Tuesday, March 13, 2007

Is UFC the next big thing in Pay-Per-View?

By Thomas Keister

It isn't very often you see mention of World Wrestling Entertainment or the Ultimate Fighting Championship in the business section of a newspaper. More often than not, when either company is named, there is a spot that usually proves the mainstreams media's overall ignorance of an established and successful entertainment product. A case in point was a recent British feature on the WWE making matches and other content downloadable for cell phones.

The only star on the WWE roster mentioned by name, other than a generic reference to the Divas, was "Hacksaw" Jim Duggan. No offense to the Hacksaw, but since when did you ever have mainstream heat? Certainly not in 1991, certainly not today. Maybe the British reporters could flip the channel and check out Monday Night Raw once in a while. I mean, how hard can it be? They only have like six-and-a-half channels or something.

While Spike TV has yet to grow a set and give TNA Impact a two-hour prime time slot, the UFC has been creeping up slowly on professional wrestling, not only in popularity, but profitability as well. Just the recent doses of mainstream exposure UFC has been getting has amped up its profile, with Tito Ortiz dating Jenna Jameson and Chuck Liddell appearing in the recently-released Frank Miller film, 300. Under president Dana White's leadership, the UFC has grown well beyond its reputation as a money-losing organized brawl.

The numbers aren't lying, and they are eye-opening as well. For 2006, not only did Ultimate Fighting Championship tie World Wrestling Entertainment with $200 million of pay-per-view revenue, they beat HBO Boxing, which brought in around $170 million with their PPV productions. Don King and the rest of boxing's ilk must be pissed.

What makes UFC's year that much more impressive is that the $200 million in revenue (companies typically take home about half of the total numbers)the PPVs brought in was on ten events. Take the PPV events WWE produces, with Raw, Smackdown, and ECW, and joint-brand efforts. Could you imagine the width of the smile on Vince McMahon's face if his pay-per-views were averaging out to $20 million a pop?

This is why the WWE needs to be mindful of the waves behind them, even if the sea ahead looks calm. While the creative content of WWE programming has been a little shaky at times over the last couple of months, solidifying storylines as WrestleMania 23 approaches will only keep the momentum, when the focus should be on putting more distance between themselves and the rest of the pack.

This means time to start taking care of things, such as building an honest-to-god tag team division in the company, across all three brands, and actually book it, rather than keeping a handful of token teams, only to rotate the straps out to main eventers the writers have in limbo for one reason or another. This is why Edge will end up with roughly the same number of WWE Tag Team titles as Jerry Lawler has USWA Heavyweight titles. And that is among other things, not the least of which is some of the absolutely heatless personas floundering on camera. Chris Masters, any one?

This is key to consider when you factor in the international market. While the WWE enjoys a hearty international fan base, this is where the UFC can pose the biggest challenge. Very simply put, the UFC is not in the international market yet. Won't be until next month, when they make their PPV debut in England. $200 million in PPV revenue without an international buy rate should make any one stop and reconsider things just a bit. World Wrestling Entertainment, for example, made $72 million of its $200 million from international PPV buys. Take that away, and they slide from first to third in the three man race I've described in this feature. Better yet, add 36% to UFC's PPV revenue next year, and see how the competition reacts.

How will the major televised wrestling promotions, who have to be thinking about this somehow and somewhere in their offices, adapt to try and shorten the wave the UFC has been riding into 2007?

Look for TNA to continue adding bigger stars here and there, Chris Jericho and Rob Van Dam seem to be the likeliest to wind up in Orlando next, while further expanding their PPV schedule away from home. A St. Louis area-native, I'm glad they picked the city to host a PPV. Now, if someone will just figure out where Louisville, Kentucky is on the map.

WWE is always harder to read. While the "Battle of the Billionaires" lost my interest shortly after takeoff, WrestleMania will be the massive profit we've come to expect every year, but other than that, there is still the brand extension, which I still can't figure out why is in place. How hard is it to simply re-combine Raw and Smackdown! back into a solo WWE brand, and move ECW to the former Smackdown! time slot. divide the roster evenly between the two separate but "different" brands, and then you could actually, efficiently, run a cross-brand rivalry?

As for the UFC, they have added a third weight class to the next season of their popular The Ultimate Fighter reality show/contract scouting, in addition to the aforementioned international debut in April. Right now, it almost seems like its the UFC's race to lose. It's hard not to see this not playing overseas, especially in markets like Japan, Germany, and the U.K. Right now, the only thing I could see derailing their climb would be some kind of scandal, like performance enhancers or something.

At any rate, it will be interesting to see what McMahon come up with to stay on top of the PPV mountain. If he can stay on top, that is...


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