A recent article in the Sports Business Journal emphasizes how the UFC continues to build on its success while many would-be competitors are struggling to survive. Notable excerpt:
Zuffa LLC, the UFC’s parent company, says it is turning a profit on $300 million in annual revenue. Pay-per-view accounts for more than half of that number, followed by television money generated from a deal with Spike TV, and event operations.
Gate receipts for PPV events are averaging $3.25 million this year, up nearly half a million from 2007. PPV buys were up approximately 8 percent in 2007, and another year-over-year increase is expected in 2008.
The UFC has steadily grown in the last few years by living off money generated by television and live events and using that cash to acquire competitors such as PRIDE and World Extreme Cagefighting. PRIDE was shuttered and absorbed into the UFC; WEC features lighter-weight fighters.
There are at least two things to take from this article in refrence to the state of the MMA industry. First, the difficulties experienced by ProElite, the IFL, and others don't carry over to the UFC. Zuffa is on its game, and continues to thrive. Second, challenging the UFC at this point isn't a prudent strategy. Their brand is too strong; their roster of top level fighters is too deep. Any future competition will have to come from an organization that takes a measured approach in terms of growth. Even a promotion that builds slowly and methodically faces an uphill battle, to say the least.
Fortunately for the sport, more mainstream sponsors are becoming interested. From a second SBJ article:
While the early advertisers were energy drinks and video-game companies searching for the young male at a bargain price, Kay said the number and types of advertisers have changed dramatically in the last three years. Spike has signed 59 new advertisers for its MMA programming since the second quarter of 2007.
The UFC still attracts gaming and vitamin supplement companies, but programming is now pulling in big spenders in categories such as beer, quick-service restaurants, and men’s health products. “The list of people who won’t (advertise) is getting smaller as the ratings get higher,” Kay said.
Research compiled by Anheuser-Busch, a UFC sponsor and buyer of advertising, found its programming delivers young males better than any other televised sport except the NFL, an A-B executive said.
While most of the encouraging sponsorship news focuses on the UFC, Strikeforce is also doing impressive ratings on NBC. This certainly won't go unnoticed. Besides making promotions stronger, more sponsorship dollars directly benefit fighters' pocketbooks.
Growth of the sport is important to all involved. It's certainly hard to argue that Zuffa hasn't lead the way in this endeavor and is now reaping the benefits of that work.
HT: MMA Payout