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UFC 91 – The PPV buyrate expectations game
By Zach Arnold | November 11, 2008
It was only a few months ago when everyone inside the Mixed Martial Arts business thought that Randy Couture vs. Brock Lesnar could break all-time PPV buyrates record for UFC (meaning drawing more than the 1.2-1.4 million PPV buys that Chuck Liddell vs. Tito Ortiz drew.)
Then, the American economy went into free-fall thanks to the credit crunch. Still, expectations were high that this fight could draw well. Then, UFC 90 on October 25th in Chicago happened, and there was little-to-no promotion for the Couture/Lesnar fight on PPV. Dave Meltzer lowered his expectations of the buyrate for the match to 750,000.
This week, UFC President Dana White came out and claimed that Couture/Lesnar will draw 1.2 million PPV buys. White has told the media that ‘the fight will sell itself’ in response to questions from reporters as to why UFC is not marketing the fight harder.
However, there are signs that interest in Couture vs. Lesnar is good, but not great. MMA Payout is reporting that the TV hype special for UFC 91 drew around a 0.4-0.5 cable rating, which is lower than cable ratings for previous UFC hype shows. In addition to the lower cable rating, there also has been lower interest in ticket purchasing for UFC 91 due to the high prices UFC is asking for in regards to expensive seats (they have been charging PRIDE-level ticket prices). In order to entice expensive ticket sales, UFC has recently packaged two $1,000 tickets along with gambling money, hotel accomodations, and other goodies in a $2,500 package in order to try to get more people to show up at the live event.
Given all of the information above, it’s time to predict the buyrate for UFC 91. Pick one of the numbers and give your reasoning as to why you chose it:
a) Under 500,000 PPV buys
b) 500,000 ~ 650,000 PPV buys
c) 650,000 ~ 800,000 PPV buys
d) Over 800,000 PPV buys
Topics: Media, MMA, UFC, Zach Arnold | 54 Comments » | Permalink | Trackback |
Every figure I’ve see of UFC 66 was at just a smidge over one million buys.
In any case, if you follow the MMAPayout equation for buys, you get about 200,000 fewer than Cote/Silva. A better question: Does anyone believe that’s likely? I sure as hell don’t. My guess is it does about 700,000 or so.
Hell if I know how many PPV buys are forthcoming. Do we know for certain ANY prior UFC’s PPV buys?
I’m straddling C and D. 700-900k buys. D if you held a gun to my head and made me pick one.
UFC has done nothing to show that they want this to be the most purchased card ever. There has to be some ulterior motive for why they did what they did for this show. To not produce the indepth special they were talking about, to inflate ticket prices, to not put any other big name fighters on it. It’s a real head scratcher and I hope it backfires in their faces.
I think option C, I hope option B. Ha.
C, but near the top of it.
I agree with Dana White. This fight does sell for itself. It doesn’t need a huge media push to get big numbers. Would a big build-up have helped increase the numbers slightly? Probably. But not enough for Zuffa to care. Especially when they have The Ultimate 2008 coming up along with Penn/GSP 2. And the Penn/GSP fight, we will actually see all their creative juices flow.
And UFC 66 was slightly over 1 Million, as mentioned above.
As for the failing economy, that won’t hurt the UFC. Yes, the live ticket sales will be decreased. The days of gates above $2.5 Million might be more of a rarity. But that will be offset by larger PPV sales. Theater attendance always goes up during a recession. Why? Because less people are taking trips to Disney World, and more people stay at home. Even if money is tighter, people still need to be entertained. And that means more potential PPV Buyers. Not to mention people need a level of escapism during depressing times.
Even if it only hits 3/4th a Million like Meltzer is saying, that is still a great buyrate. I know the expectations are very high, and people will call it a disappointment. But that is very big compared to anything in boxing without an ODLH name on it. That says a lot.
The initial public prediction from the UFC was 1.0 million to 1.5 million buys, and they said at the time, “And we can prove that with market research that we’ve done on Lesnar vs. Couture.” Now they’re saying 1.2 million, which was also their prediction for UFC 66 and the figure that was widely reported in the media’s pre-event coverage of that show.
They have also said that St. Pierre vs. Penn will draw 1.1 million buys, which would also top the Liddell-Ortiz all-time record of 1.05 million from UFC 66.
I love this “the recession drives up UFC ppv sales” argument. There’s absolutely NO documented numbers for this statement.
“Entertainment spending” goes up? Sure I’ll buy that people might rent dvd’s or buy dvd sets or a PS3 that will be a sunk cost but keep them occupied for extended periods of leisure time.
But to blow $45 on a 1-fight ppv that can be downloaded off the internet when money is tight? You’re also not factoring in the fact that people have 100’s of channels to watch unlike many of the past major recessions, which they’re also likely to see as “free” or “sunk” entertainment cost alternatives.
Not to mention that lack of promotion means that you’re going to be cannabalizing your buys. The people that are likely to buy or would have bought anyways are going to be more likely to “pool” with other UFC diehards to watch and save money rather than buying on their own.
1. Only a very very small fraction of people illegally download videos. And the type of people who usually do would have never purchased it anyways.
2. I’m not the biggest fan of this card, but for the casual fans, all UFC cards are filled with quality fights from top to bottom. Obviously some are better then others, but this isn’t boxing. It isn’t just the “one fight”.
3. Whether or not people have 100 channels, there is still something empowering to a person to spend their money on something that is perceived to have to a “premium”, such as going to the movies or purchasing a PPV. If your theory was correct, people would have stopped going to the movies a long time ago.
4. Yes, there might be some more pooling, but that will only increase the fanbase more, which really won’t have an effect on PPV numbers over the long haul.
There might not be research data out there to show PPV purchases will go up… But the way money is spent in a recession would indicate that my scenario is much more likely then your’s.
No it wouldn’t suggest that at all, not when there’s innumerable and cheaper substitutes. Go read an economics text.
People won’t stop entertaining themselves, but they’re a lot less likely to pay $50 for 3 hours of escapism when they can pay $0 or $5.
And since when has pooling among existing UFC fans lead to a bigger fanbase? 5 buys turns into 1 buy.
There’s little buzz outside of hardcore fans, ergo it’s less likely that you’re going to have people buying “out of interest”, especially when it costs $45-55 and the economy is in the crapper.
Will De La Hoya vs. Pacquaio get more than 1 million PPV buys?
Gaijin,
Your logic has one slight hole. We’re not comparing normal people’s buying patterns and competition for their dollars with the UFC and other entertainments. We’re comparing fight fans’ buying patterns. If you’re a UFC fan, recession or not, a UFC PPV is better than going to the movies.
True.
But how many of these fans that were watching Brock’s last fights were the casual/marginal fans that watched because their interest was piqued? How many of these fans are willing to shell out the $45 now? I just don’t know what the elasticity of demand amongst the broader spectrum of UFC fans is at this point.
We all know they have a base of around 300-400k fans who buy everything, their buying habits are not in question at all. It’s the 400k-1m+ that I’m talking about – how many of these people are going to shell out their scarce entertainment dollars vs. what their entertainment dollars get them elsewhere? These are the “sports/entertainment” demo rather than “mma fans” who are more fickle buyers of the UFC’s product.
If you’re part of the 6% unemployed, chances are that your entertainment dollars are going to be restricted and PPV is probably off your list.
Now, if you’re still part of the 94% employed, what are the chances that you’ll cut the PPV to save money for the movies? No, in a recession, people cut back on big ticket items, not small ticket items. PPV is a small ticket item. You’re overstating the recession’s effect on entertainment buys.
Your logic has one slight hole. We’re not comparing normal people’s buying patterns and competition for their dollars with the UFC and other entertainments. We’re comparing fight fans’ buying patterns. If you’re a UFC fan, recession or not, a UFC PPV is better than going to the movies.
Perhaps. Its also more expensive if buying by yourself (or you fall into the grouping trap) and there’s numerous alternatives that are far cheaper or free. Thousands of such, in fact. More alternatives than any other time in history. People spend less during recessions on luxury items, and $50 PPVs are definitely that, whether or not you’re willing to admit it.
Now, you could argue that certain sports saw significant increases in popularity during the depression. Boxing is often mentioned, but what is never mentioned along with that is how boxing’s national coverage was free via radio, or that football, hockey,and basketball were far from breaking into the public’s consciousness.
On the other hand, discretionary spending for other forms of entertainment suffered. Movie theaters saw a cut of roughly one third in attendance on a national basis. Amusement facilities such as arcades and amusement parks closed in droves; this at a time when gated amusement parks were rare and free or minimally costly entry was the overwhelming norm. These are forms of entertainment that cost far less than PPV fights and were far more ingrained in society than MMA is today.
How so? You’ve got 400k people that will buy short of a great depression.
Then you’ve got a range of people between the 400k-1M mark that buy very subjectively. They aren’t zombies that buy every card, every month and they will spend their dollars elsewhere.
Tight(er) budgets and many substitutes (many of which are cheaper or more long term) doesn’t mean “entertainment buys” or spending goes down, but it does mean there’s probably less to go around and not everyone is going to choose the same product. How people have determined that this is QED – UFC’s ppv will go up/remain strong is beyond me.
Lets not get carried away. This is a recession, not a depression. In recessions, entertainment historically has weathered things best, and that includes going to the movies.
They couldn’t even get the 400,000 to show up on two separate occasions this year. Roughly half of them showed up for those cards. I guess maybe you could argue that MMA fans hate expansionism or something, but I’m guessing it has more to do with how weak UFC 80 and 85 were.
D. Cap – stop making logical and sound arguments.
The fact that boxing did well when it was basically free and that “entertainment spending” has historically gone up during recessions is point and fact that $45 monthly ppv’s will continue to be strongly bought – since of course it’s the only form of entertainment available to consumers.
I’m not predicting anything since I don’t have the data yet. However, you’re predicting that PPV will go down. You obviously don’t know that for a fact either. All we can go on is historic trends and extrapolate from that data. Entertainment dollars for small ticket items go up in times of recessions.
I’m of the recession won’t affect PPV sales substantially. It may affect UFC live event sales, however.
Lets not get carried away. This is a recession, not a depression. In recessions, entertainment historically has weathered things best, and that includes going to the movies.
The depression was a buzzword for the recession of the 1930s because it was so long and severe. In prior recessions, you hardly see booms in various industries. Sports far more popular than the UFC are hurting: The NFL took out a $2B line of credit for its teams, NASCAR is worrying about having full fields next year, so on, so forth. To argue that the UFC, the leader in a fringe sport, is going to ride it out like nothing happened, is nuts.
Did you guys ever bother to think that the people who buys PPV for $45 is the same people who still have jobs in a recessionary period? Any of you guys got laid off recently?
D Cap, if you think the 1930’s was a “recession” then I don’t know what to say.
We won’t be going into a depression because of the government intervent. So that isn’t much of a concern.
During these times, people are less likely to take a big vacation. Even the people with better paying jobs. There is a fear that any company can go under, and therefore a hoarding of money occurs.
$45 is no longer considered a luxary item price for PPV. Buying a $300 iphone with a $80 plan per month is considered luxary. So is a big screen TV purchase. So are more expensive cars. And so is a $400 UFC Ticket.
During a recession, restaurants get hurt badly because people eat out less. With 1/3rd of the meals being eaten outside of the home, a family just has to reduce the % of times they go out a week, and the restaurant indusrty tumbles. They will more likely order pizza then go to a Steakhouse. However, people still need to have an “event night”. Whether that be bowling, the movies, or ordering a PPV.
Ticket sales for UFC events will almost surely suffer. However, the bulk of revenues don’t come from these events. I don’t think there is much debate there. The PPV buyrates likely won’t go down. If anything, there is more money floating around for people who are employeed to buy smaller purchases such as a PPV.
“During a recession, restaurants get hurt badly because people eat out less.”
That’s not really true. I work at a restaurant, and yesterday was pretty god damn busy. And it was from about 12:30-2:30 that we got a good lunch rush. It was the busiest Tuesday I have experienced for a while, and I made better money than I usually do on Tuesdays. And I only work lunch shifts anymore. If anything, it’s not a recession that is hurting restaurant business, it is autumn/winter seasons and not it being near Xmas that hurts resaturant business, not so much the economy (even though that hurts a little bit). I am making as much money now (actually a little bit more because I work lunch shifts and not at night anymore) as I have before the economy went into the shitter.
Then again, it was Veteran’s Day yesterday I believe. But why would Veteran’s Day spike restaurant sales?
“$45 is no longer considered a luxary item price for PPV. Buying a $300 iphone with a $80 plan per month is considered luxary. So is a big screen TV purchase. So are more expensive cars. And so is a $400 UFC Ticket.”
PPV yearly output = $45 X how many PPVs?
Is PPV yearly output a luxury item?
I’m just here to raise the questions, folks. (In other words, I’m bored at work.)
D Cap, if you think the 1930’s was a “recession” then I don’t know what to say.
What part of it wasn’t a recession? It was as bad a recession as can be imagined, but it was that. A recession.
There’s no real point going elsewhere: The majority of Americans during the Depression were also employed just as they have been in all previous recessions. The difference is that they are not spending money, probably because they have no money to spend. Already consumer spending has tanked and “recession proof” businesses like casinos are taking a major hit.
Why can’t the need for an “event night” be filled by other entertainment options? The core fans who are buying these PPVs have been fans for all of 24 months.
Bingo.
And I’m not saying that PPV buys are going down per se, as mentioned numerous times – they have that base.
I’m saying that they’re not likely to reach these high projections or get stronger as others are arguing. They are not invulnerable to the current economic stress.
the countdowns rating’s being so low could be due to the fact that it started at a later time than most people had the dvr’s and tivos set to. i can remember earlier this year when a tuf episode did it’s lowest ratings ever and alot of fans complained that they had problems with comcast and their dvr’s and tivos didnt record it. comcast fixed the problem and the next week the ratings almost doubled. we’ll see. i have seen that espn has been and will be doing alot of live coverage for this event and that cant hurt. i think 91 will do between 750-800k, wich is awesome #s considering that they are only having 1 “big” fight. FLUYID. since you’re bored at work i’ll say that oscar/manny will do a million ppv’s or more. oscar could box a kangaroo and still get a million buys. once he’s gone though, i doubt if we’ll see any more boxing ppv’s hit that mark, or even come close, for a very long time, unless some tysonesque hw comes along and captures the publics attention.
Recessions and depressions are two separate definitions.
The Depression is the name of the 1930’s depression era.
A recession is when GDP goes negative.
A depression is when GDP goes more than 10% in the negative.
I don’t know why they don’t have the countdown show after TUF or Unleashed. Putting it on a separate night all by itself can’t help ratings.
Personally, I can never remember to catch it at 11pm on Monday. Usually I have to wait for the encore on Thursday or miss it altogether.
So, your proof of depressions and recessions being different is to establish that a depression is a very severe recession? Good job!
Neat, just like a real forum dispute. Well done.
http://www.frbsf.org/education/activities/drecon/answerxml.cfm?selectedurl=/2007/0702.html
http://economics.about.com/cs/businesscycles/a/depressions_2.htm
A severe tropical thunder storm is called a Hurricane.
D Cap, why can’t you ever admit you’re wrong? You’re the most obnoxious commenter in the world. Remind me never to address your post in the future.
Recessions aren’t even a proper financial term, probably because the term didn’t exist until the mid 1930s. I would enjoy seeing what reference material would call them such, in fact. But yeah, depressions are totally not like recessions because instead of the economy going down the tubes, it goes like, way down the tubes.
All that handwringing doesn’t exactly change the base, which is that luxury items of any sort are the first to start getting axed from people’s budgets when their financial states enter ruin. Don’t need to be unemployed to be in tens of thousands in debt, last I checked.
I think 750,000, with the possibility of 900 if it takes off on ESPN on Friday and Saturday.
Regarding recessions, the same things that put people in financial trouble lead to entertainment companies doing okay in bad times. Hollywood is famously counter cyclical. People have to give things up, but they end up shorting on things they need and keep spending on things they don’t. Alcohol spending for example does not drop the way other sales drops during poor economic periods.
For individuals, credit cards are still easy to come by, the credit crunch is in interbank lending. People will just go more into debt to keep living the lifestyle they want.
Live ticket sales obviously will suffer, especially when they keep raising prices. But in the end, they are going to do a 5 million dollar gate for this show. They have 4 million sold + over a million in casino buys. The pain will probably be in Dec. and Jan. but they will still do 3 million gates at least.
Just on a quick search I found a couple articles on the alcohol industry in 2008 and during the last recession in 2002.
2008: http://www.wspa.com/spa/news/local/article/alcohol_sales_steady_despite_downward_economy/5640/
2002: http://www.jointogether.org/news/headlines/inthenews/2002/alcohol-sales-climb-during.html
While it’s quite an interesting fact, alcohol =/= UFC PPV’s.
I don’t even want to get into the discussion of alcohol dependency/addiction and its history of use as a coping mechanism (re: bad financial times or joblessness) – which has little relevance to “entertainment spending”. Alcohol and cigarettes have as close to inelastic demand as a product can get, in fact in Canada where they introduced heavy sin taxes, especially on cigarettes, sales saw little/no change whatsoever.
So again, quite interesting links, but this is apples to oranges.
What about video games? Video games is about as recession proof as you can get. The games cost $60.
Well, 1) millions more people play video games than watch the UFC 2) its previously hit major slides during recessions (the early 80s being a prime example) 3) Its now been ingrained generationally into kids 4) and the analysts are warning that if there’s not a rebound in October of console sales following some recent slides that you’re looking at that industry taking a major hit with this recession.
For individuals, credit cards are still easy to come by, the credit crunch is in interbank lending. People will just go more into debt to keep living the lifestyle they want.
That’s on the verge of changing. Most banks are already reducing credit limits and those who aren’t right now will be soon. There’s no way consumer credit isn’t going to be affected.
I obviously do not think alcohol spending = UFC, the point is that people tend not to give up their vices and routines. Most people are not alcoholics, they just like to drink. They want their entertainment on Saturday nights. As long as the UFC keeps it to one Pay Per View per month, I think they’ll be okay.
Still, there are some considerations. They need to worry about doing too many free specials that induce people to skip, and result in watered down cards. I think the recession will most hit the weak cards where it’s a borderline buy. I do not believe big cards will take a hit.
There’s a lot of confirmation bias going on. The Pavlik/Hopkins fight did just under 200k and it’s being blamed on the recession, but UFC 87 did 600k buys at a time that wasn’t exactly booming.
If the show does 600 it’s not necessarily proof that a recession caused it, though I’m sure that will take the blame.
As far as the credit crunch goes, there’s a lot of debate about what it is right now and where it’s going. Nobody can really say, there are a series of economic debates going on around econlogs among professors and academics with some asserting the whole thing is completely overblown. It’s hardly settled what the future of individual credit is.
The number of individuals playing video games make no difference. If people cut back, the percentage of sales go down regardless of the number of people actually buying video games.
Video games sales have resisted the last few recessions and is doing well so far on this one as well.
Video games and MMA cater to the same general demographic.
The WWE is the closest comparison in terms of sports entertainment and it had performed well during the 2001-2003 recession. On the other hand, the demographics of MMA skew slightly older than the WWE which bodes well.
Since modern MMA is too new for us to have real data on its effect until at least the beginning of 2009, we can at least correlate it with historic trends. To me, historic trends are in its favor.
Rome hit a solid point on the head that I was about to mention as well – the UFC while attempting to stunt its rivals and increase exposure has created a bit of a precarious situation for themselves. They have now created the expectation that there will be a free “ppv-quality” show almost monthly. This may have the effect of pushing some of the people that consider buying the PPV’s to not buy and wait on the free shows (UFN/UFC UK) or to catch the ppv from this month 3 months from now for free.
“What about video games? Video games is about as recession proof as you can get. The games cost $60.”
Sure they cost $60, but they’re more of an “investment” (I’m sure people that buy them might not look at them that way specifically). They provide far longer than the 3 hour entertainment time than a PPV would. Not to mention the on-line gaming capabilities and almost interactive movie level of experience – I think you’d be able to convince a marginal gamer to spend $60 (or far less for 2nd hand) on the game a little easier than the marginal ppv buyer.
I think it is going to depend on how much mainstream press this week.
Today’s Video Blog had Dana being interviewed by the Wall Street Journal. IF they can get strong press this week, I can see this doing 700k.
The Gaijin,
A movie lasts 2 hours, and for a family of 4, it costs $40. So how long entertainment lasts is not an indicator.
If Couture/Lesnar gets anywhere over 500,000 PPV Buys (which it will), boxing writers who are claiming the Hopkins/Pavlik buyrate on the economy will lose that arguement. It will also show how badly boxing is hurting today. No real big stars left.
45 just loves to talk about boxing being dead. I mean, I don’t know how a fight involving a 45 year old man could possibly prove without a shadow of a doubt the future of MMA, but you know, whatever. Then again, he still believes Floyd Mayweather’s never coming back lololol.
As for a motion picture, again, gradients. Netflix costs $10-15 a month, and for those who are more into staying at home. PPVs are bought for viewing at home, whereas movies are an actual outing, not to mention that movies can be purchased on PPV.
This is all silly. Reading this, you’d swear that no one in entertainment is going to be seriously affected by an economic slowdown. There’s next to no evidence that this is the standard, but it should be assumed that this recession is different?
The whole point of this thread is about how entertainment tends to weather a recession best. Nobody is saying that it won’t be affected.
The future of MMA is not Coture but Lesnar. I would never expect a boxing fan on an MMA blog would understand that.
Damn, I broke my rule of not addressing you anymore.
Lesnar actually has to win the fight first. If he fails to do that, it throws a pretty big wrench into said future, doesn’t it? Even then, its funny that boxing has “no future stars” when the guy fighting Oscar is a pretty decent draw himself and actually younger than Lesnar.
But who likes facts? Blind assertions, that’s the ticket!