In an era where there are more and more avenues for combat sports events to be broadcast in pay-per-view due to services such as DAZN, FITE and others, as well as decreased buy rates due to illegal streaming, cable and satellite companies have had to renegotiate what they offer companies such as the UFC.
The Ultimate Fighting Championship recently capitalized on the current market, knowing that boxing’s biggest draw in Canelo Alvarez has left traditional pay-per-view, and moved exclusively to DAZN.
According to an article recently in the Sports Business Journal on the UFC, the company is working to negotiate a new deal with cable companies and satellite providers that will give them closer to a 70/30 split.
In recent years the UFC and the cable or satellite companies did a near 50/50 split on profits where as years ago the UFC would only see 40 percent and the provider would bank 60.
MMA Fighting broke down the numbers and this is what they came up with:
“If we estimate 5,475,000 PPV buys for UFC this year, and that 15 percent, which is a generous estimate, would be Internet purchases, and a $70 price point on average, UFC’s PPV business through satellite and cable companies would gross them about $163 million on the current 50/50 split. If we estimate a 70/30 split on Internet orders, that’s another $40 million from Internet purchases, or $203 million.
“If we take the same numbers next year, but with a 70/30 split across the board, that comes out to $268 million, or an increase of $65 million in what is likely almost pure profit unless they negotiate up people’s pay-per-view points. PPV points in standard contracts is based on numbers of buys, not revenue, so an increase in revenue for the same number of buys is still pure profit.”
The deal would likely include a clause that the UFC does not move from traditional pay-per-view.