Advertisers Will Pour In for Fox UFC Package

Given the bloodshed and controlled violence that are hallmarks of mixed martial arts events, advertisers understandably have been skittish about aligning themselves with the Ultimate Fighting Championship. But in the run-up to the UFC’s national broadcast TV debut, media buyers say demand for Fox’s new sports property should be fast and furious. On Saturday, Nov. 12, Fox will step into the UFC octagon for the first time with a special one-hour, two-fight card set to air live from Anaheim, Calif. In a sense, the short program will serve as the undercard to HBO’s pay-per-view presentation of the WBO welterweight title bout between Manny Pacquiao and Juan Manuel Marquez. The Pacquiao-Marquez fight will take place shortly after 10 p.m. EDT, allowing UFC fans to jump over to HBO’s PPV offering without missing a beat. While the UFC card hasn’t been announced, Fox is likely to get things started with a bone-crushing meeting between some of the sport’s biggest names, bruisers like current heavyweight champ Cain Velasquez and the widely reviled Brock Lesnar. Whoever makes the cut, the commercial slots should be accounted for well before the opening bell. One national TV buyer who represents a client that has bought time on Spike TV’s UFC programming said he wouldn’t be at all surprised to see more mainstream brands begin to line up for MMA events. “Content is definitely an issue, but no one’s going into this with their eyes closed,” said Kevin Collins, director of national broadcast buying for Initiative. “You’re not going to get your traditional Sunday NFL audience, but I expect you’ll find a lot of theatrical dollars, as well as QSR and beer.” Fox certainly did its due diligence before jumping into the ring with the UFC—10 years’ worth, according to Fox Sports chairman David Hill. As such there’s little fear that it won’t be able to make things work on the sponsorship front. “We did a lot of research before making this deal,” Hill said. “There might be a few companies that have a ‘Do Not Buy’ on the UFC, but there are a hell of a lot of companies that have a ‘Do Buy.’ If you look at the history of the Fox sports media group and what we do, we didn’t go into this with our fingers crossed.” While the UFC’s Fox premiere is garnering a lot of attention, the bulk of the organization’s commitment is with cable network FX. Fox will carry four UFC brawls per year, while FX is slated to carry 32 weekly events, including the reality series The Ultimate Fighter. And whereas the median age of the Fox viewer is 49 years old, FX is in no danger of aging out of the 18-49 demo, boasting a median age of 38. Age and gender affinities appear to make FX a perfect partner for the UFC. Nearly 80 percent of the sport’s fans are male and more than half reside in the 18-34 demo. “Looking at that young demo, it’s always wavering,” said Hill. “The young men who are growing up with the sport . . . will go on to teach their kids.” The alliance should also go a long way toward reinforcing FX’s position as a full-service entertainment network that just happens to reside on the cable dial. That same mix of original and off-net series, acquired movies, and sports has given TNT a license to print money, and Hill hasn’t been shy about wanting to hop aboard the gravy train. “FX already does killer numbers with their originals, and the UFC will only help them draw a bigger chunk of that younger male audience,” Collins said, adding that it’s possible that at least one Initiative client that has bought time in previous UFC telecasts on Spike TV may be back for more when the sport shifts to FX in March 2012. “There’s no question that some clients are already very comfortable in that environment. I can’t say for certain that MillerCoors will move forward with the UFC, but they have been a sponsor.” Having improved its prime-time deliveries 18 percent versus the year-ago period, FX will close out the summer ranked fourth among all basic cable networks with viewers 18-49. With a greater concentration of sporting events—FX will air weekly Pac-12 and Big 12 college football games beginning Sept. 1—the network hopes to lift its ratings and ad sales revenues. Currently, FX’s 18-49 deliveries are roughly three-quarters that of TNT; at the same time, TNT’s annual ad sales take is nearly double that of FX ($825 million to $437.5 million, according to SNL Kagan estimates for 2010). Affiliate fees are another matter. While bigger Friday night crowds should lead to more ad dollars, it’s unlikely that the UFC will have an immediate impact on FX’s carriage agreements. According to an affiliate sales rep at a third-party cable network, FX cannot negotiate to raise its fees until its original carriage deals expire. While FX president John Landgraf did not confirm that there are so-called “surcharge protection” provisions baked into the network’s affiliate contracts, he agreed that hosting viable sports properties is perhaps the greatest investment toward future growth. “I don’t set policy on rates; my job is to make this the best channel I possibly can,” Landgraf said. “But do I hope that the UFC will allow FX to continue to grow? Absolutely.” With an average affiliate fee of 43 cents per sub per month, FX brings in approximately $510.8 million in annual subscriber revenue. By comparison, TNT’s $1.03 fee translates into a yearly haul of $1.25 billion. Most buyers said that while mainstream sponsors may be unnerved by the UFC’s brand of bone-snapping pugilism, the lure of that hard-to-reach 18-to-34-year-old male audience should be enough to dispel any final misgivings. “It’s not going to work for everyone,” said one entertainment buyer. “Some clients are more skittish than others. But we have good relationships with the Fox Sports guys, and we trust that they won’t burn us if we decide to test the waters.” Another buyer said that even nonendemic advertisers have begun haunting the margins of the UFC. “P&G had Downy in a few fights on Spike TV,” the buyer said. “Are we going to see the Snuggle bear in an integration? Probably not. But this is the fastest-growing sport out there. There’s going to be a run on that ad time.” Landgraf sees the sport growing alongside FX, and while men will always represent the bulk of the MMA audience, he expects greater numbers of women will begin tuning in as well. “We’ve had a number of original series that began as very male-centric, shows like Rescue Me and The Shield and [It’s Always] Sunny [in Philadelphia],” Landgraf said. “As more young men started watching these shows, they began recruiting their girlfriends and wives. Fox will bring an enormous amount of promotional muscle to bear . . . and as the audience for this sport grows, I’d like to see MMA occupy a greater place in the culture as a whole.”

Convergent TV

Advertisers Will Pour In for Fox UFC Package

Content issues aside, young male demos too good to pass up

Anthony Crupi

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Anthony Crupi