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ZuffaKiller- Posts : 4178
Join date : 2011-11-19
Report: UFC 151 cancellation estimated at a $40 million economic loss
Tue Sep 11, 2012 4:50 pm
MMA Fighting reports the financial impact of the cancellation of 151 caused a $40 million impact on all parties involved. Not only were fighters on the card financially impacted , but the trickle down of parties impacted by the loss including, hotels, taxis, restaurants, clubs and gambling revenue.
The UFC had invested $2 million in marketing costs for 151 at the time it had to cancel. A source with the UFC stated that the estimated loss for the company from 151 was at $20 million.
Via MMA Fighting:
Because major Las Vegas events are largely commuter shows, with people coming from around the country, and extensively from California, the impact on the local economy for a typical pay-per-view event can easily reach $20 million. And that’s direct lost revenue because even though all the fights scheduled have been added to shows between Sept. 22 and early December, none of those events are in Las Vegas.
In addition, the article goes on to discuss the possible sunk costs for the event including a site fee for the event and expectation costs such as lost PPV buys and ticket sales. The gate was estimated as being between $2 to $2.5 million. There is also the estimate of a $7.5 million losses from cable and satellite companies for PPV. As for the buys, the article estimates that 151 would have done 500K buys (assuming $55 PPV) which would amount to $27.5 million in revenue.
Payout Perspective:
Some of the items in the article written by Dave Meltzer is based upon certain assumptions so there is nothing definite except for the investment Zuffa had made in marketing costs in the neighborhood of $2 million for UFC 151 at the time of calling the event. That number was given by Dana White in his UFC Tonight interview. Whether or not you believe the $40 million loss, its safe to say that cancelling a fight equates to an economic loss for all parties from the fighters to the cable companies, to the hotels, to the taxi cab drivers. Assuming that these were the losses involved with pulling the plug on UFC 151, it makes the UFC’s decision to do so very interesting. One might assume that if the UFC went through with a watered down card, it would draw negative press and cause major ridicule. Thus, the UFC had to weigh the economic hit versus the public relations issue in cancelling the event.
http://mmapayout.com/2012/09/report-ufc-151-cancellation-a-40-million-economic-loss/
The UFC had invested $2 million in marketing costs for 151 at the time it had to cancel. A source with the UFC stated that the estimated loss for the company from 151 was at $20 million.
Via MMA Fighting:
Because major Las Vegas events are largely commuter shows, with people coming from around the country, and extensively from California, the impact on the local economy for a typical pay-per-view event can easily reach $20 million. And that’s direct lost revenue because even though all the fights scheduled have been added to shows between Sept. 22 and early December, none of those events are in Las Vegas.
In addition, the article goes on to discuss the possible sunk costs for the event including a site fee for the event and expectation costs such as lost PPV buys and ticket sales. The gate was estimated as being between $2 to $2.5 million. There is also the estimate of a $7.5 million losses from cable and satellite companies for PPV. As for the buys, the article estimates that 151 would have done 500K buys (assuming $55 PPV) which would amount to $27.5 million in revenue.
Payout Perspective:
Some of the items in the article written by Dave Meltzer is based upon certain assumptions so there is nothing definite except for the investment Zuffa had made in marketing costs in the neighborhood of $2 million for UFC 151 at the time of calling the event. That number was given by Dana White in his UFC Tonight interview. Whether or not you believe the $40 million loss, its safe to say that cancelling a fight equates to an economic loss for all parties from the fighters to the cable companies, to the hotels, to the taxi cab drivers. Assuming that these were the losses involved with pulling the plug on UFC 151, it makes the UFC’s decision to do so very interesting. One might assume that if the UFC went through with a watered down card, it would draw negative press and cause major ridicule. Thus, the UFC had to weigh the economic hit versus the public relations issue in cancelling the event.
http://mmapayout.com/2012/09/report-ufc-151-cancellation-a-40-million-economic-loss/
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