MMAjunkie‘s Steven Marrocco and Ben Fowlkes obtained a UFC investor document that contains details on the inner workings of the world’s dominant MMA league. The pair covered how the new owners intend to increase earnings. Then they detailed who the UFC believes will be bidding for television rights when the current FOX deal expires in 2018.
And in their latest story, Marrocco and Fowlkes explain how the company’s PPV buys bounced back in 2015.
PPV revenues dropped precipitously from $212,000,000 in 2013 to $116,000,000 in 2014, due to a series of high-profile injuries. However, they rebounded smartly in 2015.
The majority of the $462,000,000 from content generated revenue in 2015 was from PPV:
•$236,000,000 (51%) from PPV
•$129,000,000 (28%) from domestic television
•$83,000,000 (18%) from international deals
•$14,000,000 (3%) from UFC Fight Pass
The rebound came from a number of sources including a new “double stacking” process, the rise of Conor McGregor, and Ronda Rousey.
Huge boxing cards have long focused solely on the main event, with the undercard relatively unimportant. However, boxing has less of the joint injuries that lead to MMA bout cancellations. So the now UFC double stacks – they put emphasis on the main and co-main, so if one drops out, all is not lost. Further, for two or more events in 2015, the league also had “other top fighters on retainer and prepared to step into the fight with minimal notice.”
So main event changes continued at about the same rate in 2015 and 2016 as they had in 2014, but PPV buys went up.
And then there was Conor McGregor. ‘Notorious’ broke 1,000,000 buys in two of his three headlining events, something Brock Lesnar achieved once and Anderson Silva achieved once. McGregor’s two 2015 events did 2.025 million buys, over 25% of the PPV buys in 2015.
Then UFC women’s bantamweight champion Ronda Rousey did 2.6 million buys in her three events in 2015. The document noted that Rousey and McGregor together did 56.1% of all PPV buys from 2012-2015.
A Two Trick Pony growth strategy would appear to be unsustainable, but the document noted that the UFC is less reliant upon PPV revenue than it was in the past. From 2008 to 2011, PPV was over 50% of total revenue, and dropped to 39% in 2015 even as overall revenue rose.
Further, McGregor headlines the biggest card in MMA history at UFC 205 in November, and Ronda Rousey returns at UFC 207 in December. 2016 will be the most lucrative year in league history.