know of this and everyone else is blind. I hope you are Jerry Millen or one of the Culinary Union morons because then there would be a explanation for this level of blind hating.
” Not to mention Jose gave us an update… DIRECTLY IN FRONT OF YOUR POST of a projected 280K buy for 137??? ”
You mean now you have abandoned your theory of Zuffa inflating the PPV buys? Those numbers come from the same source as all the other numbers, Dave Metzer. As for the numbers it is very early. The PPV numbers are never ready this soon. That is likley the numbers they have come up with so far. But as most know. The PPV numbers have to be gathered fro many cable operators and satellite providers. I would expect 350K when all is said and done. Which is not bad considering this event lost its main event 2 times and was headlined by a guy who hasnt fought in the UFC in 5 years and most realize he is a joke. Why would this event do any better? Also Penn was coming in with only 1 win in his last 4 fights.
“Lastly, where the heck do you think “industry insiders” come from you dipshit??? The leaks would be made from where… gee i dunno maybe the company that everyone is talking about? Like i said… inflation of up to 25% to put better numbers on the street.”
Dave has said many times his numbers come from the cable companies. With theories like you keep coming up with you sound like should be Occupying Wall Street. Better you i think it would be best for everyone if you were occupying a Sylvia Learning Center.
I find Mossman’s excessive posts and assumed expertise in marketing to be mildly amusing—never have I seen such a glum, and defeatist so-called marketing professional!!! ‘ )
I think part of the problem with the MMA Payout site is that they truly believe the tail wags the dog. Numbers and money consume analysis and the trees within immediate sight are quickly counted–and an ‘factual’ opinion is generated–and of course, the entire vast forest gets missed completely.
The reason the UFC has been successful is primarily because they offer a product that people want to see. This has been accomplished NOT by the bells and whistles of marketing hype, but by excellent, honorable and highly skilled fighters who leave their hearts and souls in the octagon. The UFC has put faces on the usually faceless fighters.
That is what attracts fans.
That is what brings in the money.
Marketing bells and whistles enhance an already successful model, but they don’t make it–and they will never make it last longer than a fad.
It is the fighters who make the UFC what it is. It is the excellence of the fighters and the sport which makes it worth watching, and makes MMA fans more fanatic than any other fan.
That is what is missing in all the talk of numbers and ‘estimated’ ratings and short-term thinking.
Don’t get me wrong–statistics and ‘estimates’ about viewing numbers are a very important tool in marketing analysis, but they are only one of many tools available to those who wish to understand the whole sport of MMA, and the UFC in particular.
The notion that the UFC market is saturated (not over-saturated, please) assumes that the maximum number of fans for the sport has been reached–this is preposterous. There is a huge potential market for new MMA fans not only in the US but globally. Dana White, who can see the forest, not just the individual trees–sees how the sport of MMA and the UFC in particular appeals across national boundaries, and across linguistic and cultural barriers.
The people at Fox are expert in their field–and they just signed a 7 year deal with the UFC. Why would they do that if they felt the sport was on the decline?
I know when I go into a sports bar literally packed with fans–that the bar counts as only one PPV in the numbers. Or when me and my buddies get together, 8 or 10 of us and chip in for a UFC card, that only one PPV is shown in the ‘numbers’. Or when I don’t feel like going out, and I connect on the internet to see the PPV for free–as so many do around the world, that the ‘numbers’ don’t show my participation.
My point is that PPV buy rates are inaccurate guages of the global popularity of the sport, and the recent ebb and flow of numbers reflects a poor and pessimistic economy, not fan interest or ardor for the sport.
Whenever I analyze businesses, I look at the track record–if one is avaiable, not just the current year’s numbers. The UFC has an incredible track record of growth and success in growing its fan base.
First you grow your fan base, and second you think of ways to exploit it–not the other way around.
The UFC is in transition. The PPV model is limited and keeps the sport from achieving the kind of broad popularity which the NFL and soccer/football has globally. Imagine how NFL would do if it were only on PPV? Dana White and the Fertitas know the future is in free TV, but the money is not yet there, and they must continue with the PPV model gradually transitioning to free TV in the long term.
This will not happen overnight. The Fox deal is the key to reaching that eventual goal. But deals all over the world are being cut right now. Brazil has a population of nearly 200 million, and even small inroads into that market will reap huge rewards–in time.
The UFC, to continue to be successful, must draw in more fans. The only way to do that is to continue acquring the best fighters from around the world, and fostering the sport of MMA globally so that new and exciting young athletes will choose MMA as the sport in which to train.
This is the long view.
CodeMaster:
We at MMAPayout believe that MMA has a great deal of potential still (though there are hurdles in front of it). Like you said, the upside for the sport is still huge and we don’t necessarily believe that is on the decline or that it is exponentially still growing, but we do our best to use the numbers and resources we have available to measure where the sport is at and where it may be headed. Yes, there may be a bit of micro-views (at times), but we still see the bigger picture and try to paint a clearer one for our readers.
Cheers and thanks for the great input.