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The UFC’s new pay-per-view deals with both inDemand, which covers traditional cable television, and with DirecTV, the leading satellite provider, expire at the end of this year and are in the middle of ongoing negotiations.
A report originally from Sports Business Journal and reported here regarding a new deal being in place which would give UFC a 70-30 split on the revenue is premature based on those with familiarity with the negotiations. While a figure has not been agreed upon, that number — which would have been worth an additional $65 million in revenue based on a 70-30 split if next year would be equal to 2018’s final numbers — would be dependent on what may be an overly optimistic final deal.
UFC is currently getting roughly a 70-30 split on its digital pay-per-views, a number that has been growing annually as more fans become familiar with it. It was estimated that about 480,000 digital orders were made for UFC 229, roughly 20 percent of the total estimated at 2.4 million, but that figure was an unusually high percentage.
When it comes to pay-per-view, the vast majority of buys come from orders to cable and satellite companies, which offer a lower split to UFC of roughly 50-50 under the current contract. Thus, it becomes in UFC’s best interest long-term to push buys in particular to UFC.tv, where they get the highest percentage of the total revenue, while at the same time maintaining deals with traditional providers since they make up the vast majority of buys.
But there is also a long-term game as to the future of streaming pay-per-view, and even pay-per-view as it stands in general, with subscription streaming services offering huge money for rights to events.
With the advent of streaming services, most notably the WWE Network for pro wrestling, and now DAZN and ESPN+ for boxing and MMA, there has been a direction of providing big events at a fraction of the price. Streaming services like WWE Network and DAZN are $9.99 per month, while ESPN+ is $4.99 per month and $49.99 per year.
Ever since 2014, when WWE made the move, and with the increase in piracy, people have believed that consumers would no longer be willing to spend that kind of money for single events and the pay-per-view era would be over.
There is no indication that’s the case. It has just changed. The major events have gone with higher prices, such as $99.95 for the Floyd Mayweather Jr. vs. Conor McGregor and Mayweather vs. Manny Pacquiao boxing matches, and drawn almost unheard of levels of numbers, both beating 4 million buys in North America alone when the old record was less than 2.5 million.
UFC has seen the same pattern. Its biggest events do numbers far larger than even a few years ago, before the advent of streaming services. McGregor and Ronda Rousey were bigger draws than previous generation stars Brock Lesnar, Chuck Liddell and Georges St-Pierre. McGregor’s fight with Khabib Nurmagomedov broke old records by about 900,000 buys and only three events in UFC history even did half of the UFC 229 total of 2.4 million buys.
But rank-and-file numbers are down. While a normal show would have done 300,000 buys years ago, now a similar show would do closer to 200,000. But even with what was considered a very weak first six months and only one McGregor fight this year, right now, this will end up being a strong year for the UFC pay-per-view business.
Right now is an interesting period when it comes to pay-per-view. UFC has become the major pay-per-view event provider for cable and satellite companies. UFC has generally been the leader since 2006, with the exception of an unusually big year for boxing. Boxing, whether it was HBO, Showtime, or another promotion, would run a few major shows, built mostly around its major drawing cards. Both UFC and WWE would run monthly, but WWE, while still on pay-per-view, cannibalized that business by putting all of its biggest events on its streaming service in 2014, and offering those shows along with many other shows and its library for a monthly $9.99 price. It still offers its shows on pay-per-view, but numbers have dwindled because of the much better bargain of ordering the network and getting access to those events at no extra charge.
In doing so, UFC became the last major steady provider of live event content on pay-per-view, as other MMA promotions, such as Bellator, and most recently, Golden Boy, have offered shows. Bellator did two events which hovered around 100,000 buys, the last one in 2017, and has made no indication of doing anymore, particularly after signing a streaming deal with DAZN. Golden Boy ran on Nov. 24, but after Tito Ortiz vs. Chuck Liddell 3 did an estimated 40,000 buys, and with no marquee fighters under contract, they don’t appear to be a factor.
The results of Saturday’s Deontay Wilder vs. Tyson Fury heavyweight boxing match will also be very significant short-term. Boxing on pay-per-view was surviving based on Mayweather Jr., Canelo Alvarez and Manny Pacquiao in recent years. With Mayweather seemingly retired as a serious boxer, and Alvarez having signed with DAZN, taking him out of the pay-per-view market, and Pacquiao near the end of his career, it appeared the day of a boxing blockbuster was coming to an end.
But if Wilder vs. Fury posts big numbers from two fighters who had no history on pay-per-view as draws, it would indicate the future isn’t nearly as cut-and-dried as many thought when the Alvarez deal was announced after DAZN had also seemingly locked up Anthony Joshua.
For the cable and satellite providers, the game is also changing based on companies being able to get higher margins digitally and what the long game is.
A report originally from Sports Business Journal and reported here regarding a new deal being in place which would give UFC a 70-30 split on the revenue is premature based on those with familiarity with the negotiations. While a figure has not been agreed upon, that number — which would have been worth an additional $65 million in revenue based on a 70-30 split if next year would be equal to 2018’s final numbers — would be dependent on what may be an overly optimistic final deal.
UFC is currently getting roughly a 70-30 split on its digital pay-per-views, a number that has been growing annually as more fans become familiar with it. It was estimated that about 480,000 digital orders were made for UFC 229, roughly 20 percent of the total estimated at 2.4 million, but that figure was an unusually high percentage.
When it comes to pay-per-view, the vast majority of buys come from orders to cable and satellite companies, which offer a lower split to UFC of roughly 50-50 under the current contract. Thus, it becomes in UFC’s best interest long-term to push buys in particular to UFC.tv, where they get the highest percentage of the total revenue, while at the same time maintaining deals with traditional providers since they make up the vast majority of buys.
But there is also a long-term game as to the future of streaming pay-per-view, and even pay-per-view as it stands in general, with subscription streaming services offering huge money for rights to events.
With the advent of streaming services, most notably the WWE Network for pro wrestling, and now DAZN and ESPN+ for boxing and MMA, there has been a direction of providing big events at a fraction of the price. Streaming services like WWE Network and DAZN are $9.99 per month, while ESPN+ is $4.99 per month and $49.99 per year.
Ever since 2014, when WWE made the move, and with the increase in piracy, people have believed that consumers would no longer be willing to spend that kind of money for single events and the pay-per-view era would be over.
There is no indication that’s the case. It has just changed. The major events have gone with higher prices, such as $99.95 for the Floyd Mayweather Jr. vs. Conor McGregor and Mayweather vs. Manny Pacquiao boxing matches, and drawn almost unheard of levels of numbers, both beating 4 million buys in North America alone when the old record was less than 2.5 million.
UFC has seen the same pattern. Its biggest events do numbers far larger than even a few years ago, before the advent of streaming services. McGregor and Ronda Rousey were bigger draws than previous generation stars Brock Lesnar, Chuck Liddell and Georges St-Pierre. McGregor’s fight with Khabib Nurmagomedov broke old records by about 900,000 buys and only three events in UFC history even did half of the UFC 229 total of 2.4 million buys.
But rank-and-file numbers are down. While a normal show would have done 300,000 buys years ago, now a similar show would do closer to 200,000. But even with what was considered a very weak first six months and only one McGregor fight this year, right now, this will end up being a strong year for the UFC pay-per-view business.
Right now is an interesting period when it comes to pay-per-view. UFC has become the major pay-per-view event provider for cable and satellite companies. UFC has generally been the leader since 2006, with the exception of an unusually big year for boxing. Boxing, whether it was HBO, Showtime, or another promotion, would run a few major shows, built mostly around its major drawing cards. Both UFC and WWE would run monthly, but WWE, while still on pay-per-view, cannibalized that business by putting all of its biggest events on its streaming service in 2014, and offering those shows along with many other shows and its library for a monthly $9.99 price. It still offers its shows on pay-per-view, but numbers have dwindled because of the much better bargain of ordering the network and getting access to those events at no extra charge.
In doing so, UFC became the last major steady provider of live event content on pay-per-view, as other MMA promotions, such as Bellator, and most recently, Golden Boy, have offered shows. Bellator did two events which hovered around 100,000 buys, the last one in 2017, and has made no indication of doing anymore, particularly after signing a streaming deal with DAZN. Golden Boy ran on Nov. 24, but after Tito Ortiz vs. Chuck Liddell 3 did an estimated 40,000 buys, and with no marquee fighters under contract, they don’t appear to be a factor.
The results of Saturday’s Deontay Wilder vs. Tyson Fury heavyweight boxing match will also be very significant short-term. Boxing on pay-per-view was surviving based on Mayweather Jr., Canelo Alvarez and Manny Pacquiao in recent years. With Mayweather seemingly retired as a serious boxer, and Alvarez having signed with DAZN, taking him out of the pay-per-view market, and Pacquiao near the end of his career, it appeared the day of a boxing blockbuster was coming to an end.
But if Wilder vs. Fury posts big numbers from two fighters who had no history on pay-per-view as draws, it would indicate the future isn’t nearly as cut-and-dried as many thought when the Alvarez deal was announced after DAZN had also seemingly locked up Anthony Joshua.
For the cable and satellite providers, the game is also changing based on companies being able to get higher margins digitally and what the long game is.
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