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.”
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.”
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?
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)
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. 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.
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.
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.
(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.)
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?
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?
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:
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:
“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 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?
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.
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.
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.
(“We will open the bidding for a UFC 149 pay-per-view purchase at $49.95. Do I hear $49.95? What if I said I’d thrown in this *authentic* jersey, completely free of charge? $49.95…anyone? OK, how about ten bucks?”)
Recently, after reading 12OzCurl’s article (well, just the opening paragraph) I came to a realization that the only reason why I’m here is because I’m Asian and Benny figures that must mean I’m good with numbers. So break out your abacuses…this shit is about to get real.
Today’s class? Variable pricing and whether or not this system should be adopted by the UFC in regards to the pricing of pay-per-view events. I’ll wait for everyone to decide whether or not to skip this article and go straight to the “Hot Potato” links.
Still with me? Probably not. But anyways, here we go.
For those that don’t know, Variable Pricing (or Dynamic Pricing as it is called) has been the main pricing strategies for airlines and hotels on how they price their own inventory. Recently, the San Francisco Giants adopted this form of pricing in order to better optimize ticket sales for their events. The strategy is similar to that used by the hotel and airline industry where prices go up and down depending on current market conditions and historical trends. Did it work? Hell yeah it did. By using sell-out history from past games based on opponents, starting pitchers, weather, day of the week, evening versus afternoon, and of course, current supply, the Giants were able to significantly increase their ticket sales revenue to such a degree that other franchises are looking to adopt similar methods to pricing their games.
(“We will open the bidding for a UFC 149 pay-per-view purchase at $49.95. Do I hear $49.95? What if I said I’d thrown in this *authentic* jersey, completely free of charge? $49.95…anyone? OK, how about ten bucks?”)
Recently, after reading 12OzCurl’s article (well, just the opening paragraph) I came to a realization that the only reason why I’m here is because I’m Asian and Benny figures that must mean I’m good with numbers. So break out your abacuses…this shit is about to get real.
Today’s class? Variable pricing and whether or not this system should be adopted by the UFC in regards to the pricing of pay-per-view events. I’ll wait for everyone to decide whether or not to skip this article and go straight to the “Hot Potato” links.
Still with me? Probably not. But anyways, here we go.
For those that don’t know, Variable Pricing (or Dynamic Pricing as it is called) has been the main pricing strategies for airlines and hotels on how they price their own inventory. Recently, the San Francisco Giants adopted this form of pricing in order to better optimize ticket sales for their events. The strategy is similar to that used by the hotel and airline industry where prices go up and down depending on current market conditions and historical trends. Did it work? Hell yeah it did. By using sell-out history from past games based on opponents, starting pitchers, weather, day of the week, evening versus afternoon, and of course, current supply, the Giants were able to significantly increase their ticket sales revenue to such a degree that other franchises are looking to adopt similar methods to pricing their games.
For the actual pricing of live events, this really doesn’t make any sense. The UFC really isn’t in the same spot on a regular basis for this type of pricing to make sense. Any city the UFC visits, it is considered a major event and will most likely sell out regardless of any other variables that may come into play. Since live events are constantly moving from one city to another, there is no localized sample of potential buyers to track buying trends in order to utilize a dynamic pricing strategy. However, this could be applied to pay-per-view pricing for events.
Before I go any further, here’s some numbers calculated from 2008-2012 that you may find interesting.
Average PPV Buy Rate = 526,470
Average PPV with Title Fight = 605,114 (+15% over average)
Average PPV with Non-Title Fight = 385,000 (-27% over average)
Average PPV Buy-Rate Featuring TUF Coaches = 940,000 (+79% over average)
Average PPV Buy Rate with Main Event Cards Affected by Injuries = 405,357 (-23% over average)
Average PPV Buy Rate Featuring Heavyweight Bout in Main/Co-Main Event = 748,182 (+42% over average)
(*List compiled based on fighters with a minimum of 4 or more appearances in the main or co-main event)
Whether you blame the injury curse of 2012 or the influx of UFC events over the course of the year, last year has seen a tremendous a decrease in pay-per-view buys. Since 2008, the UFC saw a steady increase in buys up to 2010 before dropping 27% in 2011. The following year, there was an additional 27% percent from 2011-2012. Overall, since 2008, where the total pay-per-view buys that year was over 9 million, the UFC has seen a 42% decrease in buys over the past 2 years.
Could there be an issue with supply and demand? Absolutely. In both 2008 and 2009 fans saw a total of 20 events (both free and pay-per-view) and 2010 had 24. In all three years, the ratio of PPV vs. free events was roughly 3:2. Flash forward to 2012, and you’ll see a total of 32 to events and the ratio of PPV to Free events shift to roughly a 2:3 ratio. Last year we saw a total of 18 free events compared to 14 pay-per-view events (it would have been 15 if it wasn’t for you know who not wanting to fight you know who and pissing off you know who…oh, how that seems like ancient history now). Still, the number of pay-per-view events last year was less than the number of free events. Why bother paying for an event, when there are plenty of other events being featured on free TV? Add in Bellator on Spike and the World Series of Fighting on NBC Sports and now the UFC has even more competition to deal with. You could also argue that the new deal with Fox may have resulted in the UFC cannibalizing themselves with all the events on Fox, FX, and FuelTV.
One thing the UFC has done right is airing international events on free TV and not on PPV. The numbers show that events not held in the North American continent are more likely to be 44% lower than the 5 year average. Those “marquee” events in Brazil, Japan, and Abu Dhabi? They also netted numbers below the PPV average.
There are a few things to note here (or “limitations” as we in the scholarly world like to say). All of these numbers are provided by the UFC and are rough estimates as opposed to actual numbers. That said, it’s safe to assume that these numbers, while just estimates, provide a good baseline for this study.
Could dynamic pricing work for PPV events? Possibly. Of course, there is the logistic nightmare of having to reprice events based on injuries that may occur leading up to the date. There’s also the perception that the UFC may be “cheapening” their image by pricing certain events lower than others. How this may affect certain fighter contracts that receive a percentage of the PPV buys is also something to take into consideration.
All things considered, should PPV events featuring non-title fights be priced the same as those that do feature a title fight? After all, in such cases where a title is on the line, more is at stake and could be considered a higher value compared to those where a title is not. Should Mir vs. Cro Cop be priced the same as Lesnar vs. Velasquez? Should the heavyweight main-event fights be priced higher than the lighter weight divisions? If Penn vs. Diaz was priced lower, would they have netted a buy-rate closer to the average? Would main-events featuring Frankie Edgar be better off priced at a discount rate compared to other events (you’re still my boy, Frank)? How will the new Fox Sports 1 and Fox Sports 2 affect the current rate of free vs. PPV events for the UFC?
At the end of the day, the ultimate question will be what will the consumer be willing to pay for what event? In other words, would you be willing to pay more than $44.95 for GSP vs. Diaz this weekend? How much will you pay for UFC 161?
