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Is World Series of Fighting’s “Pay the Fighters Half” PPV Model Crazy Enough to Work?

(“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…

(“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)

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)

Update: Bellator 120 Pulled Over 100,000 Pay-Per-View Buys [WHAAAAAT?]

(Looks like Bjorn is dick-ridin’ all the way to the bank. / Photo via TheExaminer)

Earlier this week, initial estimates pegged Bellator 120: Rampage vs. King Mo as earning 65,000 pay-per-view buys — a number that exceeded the basement-level expectations of most observers. But it turns out that Bellator 120 wasn’t just a moral victory. As first reported by Sherdog (and later confirmed by MMAFighting), Bellator’s inaugural pay-per-view card did over 100,000 buys, making it an unqualified success

Sherdog’s report was based on an anonymous source “speaking on the condition of anonymity because they were not authorized to release buy-rate data.” The source explained that the buyrate information will be readily available in Viacom’s SEC filings later this year.

In a statement released to MMAFighting, Bellator CEO Bjorn Rebney played it cool: “I won’t be discussing specific PPV buy rates, but what I can say is that with one of our main events falling out just seven days before our first PPV, a six figure plus buy rate is a good starting point. But, it’s just that, a starting point. My focus is to continue working with our partners at Spike to create the type of big event experience that we created on the 17th.”

(Looks like Bjorn is dick-ridin’ all the way to the bank. / Photo via TheExaminer)

The only other non-Zuffa MMA PPV to hit a six-figure buyrate was Affliction: Banned in July 2008, and that card featured Fedor Emelianenko, three former UFC heavyweight champs (Tim Sylvia, Andrei Arlovski, Josh Barnett) and a host of other recognizable MMA veterans. Bellator hit 100k even after losing its main event. That’s kind of astounding. Rampage and Tito can still put asses in seats, I guess.

So what’s the ceiling for Bellator’s pay-per-view potential? With a stronger card, can they approach the 140k-150k range that the UFC has pulled for its least popular PPV shows? And if so, then what? Will 2014 be the year when Bellator can legitimately call itself a competitor to the UFC?

The Pay-Per-View Buyrate Estimates for UFC 169 and UFC 170 Are Not Awesome

(Ronda Rousey might actually be the biggest star the UFC has. Unfortunately, that’s not saying much. / Photo via Getty)

According to Dave Meltzer’s latest pay-per-view buyrate column on MMAFighting.com, the first two UFC PPV events of 2014 didn’t exactly blow the doors down.

Let’s start with UFC 169: Barao vs. Faber 2 on February 1st, which featured two championship fights (including a featherweight title bout between Jose Aldo and Ricardo Lamas in the co-main event), and a solid heavyweight feature between Alistair Overeem and Frank Mir. That show took in just 230,000 buys, by Meltzer’s estimates — the lowest total for a UFC PPV since last summer, when UFC 161 and UFC 163 completely crapped the bed. It’s worth noting that the first time Urijah Faber and Renan Barao headlined a pay-per-view (UFC 149), it pulled in a nearly identical number. Maybe the California Kid isn’t quite the superstar we’ve made him out to be.

Holding an event on a weekend when so much attention was focused on the Super Bowl gives the UFC a convenient excuse as to why UFC 169 may have underperformed. But it still doesn’t bode well for the promotion’s ability to sell pay-per-views for events headlined by male fighters under 155 pounds. UFC 169 featured Renan Barao, Urijah Faber, Jose Aldo — the only absent sub-155 star was Dominick Cruz — and they still barely cleared the UFC Mendoza Line of 200k buys.

The good news (or bad news, depending on how you look at it) is that Ronda Rousey is a bigger draw completely on her own than Barao, Faber, and, Aldo put together…

(Ronda Rousey might actually be the biggest star the UFC has. Unfortunately, that’s not saying much. / Photo via Getty)

According to Dave Meltzer’s latest pay-per-view buyrate column on MMAFighting.com, the first two UFC PPV events of 2014 didn’t exactly blow the doors down.

The good news (or bad news, depending on how you look at it) is that Ronda Rousey is a bigger draw completely on her own than Barao, Faber, and, Aldo put together. Meltzer reports that UFC 170: Rousey vs. McMann on February 22nd collected an estimated 340,000 pay-per-view buys, with a much weaker supporting card than UFC 169 had. (Two words: Durkin Cummins.) When you consider that Rousey also helped UFC 168 become the first million-selling pay-per-view since 2010, it’s undeniable that the women’s bantamweight champ has become an essential part of the UFC’s business.

Of course, 340k buys doesn’t sound like a huge number — and it isn’t, if you compare it to, say, 2009, when every single UFC pay-per-view did 350k buys or better. Or, if you compare it to Rousey’s first UFC headliner against Liz Carmouche in February 2013, which pulled 450k buys, driven by the novelty value of the UFC’s first women’s title fight. But UFC 170′s PPV performance is more impressive when you compare it to recent UFC title fights featuring guys who are allegedly stars in allegedly marquee divisions. UFC 164: Henderson vs. Pettis did 270k buys. UFC 165: Jones vs. Gustafsson did between 300k-325k buys, and UFC 166: Velasquez vs. Dos Santos 3 drew “in the same range or very sightly up.” Ronda Rousey edged them all out, and she did so against a opponent (Sara McMann) who was a virtual unknown to casual fans, who Rousey had no personal rivalry with, in a fight that was thrown together on less than two months’ notice. That’s kind of amazing, actually.

So, is Ronda Rousey the biggest star the UFC has ever had, as UFC president Dana White likes to say after huffing gas? Well, she could have a solid argument for being the biggest UFC star that the UFC has right now. Although it should be mentioned that UFC 170′s live gate of $1,558,870 fell well below expectations.

Lets be real: 2014 is going to be a rough one for the UFC, pay-per-view wise. Anthony Pettis and Cain Velasquez won’t return until the end of this year, and Johny Hendricks will most likely be out until the fall. Ronda Rousey literally has nobody to fight right now, and the male featherweight/bantamweight/flyweight divisions simply don’t draw. UFC 173 has a cool poster, but probably not blockbuster potential. Anderson Silva won’t return this year, and Georges St-Pierre’s return depends on the UFC overhauling its drug-testing policies, which ain’t gonna happen any time soon.

And so, 340k buys represents a new high-water mark, which only a small handful of UFC PPVs will be able to clear this year. Most likely, the buyrate trend will continue to drop as the UFC shifts its attention to small-scale international shows, while the burned-out North American fanbase is content to watch the UFC’s free FOX/FS1/FS2 events and skip the ones that cost $55 simply because there’s a belt on the line in the main event.

The next UFC pay-per-view is UFC 172: Jones vs. Teixeira on April 26th — a light-heavyweight title fight that will probably pull around 300k buys. That’s just the way it is, now.

–BG

Random Thoughts on the UFC’s Decision to Increase the UFC 168 PPV By Five Dollars

(Lofty claim that is later revoked + at least two f-bombs = another classic DW soundbite.)

If you follow any other MMA site(s) besides CagePotato — which, why? — then you might have heard that the UFC is planning on raising the pay-per-view price of UFC 168 from $44.95/$54.95 HD to $49.95/$59.95 HD. You also might have been directed to the above clip, taken from a media scrum prior to UFC 96, in which Dana White declares that he “will f*cking go on record right now and say I will not raise pay-per-view.”

Whether the five dollar increase will only apply to UFC 168 or to all future UFC PPVs is still up in the air, but the increase has raised a few questions amongst the staff here at CagePotato, so we figured we’d lay out our qualms with the price hike, then let you, our esteemed readers, weigh in. Join us after the jump to get in on the discussion.

Random Thought #1: Does This Mean That the Price of Subpar PPVs Will Go Down?

(Lofty claim that is later revoked + at least two f-bombs = another classic DW soundbite.)

Random Thought #1: Does This Mean That the Price of Subpar PPVs Will Go Down?

I’m being facetious of course, but if the increased PPV price turns out to be just a one time thing for UFC 168, it raises an interesting predicament regarding how the UFC gauges the quality of each card. By raising the price of UFC 168, Dana & Co. are essentially telling fans, “This is the most stacked, hyped-up card of the year and the price has been adjusted accordingly,” which is fine, I guess, but what does that say about the less-than-stacked PPV cards we are surely in for down the line, or the value of the fighters competing on them, for that matter?

Fortunately for us, the next couple UFC cards don’t really face this dilemma. UFC 169 will (hopefully) feature not only the long-delayed bantamweight title fight between Dominick Cruz and Renan Barao but a featherweight title bout between Jose Aldo and Ricardo “Remember Me?” Lamas. UFC 171 is ages away, but a light heavyweight title tilt between Jon Jones and Glover Teixeira is a good start to a card that will surely feature several more big names before all is said and done. But neither of these cards are arguably as stacked as UFC 168, so should the PPV price reflect this? And while I’m asking questions based around the completely unattainable false reality I have just constructed, why won’t Halle Berry return my phone calls?

Random Thought #2: Why Now?

The obvious answer to this question being: UFC 168 is the first card since 2007 that will feature Anderson Silva fighting for a title, and that is something that every MMA should be willing to fork over a couple extra bucks for. The UFC wants this buyrate to be huge; that much we know. I’m talking Sonnen vs. Silva II huge. I’m talking that time Michael Bisping fought Fedor on Zeus’s shoulders and they both could punch but only one could kick huge. But charging fans more for a PPV in a time when fan interest appears to be waning seems about as foolproof as, well, a subscription-based digital network in a world where torrenting is a thing. I base these opinions, of course, on absolutely nothing.

Sure, UFC 167 broke the bank, but so does every Canadian-based card headlined by GSP. American stars like Jon Jones, on the other hand, have seen their buyrates decline lower than ever before in recent months. UFC 165′s numbers were “low.” UFC 166′s were “hugely disappointing.” Hiking the price is not the solution. Suppose I owned a hardware store; if I wasn’t selling any hammers at $5 a pop, I sure as hell wouldn’t raise them to $6 in the hope that people would start buying them.

At the end of the day, you’d have to be dumber than that analogy to pass up this card. But at the minimum, the timing of the price hike makes you wonder whether it will become a permanent addition or not in 2014.

Random Thought #3: This.

While it’s damn near impossible to deny the necessity of (and interest in) a Weidman/Silva rematch, one could argue that fans are not nearly as interested in a Ronda Rousey/Miesha Tate rematch as the UFC thinks we are. You can blame it on the new network all you want, but the TUF 18 ratings have been rather lackluster this past season. Rather lackluster, indeed. (*huffs glue from a dirty sock*)

Did Tate give Rousey her toughest test to date? Maybe (Ed note: She never came this close to finishing her, that’s for sure). Is there a legitimate rivalry between Rousey and Tate that is sure to stir up fan interest? Brother, you don’t even know…

…come to think of it, the fans who don’t tune into Rousey/Tate II in the hope of seeing Rousey knocked off her “real mean” pedestal will likely tune in for the chance to see a woman’s arm literally ripped from her body. Something about moths to flame. I recant my previous statement, but still stand firmly in the “rematches should not become the high standard of UFC matchmaking moving forward” camp.

But what do you think of the price hike, Nation? Will you happily fork over the extra cash, or just continue stealing PPVs from sketchy foreign sites as is tradition?

–J. Jones

[VIDEO] Wanderlei Silva Responds to Chael Sonnen

(Video via WandFightTeam Youtube)

It doesn’t look like Wanderlei Silva is interested in retiring just yet. The former Pride champion and perennial bridesmaid Chael Sonnen are eager to face one another but UFC President Dana White recently seemed to put the kibosh on the match up because he didn’t want to make the fight a pay per view bout and give Silva percentages of the buy rates – something often done for big stars.

“[Silva] said he won’t fight [Sonnen] unless he gets PPV [points] so I guess he’s gonna retire,” White told MMA Fighting.

You can see what we think about that nonsense here, and in the video above you can see, hear and feel what Wand himself thinks. In the video, we get the Wanderlei standard lines – that Sonnen is disrespectful, a less accomplished fighter than champions like himself, Anderson Silva and Shogun Rua, and that he cowardly says things on twitter and in front of cameras that he wouldn’t dare say to someone’s face. You know, well established facts about Chael P. Sonnen.

However, in the video we get all those undoubtedly sincerely-felt expressions from Silva in a seemingly forced and corny presentation. There’s a spot light, horribly bland stock metal guitar music and Silva telling fans to let Dana White know they want to see the fight. Clearly, this is Silva’s way of proving that there is interest in the bout and that White should reconsider giving him back-end money for a potential Sonnen vs. Silva pay per view main event.

Listen, Wanderlei has accomplished more in MMA than Sonnen ever has or likely will, has legions of fans for the way he conducts himself in and out of the ring and already called Sonnen out in the only way that matters – face to face. He’s also taken ungodly amounts of damage throughout his career and should have retired for his health half a decade ago.

There is no need for Wanderlei to fight Sonnen – who still appears in his prime and has avoided excessive damage with a career filled with screaming and tapping out – especially because he has a chance to go out on a win. Silva’s last fight was a brutal affair where he stopped and retired Brian Stann in what is the front-runner for nastiest fight of 2013.

But Silva is the master of his own fate and makes clear above that he wants to fight Sonnen just as much as Sonnen wants to fight him. Some of our favorite Silva quotes from the video after the jump:

(Video via WandFightTeam Youtube)

“[Silva] said he won’t fight [Sonnen] unless he gets PPV [points] so I guess he’s gonna retire,” White told MMA Fighting.

But Silva is the master of his own fate and makes clear above that he wants to fight Sonnen just as much as Sonnen wants to fight him. Some of our favorite Silva quotes from the video after the jump:

“I fight with all of my heart. I don’t go in there to give up, like Sonnen did against Jones in the very first round. Like he did against Anderson when he took a knee to the chest and stayed down like a little girl. Sonnen is a lower level fighter.”

“Now you’ve messed with the wrong guy and I will beat you up.”

“I’ve already shut you up, face to face, and you were not man enough to step up to me. Sonnen, you are afraid of me and I can see it in your eyes every time we meet.”

“I will go into this fight not only to fight but to hurt you…I don’t go in to fight, I go in to brawl. I go in to punch the face. I go in to draw blood, to break noses.”

“I want to see you repeat what you said, this time face to face.”

When Wanderlei says he’ll fight, you’ve got to believe him. But, nation, do you really want to see this fight happen?

– Elias Cepeda

Counterpoint: How Bellator’s PPV Venture Will Benefit All MMA Fighters

(Photo via Sherdog)

By Brian J. D’Souza

Bellator’s planned November pay-per-view headlined by Quinton “Rampage” Jackson vs. Tito Ortiz is what it is: two once-great names that are way past their “best before” date. Fans, media and pundits were faster to criticize the match than a Jewish mother criticizing her own kids.

There’s no mystery as to why Bellator is entering the fold — the pay-per-view marketplace is where the profits are for MMA promoters. Yet as Yahoo’s Kevin Iole is fond of noting in one of his latest columns, the only entity in the 20-year history of MMA that has successfully pulled off profitable pay-per-view shows has been the UFC. Merely attempting to break even with a Tito-Rampage main event might be over-reaching on Bellator’s part.

Part of what Iole writes is true, including how Bellator CEO Bjorn Rebney is contradicting his previous statements about Bellator aiming to build stars from scratch rather than relying on former UFC fighters. But it is myopic of Kevin Iole to rail off biased theories about how the Bellator PPV is just a ploy in the legal drama between Bellator and Eddie Alvarez, who are feuding over the matching clause in Bellator’s contract. As Iole argues:

“Bellator also looks petty by even putting on a pay-per-view show, because it is likely just a legal maneuver in its court case with top lightweight contender Eddie Alvarez. Alvarez attempted to sign a UFC contract, but Rebney contended Bellator matched the UFC offer and that Alvarez belongs to Bellator.

That’s for a court to decide, but it’s unconscionable for Bellator officials to tie up a young athlete in the prime of his career. But Bellator, which in the suit said it planned to feature Alvarez in a pay-per-view to compete against the UFC offer, now has to go forward.”

A talented fighter like Eddie Alvarez does deserve his chance in the UFC. Unfortunately, the cream does not rise to the top, especially in the fight game: Without the right management, political maneuverings and opportunities, it simply spoils unnoticed and unheralded on the sidelines. Where Iole misses the point over both the Alvarez situation, as well as the true significance of the Bellator PPV, has to do with the context that he explains these situations occurring within.

Bellator didn’t trip over itself to find Tito Ortiz and Quinton Jackson. They just happened to be the only available and marketable MMA fighters who fit into Viacom/Bellator’s plans. Interestingly, the Eddie Alvarez situation speaks directly to the reason why so few free agents exist in MMA, because of how Alvarez’s MMA contract essentially enslaved him to his promotion.

(Photo via Sherdog)

By Brian J. D’Souza

No promoter wants to invest in a fighter without assurances that they will be able to recoup what it cost to develop them down the line. An undercard fighter with a purse of $3,000 (plus expenses like airline tickets, hotel, etc.) has to bring in $3,000+ worth of net profit in ticket sales, pay-per-view buys, merchandise, marketing or sponsorship, otherwise the promoter is taking a loss every time said fighter has a match. It’s no wonder that a promoter would favor long-term contracts that allow them to hang on to the few prospects who do pan out as draws.

The situation between Bellator and Eddie Alvarez is similar to the situation between the UFC and Randy Couture that occurred in October 2007 when Couture tried to bail on a UFC contract with two fights remaining (By the way, did Kevin Iole lament the waste of Couture’s prime athletic years back in 2007-2008?). While Eddie Alvarez should have had a lawyer review his Bellator contract before he signed it, perhaps he felt he had no other options at that juncture of his career.

Without competition in the MMA marketplace, promoters are free to offer fighters the worst contracts possible — the kind that’s chock-full of legal jargon which emasculates them and diminishes their brand. These can include clauses that demand likeness rights, video game rights, a cut of sponsorship, matching clauses — you name it, a lawyer can put it in writing and have the fighter sign it in their own blood.

For all the flaws of the Rampage-Ortiz PPV, it has value for fighters everywhere. Suddenly there’s a second MMA promotion running pay-per-views, and in-demand fighters can use that as leverage in contract negotiations.

The UFC is well-aware of the dangers of competition. Their former competitor Strikeforce was swallowed up back in March 2011 before the San Jose-based outfit could even attempt to put on a PPV show. A free UFC card featuring Anderson Silva vs James Irvin was quickly slapped together to counter-program Affliction’s July 19 show in 2008 (Iole omits this fact from his criticism that Affliction’s PPV show drew an estimated 100,000 PPV buys).

Strategically, the UFC is making the correct move behind the scenes in anticipating Viacom/Bellator’s strategy. That’s why you see fighters like Roy Nelson being signed to a nine-fight contract, or Anderson Silva signing a 10-fight contract. Even if Bellator was able or willing to match UFC salaries, the promotion legally couldn’t even field an offer to fighters like Silva or Nelson — not unless Bellator is waiting to wait several more years.

The fight game has always been about opportunism, greed and hypocrisy, and no promotion should be exempt from judgment. There are numerous stories afloat about how Bellator has shortchanged its fighters, the Eddie Alvarez situation just being the visible tip of the iceberg. Simultaneously, the MMA media has to acknowledge what the underlying issues are with regards to fighter contracts, rather than attacking the symptoms of a corrupt universe as Kevin Iole has done.

The bottom line is that the success of the Rampage-Ortiz PPV shouldn’t be measured on the show’s PPV buys. Bellator’s strategic goals are to achieve a larger television audience on Spike TV and to acquire several more marketable pay-per-view stars. Perhaps if Anderson Silva puts on another performance as embarrassing as the one at UFC 112, or if Jon Jones refuses another last-minute opponent leading to the cancellation of an event, Bellator might finally be able to put on a PPV event worth buying.

***

Brian J. D’Souza is the author of the recently published book Pound for Pound: The Modern Gladiators of Mixed Martial Arts. You can check out an excerpt right here.