Viacom has bought a majority stake in Bellator Fighting Championship. What does this mean going forward?
Timing, by definition, is a placement or occurence in time. The swinging of a bat at the precise moment a baseball flies into the strike zone is the perfect example. In a more general context, timing is everything. It can determine whether moments in our lives are filled with success or failure, sometimes in a very short period of time.
For Bellator Fighting Championships, the timing couldn't have been any better. USA Today's Sergio Non reported late last night that Viacom, MTV2's parent company, had bought a majority stake in the Chicago-based mixed martial arts promotion, and it will move the promotion from its current home on MTV2 to Spike TV in 2013.
Timing has more to do with the meteoric rise of the promotion than Rebney's business skills, although his ability to find new homes for the promotion while increasing its television exposure helped solidify it as a staple in our diets over the last few years. The UFC's deal with Fox and their exit from Spike TV opened up the possibility for a new MMA promotion to fill the void. Naturally, most fans and media gravitated toward Bellator because it already existed on a Viacom-owned network. Those assumptions became more realized when news broke that Spike TV executives were scouting Bellator events. Furthermore, a report surfaced stating that it wasn't a matter of "if" Bellator would move to Spike TV, it was a matter of "when".
And here we are today, staring at a headline that isn't quite what we expected, but meets the end goal nonetheless. What exactly does this mean for Bellator? What is the most important asset that Viacom brings to the table?
The short answer is sustainability. Bellator's former majority stakeholder, Plainfield Asset Management, had $5 billion in assets before last year, then took a monumental nosedive to $1.25 billion this year, likely due to the poor economic conditions and terrible management. As reported by MMAPayout.com in March, the company made it known that it would return all capital to its investors by June of next year, then contemplate its future.
As you can imagine, that future is bleak, thus Bellator needed to find a new source of funding. Rebney, according to insiders I've talked to in the past, is a master salesman, so it isn't a stretch to believe he would have found a new investor to keep the boat afloat for another year. Viacom's stake, however, creates the impression of prolonged sustainability, and it saves us from talking about Bellator's impending demise next year.
Once the promotion moves to Spike TV in 2013, other advantages to the buyout will kick in, the most obvious being Spike TV's larger reach. They reach roughly 20 million more homes than MTV2, and the channel isn't filled with shows featuring Chanel West Coast. Yes, she's a real person, not a brand of perfume you buy your wife for Christmas.
Bellator will have more resources, a stronger promotional platform for its fighters, and more capital at their disposal. Let's not blow this out of proportion however. A Viacom-backed promotion isn't throwing UFC-sized contracts at some of the best free agents in the business right away. We have yet to see, in action, the commitment that Spike TV and Viacom are throwing at this venture. What's the expectation, and how much money are they willing to dump into the product?
Bellator's key to success, its talent relations department, should have more leverage. Sam Caplan and company are already beating the Zuffa machine to the punch on many of the sport's top prospects, and the promise of exposure on Spike TV along with more money from sponsors may help entice an even better prospect class short-term. Long-term, if Viacom and Spike TV are committed, higher salaries are a possibility if Bellator can succeed on the network.
More minor advantages involve a move away from direct competition with the UFC and an easily accessible HD option for fans. Fighters will benefit as well. Bigger sponsorship checks with the potential of endorsement deals for the more prominent fighters like Eddie Alvarez are a realistic expectation now.
In the grander scheme of things, this presents an interesting situation for the UFC. Time and time again, promotions, as single business entities, have fallen at the wayside to the Zuffa machine. In this instance however, a network did the smart thing that Showtime should have done with Strikeforce. They bought the promotion. Zuffa can take down independent companies solely promoting MMA, but they can't take down a media conglomerate like Viacom. The UFC would have to go out of their way, spend more money to make life hard for Bellator. I don't see that happening right now with their focus on pleasing Fox.
The deal is certainly a major stepping stone for Bellator. It could possibly lead to Bellator becoming the consensus #2 mixed martial arts promotion in the entire world. But I'm still skeptical of Spike TV and Viacom's overall commitment to the promotion. They aren't going to simply dump coffers of cash in front of Bjorn Rebney and say "Go for it!" tomorrow.
The battle will be a calculated chess game with a male demographic that just so happens to be heavily influenced by the UFC's brand. They are definitely the underdogs in the war of marketing against a giant like Fox, so it remains to be seen whether Viacom is willing to infuse substantial capital into a promotion that might get smothered by the UFC's new partner.
Regardless of my reservations, Bellator is a thorn in the UFC's side now. Under Viacom's umbrella, they can provide a challenge that the UFC has never had to deal with in the past. That is if they can prove their viability in a market that's saturated with the UFC brand. Will we be singing the praises of Bellator in two or three years? Only time will tell.