The UFC had its biggest pay-per-view of all time at UFC 148 on July 7; however, they should switch to a completely non pay-per-view format to become a more profitable and mainstream entity.
They set records for both live attendance and are projected to have the pay-per-view revenues to match it. There is still a feeling that they could do more. The UFC has turned into a household entity much like boxing was in the past. It’s gone from something that people would watch only at bars to something that people will watch the preliminary fights just to get even more amped up for the main events.
The main issues that Dana White would look at in making the UFC completely free for fans to access are the profitability, longevity and competition: three things that would be enhanced from making the call to switch to the non-PPV format.
When looking into profitability, there has to be research into the current format of events on Fox, F/X and pay-per-view. Let’s use general rough estimates here. Say the UFC currently averages 850,000 buys— shooting high—at an average of $54.95 for the High Definition feed; that means that the UFC is making $46.7 million on every pay-per-view.
Take the $46.7 million and multiply that by the 26 events that they could put on every year through bi-weekly pay-per-views, and the UFC would make $1.2 billion. However, these are rough estimates on the high end of what the UFC could do. In a more realistic setting, the UFC is really only in the $900-950 million range for its PPV revenue every year.
The best option could be to have an exclusive deal to bill the events as “UFC on ESPN,” and sign a $1.5 billion-per-year contract over the next three years to have every bi-weekly event on ESPN. It would make more money than the brand currently is right now while also expanding the reach of their biggest events using cable television.
Much like what boxing used to do with the “Friday Night Fights” series, the UFC could take a step into the right direction by moving some of its biggest fights from pay per view to cable. They would also be able to pay their fighters better with the bump in revenue. However, that leaves the question of longevity.
The UFC would switch from a buy-rate model to a ratings model. This would mean they would always have to put their best fights on the cards to keep people interested. It’s not an issue though, because the UFC has always been one of those promotions that tries to put the best against the best. They should be able to keep the interest up and longevity shouldn’t be an issue.
The final issue of competition is a non-issue. Unlike Boxing with their 18 weight classes and four major boxing organizations, MMA has just the one primary organization in the UFC and a couple of minor ones like Strikeforce. By signing onto an ESPN deal, UFC would be putting their competition completely out of business and turn their organization into the NFL of fighting.
By virtually eliminating competition and increasing revenues, the non-PPV model would be extremely beneficial to the UFC. If they completely get rid of pay-per-views all together, they could spare their fate long term from being the same as boxing: dead.
Scott Carasik is a Featured Columnist and Trends and Traffic Writer for Bleacher Report. As a Featured Columnist, he covers the Atlanta Falcons, NFL and NFL Draft. He is also the Falcons analyst at Drafttek and also runs the NFL Draft Website ScarDraft.com and the host of Kvetching Draftniks Radio.
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