Abu Dhabi govt paid UFC ‘huge’ money for booking McGregor

Conor McGregor made the UFC a lot of money (again).

UFC 257 was a massive success, reportedly being one of the highest ever drawing events with a reported 1.2 million pay-per-view buys in the US, along with an added 400,000 purchases from abroad. Conor McGregor may have lost to Dustin Poirier that night, but he did bring the UFC a significant amount of revenue.

Veteran reporter Dave Meltzer discussed PPV buy rate on his Wrestling Observer newsletter:

That number would be a figure not including refunds, and while nobody knows the number, there were a significant number of people who asked for and got refunds. The ESPN+ number is legit. The international number is an estimate and an extremely generous one, but even at 1.5 million, the show was a huge success. Only the biggest boxing matches in history have ever topped it, and nothing but boxing and the one UFC fight in the history of PPV have ever even been in the ballpark.

The U.S. PPV revenue would have been roughly $84 million, so ESPN’s $200 million purchase of the rights for the year looks like a steal now.

Apart from money from PPV buys, and Abu Dhabi shouldering most event costs, Meltzer says the UAE government also paid the UFC a huge amount to have their biggest star compete in the country.

An interesting question, given the nature of the revenue, is if ESPN is kicking any money into McGregor or if it’s all coming from UFC, since the windfall he’s bringing is going to ESPN. UFC got a huge figure from the Abu Dhabi government for its three shows over eight days, largely based on bringing in McGregor.

Photo by Jeff Bottari/Zuffa LLC

Bloody Elbow’s business writer John Nash also looked at the financial impact of this massive event.

UFC 257 was the 12th Zuffa pay-per-view to cross the one million buy mark. Seven of those twelve were headlined by Conor McGregor: UFC 194, UFC 196, UFC 202, UFC 205, UFC 229, UFC 246 and UFC 257.

The highest selling pay-per-view was UFC 229, which reportedly did at least two million buys. If UFC 257 really sold around 1.6 million buys (with a minimal number of refunds) then it would be the 2nd highest selling PPV in the promotion’s history. (The current number two is likely UFC 202.)

Of course the comparison between these events isn’t exactly apples to apples. Until recently, PPV was limited to the United States, Canada and Australia. The UFC has since started selling some of their bigger events — namely McGregor cards — on PPV in territories where they previously had not. These include the UK (where BT Sports charges around $27 for the PPV) and Scandinavia (where Viaplay charges close to $60).

So where international PPVs previously amounted to 10-15% of the UFC’s residential PPV buys, they are now much higher. The Sports Business Journal reported both UFC 251 and 257 sold 400,000 PPVs, which is 30% and 25% of the buys, respectively.

Even without considering the “huge” amount they got from Abu Dhabi to host McGregor and those three January events, UFC 257 alone generated a significant amount of revenue for the MMA promotion. Nash breaks it down:

While we don’t know the exact split for the UFC got for each PPV, we do know from the Company Overview — made public due to the UFC antitrust lawsuit — that they projected the average PPV revenue per buy would be around $35 in 2018. This includes both domestic and international buys. That would suggest that UFC 257 generated around $55 million in revenue for the UFC from PPV alone. Other sources of revenue, namely sponsors and international television fees likely added another $10 million for the main card. This doesn’t include the fee ESPN pays to broadcast the prelims.

1.2 million ESPN+ buys means this event sold on par domestically with other McGregor events. UFC 196, 202, and 205 all sold similar amounts of PPV in the US. They each also generated around $60 million in total event revenue for the UFC. Without even including the site fee paid by their UAE hosts, UFC 257 easily surpassed those events by several million. We can only assume how much more it actually was.

UFC clearly benefits not just from having McGregor sell huge PPVs, but from their controversial but highly lucrative partnership with the Abu Dhabi government. The UAE in turn, gets a PR push to rehabilitate their image and sportswash their atrocious human rights record by hosting these massive events.

As for McGregor, he might just be benefitting the least from this set up.

We may not know how or if this loss impacts his future drawing power, but the money he brings in for both UFC and ESPN is undeniable. If you count MayMac, eight of McGregor’s fights are among the highest grossing UFC events in history. So while he may just be the highest paid MMA fighter today, he is also by far the most underpaid.