After an uncharacteristic three-week break and a well-regarded but low-profile cable TV event last week, the UFC begins its madcap push toward the new year in style this weekend.
Actually, that qualifies as a significant understatement.
By the time it’s all done, Saturday’s UFC 205 from Madison Square Garden in New York City may go down as the biggest event in the fight company’s history. After a lengthy political battle to see MMA sanctioned in the Empire State, the UFC is doing everything it can to make sure its first event there makes a splash.
UFC 205 will feature three title bouts—headlined by a bona fide superfight between lightweight champion Eddie Alvarez and featherweight kingpin Conor McGregor—and a lineup so deep even the prelims feel special.
With Tyron Woodley making the first defense of his welterweight crown against Stephen Thompson and Joanna Jedrzejczyk putting her strawweight belt on the line against Karolina Kowalkiewicz, there should be something for everyone when the UFC makes its first appearance in the Big Apple.
As the head honchos at WME-IMG begin to make themselves at home as the UFC’s new owners, does the stacked nature of UFC 205 indicate a new direction for the organization’s pay-per-view lineups? Or is this a one-time-only blowout to celebrate the sport’s (legal) arrival in NYC?
I’m joined by Bleacher Report’s Mike Chiappetta to discuss the significance of UFC 205 and whether these sorts of star-studded mega-events will become a trend moving forward.
Chad Dundas: If the whiff of this particular UFC mega-event feels familiar, it might be because the UFC just put on a star-studded gala in the form of UFC 200 on July 9. Like UFC 205, that fight card was meant to feature three title fights, though a public hang-up in negotiations between UFC ownership and Conor McGregor led to one of them being scratched (more on that in a moment).
At the time, UFC 200 was promoted as the biggest event the fight company had ever done. It scored an eye-popping estimated buyrate of 1.2 million, according to Dave Meltzer’s Wrestling Observer Newsletter (via MMA Payout). It also set records for total gate at an American MMA show, the highest reported combined payout for any single UFC event and an attendance record in Nevada.
Not too shabby—even by the UFC’s garish standards—for a marquee celebration of the organization’s bicentennial.
With one notable exception, however, the pay-per-view events between then and now have been somewhat lackluster.
UFC 201 on July 30 was headlined by Woodley’s welterweight title win over Robbie Lawler and drew a fairly paltry 240,000 buys.
UFC 203 on September 10 featured Stipe Miocic’s successful heavyweight title defense against Alistair Overeem and also got some help from CM Punk’s MMA debut, but it still managed just an average estimate of 450,000.
UFC 204 on October 8 boasted new middleweight champ Michael Bisping’s long-awaited grudge rematch with Dan Henderson, was staged across the pond at in Bisping’s native Manchester, England, and was projected to net 275,000 buys.
Of course, that one exception we mentioned above was a big one, obviously.
After McGregor got yanked from the UFC 200 card, the UFC bounced his rematch against Nate Diaz to UFC 202 on August 20 and ended up breaking its own single-event PPV buyrate record. The second installment of their welterweight blood feud spiked the UFC 202 buyrate all the way up to 1.65 million—but was a huge anomaly, for obvious reasons.
Had the UFC and McGregor not gotten crosswise at UFC 200, the enormous success of UFC 202 never would have happened, so let’s take it off the table for the moment.
Without UFC 202, the combined buyrates of UFCs 201, 203 and 204 fell well short of what the organization managed to pull in a single weekend with UFC 200. They also fell short of what the company expects to garner Saturday with UFC 205.
So, Mike, is UFC 205 just a one-time extravaganza to celebrate the promotion’s first event in New York City? Or does its proximity to UFC 200 signal a developing trend? Will the UFC continue to pop its buyrates once per quarter with one big tentpole event like 200 or 205 while letting some of the rest of them slide?
Or with rumors of a reduced live event schedule coming as early as 2017, is it possible that by next year every UFC event becomes this kind of high-profile homerun? What say you?
Mike Chiappetta: I think an equally important question here is, Can the UFC actually continue to produce such monster events? We can’t even discuss the possibility of these types of mega-shows without the presence of superstars.
The event business is a star-driven one, so what happens if Ronda Rousey retires after UFC 207 on December 30? She’s already said it’s one of her last fights, but some, such as FloSports’ Jeremy Botter, have said it will be the final fight for Rousey. What happens if McGregor takes a long break, as has been rumored and reported by multiple outlets including the Sun?
If we look at the UFC’s pay-per-view sales over the last five years, only six have done over one million buys. Five of them have included McGregor or Rousey. The only other to reach the mark was the aforementioned UFC 200 that featured the surprising return of Brock Lesnar.
If the UFC is playing with a smaller deck of cards—or, more specifically, if the aces are pulled from the deck—are mega-events even possible?
I, for one, do not think so. The UFC may get lucky if Jon Jones wins a shortened suspension (Editor’s note: Jones was suspended for one year), but no other champion or athlete on the roster aside from perhaps the Diaz brothers can spontaneously generate the kind of star power and buzz necessary for a true tentpole event.
Sure, by running fewer events, the UFC has a better of chance of stacking shows with multiple title fights as well as extra bandwidth to promote them. That’s a positive. But adding Miocic to, say, Demetrious Johnson does not exponentially increase their star power or the value proposition for viewers who are debating whether to part with 60 hard-earned dollars. Sure, an event with two such champions will do better than a show with just one, but most of the viewers responsible for taking a show past the baseline audience are savvy consumers who demand to be wowed before making the buy.
It’s great for the UFC to stack shows, but do you think this can be a realistic, successful strategy long-term?
Chad: That’s a good question. Together, McGregor and Rousey accounted for more than 60 percent of the UFC’s total PPV buys during 2015, according to a recent story by MMAjunkie’s Ben Fowlkes and Stephen Marrocco. That makes them even more important to the overall success of the company than previous big-draw tandems like Chuck Liddell and Randy Couture or Anderson Silva and Georges St-Pierre.
Still, these are human beings we’re talking about, and the UFC would be comically shortsighted to not plan for life without them.
The fight company managed to make UFC 200 a smashing success minus both its top draws—but it needed Lesnar and a late-replacement effort by Silva to make it all come together. Even then, some observers thought the card lacked a little oomph after the UFC forcibly withdrew McGregor.
Still, as UFC President Dana White is fond of pointing out, sideline spectators perennially predict doom and gloom when known UFC draws near the end of their runs and somehow new stars always pop up to take their places. McGregor, for example, was a virtual unknown prior to his arrival in the Octagon in mid-2013. Fast-forward a few years, and he’s arguably the biggest star the sport has ever produced.
If there’s any one place where WME-IMG might have the upper hand on previous UFC ownership, in fact, it has to be the potential for creating new stars. That’s sort of what the Hollywood-based mega-talent agency does, after all. If the new owners want to take some of the organization’s young guns and get them out in front of the public, they are better positioned to do that than anyone in the history of MMA.
In the short term, however, your fears are well-placed. But if McGregor and Rousey both go on hiatus during 2017, it will only increase the pressure for the UFC to pop buyrates by trying to put on a tentpole event once every few months. Even if the athletes lack real crossover drawing power, stacking UFC titles two and three deep is a fairly tried-and-true method of pushing numbers up over at least 500,000.
So, Mike, just for argument’s sake, let’s say White calls you up tomorrow and puts you in charge of UFC PPVs for the next year. What does 2017 look like under the Chiappetta regime?
Mike: Before I unwrap my master plan, it needs to be said that the ability to “create” new stars is a fairy tale. Think about how many billions of dollars movie studios spend making flops. In 2016 alone, the Ben-Hur remake is believed to have cost Paramount a $100 million loss, according to Brent Lang of Variety, while The BFG, a Disney film, will lose the studio more than $100 million, according to Bloomberg.
The same people who push these films are the ones running agencies like WME-IMG. They don’t have a golden touch or a secret formula. They do market research and see what connects emotionally and try to bridge the two as best they can to sell a product.
It doesn’t always work. And movies are a business they actually understand deeply. Mixed martial arts is a different animal completely. The entertainment business is largely dependent on focus groups and months of planning; how nimble will they be in changing their promotion in a late headline switch?
In MMA, stars have always grown organically. McGregor, for instance, arrived with a grassroots Irish fanbase behind him but captured wide acclaim through his brash personality. Rousey showed up on the scene with her Olympic credentials, and her magnetic presence and killer instinct quickly won over the masses. It takes many elements to “create” a superstar, and several of them are intangibles that can’t be added on, only magnified.
Sure, WME-IMG has the infrastructure in place to create awareness of its events and athletes, and I’m sure that’s what you’re referring to, but what I’m getting at here is that WME-IMG leadership has no easier task than its predecessor.
If the goal is to stack events in hopes of increased eyeballs, my strategy would be to bank up the Brink’s truck for the true stars.
Yes, WME-IMG has aggressive earnings goals in place, and yes, it wants to maximize its profit. While it’s easy to spend other people’s money, in the long run, it would make sense to pay the true superstars who create these mega-shows. After all, 60 percent of a one-million-selling, $60 million revenue-generating pay-per-view monster is far better than 100 percent of a 200,000-selling, $12 million snoozer. If the only way to incentivize McGregor, Rousey and the Diaz brothers is through cash, then pay them. Sure, eventually, someone else will break through the noise to join them, but no one appears close to ready quite yet.
Pay-per-view is an unforgiving medium. As long as the UFC depends on it for the bulk of its revenue, it will be susceptible to yearly swings. There are ways to mitigate those risks, and it involves paying the athletes what they’re worth. If McGregor, Rousey, et al. are the rainmakers, paying them accordingly isn’t a gesture of altruism; it’s simply good business.
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