The UFC PPV model is dead. This is what many will glean from the deal announced on Monday. Certainly, the TKO and the UFC have $1.1B a year for the next 7 to forget about asking fans for $80 extra to what they are already paying for an event. But, what does it mean for top-tier fighters who made significant amounts of money based on a percentage of the buys they attracted for the fight.
In the mid-2010s almost 50% of the UFC’s content revenue generated by the company came from PPV buys followed by U.S. and international media rights. This exemplified the UFC model which followed the traditional boxing and pro wrestling models which focused on a big event and reaping the rewards through pay-per-view. There are obvious drawbacks which include the middleman of having to work with cable and satellite operators and the need to include them when budgeting an event.
Of course, the big issue with the elimination of the PPV model is determining how fighters will be compensated. While fighters’ are paid for making the contracted weight (receiving money from uniform compliance pay) and winning, PPV buys offered fighters to make additional money for big events. Fighters had the ability to negotiate percentage points on PPV revenue for an upcoming event or receive a bigger payday if they event hit certain PPV benchmarks.
For those wondering what this might look like in a contract, here is the one from litigation in the Eddie Alvarez v. Bellator case from January 2013.
It has been stated that the UFC’s PPV performance has been on the decline. But, as I wrote, it has been compensated elsewhere on its balance sheet. Namely, through sponsorships and live events (read sight fees).
Notably, Sportico penned an article in which surveyed some several executives, Jake Paul and Josh Barnett to discuss what may happen post-PPV. While there are some that believe the UFC will to do the right thing and compensate the fighters better to Jake Paul and Josh Barnett pushing for individuals to negotiate better contracts for themselves, to others like constant critic Campbell McLaren stating that the UFC will have more leverage over the top fighters “without PPV sale pressure.”
Payout Perspective:
I do not believe PPV points was something that every fighter could bargain for in a contract, or had an option in negotiations with the UFC. Not every fighter on a card received PPV “points” as they are called. However, the carrot of PPV points is something every fighter could aspire to if they were at the top of a UFC card. But, it made a good payday a life changing payday for some fighters if an event was a success. The concern for fighters with the elimination of PPV, is the hope (and need) for the UFC to pay them better. Certainly, this has been creatively done through the uniform policy and potential to work with the UFC sponsors outside of the Octagon. While the elimination of the PPV model is good for the UFC, it may not be for fighters.
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