2019 was a big year for the business of MMA as the industry changed in many ways. While I’ve given you an extended look at the year’s events, I’ve had other things going on. Thus, here is a truncated version of some of the top business stories in MMA.
Brock Lesnar out after thoughts of returning to face Cormier
At the beginning of 2019, most UFC fans believed that Brock Lesnar was ready for a return ot the Octagon. After Cormier’s victory against Stipe Miocic at UFC 226, Lesnar stepped into the Octagon to confront the double champ. He also entered the USADA testing pool in July 2018. But, Lesnar still had a pending fine with the NAC to pay before fighting. The Lesnar hope ended as the former UFC Heavyweight Champion returned to the WWE in 2019.
The obvious reason for Lesnar to return was his drawing power. Despite a short-lived career in the UFC, he was a PPV star. Instead of Lesnar, Cormier fought Stipe Miocic in a rematch of their 226 battle. This time, Miocic earned the victory.
ONE Championship makes moves to become more visible to a North American audience
Touting its massive following and deep pockets, ONE Championship made its move to attract a North American audience. It unleashed a multi-city U.S. tour with former UFC athletes Demetrious Johnson, Eddie Alvarez and Sage Northcutt. One Championship debuted on TNT (on tape delay) and drew 264,000 viewers. In July, Chatri Sidyotong indicated that it would take baby steps with a move into the U.S. although the Singapore-based company established satellite offices in New York and Los Angeles.
The Athletic expands to combat sports
While this happened outside of the Octagon and cage, MMA (and boxing) sports journalism changed with The Athletic covering the sport starting this past summer. The online subscription service offers more long-form writing and covers more of the stories that fell between the cracks. Its business model thought to be an albatross in a market where consumers can find mostly anything free online, subscription trajectory has gone up in 2019. Overall, The Athletic offers some detailed coverage that other sites do not get to do and it’s well worth the money to read it.
UFC adds value to ESPN+
The UFC’s move to ESPN was a success for both sides as the UFC has benefited from the additional platforms and exposure of the network while ESPN added subscribers. February of 2019, ESPN attributed 525,000 subscribers adding ESPN+ due directly to the UFC.
UFC moved to ESPN+ as the exclusive PPV distributor in March. The move was premised upon the company’s popularity on ESPN and inability for it to get distributors to budge from the 50/50 revenue split on PPVs. Since beginning with ESPN+ in January, the UFC saw an ascension of ratings and visibility due to ESPN’s built-in audience of sports fans. This move was a gamble that has paid off with higher buy rates for UFC events. It also centralizes the company’s revenue to ESPN+ PPVs. The move also lengthens the UFC’s relationship with ESPN and reflects the approval the network has for bringing it subscribers. While there was some speculation that consumers would not pay for what amounts to a double paywall (subscribing to ESPN+ and then buying the PPV), it has not hurt the company business. Even though the cost of PPVs is going up $5 in 2020, I doubt this has an effect on the overall PPV business in 2020.
Endeavor IPO does not happen
An Endeavor IPO thought to come to fruition this fall did not happen due to weak Wall Street demand. A combination of lack of buzz on the company’s “road show” and poor performances from other IPOs that preceded it caused the company to delay its stock offering.
Perhaps the silver lining from this is that Zuffa was one of the shining stars (read profitable) of the Endeavor portfolio. At some point Zuffa will have the opportunity to go public if it so chooses according to SEC filing paperwork from Endeavor. But until that happens, we shall see if Endeavor regroups and attempts to make another run at a stock offering.
UFC Antitrust Lawsuit moves forward, but not that much
The UFC Antitrust Lawsuit is the annual business law story that has continued since its filing in the mid-2010s. This year there was substantial movement as the public saw documents previously not seen by most. In late August, there were expert hearings to access the viability of plaintiffs’ claims as to whether the judge should grant class certification. ShowMoney hit Vegas and although I could only stay a day and a half, Nash and Gift were there for the full week with interesting observations.
2020 should reveal whether Judge Richard Boulware will grant class certification or deny it. Regardless of the ruling, expect an appeal from one side or the other and the case to go through 2020 barring a miraculous ending.
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