In the most recent edition of the Wrestling Observer Newsletter, Dave Meltzer pointed out a few key points which would indicate that WWE is going to have a better year than UFC.
The Ultimate Fighting Championship was recently sold for close to four billion dollars, and they have had success with high pay-per-view buys since the William Morris Endeavour purchase of the company. However, these pay-per-views were loaded cards reliant on the biggest names at UFC’s disposal. Meltzer says that loading shows with top talent is a key to UFC’s success.
WWE had a mixture of good and bad over the past year, but there is a key difference in the company’s business model compared to their MMA contemporary. While UFC relies on pay-per-view revenue on such a great deal of their monetary take-in, WWE is much more diversified.
Meltzer reports that even though UFC had a tremendous year, WWE is the more solid business bet in 2017. He goes on to say that WWE’s revenue streams will remain constant without much variation this year. It’s projected that although UFC’s television profits will most likely increase this year, their model still places a lot of importance on pay-per-view buys. Placing such an importance on pay-per-view buys is a risky choice considering the unpredictable nature of injuries, buy rates, and the tricky art of negotiating fights.
Metlzer reports that it is possible that WWE profits might exceed those of UFC by the end of the year, but it is also dependent on the UFC’s usage of big names such as Conor McGregor and Ronda Rousey. He goes on to say that the pay-per-view business has become a ‘feast or famine’ kind of business in the past year, UFC 200 and 202 might have had high buy rates but they were still somewhat lower than expected.
Aside from a few exceptions, WWE is out of the unpredictable pay-per-view game thanks to the WWE Network. Although pulling the big four pay-per-views might have been an initial mistake, the WWE Network is better off in the long run for it. It was noted that the loss in pay-per-view revenue is made up for by the increases in television rights fees. WWE is reliant on steadier and more predictable revenue streams, television rights fees which are guaranteed through 2019.
Although the key to UFC’s success might be loaded shows, the problem is that bigger stars want much more money. A real deciding point relies on the state of the television industry and what kind of deals each promotion can make.
