After Saturday's UFC on FUEL TV 6, the UFC completed its first year of contractual obligations to that FOX family channel in terms of live event programming. What we've witnessed in the last year is that while these shows are often wildly entertaining with meaningful bouts, they are much more difficult to plan and construct than their size and scope would indicate.
The following are four of the key challenges the UFC faces with this franchise. None of the problems have been perfectly solved for and some of these solutions the UFC has proposed work better than others. Nevertheless, it's important to understand why the most minor of the UFC's branded series may be some of the more difficult shows for the UFC to properly promote and leverage.
1. Keeping salary costs low - one of the primary challenge the UFC faces with FUEL cards in terms of which fighters to use is a dual threat: they need to promote talent customers will pay money to see, but they can't incorporate talent that costs a lot of money.
The UFC knows they're not going to do huge live gates with FUEL events, generally speaking. UFC on FUEL TV 2 did a reported $2.23 million in Stockholm, Sweden, but events in the U.S. like UFC on FUEL TV 4 pulled a paltry $163, 495. UFC on FUEL TV 3 did slightly better with $343,175 and the first UFC on FUEL TV event managed to earn $406,000. The kicker? If you count UFC on FUEL TV 5 doing just short of $1 million and Saturday's UFC on FUEL TV 6 doing $1.3 million, the only gates to either come close to or pass the $1 million mark were overseas. More on that in a minute.
For now, it's worth noting gate receipts aren't the sole determinator of an event's success. They also aren't the only means by which the UFC draws revenue for live events. However, it is one of the most important factors in calculating whether an event is a money loser or winner. That means the UFC has to juggle the issue of bringing talent to places where people will pay enough money without putting on marquee talent so expensive they upend the financial ledger. They also need to make sure they match their biggest stars with the biggest platforms.
The UFC's answer to this challenge thus far has been filling cards with intriguing prospects and rising contenders. On the prospect end of things, they're almost universally affordable and are a cheap way to generate fan interest. That much is a no-brainer. In terms of contenders, they're generally affordable as well, but their inclusion on FUEL shows leads to another problem besides finances: are enough viewers actually watching these contenders earn some of their most important victories?
2. What to do with top contenders - we know, generally speaking, contenders aren't as expensive as champions, former champions who are still box office draws or other noteworthy fighters. That makes them attractive to be placed on cards not simply for their costs, but for their fan intrigue. Yet, as I just alluded to, that creates another problem. Up until recently, the UFC has been using several contenders on FUEL who were in what were arguably title eliminators. The UFC never explicitly stated as much, but the positioning was so close it was confusing for fans and media alike. Was Jake Ellenberger going to get a shot after beating Diego Sanchez? What about Alexander Gustaffson getting past Thiago Silva? Surely Chan Sung Jung is deserving of one after besting Dustin Poirier, right (UFC even suggested he'd get one after his victory, although it's not clear if that will ever happen)
To date, no winner of a UFC on FUEL main event has earned a title shot in their next fight. That is not a coincidence and the reason is simple: FUEL simply doesn't do enough ratings. It would be promotional malpractice to place a fighter who punched his ticket on a FUEL platform into an important title shot on pay-per-view.
It's not that champions shouldn't fight all comers; it's that having a champion fight someone who is basically unknown by rushing them to a title opportunity rarely brings good financial returns, isn't even necessary and can severely backfire on the fighters involved as well as the promoter.
UFC has to constantly make hard decisions about matching the popularity of a fighter and the importance of the bout they're in with the size of the platform. As it relates to rising contenders, FUEL shows involve the most difficult calculations of all.
3. The challenge of TV ratings - pop quiz: which MMA events do better ratings, Strikeforce shows on Showtime or UFC on FUEL TV shows on FUEL? The answer without exception is Strikeforce on Showtime and the margin is at least by 100,000 viewers or more. FUEL is a great channel with excellent programming, but it's reach is simply too small at 36 million. It's true Showtime's reach is smaller at 21 million, but the dynamics of premium cable (that happens to also have Emmy award-winning programming) helps create more destination viewing.
None of this is to say the UFC on FUEL events don't do good ratings for FUEL. They unequivocally do. It's also not to suggest no one watches these events. They clearly serve a valuable role and service an important audience. But the challenge they face is using contenders who are a) cheap enough to use and b) intriguing enough to draw media/fan attendance. That means they'll likely need to be in fights that matter. But that leads to the problem of putting them in positions where the significance of the fight is lost on a platform lacking adequate exposure.
That's why it's worthy noting the last two UFC on FUEL events were handled more appropriately in terms of booking main event talent. At UFC on FUEL TV 5, Stefan Struve and Stipe Miocic were fighting simply to move into the upper echelon of heavyweights. It was fairly obvious neither was going to do enough to create fan demand for title shots. Neither is prohibitively expensive. They also were flanked by Dan Hardy, a popular draw in his hometown as well as UFC fans everywhere.
On Saturday, UFC achieved a similar result with a different pairing: they used two aging veterans. They don't come cheap (most recent payouts put Franklin at $75,000 to show/win while Le earns a flat fee of $150,000), but they aren't overly expensive either. They also aren't fighting for a title shot. Most importantly, they were competing in a place that was on pace to draw strong gate receipts. It goes without saying they're popular enough to pull the kind of numbers both UFC and FUEL expect for this series.
How the UFC proceeds with main events on FUEL shows will be interesting to watch, but if forced to make a bet, one would have to think the design of the last two shows - good prospects not yet in title contention or two popular veterans long past title contention - is much more likely to be the model than the first four shows. They'll need a supporting cast of other prospects and contenders, but that portion of the equation is much easier to solve. It's also likely to deliver the kind of ratings good for FUEL while giving fighters the exposure they deserve.
4. Location, location, location - the one lesson after the UFC's first year of FUEL is undeniable: doing UFC on FUEL events stateside is a challenge if not an outright dubious idea. The only gates to come close to or exceed the million dollar figure are those that took place in Sweden, China and England (in a city the UFC had not previously been to). The total gate receipts for the stateside FUEL events is less than what the UFC pulled for their FUEL event in Nottingham, England. And yet, that event is also the lowest gate receipt for any of the three overseas FUEL events.
History tells us the first time or first few times they stage events in a new city or country, the fan enthusiasm is high. And as everyone in the MMA community knows, UFC also has significant international ambitions. They also owe FUEL 6 live events a year. It only seems natural FUEL would end up as place for UFC to dip its toes in different international markets in a way that makes effective use of prospects, pulls strong returns at the gate and even television ratings.
Yes, ratings. If the 2012 Summer Olympics taught us anything, it's that while the hardcore enthusiasts want to see sports in real time, tape delaying events for broadcast in primetime slots still results in strong ratings. The ratings for the last UFC on FUEL event (and its subsequent replay) underscore that: the initial broadcast at 4 p.m. ET only earned 111,000 while the 10 p.m. ET replay drew 140,000 viewers. The numbers aren't in for Saturday's show, but if past is prologue, that dynamic shouldn't change.
There are limits to the international expansion in terms of where FUEL can be helpful. For big, marquee events, FUEL simply won't be sufficient. If you need to promote the biggest fights and the biggest fighters, placing them on a platform of that size is an improper use of resources. That's why it should come as no surprise that the UFC's next show in Japan, set for March 2013, will still begin at 10 p.m. ET, but will start on Sunday morning local time in Japan.
The chief takeaway for UFC on FUEL is this: they require a special kind of nuance the typical UFC show pay-per-view may not. UFC ppvs are the most important events the organization stages, but more closely respond to 'bigger is better' influence. Yes, the pressure is on to do big gate receipts and big buyrates, but they're more often using big talent in big media markets. There's just more to work with. To a lesser extent, UFC on FX shows operate similarly.
FUEL shows, however, don't respond as much to the 'bigger equals better' push, at least not without costs on the other end. They require the UFC to get creative about main events both in matchmaking and in not using up important resources that can be better leveraged elsewhere. They require working knowledge of prospects, both international and domestic. They require a delicate use of rising, popular contenders who need fights to get better and gain experience, but who don't need to do their best work to small audiences. They also put a premium on a financial bottom line that isn't as in focus for UFC events of larger size. UFC on FUEL events have to deliver, but on a strict budget both of financial and talent resources.
How FUEL shows look in 2013 is anyone's guess, but this much is certain: the UFC is getting better about understanding the challenges they face with them. I'm sure they'll be misfires with them as much as pay-per-views in the coming year, but the record of improvement in terms of understanding what fans expect, what the UFC needs and what FUEL asks is being more expertly handled each time out. Let's hope that quick grasp of the learning curve extends to the other FOX platforms as well.