How low would UFC PPV buyrates have to go for them to change their PPV strategy?

[j18lee]

I'm not one of those fanatics who get all excited about PPV buyrates for fighter X and how awesome or not awesome that guy is.

However, I do check the numbers for fun and like everyone else, see that the UFC PPV business had declined dramatically since the "Golden Age" of 2009-2010.

The PPV buys rates are getting so low that it actually has me excited that maybe the UFC will have no choice but to alter their PPV model.

Possible changes in my estimation from most likely to least likely:

1. Have fewer PPVs per year. Maybe go back to every 1.5 or 2 months.
2. Stack the cards more, like UFC 174 by having champions fight 3 times a year instead of 2 times.
3. Reduce the price of lower quality PPVs like UFC 173 and UFC 174 to something like $30.
4. Do away from the PPV model completely and have more FOX cards, or maybe strike a deal with premium cable like HBO or Showtime.

As recently as last August, UFC 163: Aldo vs. Korean Zombie (which also had Machida/Phil Davis) sold 170,000 PPVs. A typical PPV now sells about 250k buys. This weekend's UFC 173 has a chance to dip below 170k I think because Barao is less known than Aldo. And UFC 174 with DJohnson? Probably just above 100k buys.

Would low do you think the PPV buy rates have to go for the UFC to be forced to change their model? 100k? Or sub 100k?

And which of the four options do you think they would try, or a totally different one?

 

[ALAN PARTRIDGE]

100K and they'll be thinking WTF

 

[DirtyLandry**]

they are already "concerned"
panic level would be around ~75k
I like #1

Don't see #2-4 happening

 

[Stan]

Maybe if they gave title fights to those that deserve them along with #1 contender fights they would have more sales. But watching PPV's with 1 true main event and having fights with #4 contender vs #14 ranked opponent along with the rest of the card filled with TUF rejects will just bring PPV sales down even further. Face the facts the UFC is starting to die cause of the bad match making.

 

[BionicCommando]

The question isn't how long the buyrate goes. It's how high Fight Pass has to be before they change it.


The UFC would have to go under 100K to lose money and even that would be dependent upon the card.

 

[Lafwanda]

Does anyone know their operating costs?

I'd imagine 100k will piss them off but I can't imagine they will change it up until they start hemorrhaging.

 

[TheUFCSuperFan]

100K but I doubt it will ever get that low.

 

[theanticool]

Until they stop making money off of every PPV they put out. They don't need a high buy rate to make money off a PPV.

 

[BionicCommando]

Also understand that even in a "down" economy and the decline of the boom period, they sold more PPVs in 2013 than they did in 2011 and 2012. As long as they can pop big ones from time to time, they'll be married to the PPV model.

 

[EndlessCritic]

sub 200k consistently.

 

[dawnslayer]

Will be a rough year without GSP and Andy.

 

[Senzo Tanaka]

There's a very real chance that this weekend will do scarily close to 100k. They'll just blame it on Barao not being a big enough star yet.

 

[j18lee]

Hum.. Good point about Fight Pass maybe being a greater focal point in the future. However, I think TV distribution will still be more important. Would bars start to hook up their computers to show UFC live events?

Sounds like a lot of people think at 100k buys, the UFC may start thinking about making some serious changes.

As I had mentioned, as UFC 163: Aldo vs. Korean Zombie (which also had Machida/Phil Davis) sold 170,000 PPVs, maybe UFC 173 will do like 130k? UFC 174 just might hit 100k...

 

[Dart Feld]

I think it would take having a comparatively low peak before they consider change.

If no PPV breaks let's say 500k then that's something that'll catch their attention. You can see them really trying to break 400k finally this year with how much they're stacking UFC 175; Weidman, Machida, Ronda, Sonnen, Wand, and Faber all on one main card.

 

[Kingfarthur]

The average UFC ppv is not "about 250K", its higher than that. UFC 168 did enough for four average ppvs then...I think the average is closer too 375-400K.

 

[Kingfarthur]

Hum.. Good point about Fight Pass maybe being a greater focal point in the future. However, I think TV distribution will still be more important. Would bars start to hook up their computers to show UFC live events?

Sounds like a lot of people think at 100k buys, the UFC may start thinking about making some serious changes.

As I had mentioned, as UFC 163: Aldo vs. Korean Zombie (which also had Machida/Phil Davis) sold 170,000 PPVs, maybe UFC 173 will do like 130k? UFC 174 just might hit 100k...

The two co-mains at 173 are good, and Hendo is a big name. 174 is worse, maybe the worst ppv I've seen. I'm gonna call it now.

173=280,000
174=180,000
175=675,000
176=350,000

 

[Kingfarthur]

There's a very real chance that this weekend will do scarily close to 100k. They'll just blame it on Barao not being a big enough star yet.

Have you seen the promos? They're marketing all three of the main fights together, not just the main event.

 

[BIGTKO75]

To me its not about the buyrates its about the money. If there making $200 million a year in ppv buyrates and a network came along and offered them $300 million a year they would be off ppv in a heartbeat.

 

[LongTermLurker]

Not sure their break even #.

With the news about the WWE network I think the UFC will keep with PPV until they start losing on cards.

I like the idea of less ppvs. If they had a tv partner willing to pay for more cards that would be good for fans.

 

[BionicCommando]

Hum.. Good point about Fight Pass maybe being a greater focal point in the future. However, I think TV distribution will still be more important. Would bars start to hook up their computers to show UFC live events?

Sounds like a lot of people think at 100k buys, the UFC may start thinking about making some serious changes.

As I had mentioned, as UFC 163: Aldo vs. Korean Zombie (which also had Machida/Phil Davis) sold 170,000 PPVs, maybe UFC 173 will do like 130k? UFC 174 just might hit 100k...

It's not just about a number though. It's about a totality of circumstances. It would have to be at a "batten down the hatches" type failure combined with a fat payroll. Let's just play the numbers game momentarily using only the briefest of amounts.

Let's say this event does 150K. 150K x 60 bucks is 9 million dollars. Splice that in half for PPV providers and you've got 4.5 mil. Throw in anywhere from 1 to 2 mil from Fox to air prelims and you're at 5.5 to 6.5 mil. Now throw in a live gate of about 1 mil (for the low side) and you're at anywhere from 6 to 7 million. Subtract 1.2 mil to put on the event since that's the estimated production costs and subtract, for the sake of argument, 1 million to pay fighters on the event.

7 mil minus 2.2 mil still gives you 5 mil IN THEORY off an event, just playing off of isolated value like gates PPVs, productions and the check they get to air these shows. Now remove PPV and try that again. NOW you're hitting a real panic area.


That's why they're stuck on PPV despite their constant admission that they see Fight Pass as the next step. It's why they'll sit there and go "well if Ali Bagautinov vs Mighty Mouse is a flop on PPV, we're still making bank on the event". Would they be happy about it? Probably not but it's also the only thing they know right now.


That's why Fight Pass over the next two years matters a lot for them. If the WWE Network manages to salvage itself (which I think it will) and Fight Pass continues to go up, I can easily see them dicing 4 PPVs off the schedule, putting them on Fight Pass and adjusting the price to something that would help soften the blow. Until then, PPVs would have to drag ass.