Often it’s tempting to draw direct comparisons between the two largest promotions in Mixed Martial Arts. However one would be hasty to draw conclusions of the success of one promotion based on its business model versus the success of the other based on that same model.
Let me explain… The UFC’s business model is one that is based primarily on house Ticket Sales and PPV sales. The UFC has no network that it owns and as such collecting revenue from advertisements is limited to in-venue or product / brand placement within the broadcast of the event. Notice how often sponsors are mentioned (even during a PPV broadcast). Bud Light for example.
What about the arrangement that UFC has with Fox Sports? Well, since the specifics of their agreement are not a matter of public record it’s pure speculation to assume that the UFC is making significant profits from advertising broadcast during an event. However it will likely get revenue for the continued product placement and sponsor support.
If the UFC owned a network of its own, it would essentially have the entire food chain, then you can start comparing apples to apples.
Now let’s look at Bellator. Owned by Viacom (one of the largest media companies in the world), ratings during its Free TV events have much more impact on the success of the property and the benefit of its parent company. As a media company Viacom makes much of its revenue from advertising sales on its programming networks. This is where ratings play a huge part in the success of a specific property.
Let’s assume for a moment that ticket sales are abysmal at an event but the ratings are phenomenal. Ticket sales are a one-time revenue generator. You can’t charge people to see an- event that has already taken place. If they attended, great, if they didn’t then you must figure out another way to continue to generate revenue off that property.
Owning a network (as Viacom does) allows them a great deal of flexibility in continuing to air a successful property and charging their advertisers appropriately for the relative value of that broadcast. The success of Bellator 106 with regards to ratings likely negates any lack of ticket sales at the venue. The fact is Bellator now has a popular piece of broadcast material and you can bet that Viacom airing an encore performance on Spike is no coincidence. Bellator will reap the benefits of additional revenue from their advertisers.
And so now how do we compare the success of the UFC’s business model versus that of Bellator? Well it’s challenging and you’d be hard-pressed to make a cogent argument until the playing field is leveled. Either the UFC needs to clarify whether there is a revenue share for its broadcast agreement with Fox Sports or Bellator needs to get into the PPV game. Either way you slice it though, as long as Bellator is owned by Viacom it does have a distinct broadcast advantage that makes a formidable competitor for the UFC regardless of ticket sales. Look at the ratings and ad revenues per broadcast. That will tell you more than any single event’s ticket sales.