After the first week of Fox Sports 1’s launch as a cable channel, only one thing is certain so far: UFC is the big winner.
The opinions of the programming content on FS1, so far, have been mixed but more negative than positive. The network suits highlighted “fun” and “jockularity” as their creative visions for FS1. Basically, a Best Damn Sports Show Period on steroids a decade later. During a Wednesday night spot on Fox Sports Live, Dana White was given the royal treatment when he talked about being friends with Alex Rodriguez and promoted an upcoming fight between Tim Kennedy & Lyoto Machida for November. It was the kind of super-soft, overly scripted, puff piece of a segment that someone like Dana White & Lorenzo Fertitta could only dream of getting.
There’s a reason Fox Sports management is kissing the UFC ring right now. UFC is the one bright spot, so far, on a network that hasn’t had too many positive things going for it in the ratings fight with ESPN & NBC Sports Network.
UFC helped give FS1 a ratings last Saturday with their Boston show featuring Chael Sonnen vs. Mauricio Shogun. It drew a 1.5 cable rating with 1.8 million viewers watching the show. Given the hectic problems Fox had with cable providers in getting the channel on outlets that weren’t third-level tier packages, the rating UFC drew was incredible. It was a real show of strength. The strength it showed for Zuffa is a kind of hardcore fan strength that a cable property loves to see. And not only that, this cable property is highly geared towards the 18-to-34 year old demographic that is reportedly 80% male.
What makes UFC such a fascinating company right now on television is that they cater towards a demographic that network suits drool over. They also are a “cable strong” property, not a “network strong” property. In the United States landscape where cable is still king even with the looming threat of “zero TV,” being cable strong can be a very valuable thing. 1.8 million viewers for a Fox Sports 1 show is pretty damn good. What’s so interesting is that in any other country, being a “cable strong” property instead of being a “network strong” television property would mean doom for your financial model. In Japan, network television is still king. Drawing 1.8 million viewers wouldn’t even get you a sniff at a 4 AM time slot unless you wanted to pay for television time and bring your own sponsors along. And even then, you might get rejected. When PRIDE ran their Bushido series of lighter-weight fighters, they drew 5-to-6 million viewers for edited broadcasts that aired on lousy Fuji TV time slots late in the night a day or a week later after an event took place. 6 million viewers was seen as largely a failure to network television executives. Bushido meant “hardcore” and the suits didn’t care about hardcore otakus watching an MMA fight product. They wanted a product that would attract 15-to-20 million casual television viewers on broadcast television. Many of PRIDE’s biggest shows drew insanely high ratings on broadcast television.
If PRIDE had been a “cable strong” product, they wouldn’t have lasted for more than a few shows — even with yakuza money backing the operation.
However, “cable strong” has its usefulness in the United States marketplace and the UFC is about to take great advantage of this. If UFC can’t grow the tent and appeal to casual fans, then at least maximize the value amongst the hardcores and see where it goes. Ratings for FS1 shows after the UFC Boston event did very well. The next day, the day after, and up until this point the ratings on days without a UFC live event have tanked. Golden Boy’s Monday night fight show drew around 150,000 viewers on FS1. The UFC Boston show drew 12 times more viewers for a live fight than Golden Boy on the same network within the time span of two days. That’s what you call cable dominance.
It’s also what you call tangible evidence as to why Fox Sports sees UFC as such a valuable business partner. UFC can help deliver ratings for other programming after live fights. Ever heard of the saying, “a rising tide lifts all boats”? Same principle in action here. Much like the effect of a strong political candidate at the top of the ticket helping downward ballot candidates, the UFC can bring real value to Fox Sports 1 in terms of a carryover effect. Now, the carryover effect is limited to same-day programming, but it’s still a great trait to have as a cable property.
How valuable of a trait is it to possess? Ask Dave Meltzer:
You put almost any other sport on network prime time, and then three weeks later put a non-major event on an unknown channel and the difference would be huge. This was a fan base well aware of the show enough to go out and find it. It was not made up of a lot of people that looked around and went through a few of their favorite stations, and decided to sit down and watch a sports event.
With Fox Sports 1 suits ready to implement a double-box format for future UFC shows on the channel so commercials air in one box while UFC airs in another box during rounds, the advertising appeal of the product is only going to increase.
What does this all mean to you? It means that Fox Sports will have great interest in increasing the amount of UFC shows on their channel. They want that momentum from live events to help boost ratings for same-day programming. The carryover effect means more advertising revenue. It means that Fox Sports has an incentive to make it worth the UFC’s time and trouble to run more fight cards. Perhaps it means a few less PPV events in exchange for a significant increase in the number of FS1 shows. This is something Dana White has been preaching about for a few years now. It could mean significant cash flow for both the UFC and Fox Sports.
However, the strategy does employ a high-risk, high-reward element. PPV is still the key revenue driver for UFC but buy rates have been on the decline. Still, it’s hard to simply tinker with a business model in which PPV accounts for 70% or so of your cash flow. Additionally speaking, you need as many warm bodies as possible for booking fight cards. Either the UFC will have to sign even more fighters or they will have to cut the amount of fights per card on the FS1 telecasts to five or six. That would make the most sense given how many injuries there are. The burn out rate for fighters in MMA is very high. A real philosophical change in the way UFC matchmaking is performed would have to be on the table if the UFC wanted to go to a weekly format with FS1.
The benefits of such a strategy are clear, but do they outweigh the potential pitfalls & risks?