The State of MMA Sponsorships: A Digital Deal
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The world of streaming is currently in a boom phase. From giants like Netflix + Hulu to the audio merchants like Spotify and Apple Music, it’s feeling like the same internet I used growing with up is changing, and I can’t tell if it’s for the better or not.
Paywall after paywall; it’s slowly becoming a financial drain for people that wish to cut the cord and opt for the ‘cheaper route’. I’m sure if you’re reading this, you can relate to having to pick out which app gets deleted, or which service is worth that monthly cost and it’s only normal. Picking and choosing which service you wish to keep is normal, but for some reason, when I try to apply this line of thinking to MMA, it starts to get weird.
The first thought that comes to mind is how did we get here? To the point where we must decide which app is worth holding onto for our MMA consumption, where impressions and Instagram likes dictate the movement of our sport as a whole, and instead of just sitting back waiting for that monthly PPV bill… it’s almost twice as much to get your hands on the same type of content that was free just last year.
How is this going to work for me as a fan, and how does this move from traditional domestic broadcast deals to digital really affect the fighters?
Let’s try and put some of this into context as we continue this pocket bleeding march into 2019, where digital deals in MMA are the new norm. Exclusivity hurts the artist. That’s a phrase that has become popularized over the past 2 years in the music industry. The argument is that in this streaming era, where the big names can sign exclusive distribution and licensing deals with the like of Apple and Spotify among others, it actually can hurt the artist and limit their overall reach in the long term if they take the one-off check of say $20 million just to ‘secure the sale’. If you as the artist choose to side with a particular app, that may increase your immediate sales, but as opposed to traditional radio and music platforms on TV that historically broke artists to the mainstream, you are now selecting which fanbase you market and sell to.
It’s easy to seehow that can limit your reach if you don’t choose carefully. Now in music there is always slight of hand, and even the giants like Jay Z and Drake can’t avoid a bit of this new age digital controversy. But, you can clearly see if you peak your head out of the MMA window how this can operate, and how easily people can get lost in the shuffle. There is concrete benefits to getting your fanbase to go digital and more specifically, sign up for whatever app you are on, and while it has never been easier to fake your numbers, sell investors on a plan instead of a concrete product when it comes to the digital age. All parties are affected just at different times and innew forms.
What is the actual worth of your piece of recorded audio? or your posted YouTube video?
Sure creators seem to have a much easier option available nowadays if they wish to get paid, but the flip side from the start of this ‘monetize everything’ age has been that no one truly knows their worth. From indie musicians to the big names, even platforms themselves are trying to figure out how do you monetize content that people aren’t paying for anymore? From pirating to bootleg YouTube channels, free content is also in a boom phase and everyone is trying to find the middle ground. So in the exact same way that Jay Z signed a deal with Sprint, locking in his 1 million in sales upfront while simultaneously handing over the bulk of his promotional duties, the UFC and Bellator; the 2 biggest MMA promotions in the world, decided to follow this same line of thinking and go exclusive… and I can only wonder, will some of the same side effects show up here?
Exclusivity hurts the fighter? This phase that MMA is in, and has been in since the UFC announced that it would be an exclusive broadcast partner with ESPN has started a complicated shift into the digital age?
Other players have followed up and Bellator, the 2nd biggest MMA promotion by most metrics, decided to go exclusive with a new streaming service that hadn’t even been launched at the time of the announcement. DAZN. Promotions like the PFL and ONE Championship are now in the mix as well and I outlined them in the previous article so I’ll skip that for now. However, just as things started to settle and it seemed everyone had their partner, there was another shift.
The UFC announced that all PPV’s would now only be available through ESPN+, the premium streaming service that was launched on April 12, 2018. So fighters that are concerned about how they are going to be seen or where their fights are going to be shown, now have to convince their fans to download and subscribe to a third party service.
In the same way that an artist has to try and juggle the pros and cons of picking and choosing which service is the best to host their music, now fighters have to take into consideration what service they’ll be shown on. That may sound weird at first, but it’s not just conjecture on my part, its a symptom of the situation. Most fighters are just that, fighters, and as a whole we don’t necessarily like when our fighters have to stray too far from that. Trying to balance out social media and the role it plays is difficult, but necessary; how you look in press appearances, what clothes you wear all the way down to what kind of dog you have are all factors as to how/why people approach you, interact with you and ultimately follow you.
There is a trail of breadcrumbs here in terms of the link between likes/follows and link clicks/subscription rates and how it leads back is important. The UFC/PFL/Bellator or whomever else decides to sign an exclusive broadcast deal that keeps everything in house and online, decides to place a paywall behind the product which will limit the amount of consumers willing to buy based simply on the fact that money doesn’t grow on trees for most. I feel safe in saying that everyone isn’t going to signup for FightPass, DAZN, ESPN+ and pay the PPV all in one month.
There needs to be a give.
But because there isn’t one at the moment, people will pick and choose which app they wish to keep. This then trickles down to the fighters who are now having their audience cut down to whoever feels like logging on, and they also have to fulfill their promotional duties and help GET people to log on in the first place.
Prior to 2019, fighters had to get you fired up enough to make it to a TV in time for them. Now, they have to get the consumer to pay the monthly fee for a specific app. As we all know, fighters aren’t getting a piece of the pie, but they must promote and sell that specific app as if they were. Why? Because if said fighter doesn’t get you to follow them, or they aren’t constantly tagging the promotion on Twitter, coming up with content to let you know about it, well then you simply won’t know or care to watch.
Simple but true, this is a trail that leads back to the top. Everyone has to choose now, but the decisions now have never had more direct impact. When fans have to pick and choose when it comes to content in this regard, it directly affects the athlete. Every promotion needs fighters that fans are willing to pay to see, and now this even applies to the mid-tier or more unknown fighters as well. If a fighter can’t do that, as the streaming provider they can tell, and when you add on top of that the paywall that every provider and promoter thinks, we are just going to happily jump over. You have a situation where fans are constantly being bombarded online with marketing from all angles, all trying to get you to sign up for their monthly service.
From the fighters point of view, they now need the fans attention AND wallet which makes the value of their social media rise, since all of these apps can’t promote it all by themselves, while they will most likely use it against you and say you aren’t a draw if you can’t convince people to sign up to our app.
The definition of being a draw is shaping, now it may not be about if they can get you to lay down 60 bucks a month, but if said fighter can convince people to sign up for 5 bucks, all of a sudden we have to change our discussion. This can in turn be used to the fighter’s advantage if they have a savvy enough Social Media team or manager, who can point something like that out in the board room. Remember when Nate Diaz said that he was a draw, he just wasn’t on PPV? This is like the 2019 version of that in a way, I believe that there may be a window to help fighters understand what is actually going on around them when it comes to their space in this digital market, where impressions are leveraged for dollars.
Being able to monitor a fighters analytics, their social media following, demographics, etc, are a catch 22 because the numbers can be taken out of context… and I’ll get to that one later, but on their face it can be used to understand the payoff a fighter gets from promotion or vice versa. Remember, prior to 2019 none of this was really an issue because they were vying for your time. Now, it’s all still connected to the same goal, watching the fight, but there’s a paywall they need to convince you to hop over first. In this new situation, fighters now have the ability to point directly to their own social media information via freeware like Buffer or ManageFlitter, get their data refined to when it is most convenient for them to post and share, and grow that way. From there, not only can they see their own data for free should they choose, but instead of being force fed numbers from the outside, they can see what exactly is paying off and what isn’t, and use that as apart of their argument in negotiations with their different partners or business dealings.
The music industry has gone through this phase of transitioning to digital, and ever since, the more questions arise as to the actual worth of content, the roll artists play in promoting a service that pays back a fraction of what physical copies did and if any of these services will stick around in the next 5 years. I could easily open this up to a wider branch of entertainment since everyone seems to be facing these problems collectively, but I’ll keep it to just MMA and music. In the same way as a producer, I can attempt to gather all of my analytics and use third party services to forecast my paydays. In MMA, promoters are doing the same. Seeing who on their roster has enough analytics built up to where it makes sense to place them higher up on the card as opposed to the person that may ‘deserve’ it in an attempt to forecast my viewership, and in this case that’s directly tied to subscriptions.
Instead of fighters laying back and waiting for a Monday report about PPV sales, they now have much more to keep in consideration, including but certainly not limited to, their individual conversion rates and a big part of that is now dependent upon how they choose to operate in this space. Knowing your own analytics as opposed to having others show them to you is a major part of this process, and while I don’t ever foresee MMA going the route of SoundCloud in terms of truly opening up analytics to everyone, I do think there is reasonable cause to suggest that now more than ever, a fighters online presence has concrete value. ESPN is all in for the next 7 years and has put all but a few cards behind its paywall. Bellator, PFL and others followed suit as well, but they couldn’t have done so if someone on the other side of the table didn’t cut a check.
ESPN, DAZN and others are now the ones paying for these broadcasting rights and in the same way user bases fluctuate for any other server based service, I predict we will see the same pattern for this. The only difference is that we are talking about viewership which can be directly leveraged against a fighter almost without them even knowing. In the same way, I can’t just pump my fist to the sky and demand more money from Spotify and have to know who pays what, they [the fighters] wont be able to rely on PPV numbers and traditional metrics like Nielsen and TV ratings to demand more from their promoter. At least not in the same way.
Some of these streaming services will get consolidated, downsize or simply cease to exist altogether. We’ve already seen platforms like DAZN have to raise their monthly price, one could speculate that it’s due to such factors as people choosing not to go over that 12 dollar price tag.
As subscription bases fluctuate, we usually see activities like this. Raising prices to offset the lack of subscribers, constantly trying new approaches with the talent you have available, signing new faces, cross promotion and all. This is a time where the traditional ways of consuming entertainment are changing, and the newest face to embrace this complicated wave of growing pains is MMA. From figuring out how to combat piracy, to deciphering the true value of content like highlights and ads via websites, these are all things that were always there in our face, only now there’s bigger names hoping we click or log in. Prior to 2019, that little pop up ad meant nothing. Now that may be the only way a promotion can get word out.
With traditional broadcasting changing, so does the way people market. Now, business decisions are being made based off of online user bases. We’ve seen the switch in music, in video games, from traditional marketing to now free games loaded with ‘premium’ content all hinging on the consumers that log in to purchase, and now in comes MMA.
From hoping you pick up your remote, to hoping you subscribe and log in, from getting a TV spot to hoping an individual post goes viral for the same effect, how fans can consume MMA and what decisions are made when the promotion is paid upfront. Broadcast decisions are now based on online metrics, since that’s where everything is now. This year not only signaled the beginning of Silicon Valley money for promoters, it also shows how the landscape around us is changing. If we look outside of our little bubble, we can see how this will play out to a degree, but trying to understand how that looks when it’s not simply a show or a song you’re hoping we stream but an entire fight card, can get tricky.
MMA promotions and the actors involved have to get more creative now more than ever and it’s directly tied to some of the recent decision making from the top. How that will fully affect the fighters from a visibility standpoint remains to be seen, and while ESPN is off to a strong start adding over 2 million subscriptions to their service and being able to retain over 1.3 million of them as of April 2019, things like longevity of these services are still an open question.
The UFC is on the forefront of this battle.
We won’t be able to predict it based off of the past because this is all new territory. Whether this transition works or not, we’ll be the first to know, and feel it. Will DAZN become the Tidal of MMA? Holding onto relevancy by hiking prices all the while struggling to keep up with an expansive library worth the cost? Will ESPN become the Apple in this situation, fielding all the big names and locking them into exclusive deals, where if you aren’t a part of that ‘loop’ then you miss a bulk of the action until later? And the fighters, are they going to become our version of ‘starving artists?’ Where the big names can get theirs while everyone else hopes they can get enough buzz online to convince one of these promotions to sign them on?
In this new world where promotions need a strong online presence as opposed to a TV package, it’s going to make decision making like that a reality. And for us, the fan? Will exclusivity hurt us too? If you have no problem picking what you want to pay for then no, but for those that want to keep up with everything by the moment? Well that task just got more expensive and taxing. The MMA consumer has some decision making to do in 2019 and with more apps, services, and options available, the jury is still out on if this is all a good or bad thing for the sport.
MMA is peaking its head into the streaming game. There are going to be woes along the way as every player tries to tug away at your 10 bucks a month. Maybe with all the money heading towards cord cutting/streaming, this was inevitable. But we are here right now, digital deals are signed. The only question left to ask at the end, and in my opinion the most important question of them all, is when you decide to watch MMA – what service are you picking? Because the cloud servers, fighters, and promotions alike are all chomping at the bit to find out. And it may determine whose left standing at the end of this.
Stay tuned for the next part of the MMA Sponsorship series – “The PFL – Somethin’ about a Million”
Sources used to write this article:
– ESPN
– Variety.com
– Law.com
– VOX
– USA Today
– The Verge: 1 / 2
– Forbes: 1 / 2
– Tech Day HQ
– Manage Flitter
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