Fox and the UFC are Gaining Sponsors: Can a Pay Per View-less Model Be Sustained?

Contributor: Tim Bernier

Last week, an article from Adweek went largely unnoticed, and I couldn’t understand why. It seemed rather important from a business standpoint. Adweek reported that Fox sold out the advertising slots for UFC on Fox 6, and doubled the amount of clients from previous Fox cards. This fact alone is great, but is not the most important one. Over the past two years, when UFC business was down, you’d hear the term “blue chip sponsors” and the UFC’s inability to attract them. Blue chip sponsors are the ones who are able to pay much more for advertising. They’re the giants in the marketplace, who have billions of dollars of revenue a year. Instead of having blue chip sponsors, the UFC had things like “Corn Nuts” embarrassingly advertising in the middle of a fight.

This has changed for Fox and the UFC- for the first time, UFC products would be supported with ad revenue from some of these blue chips sponsors.  UFC’s biggest advertiser to date, Bud Light, returned for UFC on Fox 6, but Fox was able to add a slew of other huge industry mega companies: Coca Cola, Chrysler, Geiko, and DirecTV.

These types of sponsors give Fox more ad revenue for the UFC timeslot. The reason why this is good is obvious: the UFC is more profitable for them. If the UFC is making them money, Fox is going to want to keep promoting their product, possibly put on more shows, and build the UFC as a megastar like they do with NFL Football programming.

With an increase in the level of sponsors comes an increase in scrutiny. Much like a rising star like Glover Teixeira getting a chance on a big show against a big name, the UFC had to perform well on Saturday. And by all accounts they did. UFC on Fox 6 is being heralded as the best Fox card they’ve put on to date. Fantastic bouts between high level fighters stacked the whole card, and it payed off big with brilliant displays of violence and athleticism. The card was excellent, and the ratings followed suit. With a huge advertising push from Fox during the NFL playoffs, the ratings were quite good: they averaged 4.2 million viewers and peaked at 5.2 million. They’re slightly down from UFC on Fox 5, but continued solid cards go to show that Fox 2 and Fox 3 were aberrations, and now that they’ve figured out a consistent formula Fox and the UFC can cash in on great business. The key demographic was even better; Adults 18-49 were up 7% from the last card.

Continued good ratings were really important for this card because of the advertisers Fox picked up. Those companies have to be more than happy to see these ratings come out, as more eyeballs were seeing their ads. Continued support from these huge companies is going to make UFC more profitable for Fox. As the UFC gets them more money, Fox is going to want more and more of their content. With the changes of Speed and Fuel becoming Fox Sports 1 and 2 respectively, the UFC is in a prime position to continue their transition from a Pay Per View model business to one of free network TV cards, finally joining the other major sports.  Once free cards with big advertising become more profitable than Pay Per View, the UFC will without a doubt shift away from that model, or else they’d be leaving money on the table. Two years ago Dana laughed at the idea of having only free UFC cards. With the excellent chemistry between Fox and the UFC, Dana has definitely opened up to the idea of leaving Pay Per View, and hasn’t ruled it out. That is a huge change. To one day be named in the same breath as the NFL, MLB, or NBA, the UFC will have to switch to a free TV model. That much is certain, and that possibility is looking brighter.

-Tim Bernier can be reached on Twitter at @TimBernier31