Spike TV's Kevin Kay on pushing Bellator MMA past the demarcation line of pay-per-view success

Esther Lin, MMA Fighting

In the modern age of mixed martial arts, it's been proven non-UFC brands can still draw respectable if not quite tantamount ratings in the broadcast television space. EliteXC and Showtime drew well on CBS, WEC had its moments on Versus and by NBC Sports Network standards, World Series of Fighting pulls a respectable return.

And yet the final demarcation line separating the UFC from its rivals and contemporaries remains largely intact: pay-per-view.

For all of the success of mixed martial arts on broadcast television, no other MMA organization has been able to pull pay-per-view buy rates that can match the UFC's average (much less their peak) or their consistency. In the ceaseless cycle of promotion upheaval, this constant has served as a steady reminder of the UFC's comparative advantages and absolute strengths.

That makes Bellator's first foray into pay-per-view at Bellator 120 on May 17th as dismissible as intriguing. History indicates no other organization can hope to replicate the UFC's success, but Bellator's position is also historically unique. The distant number two MMA promotion is broadcast almost thirty weeks every year on the very channel that helped usher in the MMA boom nearly ten years ago, Spike TV (disclosure: I co-hosted a show on the network in 2012).

The bet among Viacom executives, which could just as easily be characterized as hope, is that cherry picking the best from Bellator's roster to form a card that can be promoted on the very channel which helped the UFC turn into the billion-dollar brand leader will ultimately translate into a version of success on pay-per-view.

Whether that will actually happen remains very much an open question. Spike's historical success with the UFC cannot be glossed over, but neither can the occasionally good, sometimes anemic ratings Bellator events pull on the very same channel.

Still, in some key ways, Bellator is better positioned than most, if not all, previous MMA organizations outside the UFC to make noise on pay-per-view. The key considerations are whether this is the right card to try it with and if now is the appropriate time.

In this interview with MMA Fighting, Spike TV President Kevin Kay discusses the Bellator 120 card, the collaborative relationship of Bellator and Spike, whether there is any space for a Bellator pay-per-view in the current landscape, the ratings of Bellator on Spike TV and more.

Partial transcript of our conversation below.

Star-divide

For Bellator 120, why make the jump to pay-per-view at all? What does going to pay-per-view do that staying on television does not?

Look, I think there's a point that comes in any promotion where you want to play with the big boys, right? Pay-per-view is the big boys and you want to put on premium fights.

It's nice to give stuff away for free, but there's an economic model and pay-per-view is a real opportunity to make some money. Hopefully that translates to lots of different things. It's a business opportunity. Pay-per-view is also an opportunity for fighters to make more money in success because guys at the top of the card potentially earn more. So, I think it's good for everybody.

Aside from potential revenue earnings, is there any other benefit conferred from being on pay-per-view?

I don't know. I think pay-per-view is about money. I'll just be honest. That's what it's really about. It's not rated, there's just a buy rate. It's really about revenue generation and revenue generation for a promotion, for a network, for our pay-per-view partners and for fighters.

I think pay-per-view is about money. I'll just be honest. That's what it's really about.


I have to ask about whether there's a benchmark, a threshold for what the organization would define as success in terms of a buy rate for this pay-per-view. Is there one?

You know me, I never predict ratings. Buy rates I can't even predict because this is Bellator's first one. So, that's an even more difficult question. Here's what I'd say: the threshold for success is putting on great fights and getting people to sign up this time and hopefully then the next time because they saw great fights this time, and I think we have an extraordinary card.

I cannot tell you how excited I am about Mike Chandler and Eddie Alvarez. Their first two fights were extraordinary. They are great fights. They go down in history as great fights and now you've got two guys, the stakes could not be higher.

Mo and Rampage. People can say whatever they want about it. These two guys do not like each other, for whatever reason, however this animosity has continued to grow. It's there and they don't like each other and they're exciting guys to watch.

Quite frankly, talk about stakes, stakes for Eddie Alvarez are win or go home. Stakes for Mo Lawal, same thing. This is the biggest fight of Mo's career. I think there's a lot on the line in the main event and co-main event and I think it's exciting. That's what the goal is here: put on great fights and hopefully people will pay for them and want to pay for them in the future.

How would you characterize the difference in the value proposition between the first intended if ill-fated Bellator pay-per-view card and the actual one being staged at Bellator 120?

I think this one is better. It was unfortunate that Tito [Ortiz] got hurt and that pay-per-view had to get scrapped at the last minute. The good news was it went on to Spike and the fans got an extraordinary night of fights, particularly Mike and Ed that night.

I think that now has translated into even more interest and, 'what is this trilogy?', 'how is this trilogy going to end?'. That's what the value proposition is here and look, Mo and Rampage is a fight I've always wanted to see. One of the pieces of shoulder programming is Mo and Rampage just sitting down across from a table from each other and kind of hashing it out. It's a great piece of TV. It's a great piece that makes me want to watch that fight. Quite frankly, I'm more interested in the Mo-Rampage fight than I would've been in the Rampage-Tito fight.

We've got a better card. The fact is Tito's still on this card, he's fighting Alexander Shlemenko, that's an interesting fight, right? Tito got cleared medically at the last minute here, only a couple of weeks ago. There really wasn't an opponent for him on short notice and Alexander Shlemenko steps up and says, 'I don't care what I weigh and what you weigh. I'm a champion. I'll fight anybody.' Now I find that interesting. I think that's value-added to what's already a great card.

What's going on pay-per-view this time is a better value proposition than what potentially would've happened last time and I'm excited about that.

How pivotal is success on pay-per-view for Bellator's future?

I think it's important. Bellator is in business to make money and pay-per-view is an opportunity to make a lot of money and success says that's where there's a lot of money.

Does Bellator exist without pay-per-view? Of course, we're doing really well on TV. Bellator ratings continue to grow. People said it was never going to work on Friday night. Here we are, this season's more successful than last season. Lots of times we're seeing 700,000 to 850,000 viewers on a Friday night. Those are good ratings. We're peaking in main events over a million viewers.

Bellator can do very well on free TV, but obviously, Bellator also needs to maximize revenues, needs to make as much money as it can make so that it can continue to support a huge roster of fighters. Pay-per-view will be additive to that process.

Even if you can say UFC pay-per-view buy rates aren't what they once were, there's still a lot of UFC pay-per-view events. Isn't that saturation level a problem Bellator has to contend with?

Put aside the UFC for a second. In just general across the business, it's getting harder and harder because of [Manny] Pacquiao and [Floyd] Mayweather and Canelo [Alvarez], you're seeing more boxing pay-per-views that are successful and they're going to continue to push forward with the amount of pay-per-views they do because they're good at what they do.

The WWE has switched a model now. I'm not exactly sure what's going to happen there. Some providers are dropping them, some are keeping them. There's a lot of UFC pay-per-views out there. The trick for a promotion like Bellator is figuring out in any particular billing cycle, 'where do you sit?' Because you can only ask the consumers to spend so much money.

You've got to be very careful about it. Glory is doing a pay-per-view. You gotta be very careful about when you are in the billing cycle because you can only ask customers to pay so much money. Nobody wants to look at their cable bill and say, 'I bought four pay-per-views this month!' That's a lot of money for the average consumer.

I think it's tricky. I think you have to be good at scheduling it. You have to have great partners, which we do. You gotta promote really hard. You gotta have a lot of cross-channel promotion from your partners. Those are all the things that are going to make it successful, but it's certainly not an easy landscape.

Obviously more promotion is better, but what's the thinking in doing four different kinds of shoulders programs to promote this event? What do these do that one big program repeated often can't do?

We were talking to our distribution partners, our pay-per-view partners - the MSOs (multiple systems operator) - as we started to plan for this and one of the things they said to us was, 'Look, give us as much content as you can because the more content you give us, the more we can put up there, the more exposure you're going to get. So, we want fresh content'.

One of the things that came up in the discussion, and it's something I've felt for a long time, is that promotions generally do the same things over and over again to promote fights. There's countdowns and everybody does a countdown. And then there's a 24/7. HBO kind of paved the way with 24/7, so people started doing whatever their versions of 24/7 were, but that's really all that's been out there.

We did 'Unfinished Business' last time with Ed and Mike, which I thought was a great idea where Chandler and Alvarez sit and watch their last fight and really analyze it, almost frame-by-frame: what did I do right, what did I do wrong, what did I learn from this, how did I feel in that moment. I thought it was fascinating and I thought it was a really new, fresh way to promote a pay-per-view.

We did one this time because the second fight was so amazing. Those guys are really good at talking about fighting. They're really insightful and really candid about what they feel they accomplished and what they can do better.

With Rampage and Mo, we wanted to sit them down face-to-face because I thought that's another thing that I haven't seen. It's another way to promote pay-per-view that we haven't seen. I like it. I really think the proliferation of as much content as we can get out there for our partners is a new way of doing it, but more importantly, let's break the mold. Whe HBO did 24/7, we all kind of slapped ourselves in the head and we said, 'Wow! Look what they did. That's a great piece of programming and a great new way to promote it.'

I'm always looking for new ways and that's why we have four pieces of programming. We did the countdown because that's what the fans expect. Everybody expects to see a countdown, but why just leave it at that?

The obvious response, though, is if you have these programs you believe in and they're central to selling the pay-per-view, why are they predominately airing at 11 and 11:30 p.m. ET? Is that really the optimum time to gain exposure?

Actually, great time for us. If you go back to when we were promoting UFC pay-per-views, we always premiered them on Monday night at 11 o'clock. You want to be early in the week of the week that the pay-per-view is airing.

Then it gets repeated, played throughout the schedule. 11 o'clock for Spike is primetime. Cable primetime is really 7 pm to midnight. We have great lead-ins. We have great shows on 10 o'clock. These shows will have the benefit of having a tremendous audience pushed into them, whether it's [TNA] Impact on Thursday, whether it's Ink Master on Tuesday. We've just got a lot of great things happening on the schedule.

Spike could not be in a better place right now. Our ratings are up tremendously. We feel good about our ability to push to pay-per-view. And 11 o'clock, there's nothing wrong with 11 o'clock. It's actually a really good slot.

There's two portions to this card: the Spike TV preliminaries and the pay-per-view main card. I'm sure Spike had a fair amount of say in who fought on the preliminary card. To what extent did they have a role in defining who was on the main card?

People over estimate the amount of say Spike has on any of this. Bjorn [Rebney] and I have discussions. He tells me what he's thinking and generally, I say, 'It's up to my friend. It's your pay-per-view.' Obviously Alvarez-Chandler was a given. I always had a sense about Mo-Rampage, it's just a fight I wanted to see. Bjorn really felt like they needed to go through a tournament. I was like, 'I don't know, that's good. Tournament's fine, but I'd be happy if they just fought.'

Tito [Ortiz] and [Alexander] Shlemenko was something that Bjorn pitched to me a couple of weeks ago and said, 'Look, Tito's cleared. Alexander has stepped up. How do you feel about it?' I said, 'If you believe in it, do it.'

In terms of the prelims, I think really the only input we had was we suggested that if [Cheick] Kongo was available and ready, that he's a guy our audience likes to see and we've seen the benefit of the ratings of having Cheick Kongo on Bellator. If we was ready to fight and there was the right fight for him, we'd love to see him on the prelims because it'll help drive people to the pay-per-view.

Patricky Pitbull is somebody we always want to see. I think Marcin Held is the Ronda Rousey of toeholds, but we don't make the card. Basically we just talk about it. That's kind of how that evolved.

This most recent season featured some record-high ratings for Bellator, but some of the numbers toward the middle of the season have been much lower. How would you grade the ratings this season?

I feel really good about them. The cards you're talking about in the middle of the season were up against NCAA playoff games, which is always challenging for us. There's some competitive factors there. I think, in general, we feel really good about the season. Peaking with over a million viewers in your main event and doing some weeks 700,000-800,000 on a Friday night, that's growth from last season, so that's good. I generally feel like we're in a good place and we just have to continue to put on great shows and people are showing up.

People like the regularity of the Friday nights. The fans that are home are watching them. We're seeing some strength in the DVR numbers as well. People are watching Bellator on Friday nights. It's good. It's good to have a regular time slot.

True or false: If Bellator did fewer shows per season - understanding this would complicate the existing business model, but taking the hypothetical for what it's worth - and was able to stack them more, the ratings would be higher.

I don't know. Here's what I'd say about that: we have a tournament structure that doesn't permit for that to actually happen, so it is a true hypothetical. The only thing I would comment on about that is that one thing that makes the tournament structure difficult is you say to yourself, 'Let's not go up against the Olympics because that's going to suck all the air out of the marketplace and it's going to be a tough thing. Let's not start until the Olympics are over at the end of February.' Then you're like, 'Ok, now we're up against the NCAAs.' If you had less fights and you weren't stuck with the tournament structure, you could schedule around that a little differently, but because you have to go eleven weeks in a row, that's the challenge you face.

That said, that's what we do. And we've been very effective at it. I don't believe that's changing anytime soon.

I think the tournament structure is hard. In no way do I mean that in a negative, as in we don't like the tournaments. It's just the explanation of it and the consistency of it and the injury quotient makes it hard for the audience to follow sometimes.


Going forward, what changes do you want to see for the next season that you can improve upon for the broadcast or the Bellator product? What would you like to see changed?

I think the message of the tournament structure just needs to continue. It's complicated. It's hard because of injuries, we all knew that going in. It's important that we continue to do what we did this season, which is make sure we have a big main event on every card so that people show up. One of the other things that got implemented this season was to try to start the night with a big fight or with a name people know, so you don't lose the lead in that you have because you're getting a great lead in from 'Cops' and a lot of people show up. Make sure that first fight starts within the first couple of minutes and hopefully it's a fight that's recognizable with fighters that people know. You get them there, you keep them there and they stay for a big main event.

I think the tournament structure is hard. In no way do I mean that in a negative, as in we don't like the tournaments. It's just the explanation of it and the consistency of it and the injury quotient makes it hard for the audience to follow sometimes. They just have to continue to do a better job of explaining it and continue to do a better job of executing on it and keep your fingers crossed, hoping there's fewer injuries.

As I understand it, the price point for this pay-per-view is slightly relaxed from a standard MMA fans are accustomed, I believe $34.95 for standard definition and $44.95 for high definition. What was the decision internally that made you choose to go with this slightly relaxed price point?

You know what? That decision is totally made by the MSOs. Each MSO prices it differently and I think the floor is $34.95 for standard definition, but that wasn't our decision, really.

Who knows the customers for pay-per-view better than Time Warner, than Comcast, than Dish, than DirecTV, than Rogers? They know their customers. They know what their customers can afford. They have a sense of what their customers are willing to pay for a product. You have to listen to them because they're the ones that ultimately understand their customers and have the research. They set the price points. We don't set the price points. There's a negotiation about cross channel marketing and all of that. That's where the partnership is, but they set the price point. That is not Spike or Viacom. We really listen to our partners there. They're the ones that know and understand the marketplace and they are incentivized, just like we are, to sell the most amount of buys. You take their guidance on that.

Understanding that only the prelims of this pay-per-view will air on Spike, where does this card rank in terms of importance insofar as all Bellator cards that have aired on Spike? How critical is this event?

I think it's important for the promotion. It's an important statement for the promotion because I think what Spike wants to see, what Viacom wants to see is financial success. To be able to move this promotion into pay-per-view - not that there's any intention of doing one a month any time soon - but to be able to move it onto another platform, to make our partners happy, to make money for our partners, to make money for the promotion, to make money for Viacom, it's an important moment.

Is it the most important moment in the history of the promotion? Absolutely not. We're on TV twenty-five weeks a year. Ratings, selling advertising, bringing clients to fights, integrating clients into the programming, trying to be innovative about the programming, and putting on great shows every week is ultimately the most important thing for this promotion.

Pay-per-view, if it's successful, that's a nice add-on. That's added value for the promotion and it will absolutely, in success, help everybody that's associated with the promotion from Spike to our pay-per-view partners to fighters. It would be nice, but it's not the be-all, end-all for this promotion.

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