Lorenzo Fertitta: UFC on FOX debut will cost Zuffa $16 million ... but it's a worthy investment

http://www.mmamania.com/2011/11/9/2549557/lorenzo-fertitta-ufc-on-fox-debut-will-cost-zuffa-16-million-but-its
Ultimate Fighting Championship
(UFC) will make its network television debut this Saturday night (Nov.
12, 2011) with UFC on FOX 1: "Velasquez vs. Dos Santos," a five-round
main event title fight between reigning division champion Cain Velasquez and number one contender Junior dos Santos.

If you're thinking "that's a pay-per-view (PPV) quality headliner," it is.

But a short-term loss is a long-term gain. That's according to UFC co-owner Lorenzo Fertitta, who told the Sports Business Journal that he expects a healthy return over the next ten years thanks to FOX:

"When we were on Spike TV, that was a launching pad. We look at
Fox as a bigger and better platform that could elevate the brand. We’re
flat out going to lose money on this fight. But that’s the investment
we’re making. Those are the steps we’ve got to take to make Cain and
Junior pay-per-view stars and lift up the whole thing. Maybe we think a
little funny here, but that’s well worth forgoing $16 million. Take that
out over the next 10 years and we get a healthy return."

Fertitta's goal is to convert 100,000 freebies into 100,000 PPV buys,
using the FOX network to re-launch the brand into the mainstream market
in much the same way Spike TV did (on a smaller scale) back in 2006
with The Ultimate Fighter (TUF).






Speaking of TUF guys, the proving ground for up-and-coming fighters
is moving to a live format when it transitions to the FX channel in
Spring 2012, with 13 live episodes followed by an all-live season
finale to crown the next Ultimate Fighter champion.

The landmark deal, one that spans seven years and is valued at $100 million, may just be a series of "commercials" to attract advertisers, sponsors and PPV buyers through the recruitment of new fans -- and the re-introduction to old ones.

Anyone think the UFC has put its best foot forward? Or have you reserved judgement until the fighters actually throw down?

Not surprised and if I owned a billion dollar company, I would think it was a good investment too.

So is he just saying they could've made 16 million on PPV buys if it wasn't free on tv? I don't see how they lose money for having it on tv? The UFC is gonna make alot of money from advertising every time they have a show on TV, so I don't get how it is losing 16 million dollars unless he is talking about not having this card as a PPV. Help a brother out here.

bigbeastcardinal12 wrote:

So is he just saying they could've made 16 million on PPV buys if it wasn't free on tv? I don't see how they lose money for having it on tv? The UFC is gonna make alot of money from advertising every time they have a show on TV, so I don't get how it is losing 16 million dollars unless he is talking about not having this card as a PPV. Help a brother out here.

Pretty sure they are saying they would have made $16 million more if it were a ppv. I doubt they are actually losing money here.

damn, they spent some Anderson Silva money on this thing...hope it pans out.

KingsOwn19 wrote:

damn, they spent some Anderson Silva money on this thing...hope it pans out.

Yeah they could have used this to add 16 more millionaires to the list.

captain organic wrote:

bigbeastcardinal12 wrote:

So is he just saying they could've made 16 million on PPV buys if it wasn't free on tv? I don't see how they lose money for having it on tv? The UFC is gonna make alot of money from advertising every time they have a show on TV, so I don't get how it is losing 16 million dollars unless he is talking about not having this card as a PPV. Help a brother out here.

Pretty sure they are saying they would have made $16 million more if it were a ppv. I doubt they are actually losing money here.

Opportunity cost

This is just like when a politicians talk about saying jobs, there no real way to prove it you just pic a number that makes you look good and use it.

MMAEYES wrote:

This is just like when a politicians talk about saying jobs, there no real way to prove it you just pic a number that makes you look good and use it.

I don't think it'd be all that hard to figure out how much money they're passing up on.

An average PPV gets 500K. This is a heavyweight title fight so lets say 600K buys. 600K times 55 - Costs of a normal show(arena, fighters pay, insurance, etc) = Expected $$ made from Cain v JDS PPV.

FOX is is going to pay X - costs of a normal show(arena, fighters pay, insurance, etc) = $$ made from Cain v JDS on FOX

$$ made from Cain v JDS PPV = $$ made from Cain v JDS on FOX + 16 million.

Now I will agree about jobs saved. That is a near impossible stat to prove or even come close to figuring out.

The UFC is gonna make some money off of this fight being on Fox either way. It is a payoff even if they are making a few million vs 16 million because of exposure. Good move for Zuffa like Fertitta is saying.


We all love them on Fox for free no matter what

Well you figure if it sold 750K PPVs, which comes out to $33,712,500 minus 50%, they lose 16 million dollars. makes sense to me.