Will The UFC Be Up or Down on Pay-Per-View in 2012?

The UFC had a remarkable 2011 in the face of a painful bad luck streak of injuries, illnesses and suspensions that cost them 11 out of 14 planned main events according to CEO Lorenzo Fertitta talking to the LA Times. There were at most only three UFC cards that sold more than 500,000 pay-per-view buys (UFC 126, 129 and maybe 141) compared with 11 500K + PPVs in 2010.

But it was more than just the injuries and the loss of the mega-events that hurt the UFC in 2011. Dave Meltzer in the Wrestling Observer (subscription required) has put together a comparison of what he calls "baseline shows" from 2009, 2010 and 2011. Once you eliminate the Brock Lesnar, Georges St. Pierre and Rashad Evans vs. Rampage Jackson cards a clear picture emerges, the UFC brand is selling fewer PPVs:

We all know the prime reason UFC was down the level it was down is because of all the injuries this year. There were more baseline shows which took down the average. The only positive to come out of the year was the light heavyweight title, the historically best title when it comes to drawing, had three defenses, plus Jon Jones appears to be a slightly bigger draw as champion than Shogun Rua was. But just the name UFC on PPV seems to mean 14% less than two years ago and 9% less than last year.

Part of the downslide is the weakness of the lighter divisions as PPV attractions. With the loss of superstar champion B.J. Penn, the lightweight title is now one of the weakest headliners possible for a UFC card. The new featherweight and bantamweight divisions are even weaker. It's possible that Urijah Faber and Dominick Cruz coaching the first FX season of The Ultimate Fighter will turn things around, but if Faber loses to Cruz again, don't hold your breath waiting for another bantamweight title fight on top of a PPV card.

The next factor hindering growth has been the failure of new stars to emerge as bonafide PPV draws. The generation of UFC stars that the 2005-2010 explosion was built on -- Chuck Liddell, Tito Ortiz, Randy Couture, Matt Hughes -- has faded from the scene. The only two true stars to emerge since then, Georges St. Pierre and Brock Lesnar, were largely unavailable in 2011 and GSP won't return until late this year. Lesnar is now retired.

Light heavyweight champion Jon Jones may yet emerge as a superstar, he's certainly got the talent, but so far he's failed to put up huge PPV numbers. Middleweight champ Anderson Silva finally showed signs of emerging as a draw in 2010/2011 but its clear that he's only a draw when facing a perceived threat to his title. He'll be out with injuries until mid-2012 regardless.

MMA Payout identifies the other big factor hurting the UFC's PPV business:

Of course another factor in addressing the PPV buys is PPV fatigue. There will be 16 PPVs this year with a PPV almost a bimonthly happening. Its hard for a fan to pay over $100 bucks a month in PPVs in addition to their normal cable/satellite bill.

BE alumni nottheface expands on this point at Headkick Legend and even takes the speculation another step:

The common wisom is that the FOX deal will play big dividends for the UFC, and I don't disagree. I just don't think it will stop the decline in payperview sales. For starters they can expect no more than one fight from GSP and none from Brock Lesnar, by far the two biggest draws they've had the last few years. In addition they face the reality that half of all households in the U.S. have no disposable income so none of these new Fox fans are going to buy into a payperview market they've already oversaturated and bled dry (intentionally in my opinion -they knew the fad wouldn't last). The repercussions are going to big, with a lot of disgruntled stars now making a smaller cut of the revenue and large debt payment eating up all the owners profits.

Zuffa will sell the UFC

OK, a couple of caveats wth this one. One, I'm going to give myself an extra 6-months for this to happen. July 1st, 2013. Secondly, I don't mean Zuffa will sell the whole company, although that is a possibility, but they will sell at least 20% of the UFC to an outside party. By doing so Zuffa can eliminate a lot of their debt payments and not have to worry about tightening their belts and eliminating the dividend payments the owners have grown so accustomed to.

I'm a bit more sanguine about the UFC's chances over the short term than NTF. I think that the emergence of Nick Diaz and Alistair Overeem as stars is a very real possibility in 2012, especially with the PR muscle of Fox Sports pushing them.

What do you think? Will the UFC turn things around in 2012 or not?

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