The business of fighting had a curious year in 2017. On one hand, Conor McGregor earned the biggest payout a mixed martial artist has ever received. On the other, he had to go to boxing to do it. Television ratings and pay-per-views were down, but if UFC president Dana White is to be believed, company profits were up. Fighters saw an increasing mobility to switch organizations, but holdouts at the top seemed to become more common.
Here are the things to watch for in 2018:
The McGregor effect
The biggest star in the sport, McGregor didn’t see the inside of the UFC’s Octagon in 2017. While he did help the company’s bottom line by participating in the MayMac financial windfall and agreeing to give the UFC a sizable cut for allowing him to participate, his long-term value to the organization is inside the cage.
Now, they need to figure out a way to get him there.
To do so, McGregor has demanded a share of UFC ownership, but so far management has resisted the call. As time goes on though, the promotion will have to bend to him in some way. That’s because while McGregor’s star has continually grown brighter, the UFC has struggled to mint other stars. With proven draws few and far between, McGregor’s leverage and value only grows.
The UFC would be thrilled to get him in the cage twice in 2018, a move that would add a minimum of $50 million extra into the company’s financial coffers, but likely much more than that. That’s plenty of incentive to make a deal happen. But until their will to make it matches their interest in making money, McGregor will sit on the sideline and collect cash through his other existing revenue streams.
Right now, it’s a stalemate, and whether a resolution presents itself in 2018 will go a long way in deterring the success or failure of 2018.
In TV, everything is changing
The upcoming year is guaranteed to bring changes in the way fans consume high-level mixed martial arts.
Let’s start with the UFC, which is in the midst of negotiations with various suitors in hopes of striking a more lucrative broadcast deal. While it has largely been assumed that FOX would pony up to keep the UFC as one of its key sports properties, things were shaken up by two recent mergers.
The first came when Time Warner and AT&T announced a merger. The new company would be the parent of Turner Sports, and may well see a need for additional sports content to feed their many distribution arms. The second came in early December, when, in a stunner, FOX divested itself of its regional sports networks to Disney, the parent company of sports goliath ESPN.
The UFC is said to have a deal on the table from FOX at a cost of around $200 million per year, but it’s currently unknown how this recent development may affect FOX’s stance on retaining the UFC, or how aggressively they would go about doing so.
Sports Business Journal’s John Ourand, who covers sports media rights and has reported on the UFC television negotiations, recently predicted that the UFC will end up with AT&T/Time Warner, potentially putting their broadcasts on TBS, truTV, DirecTV pay-per-view and AT&T Wireless.
There is also the possibility that a digital disruptor like Amazon, Facebook, or Twitter will join the mix and bid on rights.
Bellator will see a more immediate change as its longtime home — and the home of the UFC before that — will be rebranded from Spike to Paramount Network. While there were fears that the re-branding and a shift in approach to “premium” content would be a negative for the fight company, the network is headed by Kevin Kay, an executive who also ran Spike and who was instrumental in bringing MMA to the channel. As long as Bellator delivers decent ratings, it should be safe.
The new incarnation launches on Jan. 18, and two days later, Bellator sets sails on its maiden voyage with a card featuring Douglas Lima vs. Rory MacDonald and Chael Sonnen vs. Quinton “Rampage” Jackson.
The fate of the Professional Fighters League (formerly World Series of Fighting) is not so clear. In early 2017, the league announced an intention to to relaunch itself with a months-long tournament, with the promise to award $1 million to seven weight class champions.
As 2018 approaches, however, the PFL’s future is in some doubt. The organization has no television partner in place, and the start of its season is set to be pushed back to the summer.
In short, organizations and fans must brace for new broadcast partners and new presentations.
The sport’s fans are aging
In June, Sports Business Journal published the results of a study in sports audience demographics. The results were quite surprising. What SBJ found was that the median age of UFC fans watching on television rocketed upwards to 49 years old. For comparison, the median age of UFC fans in 2006, when SBJ last studied the demos, was 34.
In the context of the upcoming UFC rights deal, the revelation that the sport’s fans are aging so quickly can only be viewed with trepidation.
UFC was once seen as a key sport for advertisers interested in reaching the much-coveted 18-34 year-old demographic. With demos that now match up with boxing and stand close to Olympics viewers, that is no longer the case.
To be fair, this study did not include digital viewing habits, so the UFC’s over-the-top digital channel UFC Fight Pass was not included, nor were the millions who have cut the cord and may be watching the UFC on FOX Sports’ mobile app (or Bellator on Spike’s digital site).
Still, it appears that the sport has some work to do in interesting a younger generation of fans to board the bandwagon.
Big events can still draw numbers, but small events are getting smaller
In December, MMA Fighting’s Dave Meltzer took a look at the UFC’s television business, and the results were troubling. FOX Sports 1 main cards were down over 13 percent. FOX specials were down over 30 percent. The latest FOX event, which took place on Dec. 16, drew just 1.78 million viewers, the third-lowest total for a UFC on FOX show ever.
By and large, sports television ratings are down, mirroring larger television trends as consumers continue cord-cutting and shifting their entertainment choices to various digital, social and music sources such as YouTube, Netflix, Snapchat, and Twitch.
In the midst of that shift, it’s become increasingly obvious that the UFC can no longer rely on a massive audience just by plopping their cage down on any given date. More than ever, stars matter, and in 2017, stars were hard to come by for the UFC.
As previously mentioned, its biggest star McGregor didn’t fight in the cage a single time. Ronda Rousey didn’t come back. The Diaz brothers sat out the year.
Only twice did things truly manage to fall into place for the UFC to produce a mega-event. The first was in July, when Jon Jones became eligible to compete again and signed to face his rival Daniel Cormier for the light heavyweight championship. The UFC’s onetime glamour division showed flashes of its past as Jones and Cormier sniped at each other for weeks, building to a crescendo at UFC 214 when Jones scored a knockout win. The second time came in November, when after a year of discussing a possible comeback, Georges St-Pierre re-emerged and bested Michael Bisping to capture the middleweight championship.
Both of those events did excellent business, drawing over 850,000 pay-per-view buys apiece, which ranks them both among the 25 top-selling PPVs in UFC history.
But here’s the downside for 2018: Neither Jones nor GSP are guaranteed to be back. Jones is facing another, longer suspension after recently testing positive for the steroid Turinabol, while St-Pierre quickly vacated his title, essentially saying he was only interested in a mega-fight.
And the UFC’s once rock-solid PPV business has shown holes, too. Both UFC 215 and UFC 216 struggled mightily at the box office, failing to go over 200,000 buys apiece. The former repeatedly drew only 100,000 buys, which would mark the UFC’s lowest total since the promotion failed to crack six digits for UFC 53 in 2005.
To their credit, the UFC has tried to cultivate a few talents, to varying success. Perhaps their best bet going forward is Francis Ngannou, who has a shot to wrest the heavyweight title away from Stipe Miocic in January. He has the look and a story that the mainstream can rally behind, but to get to the next level, he must win.
Holdouts at the top
Part of the UFC’s difficulty in creating huge events has been an increasing willingness of its top fighters to sit out extended periods of time in order to get the matchup or money they want.
When it comes to powering the UFC’s economic engine, McGregor is the most obvious and important holdout, but there are plenty more.
UFC heavyweight champion Stipe Miocic, for instance, has competed only once since Sept. 2016, and his inactivity has had nothing to do with injury. After learning his most recent opponents Junior dos Santos and Alistair Overeem had bigger guaranteed purses than he did, he decided to hold out while his management negotiated a new deal. Max Holloway did the same thing, shelving himself until signing a new deal in October.
Welterweight champion Tyron Woodley said he’d nurse his ailing shoulder unless the UFC could deliver him Nate Diaz, but as noted earlier, Diaz has effectively gone ghost.
In June, UFC flyweight champ Demetrious Johnson also exercised his own protest, refusing to fight T.J. Dillashaw in favor of divisional contender Ray Borg.
There’s more. GSP dropped his recently-won belt to wait for a matchup that tickles his fancy, Rafael dos Anjos has said he’ll wait for a welterweight title shot rather than risk his position against a fellow contender, and Germaine de Randamie chose to be stripped of the women’s featherweight title rather than accept a matchup with Cris Cyborg.
All of these holdouts and delays are changing the dialogue for the UFC’s matchmakers. Gone are the days of writing a matchup in ink on their board upon conceiving an idea. Fighters, especially those at the top, now demand a say in their futures.
The UFC has lost some luster to athletes
The UFC is the industry leader in mixed martial arts. That didn’t change in 2017, and it’s not likely to change anytime soon. But it’s also apparent that while fighters used to view the organization’s championships as the goal to be attained above all others, these days, that is not always the case.
Take for instance, the undefeated prospect Logan Storley. On paper, he seemed destined for the UFC. He grew up in small-town Roslyn, South Dakota, just a few miles from Brock Lesnar’s hometown of Webster. As a youngster, Storley was a six-time state wrestling champion, and struck up a friendship with Lesnar. He closely followed Lesnar’s rise through the UFC. And after graduating college as a four-time All-America at Lesnar’s alma mater the University of Minnesota, Storley set his sights on MMA, targeting the UFC.
But when it came time to sign, he went with … Bellator.
“As a kid growing up, UFC was what I looked at,” he recently told MMA Fighting. “But as things change, as you grow, you also look at things differently. I knew Bellator has done a great job with college wrestlers, getting them the exposure they deserve. The UFC has a big roster. Some guys will go eight months without a fight. We’ve heard multiple times these stories of these kinds of problems and money problems, and I saw Bellator as a great route. I sat down with my coaches, family and friends and that’s the decision we made.”
Bellator has done a strong job going neck-and-neck with the UFC when it comes to recruiting young talent.
Fighters who have lived the UFC experience haven’t been wary of leaving, or at least testing the open market. Fighting out the remaining bouts on a contract in order to explore free agency was one of the major trends of the year.
Gegard Mousasi and Ryan Bader both did it, and ended up in Bellator. Cub Swanson recently finished out his deal and is figuring out his future.
Flyweight Ian McCall requested and received a release to go ply his trade elsewhere, eventually signing with Rizin. Bantamweight Michael McDonald and light heavyweight Nikita Krylov made similar stands, signing with Bellator and Fight Nights Global, respectively.
What do all of those names have in common? They were all legitimate divisional contenders. That loss of depth is no small thing, and any further bleeding is a story to watch.
As MMA matures, fighters better understand the business of the sport. While the negotiation table remains tilted in the favor of the promoters, the increasing knowledge will continue to add tension to the proceedings. Fighters want to make more, and promotions want to increase profit. That’s a trend that will never change.