It’s been a strange twelve months in the MMA world. Two of the biggest MMA promotions on the planet have been purchased. The UFC has new owners with WME-IMG, following a four billion dollar buyout. The World Series of Fighting no longer exists; although it’s assets are the basis for the new Professional Fighters League. During this time Bellator; arguably the second biggest MMA company on the planet has made changes of it’s own.
Taking Care Of Business
The company has continued to acquire free agents, interesting debutants and former UFC talent at an impressive rate. Names such as Chael Sonnen, Lorenz Larkin, Ryan Bader, Rory MacDonald and Dillon Danis have all joined the Bellator ranks over the last few months. They’ve also announced Aaron Pico’s debut fight with the company. The company has also announced it’s return to pay-per-view as it looks to increase it’s revenue.
Bellator has continued to expand into Europe and picked up access to further European talent through partnerships with the British BAMMA promotion. To illustrate this European expansion; May’s Bellator 179 card will be the fifth European event in six months. To give a comparison with the UFC, that’s the same amount as the UFC have done in the previous fourteen months.
The Ratings Battle
We’re yet to see any major spikes in viewer numbers during this acquisition period, but larger events have steadily matched or beaten UFC on Fox and FS1 fight night / prelims ratings numbers. Of course there are exceptions on both sides, the UFC on Fox record is still held by it’s first event featuring the first JDS vs. Cain Velasquez bout (which was 61 seconds long and only one fight live on TV). We’re also seeing Fox affiliates having an impact on the UFC’s ratings potentially by prioritizing other sporting content.
One thing that is for certain, is that name recognition helps with with ratings. This is true even with casual fans. This is supported by the fact that the Royce Gracie vs. Ken Shamrock 3 card smashed Bellator’s ratings record. That card also had the proven ratings machine that was Kevin “Kimbo Slice” Ferguson. In fact, each card featuring the likes of Sonnen, Rampage Jackson and Benson Henderson has ended up with average ratings of over one million viewers. Take for example 2017’s viewing figures thus far; the Sonnen vs. Ortiz card is the only fight to earn an average of over one million viewers so far this year.
To give a direct comparison with the UFC; it was two figures who have a more main-stream profile that claimed the UFC on Fox top viewing average in 2016 . The main event of UFC on Fox 22 featured former DWTS cast member Paige VanZant. Her opponent was Michelle Waterson (who was part of the Fight Girls TV series).
The Importance of Pay-Per-View
The biggest business development for Bellator this year is the return to pay-per-view. This could have a massive impact on it’s ability to compete with the UFC. For all the talk and speculation that the Viacom vault has been opened; we’re yet to see evidence of it. I’ll return to that point in a moment.
The Bellator NYC event may be the first time we can get a direct comparison between the two on a similar footing. We’ve already seen Bellator stack this event from top to bottom with it’s biggest names. Hell it’s even got the most eagerly awaited MMA debut since CM Punk on the Bellator 180 broadcast portion of the card; when Aaron Pico finally dips his toes into professional MMA (sorry Dillon Danis).
To illustrate how important pay-per-view is for Bellator to grow lets do a simple bit of maths. According to Bjorn Rebney, Bellator’s only pay-per-view had a buy-rate of 100k. Not majorly impressive, but not embarrassing. If we take the average price being $34.99 that comes out just shy of $3.5 million generated in pay-per-view sales.
Since that Bellator pay-per-view in 2014, the UFC has held 34 pay-per-view events. If we take Dave Meltzer’s estimates; the UFC has sold 18.01 million pay-per-views. If you go with an average price of $49.99; the UFC generated just over 900 million in pay-per-view sales.
The Notorious/Rowdy Effect
Interestingly if you take the cards headlined by Conor McGregor and Ronda Rousey out of the equation; the average number of buys are cut by more than 50% to $8.209 million dollars. Ten events accounted for $489 million in pay-per-view buys. The average buy-rate per pay-per-view drops from over 500k to 211k without McGregor and Rousey.
Is Bellator A Serious Alternative For Fighters Looking For A Pay-Day?
This is the biggest question of the lot. Despite the press and fanfare; I’m not quite sold just yet. Whilst there has been some progress with specialised media, I’m not sure if you can definitively say they are a serious challenger to the UFC’s dominance in the market. I say this for a number of reasons, based on what we’ve seen. Even with the rumours that Viacom are pumping money in to the company to sign talent, we’re yet to see major jumps in pay for Bellator fighters.
Let’s take the example of Josh Thomson who was one of the more vocal fighters regarding his reasons for switching to Bellator. Thomson had said that he would make more money due to sponsorship rules following the Reebok deal. The headlines compared his potential $5000 pay-out to his claims of $35,000 in sponsorship for his Bellator debut. Whilst this makes for great headlines; a little further exploration makes for worrying reading to me. Thomson’s disclosed pay for Bellator 142 was $10,000 with no win bonus. If we compare that to his last UFC bout, that’s a $75,000 drop. On the face of it he may have lost a potential $40,000 per fight in the move (based on his prior UFC base pay against what he’s reported for sponsorship and received from Bellator).
This is just an example on the pay-front that the grass may not necessarily be greener on the other side. We’ve even seen with Chael Sonnen that his base pay has reduced when compared to his base salary in his last fights with the UFC. Benson Henderson is receiving a comparable rate but below his championship rate, from the disclosed base pay figures that are available. Thus far it appears that Tito Ortiz may be the major winner in the free agent lottery. Ortiz had seen his base pay with the UFC drastically cut as his competitiveness waned. In his final fight before his original retirement, Ortiz earned a base pay of $75,000. His contract with Bellator was much more lucrative. His disclosed payments with Bellator were consistently $300,000.
Rory MacDonald may buck this trend when he eventually makes his Bellator debut. Out of the big name free agents to move to Bellator; he is probably the fighter that is the closest to his peak. Davis, Bader and Larkin are all talented professionals; but there is a belief that whilst they could hold their own in the top ten of their respective divisions, they were a little below championship material in the UFC.
Can They Be A Serious Threat?
The simple answer is yes. The more complicated question is how? Bellator have been smart; they’ve been extremely opportunist in their approach to criticising the UFC’s business methods in public. Whether it’s been the Reebok deal, Coker’s excellent reputation for working with fighters or fighter’s discontent with their treatment. Bellator rarely miss an opportunity to let their representatives speak about their former employers.
You only need go on any random MMA forum to see the thoughts of fans regarding the UFC. Following the purchase by WME-IMG; this sense of injustice for fighters and their pay has continued to grow. This has consistently drawn up negative headlines against their major competitor.
Ironically the ESPN situation may work in Bellator’s favour. With the UFC looking to maximise revenue following the buy-out, the ESPN news could not have come at a worse time. The company had looked to potentially be in order to receive a $300-400 million dollar TV deal. With ESPN likely being out of the running; it could potentially lose the company expected revenue.
There are four major areas I think Bellator need to concentrate on, to potentially challenge the UFC’s dominance at the top of the MMA world.
1. Live TV: Currently Bellator does not have a live TV partner in the UK and Ireland (one of it’s biggest markets outside of North America). I believe this is also a similar situation throughout Europe. I’m finding it hard to find the direct quote but I believe Coker had said that live coverage was left open to local Viacom stations in respective markets. This is a major faux pas as far as I’m concerned. It’s also removing a potential revenue stream, as they offer no streaming services where broadcasts aren’t possible to watch live. Given that they regularly have tape-delayed shows; I think this is an avenue they should seriously look at if they wish to grow.
2. Retaining Talent: In the past, Bellator has had issues retaining it’s top talent. This is why I would still see them as a level below the UFC. It’s unheard of for a Conor McGregor or Jon Jones to move to Bellator. It’s not unheard of for Bellator’s de-facto top talent to go to the UFC. Recent examples include Will Brooks, Marcin Held and Eddie Alvarez all leaving Bellator to join the UFC. That’s before we look at a guy like Ben Askren, who was an unbeaten champion that had to go to Japan to continue his career following his time as Bellator welterweight champion. If they can not retain their top home-grown talent, they will be seen as a feeder league to the UFC.
3. Ageing Talent: I believe they need to be extremely careful about how they market and match-up the older members of their roster. Currently they are trying to market older fighters as top names and build their brand off this. I believe this is a mistake; not necessarily in putting them in the front window, but how they’re approaching it. I believe the best way to use these known quantities outside of grudge matches that are years in the making, is to use them as the gatekeepers for homegrown talent. This not only builds the talent they’ve brought into mainstream knowledge, it potentially gives them a marquee name on their record should they be successful.
4. Persevering With Pay-Per-View: Right up there with expanding their live TV footprint is the need to stick with pay-per-view. You can do this in the classic sense through cable providers or you can use something akin to Fight Pass. Given Bellator is also going to be running kickboxing cards, this is a perfect opportunity. The thing they can not do is to price themselves too close to the UFC too soon. If they are smart they will give themselves a value selling point. In an age where every dollar or euro counts, disposable income for minimal content is not going to raise major funds without major talent being on show.
What do you think? Are Bellator serious competition for the UFC? Are they going to sign more top talent in the near future? Do you think the Reebok deal has helped them or hindered them? Should they attempt more Pride F.C. styled freak-show fights? Sound off in the comments section.
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