Shall we call it the “Ronda Rousey and Conor McGregor effect,” or “Flood the market with too many events while paying our fighters peanuts” strategy? I guess it depends on who you ask. Either way you look at it, the Ultimate Fighting Championship reportedly generated more than half-a-billion dollars in 2015.
UFC CEO Lorenzo Fertitta (pictured) revealed his company’s record-setting year in an interview with CNN Money.
“Because we are a private company, we don’t get into profitability,” Fertitta stated. “But we’ll generate about $600 million in revenue for the year 2015, which is a record for the company, and it’s fairly significant growth coming off of 2014.
“The exciting part of the platform that we’ve built is that we’ve been able to embrace different tiers of revenue. We have our basic pay-per-view business, that is our biggest source of revenue. Then we have our media rights, which is really similar to rights that we sell to FOX for all of the programming we give them. And then we have embraced the over-the-top platforms, where we launched UFC Fight Pass, which is a subscription service $9.99 per month where you can access the entire UFC library and we also put live exclusive UFC events from around the world on that format, as well as original programming. So we really have those three sources of revenue to generate three ways to monetize our contacts.”
The UFC hosted 41 events in 2015, down five shows from a year ago. However, courtesy of Rousey and McGregor’s rising crossover appeal, the UFC enjoyed much greater success in PPV revenue with several shows reportedly scoring over one million buys. In addition, because of the ability to arrange blockbuster matchups, they generated $61,916,855 in live gate revenue this year against just $39,991,369 in 2014.
Much like everything else related to UFC revenue, it is unknown how much UFC Fight Pass raked in this year. However, with the recent announcement that Anderson Silva will headline a card on the UFC’s exclusive streaming online network shows the company is looking to take UFC Fight Pass to the next level.
So with the UFC making money hand over fist, why are so many fighters still griping about their meager paychecks? According to Feritta, the UFC’s top superstars are multi-millionaires. And if they are not happy, they’re more than welcome to walk across the street to Bellator.
“At the end of the day, it’s an absolute open market. There’s multiple bidders in the marketplace,” Fertitta said. “In fact, our number one competitor is Bellator, which is owned by Viacom, which has significantly more resources than we do even though we are the leading brand in this space.
“The fact of the matter is, our top athletes are making mutli-millions of dollars. And what is happening is as the sport grows and compensation goes up along as revenue growth goes up, you’re starting to see that the guys and girls at the top are commanding a larger share of that pie. I think you see that in just about every sport and every business. It’s the athletes who make a difference that people want to pay for that are commanding the big dollars.”
And there you have it, if you want to start making Ronda Rousey and Conor McGregor money, get people to want to watch you fight.
Fertitta, along with brother Frank Fertitta, purchased the UFC in 2001 for $2 million. Not a bad return on investment, eh?