Examining UFC’s Indianapolis Debut from a Business Perspective by wesreynolds
September 22, 2010, 8:03 pm
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by Wes Reynolds

If you listened to sports talk radio this afternoon, most notably 1070 the Fan, or watched your evening newscasts tonight, you FINALLY heard something about the UFC coming to Indianapolis. It wasn’t featured on any of the Sunday night sports shows due to the Sunday night Colts 38-14 win over the New York Giants. As an avid fan of mixed martial arts, I am dismayed by the lack of coverage for this event and the lack of curiosity by the local sports media. On the other hand as an avid fan of MMA who has some knowledge of the sport, I can sort of understand why this event is just being treated like another event and not as a big deal.

This afternoon we heard from a certain local radio host that UFC  is expecting a sellout for this event. That sellout may happen, and that is a tremendous accomplishment in this economy. As of early today, the event had sold 11,500 tickets (paid attendance) out of a set capacity of 13,000 (likely some of the upper obstructed view seats will be papered since you can’t see the scoreboard/jumbotron plus fighter, sponsor and local dignitaries/celeb comps) for a gate of around $1.5 million. However, there are still tickets available particularly on the floor in the $300 range. What has happened is the ticket buyers and brokers have bought all the intermediate price points in the lower bowl and club level ($100-$200 range) and haven’t been buying the floor and ringside seats, which usually go for about $600 a pop. The ticket prices are substantially lower for this event and you can even find tickets as low as $75 for this event, which is cheap and I would highly recommend buying those if you are only a casual fan and have never seen a UFC event live. Even in the nosebleeds, it’s a cool event to see in person.

SeatGeek, a ticket-search engine, posted a blog today discussing the UFC 119 event. In their most recent blog post, they analyze the average ticket prices for the previous event in Boston (UFC 118), the event Saturday at Conseco (UFC 119), and the next two shows in October (UFC 120 in London and UFC 121 in Anaheim).

As you can see in the above graph, the average ticket price is only $124 and substantially less than the previous event in Boston and the next two events. This is due to a wide variety of factors:

  • There is not a title fight headlining this card unlike at UFC 118 (Frankie Edgar-BJ Penn II for the Lightweight Title) or UFC 121 (Brock Lesnar-Cain Velasquez for the Heavyweight Title). UFC 120 also does not have a title fight headliner, but they do have Michael Bisping, the UK’s biggest MMA draw and winner of SPIKE TV’s The Ultimate Fighter season 3, in their main event.
  • Boston, Orange County and London are bigger markets.
  • This show is seen by hardcore MMA media as well as fans as a throw-away buffer show in between two larger domestic events. In fact, most of the MMA exclusive websites on the web have taken a collective giant piss on this card.

Some of the criticism is unfair because the quality and competitiveness of the fights on this card are quite good, but it does lack a true headlining superstar like a Brock Lesnar (UFC Heavyweight Champion) or Georges St. Pierre (UFC Welterweight Champion). While the fights on this show should be close and competitive, none of them have any immediate title implications. You will see two exciting, young and undefeated American prospects including Ryan Bader (vs. Antonio Rogerio Nogueira) and Evan Dunham (vs. former Lightweight champion Sean Sherk) who may be top contenders in one to two years. The Chris Lytle-Matt Serra rematch should be close just like their first fight in the summer of 2006. The main event between Frank Mir and Mirko Cro Cop, who was cleared to fight yesterday, is basically a crossroads fight between two heavyweights just looking to stay in the mix.

In terms of pay-per-view buys, the base buyrate of an average pay-per-view has settled at about 350,000 buys.  Here are the recent buyrates for UFC PPV’s.

  • UFC 118 (August 28 in Boston) – headlined by Frankie Edgar (Lightweight Champ) vs. BJ Penn II – 570,000
  • UFC 117 (August 7 in Oakland) – headlined by Anderson Silva (Middleweight Champ) vs. Chael Sonnen -600,000
  • UFC 116 (July 3 in Las Vegas) – headlined by Brock Lesnar (Heavyweight Champ) vs. Shane Carwin – 1,160,000
  • UFC 115 (June 12 in Vancouver) – headlined by Chuck Liddell vs. Rich Franklin – 520,000
  • UFC 114 (May 29 in Las Vegas) – headlined by Quinton “Rampage” Jackson vs. Rashad Evans – 1,050,000
  • UFC 113 (May 8 in Montreal) – headlined by Lyoto Machida (then-Lt. Heavweight Champ) vs. Mauricio “Shogun” Rua – 520,000

The first three PPV’s of the year only drew 300, 275 and 250 (in thousands) respectively due to massive injuries that forced late changes to the various cards. I think this will draw about 285,000. If this draws above the base of 350,000, then UFC President Dana White and company should be doing cartwheels down Las Vegas Boulevard. The UFC has largely avoided the mistakes boxing has made including actually building a brand (what is boxing’s brand?), putting more fights on free television, not placing fights on PPV that don’t have an interest (like boxing does routinely). If you have ever heard a Dana White press conference, he says they are coming everywhere and anywhere and they want to continue to grow the sport of MMA and the brand of UFC. However, the difficult part is happening right now. How do you continue to grow the sport without over-saturating the market and running too many shows?

The same radio host I mentioned above posted a blog question of whether this weekend’s UFC will be a one-time event or the first of many? I slightly disagree with the premise of this question because there are several North American markets in which the UFC has not run shows. At the top of the list is New York City, where a bill to regulate the sport just passed this passed June and is now slated to go the state assembly’s Ways & Means Committee. This weekend’s UFC may very well be successful in terms of the live gate and attendance, but it doesn’t mean it will be coming back every single year. After all, they run at least 4-5 shows in Las Vegas, 1-2 shows in California, so they can only go to so many cities each year. Many MMA experts feel they are running too many shows already.

I am personally hoping the event this weekend does well because there is a loyal and growing fanbase for MMA in this market. The hardcores will either attend the show live or buy it on PPV. The question remains whether the casual fans will care enough about this show.