Tag: pay-per-view

(“Y’know Rousimar, it’s a shame how imbalanced the profit distribution is in this sport. Sometimes, it feels like we-OW OW OW OW OKAY I’LL STOP TALKING.” / Photo via Sherdog)

World Series of Fighting turned some heads yesterday — as in, we briefly looked up from our General Tso’s chicken — when the promotion announced that it will begin putting on pay-per-view shows beginning next year. In other words, the second-tier MMA promotion that very few of you watch on cable wants you to start paying for their shows. Make sense so far?

And, because WSOF has no superfights to sell you at the moment, the promotion is trying to generate interest through a unique financial arrangement: Half of the revenue that WSOF takes in through pay-per-view sales will go to their fighters. From the press release…

LAS VEGAS (Sept. 23, 2014) – In a radical move that could forever change the earning potential of Mixed Martial Arts (MMA) fighters, World Series of Fighting (www.wsof.com) has announced that it will enter the pay-per-view business in the second half of 2015 with an unprecedented revenue sharing model that will pay 50 percent of all net revenue earned from live pay-per-view events it produces, to the fighters featured on the telecasts.

“This is a proud day for the sport of mixed martial arts and our organization and one that we hope will create a better opportunity for the fighters who put everything on the line every time they step inside the cage,” said World Series of Fighting President, six-time world champion and two-time Hall of Famer Ray Sefo.

“Until now,” continued Sefo, “one of the main things holding this sport back from becoming even bigger than it is today has been fighter compensation and the inability of the sport’s top athletes to earn on par with top-level professional athletes in other sports.

“If fighters can’t earn a fair share of the money at the top,” said Sefo, “the fighters lose hope or become disenchanted with the sport, which impacts their commitment to training and preparing properly for title fights. That is about to change, thanks to this major step we are taking now fighters will train harder than ever to become a champion giving the fans some epic championship bouts to enjoy. We want to thank NBC Sports and NBC for giving us such an amazing stage to grow World Series of Fighting since its debut…

Additional details about World Series of Fighting’s 2015 pay-per-view launch will be announced soon.

It’s not bad for a publicity stunt. But can this revenue-sharing model actually work? Let’s do some quick math…

– If the worst UFC pay-per-view card and greatest Bellator card can both pull about 100,000 buys, how many buys do you think World Series of Fighting can draw from a burned-out MMA fanbase, with verrrry little in the way of mainstream stars. Let’s be super generous and say 50,000.

– Bellator’s PPV price tag was anywhere from $30-$45, depending on cable provider. We’ll assume that WSOF’s PPV will cost an average of $40/pop.

– Generally, cable providers collect half of the gross PPV revenue. So, for every pay-per-view that WSOF sells, they’d get $20 in this hypothetical scenario.

– 50,000 x 20 = $1,000,000 net revenue for WSOF.

– 50% of that = $500,000 for the fighters “featured on the telecasts” which could mean just the ten fighters on the main card. If that’s the case, those fighters would receive an additional $50,000 apiece on average. (“Everybody! Gets! A Performance Bonus!”) If that money is distributed to prelim fighters as well — say, ten more fighters — then each fighter would get a $25,000 bump, on average. Obviously, we’d expect headliners to get a bigger cut of the pie than local curtain-jerkers.

What this exercise proves is that even a terribly-performing pay-per-view show can generate real money for fighters, if half of the money actually goes to them. Try to imagine the UFC doing this: Let’s say the UFC puts on a solid PPV card that draws 300,000 buys, at an average consumer price of $50. The UFC would collect $7,500,000 in net revenue (300,000 x 25). Half of that — $3,750,000 — would go to the fighters. Based on a UFC card with 24 bodies, each fighter would get an average payout of $156,250. And if the UFC just wants to share the cash with the 10 fighters on the PPV broadcast (which would make more sense), each main-carder would earn an average of $375,000. Holy crap, now we’re talkin’. Assuming it’s distributed sensibly, every damn one of those fighters would be thrilled.

Of course, the UFC would never adopt this model, because they don’t need to; they already have hundreds of fighters falling all over themselves to fight for $20k/$20k (if they’re lucky). But make no mistake — the money is there.

As for World Series of Fighting, their revenue-sharing model could be a great way for the promotion to attract UFC washouts and young prospects who might otherwise sign with Bellator. After all, putting pressure on Bellator seems to be WSOF’s only reason for existence.

(BG)