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Saturday, March 03, 2007
Mixed Martial Arts--- UFC PPV Revenue Tops $200 Million in 2006, PLUS: Early Word on UFC 67's PPV Buyrate
by Ivan Trembow
Originally Published on MMAWeekly

The UFC broke the pay-per-view industry's all-time records for a single year of business and generated over $200 million in revenue during 2006, according to two credible media outlets.

Both the Associated Press and the Wrestling Observer have reported that Zuffa's pay-per-view revenue in 2006 exceeded $200 million, with the Wrestling Observer reporting the specific figure of $222,766,000. As the Observer put it, "UFC grossed more money this past year on PPV than any promotion in history ever has."

Many fans of both boxing and MMA have wondered whether the UFC has already surpassed boxing. The numbers show that not only is the UFC bigger than boxing today, but it's also bigger than boxing ever was from a PPV revenue standpoint. The all-time record year for boxing was 1999, with just over $200 million in combined PPV revenue, and the UFC broke that record by over $20 million in 2006.

Specific UFC PPV Buyrates
In addition to the broader, annual statistics in the Associated Press report, the Wrestling Observer has also reported on the PPV buyrates of specific UFC events.

Leading the way was UFC 66 (Chuck Liddell vs. Tito Ortiz), which drew approximately 1,050,000 pay-per-view buys and grossed approximately $41.95 million in PPV revenue.

Prior to UFC 66, Zuffa publicly and repeatedly predicted that the event would draw 1.2 million PPV buys. While the event fell short of meeting that prediction, the total of 1,050,000 still topped boxing's biggest event of 2006 (Oscar de la Hoya vs. Ricardo Mayorga) by more than 100,000 buys, as De la Hoya vs. Mayorga drew approximately 925,000 PPV buys.

The UFC's second-biggest pay-per-view event of 2006 was UFC 61 (Tito Ortiz vs. Ken Shamrock and Tim Sylvia vs. Andrei Arlovski), which drew approximately 775,000 PPV buys and grossed approximately $30.96 million in PPV revenue.

The UFC's third-biggest PPV event of 2006 was UFC 60 (Matt Hughes vs. Royce Gracie), which drew a final number of approximately 620,000 PPV buys and generated approximately $24.77 million in PPV revenue.

Several other UFC PPV events in 2006 surpassed the mark of 500,000 PPV buys (and thus $20 million in PPV revenue), as the UFC's average for its ten PPV events in 2006 was approximately 522,500 buys per event.

Even if one were to take the three biggest UFC events of 2006 out of the equation, the seven remaining UFC PPVs in 2006 still managed to average approximately 400,000 PPV buys per event.

Boxing Has Second-Biggest Year Ever, WWE's Domestic PPV Buyrates Collapse
The only records that the UFC has not broken are the all-time boxing records for individual events, which still stand at approximately 2.0 million buys for a heavyweight fight and approximately 1.4 million buys for a non-heavyweight fight. The upcoming fight between Oscar de la Hoya and Floyd Mayweather, Jr. is expected to break the 1.4 million mark and perhaps even approach the 2.0 million mark.

While the perception is that boxing's PPV business has rapidly declined, the fact of the matter is that 2006 was the second-biggest year in boxing history at the PPV box office, with gross PPV revenue of $177 million. That would likely be seen as a far bigger news story than it currently is, if it weren't for the fact that the UFC blew away boxing's all-time records during the same year.

It's not boxing that the UFC's explosion in PPV business appears to have severely hurt; it's pro wrestling and specifically World Wrestling Entertainment that the UFC is hurting.

The UFC launched on national cable television with the highly-watched pro wrestling program WWE Raw as its lead-in, and two years later the UFC's domestic PPV business has skyrocketed during the same period that WWE's domestic PPV business has collapsed.

From a promotional standpoint, the UFC has out-done WWE at its own game with money-drawing, exaggerated personal feuds like Tito Ortiz vs. Ken Shamrock, only with real fights in place of the simulated fights that pro wrestling offers. Indeed, the same publication that broke the story of the UFC's PPV totals for 2006, the Wrestling Observer, has also written in the past year that they have been specifically told by UFC president Dana White that WWE's business model "is the business model that they're trying to emulate."

The data could not be any more clear in demonstrating that the UFC is drawing fans away from pro wrestling far more than it's drawing fans away from boxing.

The management of WWE, led by Vince McMahon, continues to publicly downplay the negative affect that the rise of the UFC has had on WWE's domestic PPV buyrates. Indeed, a WWE executive is quoted in the Associated Press story on this subject as saying, "We are not worried about UFC."

Nonetheless, WWE's domestic PPV buyrates for its monthly shows have fallen under the 200,000 mark regularly over the past year, and recently fell to as low as 55,000 for a PPV event in December. In addition to the alarming number of 55,000 domestic buys for the "December to Dismember" event, several of WWE's pay-per-view events in the second half of 2006 failed to draw 150,000 domestic buys, including Great American Bash (140,000); No Mercy (120,000); Cyber Sunday (140,000); and Armageddon (145,000).

With its total of 1,050,000 domestic PPV buys, UFC 66 actually drew more domestic buys than WWE's last six pay-per-events of 2006 combined. The last six WWE PPVs of 2006 combined to draw approximately 880,000 domestic PPV buys, which is still 170,000 buys short of UFC 66.

In addition, annual mega-events that used to be huge for WWE are now drawing domestic PPV buyrates that are far below the average UFC PPV buyrate. Two prominent examples are Royal Rumble and SummerSlam from January 2006 and August 2006, respectively. Royal Rumble and SummerSlam are traditionally WWE's second and third biggest events of the year, but the 2006 editions of these events only managed to draw 340,000 domestic buys and 330,000 domestic buys, respectively.

Even WWE's biggest event of the year, WrestleMania, was actually out-drawn at the domestic box office by the UFC's second-biggest PPV of the year, and not by a close margin (775,000 to 640,000).

The total revenue generated by domestic buys of WWE PPVs in 2006 was $131,793,000, according to the Wrestling Observer, and that's with WWE having held 16 pay-per-view events in 2006, as compared with ten events for the UFC in 2006 and eleven for boxing.

The average number of domestic PPV buys per event was a mere 208,000 for WWE; which is less than half of the UFC's average of 522,500.

UFC 67 Establishes Strong "Base-Line" for Non-Marquee UFC Events
The Wrestling Observer also reports that the UFC's first PPV event of 2007, UFC 67, drew a much stronger than expected PPV buyrate and has established a "rock bottom" for UFC PPV buyrates that would still be highly profitable.

With Georges St. Pierre having pulled out of UFC 67 due to injury, the PPV main event was Anderson Silva vs. Travis Lutter, which was expected to draw the lowest buyrate that the UFC could possibly draw at this time. The Observer added, "Anything more than 300,000 would have been considered a huge success."

As it turns out, the early estimates for UFC 67 are that it drew between 350,000 and 400,000 PPV buys, meaning that it grossed between $13.98 million and $15.98 million in PPV revenue. The early estimates are always lower than the final numbers, which have replays and "late buys" included in the figures.

It's a positive sign for the UFC if the absolute minimum number of buys that UFC PPVs are going to draw is still in the range of 350,000 to 400,000 buys.

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