Bellator Acquisition Would Give PFL the Scale Needed to Close Viewership Gap

Bellator Acquisition Would Give PFL the Scale Needed to Close Viewership Gap

Professional Fighters League (PFL) is hosting the first of two playoff events at the Theatre at Madison Square Garden tomorrow evening (Aug. 18). The four remaining men’s heavyweights and women’s featherweights will compete for spots in the 2023 PFL World Championships and the $1 million prize awarded to the winner of each weight class.

The MMA promotion entered this postseason, its fifth, in a competition with Bellator MMA and One Championship to be the considered the second-best brand in the business. By the time next season rolls around, PFL’s focus is likely to be on establishing itself as 1b to the UFC’s 1a.

PFL is rumored to be closing in on a stock-laden deal to acquire Viacom-owned Bellator.

The mass media and entertainment conglomerate’s recent decision to sell Simon and Schuster to Penguin Random House for $2.18 billion has only added fuel to the speculation.

Bellator would be additive to PFL on several fronts.

First and foremost, it would deepen the promotion’s roster of fighters. That is necessary in a scale business.

A combined PFL-Bellator roster would have 66 fighters ranked among the top 25 in the world at their weight-class per the independent ranking service Fight Matrix, twice as many as PFL currently has. The UFC has 192.

But unlike the UFC which puts its best fighters on pay-per-view cards, almost all of PFL’s top roster will be fighting on linear television or a vMVPD. Just two of the promotion’s 24 events in ‘24 are slated to be broadcast behind a PPV paywall.

It is a different distribution strategy for a fight sports business, but one the promotion credits with growing the fan base. PFL viewership is up 35% YoY, after climbing 40% YoY in ‘22.

Presumably, PFL believes adding Bellator can help further close the viewership gap that remains with the UFC over the next three or four years. A deeper roster should mean a better product, which can result in increased interest in the sport. And as the viewership grows, PFL should secure higher media rights fees and more promotion from its media distribution partners.

It is hard to imagine there are delusions about generating comparable revenues over that same time frame.

PFL currently has both linear and streaming distribution in ~75% of the 150 countries it is broadcast. Expect that approach continue–at least in the short-term.

Given its rapid growth, PFL keeps its media partners on two-year deals. That ensures it has the flexibility needed to sell concurrent worldwide rights if/when streaming providers such as Netflix, Apple, and Amazon gain the requisite scale to make linear distribution less relevant.

But a better overall product only matters to those who are already fans of the sport. Star power attracts the casual fan.

So, PFL has started to go big game hunting. Earlier this year, it signed Francis Ngannou and Jake Paul. Amanda Serrano, Clarissa Shields and Savannah Marshall, a trio of top women’s boxers, have also signed on to fight for the MMA promotion.

The addition of Bellator would add Cris Cyborg to the roster and enable PFL to stage a marquee women’s MMA bout with Kayla Harrison.

The promotion might enjoy the benefit of hosting one of men’s biggest MMA bouts next year too. Nate Diaz recently said he would fight Jake Paul in PFL’s Smart Cage for $10 million.

The halo effect of a marquee event like that, assuming it is stacked with other intriguing fights (which a deeper roster would allow for), should help change perceptions of the challenger promotion.

Purchasing Bellator would also enable PFL to put on unique cards featuring the champions of the two promotions competing against one another.

Of course, that assumes PFL would choose to reposition Bellator as opposed to folding it into the existing business. If that were to happen, logic suggests there would be a redistribution of fighters between the two promotions.

Bellator would also bring some well-respected fight executives and an extensive library of fight content to PFL.

It’s hard to imagine anyone other than PFL or UFC buying Bellator. The promotion is believed to be losing tens of millions of dollars annually, and the easiest way to turn that ship around would be to plug it into a business that already has the expertise and infrastructure necessary in place (think: sponsorship sales teams, media rights partners).

There are no rumors about UFC buying Bellator.

But Bellator has some valuable raw assets that PFL can add to its platform. And if the promotion were to be reconstructed as an international series with signature events on different continents that all fed into PFL’s regular season and challenger series, and it were promoted differently, the thinking is it could work.

Remember, PFL previously announced plans to serve major regional international markets. The company has already launched and is operating PFL Europe, and there are plans to standup outposts in Australia, Africa, and the Middle East in 2024 and 2025 too.

It’s not clear where the capital is coming from to buy Bellator, launch all these new divisions, and to sign additional high-profile fighters. You’re talking about a nine-figure spending spree.

However, speculation exists that PFL secured a $100 million investment from the Middle East. The region is known to be interested in developing champions and becoming a global leader in soccer, MMA, and other sports.

The UFC is wildly profitable. PFL has stated it will be cash flow positive in ’24. But an acquisition of Bellator and global expansion would almost certainly push that projection back to ’25.

If PFL can get a deal done for Bellator, it’s fair to assume the company’s goals will change for the bigger. It will no longer be striving to be the number two promotion in the sport, it will be working to be viewed as the co-leader.

While the company might eventually get there on its own, the Bellator acquisition would accelerate that effort.