An in-depth look at Bellator’s finances

Photo by Dave Kotinsky/Getty Images for Bellator MMA

Here’s what we know about the finances of the “no. 2 promotion in mixed martial arts.”

The last few months I have posted a number of articles that looked at various aspects of the UFC’s finances, including fighter pay (here, here, and here), event finances, the UFC’s PPV business, and Zuffa’s finances under the Fertittas’ management. For this article, I will take a break from the UFC and instead focus on the No. 2 promotion in mixed martial arts, Viacom’s Bellator MMA.

For some time I have been meaning to post an article on Bellator’s finances, but have been stymied by how little information was available. Where as a great deal of the UFC pecuniary matters have been revealed, thanks to the sale of the company in 2016 and the ongoing antitrust lawsuit, Bellator’s business has remained opaque. Even leaks from within Viacom or Bellator have been nonexistent, as sources have stayed tight-lipped on the subject.

All of this has changed over the last year or so.

First, because Bellator MMA is being used as a yardstick in the UFC antitrust lawsuit, some of their finances were disclosed recently in the expert reports. Second, because Bellator’s circumstances have improved dramatically over the last 2 years, sources have suddenly become more willing to share financial details.

For this article I have used both unsealed documents from the Le et al v. Zuffa LLC lawsuit and internal Bellator and Viacom data.

For years now Bellator, as measured by revenue, has been the second biggest promotion in mixed martial arts. The title of No. 2 is somewhat misleading though, as the distance between them and the UFC is incredibly vast. As a table from Hal Singer’s Expert Report in the Le et al v. Zuffa LLC lawsuit shows, Bellator’s revenues and market share during the period of 2010-2016, were but a small fraction of that of the UFC.

Even when comparing Bellator’s best year for revenue, 2014, with only Zuffa’s North American event revenue that same year, the Viacom owned promotion still generated less than 1/10th that of the UFC.

In comparison, the ratio of Bellator to WSOF revenues is almost identical of those the UFC’s to Bellator’s. The gap between number 2 and number 3 seems just as wide as that between the top two.

Related: An in-depth look at ONE Championship’s finances

In addition to revenues, Hal Singer’s Expert Report also has some details on Bellator fighter pay and contracts. According to the report, fighter compensation was 44.7% of Bellator’s revenue from 2010-2016. This was total fighter bout pay from every fighter on their events. There was granular details on individual fighter pay.

The report also included some details on Bellator’s Single Bout Contracts, that were different from their typical Promational and Ancillary Rights Agreements (PARs). The Average to-show amount on these Single Bout Contracts was “$2,169, compared to $17,493 for the first bout on a Bellator PAR agreement and $23,956 for the first bout on a Zuffa PAR agreement signed between 2010 and 2015.”

As the name implies, Single Bout Contract were for 1 fight only. The majority of these contracts did not include any future bout options, although some did, with the mean average contract having a 3 month option for 0.51 fights. In comparison, PARs were multi-fight contracts often with such provisions as matching rights, champions clause, and tolling provisions, that made it easier to retain a fighter.

For Bellator, Single Bout Contracts seem to be used extensively with fighters on the prelims, whose contract with the promotions lasts only as long as the single event they have signed a bout agreement for.

Singer’s report only goes up to 2016, and only looks at revenues. Others sources made available to me show Bellator’s revenues and net income up through 2018.

Years given were for Bellator’s fiscal year, which starts on October 1, the previous year, and ends on September 30. Thus for 2016, the revenues and net income would be from 10/1/2015 through 9/30/2016.

According to Bellator, revenues continued to climb after 2016, reaching approximately $25 million in 2017 and $35 million in 2018.

For almost all of Bellator’s existence, the promotion has apparently been losing money. Net income has been negative every year from 2010, the promotions first year, through 2018, the last year we have actual amounts. Total losses during this period was more than $100 million.

The one major caveat with Bellator’s revenues and net income is that it is impossible to know if we should accept it at face value. This is something I’ve discussed with my co-hosts on Show Money before: that it could have been to Viacom’s advantage to report losses with Bellator. As the owner of the promotion and the network it was playing on, it would be easy for Viacom to pay them much less in broadcasting fees from SPIKE than what they would have made with other broadcasters. This is less likely to be the case now, with most of their revenues being generated by non-Viacom owned broadcast deals (both domestically and internationally).

Should be noted too, that according to Jed I. Goodman Bellator’s viewership numbers have been declining every year 2015. Based on those numbers, one could be forgiven to assume they were doing terrible, financially. But instead it has been the opposite, with Bellator projecting their first profitable years in 2019 and 2020.

Under Scott Coker’s management Bellator’s fortunes have taken a dramatic turn for the better (even as their ratings have plummeted), with the promotion having seen 20% growth or more in revenue every year. Net income, after seeing losses hit -$18.8 million in 2015 — Coker’s first full year — has also been growing.

In 2018, net income was -$5 million, Bellator’s best year to date. And projections made in 2018, just after they signed their DAZN deal, showed a positive net income in 2019 and 2020, as revenues were expected to explode.

Bellator’s optimism was based on continued expansion of international markets (expected to be close to 1/4th of all revenues by 2019 — more than 2016’s total revenues) and the signing of a broadcast deal with DAZN that is to pay them more than $35 million a year. According to sources with Bellator, the contract is for 3 years with an additional 2 option years if DAZN decides to extend the deal.

Internal Viacom projections from when the deal was made show Bellator’s revenues rising to $80 million in 2019 and $100 million by 2020, with almost all this revenue contractual. Net income was also projected to be positive for both those years, while fighters’ share of revenue was to remain “around 50%.”

Meeting these projections would make Bellator the most successful non-UFC MMA promotion, with regards to revenues and income, since Pride FC. Even so, with the UFC also seeing growth, Bellator’s total revenues will remain at 1/10th those of their rivals.

The DAZN deal was important enough that it was mentioned in Viacom’s quarterly earnings report (a rarity, as Bellator had not been mentioned in relation to their earnings reports in years).

At the cross-section of live events and digital platforms, Bellator inked a nine-figure, multi-year distribution deal with global sports streaming service DAZN that will double Bellator’s revenue and make the organization profitable.

Viacom’s President and Chief Executive Officer & Director, Robert Bakish, also discussed Bellator with shareholders on a the Q4 2018 earning conference call.

Now our linear business is basically flat in the quarter like it was last quarter. We guided to plus 1. We delivered plus 3. And the reason we overdelivered is that our incremental businesses in the broader distribution ecosystem are developing faster than we anticipated… It shows up in the course of our significant new Bellator partnership with DAZN, which by the way makes Bellator profitable and really puts that on a track to becoming a very significant Number 2 in the space. As you know, the distance between UFC and Bellator on economic value basis is very dramatic. The reality is we’ve got the Number 2, we’ve got growing momentum, and now with DAZN here, we have more distribution, we have more revenues. And then we’re using that to increase consumer appeal, including strengthening the lineup. So that’s an exciting opportunity.

After years of struggling it looks like Bellator has finally turned the corner as a viable MMA promotion.

For my next article, I will be looking at the finances of another Scott Coker run promotion, the now defunct Strikeforce.

While I have been meaning for some time to write this piece, I was also prompted to do by Frankie NYC. he was a well known commenter on Sherdog’s Forums, who would regularly email me requesting that I write something on Bellator. Sadly, Frankie passed away last April.

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