UFC defeats WWE in pay-per-view buys
The UFC has begun to topple their greatest non-MMA rival, the WWE! A piece by Bill Alpert in Barron’s discusses how when Linda McMahon resigned from the wrestling mogul and stepped into the political world, ratings, pay-per-views buys and sales in general were on the decline.
According to the article, revenues began to slip at WWE well before Linda left and eventually won the Republican nomination to face Democrat Richard Blumenthal in what looks like a tight contest. In 2009, total sales of $475 million were down 10%. But Chief Financial Officer George Barrios proudly notes that profit margins have generally improved since he arrived in 2008. He says WWE earnings should rise when the company finds new performers that connect with its fans.
The number of viewers making “buys” of WWE pay-per-view broadcasts has been falling for three years. Over the same period, as the chart above shows, pay-per-view buys have trended up for the mixed martial-arts events of UFC. Pay-per-view is a high-margin business that contributes almost a fifth of WWE revenues but a bigger share of profits. Barrios blames the weak pay-per-view showings on a weak economy, in which the $49.95 price of an event looms larger on cable bills.
The WWE has certainly over-saturated the market with their pay-per-views and now their wrestling programs, with a total of four shows running through the week, not including replay shows. The UFC could find themselves in a similar situation in a few years from now if they are not wise in how they attack their market and make sure they do not spread themselves too thin.
What do you think about where the UFC will be financially and in popularity in five years from now?
No wonder those jackals have been poking around so much lately.
They smell money,
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