Future of Fights Sports May Largely Be In Studios

Future of Fights Sports May Largely Be In Studios

Combate Global has not yet announced its 2024 schedule. The MMA promotion will wait until Liga MX, its lead-in on Univision, discloses its ’24 slate before locking in event dates. 

But it won’t have to wait to book venues for the 36 shows it plans to hold next year–or at least for most of them. 32 of the fight cards will be held at the company’s production studio on the campus of Univision’s headquarters in Miami (the other four will be ticketed events abroad).

Combate CEO Campbell McLaren is convinced the future of fight sports is largely going to be in studios. PPV quality events aside, the economics of the model are oftentimes better, and promoters can deliver a more engaging at-home viewership experience when the facility and event’s production are optimized for television.

“Why are we still doing [the fight business] this old way,” McLaren asked. “[Promoters] are losing money on the ticket sales. [The live crowd] doesn’t increase TV viewership, it doesn’t add any real value. It’s just expected.”

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The COVID-affected seasons of 2020 and 2021 proved that watching sports isn’t the same without a stadium full of rowdy fans. But McLaren’s point is taken. No one tunes in to watch the crowd, and a half empty venue isn’t enhancing the broadcast. If anything, it reflects the relative lack of interest in the featured event.

So, why do promoters insist on continuing to stage regular shows (i.e. those absent of PPV attractions) in large arenas? 

“All combat sports were made coming out of antiquity, certainly through the ‘50s, ‘60s, and ‘70s, when [promoters] did Madison Square Garden,” McLaren said. “That is just how people think of [the business].”

To be clear, that gate-centric model can still work fine for select promotions (see: UFC).  

And “if you have a card that supports pay-per-view [or can sell out], it can throw off $2 million, $3 million, $4 million, $5 million or more at the gate,” McLaren said.

But selling tickets is a challenge for most promoters (and rights owners).  

While societal tailwinds fueled by the pandemic lockdowns have increased demand for some experiences (see: Taylor Swift tour), that truth does not apply all live content. Many sporting events do not sell out. 

“So, there’s obviously a finite desire,” McLaren said, “and I don’t think there is demand for hundreds of large scale [fight sports] events.”

That belief has led Combate down a different path.

However, its current business model is a product of circumstance. The company used to operate like the establishment.

“During COVID, we [had to cancel] 28 of our 30 events,” McLaren said. “That meant canceling 28 revenue [producing ticketed cards].”

McLaren approached Univision, Combate’s Spanish speaking U.S. broadcast partner, and inquired about its interest in building out a studio so that the promotion could continue staging fights. The broadcaster embraced the idea. 

“And we [subsequently] found out that we [could have] this great TV experience, McLaren said. “Much better than when you [see] live events [on television], even big pay-per-views.”

That’s because the studio can be outfitted with the at-home viewer in mind.

“We [are able to lower] the cage to the lowest acceptable height for the commission standards. So, our cameramen [are] really [able to] get over it,” McLaren said. “That, [along with the variety of cameras used], increases [the quality] of the coverage,” McLaren said. 

The broadcast can also be ‘tighter’ when the promoter doesn’t have to entertain (or monetize) the fan in attendance. Combate fighters are often in La Jaula awaiting combat when the show returns from a commercial break. 

“It’s fight, commentary, fight, commentary. That [pace] is crucial to bringing in this new [Hispanic MMA fan] we have and keeping the young audience [that must be constantly engaged].”

With just 150 people in the audience Combate’s studio events do not have a raucous crowd. The promotion uses a live band in its place to give the shows a uniquely LATAM vibe.

Combate found its balance sheet looked “astoundingly better” when it could focus on maximizing media-related revenues (think: broadcast rights, digital activity), rather than ducats sold, too.

“When you look at the economics of the live events, and ours are representative of the industry, we needed to sell 6,000 tickets to break even,” McLaren said. 

That isn’t an easy thing to do.

Combate’s path to profitability is easier, and more certain, in a studio. Its contracts with Univision and Paramount (its English-speaking U.S. TV partner) cover the expenses on all 32 domestic shows. 

“So, our four live event deals are [largely] profit,” McLaren said.

Any revenues generated from digital (think: YouTube, Instagram, TikTok) and FAST channels also largely fall to the bottom line.

“Pluto is a huge source of money for us,” McLaren said. “AVOD is great for old fights.”

But it’s fair to wonder if pivoting to a media reliant model is wise at a time when the Pay TV universe shrinking.

“You’re right, [the cable world has changed and] there’s going to be a bunch of niche sports and sports that [have been] growing that will suffer,” McLaren said. “But there’s still going to be a desire for content, on all the various devices around the world, [and there will still be broadcasters willing to pay for must-have content for the foreseeable future]. 

Combate expects to fall into that category.

“Fight sports –big boxing, WWE, and premium MMA– are right beneath [must-have], particularly with the Gen-Z audience,” McLaren said. And “if you want a Hispanic audience, you kind of [lack alternative MMA options]. So, we’re well positioned to move into the must have [group] over the next year or two.” 

The promotion is not banking solely on rights fees continuing to climb though. It plans to explore a host of DTC options, including micropayments, in ‘24.

McLaren understands for the business to scale it needs customers willing to pay for the product on an individual basis (as opposed to just within the cable bundle).

“Maybe there’s a point in the future where fans worldwide are paying $1 for every event; where we’re not on free TV, we’re on dollar TV,” McLaren said. “If one million people around the world watched [each event], that’s good [business].”

Combate is starting to work towards that vision. Its four shows outside the U.S. studio in ‘24 will take place in front of live international audiences.

“We’re going to go primarily to engage markets that we are developing on TV,” McLaren said. 

Chile, Colombia, Argentina, and Mexico are among the locales under consideration.

Those events should increase awareness amongst broadcasters in the markets–necessary if the promotion is going to maximize its international media rights revenues. 

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