MMA Analytics 10.08.07: UFC's Future and the Promotional Machine
Posted by Leland Roling on 10.08.2007
An in-depth look at the UFC's new promotional ideas such as their new syndicated show, UFC Wired, the possibility of new TV deals, and the rumored entrance of the UFC in the Asian market. We could see the emergence of the UFC becoming an international MMA organization very soon.
Lately, we've been seeing a lot of news coming out regarding Zuffa's negotiations with HBO, their new show called "UFC Wired", and rumors about pushing their product into the Japanese market. With this push, new fans will likely be popping up throughout the U.S. and a new promotion may give some competition to the existing Japanese promotions such as K-1 Hero's or Shooto. Although not as big as what PRIDE was, K-1 and Shooto both have advantages to already being established in the Japanese market. Let's take an in-depth look into Zuffa's market power in the U.S., how it's being increased, and what moves they have done to ensure new fans, new advertising, and more exposure.
One of the biggest stories this week has been the story regarding the saga that has been the HBO/UFC television deal that was in the works. On Friday, Ross Greenburg, the HBO Sports President, released a statement that basically said the deal was dead. The odd part about the whole break in the relationship was that Dana White felt that the deal was still going to be done eventually. He stated in an interview with Yahoo! Sports that since both sides wanted the deal, it would happen later. Greenburg said later that the business models weren't right for the deal. Both sides have different stories, HBO saying that the deal is dead and Zuffa stating that the deal will happen eventually.
What does this mean as far as the possible outcome of the HBO deal? If the deal had happened, it would have helped the UFC faithful as well as the hardcore MMA fans save a bit of money rather than buying every pay-per-view event. This would have been especially nice considering the UFC's roster is ever expanding and the number of events per month could eventually equal that of what September was like for the UFC, 3 events in one month. That's the small picture. The big picture for the deal would be exposure. HBO vs. PPV is simple. For a monthly fee added onto your cable bill, you can buy the package of HBO channels including the channels that broadcast the HBO Sports specials that right now showcase boxing. Most notably, HBO Sports broadcasted the Pavlik-Taylor bout that has drawn huge accolades for its excitement and possible implications of being a savior to boxing. HBO also has a PPV channel as well that some of the mega fights such as De La Hoya vs. Mayweather were shown on for a high price of $54.95, one of the steepest prices ever. The idea would be to run some smaller events on regular HBO for subscribers and run huge cards on HBO PPV for the price. That's my initial thought on what the deal would involve.
The deal breaking is somewhat a bad deal for the UFC. They won't increase their exposure unless they make a major deal with another channel besides SpikeTV. Some of the intriguing aspects of the deal would be the added production from HBO Sports. I doubt they would add Lampley to the commentating team after comments he made regarding the boxing vs. MMA debate, but would they still use Rogan and Goldberg? Bottom line, the deal would add some great production value, lessen the pressure to buy a lot of pay-per-views per year and just add the HBO package to your cable package, and it would definitely give the UFC a bit more exposure. For Zuffa's sake, HBO would definitely be something they should be looking to repair a relationship with and get a deal done.
Along with that news came some news that the UFC television presence would increase in 2008. In the same article about the HBO deal falling apart, White stated that there was another major television deal in the works and that people would be "blown away". It is believed that the deal could be with ESPN, which is also closely integrated with ABC Sports. As far as impact in the market goes, I think this deal is much more lucrative in many more ways. Exposure on a network like ESPN is significant in the fact that it is one of the most popular channels in the demographic that the UFC aims to hit. The exposure that the UFC would receive on such a major sports network would be astounding.
Also, the whole idea that the UFC could eventually be shown on mainstream networks such as ABC would be the dream that Zuffa would want to fulfill. Dana White has said in the past the reason he made some of the UFC events free on SpikeTV was because of the old memories of free boxing on ABC Wide World of Sports. An event on a mainstream network such as ABC would create huge exposure, big advertising dollars for companies in MMA, and also give the UFC more bargaining power in the market. It could also have a negative effect as well. More media coverage of the event and its prime spot in the mainstream could mean more bad publicity and criticism that could sink the UFC's chances of staying in the mainstream and simply sticking with secondary cable stations such as SpikeTV. An ESPN deal is a very interesting prospect and it will be something to keep our eyes on. More MMA is always better.
I want to touch a bit on the new UFC Wired show. The show is basically the same production as what UFC Unleashed is with a bit of updated production and a different way that it is being distributed on television. The only real difference I can see is that UFC Wired could potentially bring in a lot of new fans because it will be shown on different stations around the country due to it being syndicated. It's a good idea, but the show is exactly the same as UFC Unleashed except that Joe Rogan is now the host. What happened to the PRIDE video library? Where are all the great masterful fights that PRIDE produced that fans could see weekly? The FSN show that featured Jay Glazer and Frank Trigg analyzing past PRIDE fights was much better in my opinion. The UFC needs to somehow utilize that library to hype some of the PRIDE fighters coming into the UFC.
Lastly, there is a rumor circulating as to the entry of the UFC into the Japanese market sometime next year. There have been rumors of an early April-May start to the promotion in Japan. It has yet to be determined whether we are talking about a brand new Zuffa organization in Japan or an extension of the U.S. UFC promotion to Japan. There have been negotiations with WOWOW, a Japanese satellite TV company, for some type of pay-per-view deal in Japan or a broadcast in Japan of the UFC events to gain new fans from the Asian market. It could be a possible deal that would lead to bigger things in Japan. Rumors are also circulating that they may be dealing with SkyPerfect, the #1 satellite provider in Japan. SkyPerfect also broadcasted the PRIDE events after Fuji Television terminated their deal. All of this is purely rumor, but it makes for some interesting talk about the emergence of Zuffa in the Asian market. Right now, it's too early to really analyze what will happen. It depends on if the UFC plans on creating a new promotion or an extension. I would imagine having some PRIDE veterans in the UFC already would make Zuffa go with the latter idea. They could stack cards in Japan with PRIDE veterans and fans of PRIDE could come see them perform in the new UFC Japan. It's definitely an intriguing and exciting prospect for Asian MMA fans as well as U.S. fans getting more MMA to talk about and view from overseas. It also will allow Zuffa to have a presence in Asia. That could equal more talent to draw from, obviously a lot more revenue as some of the satellite TV companies can reach over 300 million viewers, and the ability to draw some big name fighters that they have been unable to get yet because of the fact that Zuffa isn't in Asia yet.
The upcoming few months will determine where Zuffa will be heading next year. I think we will see some increased ratings in SpikeTV shows as well as UFC Fight Night events due to the syndicated show in UFC Wired even though it's the same show that is already broadcast on SpikeTV in UFC Unleashed. It's all about exposure. A possible deal with ESPN may be in the works that would help the UFC gain advertising dollars and some of the MMA companies sponsoring fighters will receive more exposure as well. That would essentially make the MMA community richer. Add in the possibility of a HBO deal getting done later and some truth to the rumor that the UFC may be moving into Japan, we could see Zuffa become a huge international presence in the MMA world in the coming year.