It’s no secret that Ultimate Fighting Championship’s big money gusher is pay per view purchases, which usually run in the hundreds of thousands for a fight show.
But will UFC take a financial hit in its PPV revenue during the next several months with its big name attractions such as Anderson Silva, Georges St-Pierre and Ronda Rousey out of action at least until the summer?
“It’s a valid question,” said Lorenzo Fertitta, chief executive of Zuffa LLC, the company that runs Las Vegas-based UFC. “Stars are created and they come and go. It’s no different from other sports.”
Fertitta said his fight promotion and marketing staff is ready to usher in a new wave of high-profile fighters for PPV events, while also diversifying the UFC revenue streams to take the load off of pay per view income. A PPV event costs customers about $50 and $60 for high definition.
Fertitta said UFC, which has a reputation for building unknown fighters into attention-grabbing, personality-driven PPV stars, is working on its next cadre of marketable gladiators such as UFC middleweight champion Chris Weidman, the only man to beat Silva in UFC; light heavyweight champ Jon Jones, considered one of the premier pound-for-pound fighters in the world; and welterweight Johny Hendricks, a Midwest country kid with a wrestling background.
All three will be fighting in PPV events during the next three months.
Even with established stars like Silva (leg injury); St-Pierre (hiatus that may or may not be a retirement) and Rousey (doing movies) not appearing for the next several months, Fertitta projects 2014 revenue from pay per view events to increase by single digits over 2013.
The next pay per view event is March 15 when UFC 171 takes place in Dallas and includes Hendricks fighting Robbie Lawler, while UFC 172 is set for a PPV event from Baltimore on April 26, which includes Jones fighting Glover Teixeira. The next PPV event from Las Vegas is May 24, when Weidman battles Lyoto Machida. A PPV event is also scheduled for June 14.
This year will also be a pivotal year for UFC because the MMA fight show organization is taking a big step toward diversifying its revenue streams, Fertitta said.
UFC is launching a TV network in Latin America to capture more fans and build on its base in Brazil; selling $9.99 monthly subscriptions to its Fight Pass web site; and focusing on expanding its international revenue by selling UFC content via mobile phones in Africa.
UFC offered the Fight Pass web site to provide access to archived fights while also showcasing live fight shows around the world. It was free in January and February, but the $9.99 monthly charge went into affect March 1.
Meanwhile in Africa, UFC has begun working with mobile phone providers and is projecting to cut mobile phone distribution deals this year, Fertitta said.
“Pay per view will become a lesser percentage of the overall revenue as we grow into international markets,” Fertitta said.
On the domestic front, UFC is also expanding its UFC-branded gym program and plans to open its 100th this year, Fertitta said. The game plan, he said, is to open 2,000 gyms during the next five years. UFC gyms are located from New York City and Long Island to California and Hawaii. The Las Vegas market includes three UFC gyms. The business model for the gym expansion is franchise-based.
Contact reporter Alan Snel at firstname.lastname@example.org or 702-387-5273. Follow @BicycleManSnel on Twitter.