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UnderGround Forums >> The COLLAPSE of the UFC's PPV Model


1/12/14 1:41 AM
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Haulport
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Blazing Knees - 
FETT_GayFerPayNINJA - So has there been a single poster who actually agrees with OP that zuffas PPV model is "collapse"ing??? Phone Post 3.0

The only thing that collapsed is this thread and the OP's pride.


Yes, because a thread where:

- The same circle-jerk of shills screams bloody murder at the facts and then all agree with each other as they do on every non-favorable UFC thread;

- The level-headed fans get to see the facts;

- MMALOGIC actually admits that Zuffa would never consider international expansion a replacement for lost US revenues and would only accept new US rev streams as a replacement for the lost yearly (approximate) $135,000,000 in PPV revs;

- And people have legitimate discussion of the situation for pages upon pages

somehow translates into a collapse of my pride?

Only on the UG...........
1/12/14 3:10 AM
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6ULDV8
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It's a meeting of the minds here on the UG.  Not very bright minds mind you, but they meet here.

 

TTT

1/12/14 4:33 AM
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MMALOGIC
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If it ain't Dutch, it ain't much - I think UFC will offer fights cheaper on fight pass like WWE does but they want to see how the PPV companies react first.

DirecTV is pissed but if they do nothing, I expect UFC to offer them via Fight Pass.

http://www.awfulannouncing.com/2014/january/directv-isn-t-too-happy-with-the-wwe-network.html

If DirecTV does nothing and keeps showing WWE events, UFC has no reason not to put their PPVs on Fight Pass.

I dont think Zuffa would price ppv below cable and satelite until they become obsolete.  It would be too big of a risk no matter what happens with the WWE.  with the WWE gone from the ppv space Zuffa has more leverage with the cable and satelite systems be it in promotion and/or revenue allocation.  I think that will be the focus initially.  

Eventually, if Zuffa can get a million subscribers then fight pass would essentially be the largest ppv distributor for UFC ppv's surpassing all cable and satelite companies and then Zuffa would be in a position to optimize the price and cut the middle men out for the most part.

The question is what would be the optimal price?  you have to also figure inflation.  Maybe the sweet spot would be 39.95...  in general the lowest price point for a UFC ppv during post tuf era UFC was around 39.95.

And It all depends on what fight pass replaces... fox or ppv or neither...  if ppv isnt viable anymore then 1.5m subscribers at 14.95/mo would effectively replace ppv.  if networks paying huge rights fees for sports isnt viable anymore then 1m plus subscribers at 14.95 would effectively replace fox (but you'd still likely need a ppv backend).

if you just wanted to replace Zuffa revenue now you could just include everything at 14.95/mo... but then that's the ceiling.  You have to look at potential revenue.  The US market is worth 500m/yr to Zuffa... the question is what I the best way to mine that. 

The question is what is the best way to monetize around 100 fight nights, 13 ppv quality cards, and a dozen or so tuf editions per year and the on demand library.  I could see a way the 500m is mined through fox... i could see it with a combination of fox/fightpass... i could see it with a combination of fightpass plus ppv... i just dont know if it could be done with only subscription.

 

1/12/14 7:20 AM
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SevenLeggedSpider
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HP I made a non confrentational post and quoted it 2 more times because I was hoping you would address it since I know you don't include me in that "circle jerk" group.

 

That tells me I must've had a point.

1/12/14 8:48 AM
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Chromium
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MMALOGIC - 
If it ain't Dutch, it ain't much - I think UFC will offer fights cheaper on fight pass like WWE does but they want to see how the PPV companies react first.

DirecTV is pissed but if they do nothing, I expect UFC to offer them via Fight Pass.

http://www.awfulannouncing.com/2014/january/directv-isn-t-too-happy-with-the-wwe-network.html

If DirecTV does nothing and keeps showing WWE events, UFC has no reason not to put their PPVs on Fight Pass.

I dont think Zuffa would price ppv below cable and satelite until they become obsolete.  It would be too big of a risk no matter what happens with the WWE.  with the WWE gone from the ppv space Zuffa has more leverage with the cable and satelite systems be it in promotion and/or revenue allocation.  I think that will be the focus initially.  

Eventually, if Zuffa can get a million subscribers then fight pass would essentially be the largest ppv distributor for UFC ppv's surpassing all cable and satelite companies and then Zuffa would be in a position to optimize the price and cut the middle men out for the most part.

The question is what would be the optimal price?  you have to also figure inflation.  Maybe the sweet spot would be 39.95...  in general the lowest price point for a UFC ppv during post tuf era UFC was around 39.95.

Dude, no. For internet fans? Who's other option are free streams or torrents? $25 is just below the tipping point in my opinion if at some point way down the road they want to cut out PPV.

 

And It all depends on what fight pass replaces... fox or ppv or neither...  if ppv isnt viable anymore then 1.5m subscribers at 14.95/mo would effectively replace ppv.  if networks paying huge rights fees for sports isnt viable anymore then 1m plus subscribers at 14.95 would effectively replace fox (but you'd still likely need a ppv backend).

Even keeping all of that, I don't see that amount replacing PPV, and replacing networks is dumb. The UFC needs to be continually attracting casual fans and you of all people should be aware of this. Best way to do that is high-profile slots on network or cable television. This builds your PPV base.

 

if you just wanted to replace Zuffa revenue now you could just include everything at 14.95/mo... but then that's the ceiling.  You have to look at potential revenue.  The US market is worth 500m/yr to Zuffa... the question is what I the best way to mine that. 

I harp on more Fox shows because exposure and awareness are key to building the base.

 

The question is what is the best way to monetize around 100 fight nights, 13 ppv quality cards, and a dozen or so tuf editions per year and the on demand library.  I could see a way the 500m is mined through fox... i could see it with a combination of fox/fightpass... i could see it with a combination of fightpass plus ppv... i just dont know if it could be done with only subscription.

Please be joking about 100 fight nights a year. 35 (plus 17 PPVs/Fox shows) is insane enough. The quality of lesser Fight Night cards is already abominable on paper. Better to just make official feeders and the hardcore fans can consume [i]those[/i], if they want to watch so much MMA. Hardcore fans certainly loved the WEC, even if it wasn't quite a feeder.

1/12/14 9:41 AM
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MMALOGIC
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Edited: 01/12/14 9:52 AM
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MMALOGIC- And It all depends on what fight pass replaces... fox or ppv or neither...  if ppv isnt viable anymore then 1.5m subscribers at 14.95/mo would effectively replace ppv.  if networks paying huge rights fees for sports isnt viable anymore then 1m plus subscribers at 14.95 would effectively replace fox (but you'd still likely need a ppv backend)."

 

Chromium-  Even keeping all of that, I don't see that amount replacing PPV, and replacing networks is dumb. The UFC needs to be continually attracting casual fans and you of all people should be aware of this. Best way to do that is high-profile slots on network or cable television. This builds your PPV base.

What we know of networks today could be completely different within the next decade and that's why I said "if networks paying huge rights fees for sports is no longer viable... then...."

in an ala carte world very few are going to survive.  It's going to be as bad as the newspaper industry when news consumption went through the interent and paper became obsolete if not worse.

Bundling could remain... if that does then Fox either through a joint ventor or rights fees or a combination will be the likely scenario but without bundling the benefits of being with one of these networks largely disapears.

Their are piliot concepts and reality show concepts the size of mount everest...  as barriers to production and distribution go away what does Fox have?  They'll be competing with a million mom and pop channels.  I could be an open source television world we're looking at.

Sport is the only product you cant just invent... it's very difficult to just come up with a brand new sport compared to a movie, reality show, drama series, comedy series, etc...  in the past few centuries look at how many sports have been viable.

Bundling may not go away....  Fox, Viacom, Disney, etc... may fight tooth and nail and refuse to sell ala carte or direct to the consumer.  We could simply move to cloud based TV where the same package you buy from the cable and satelite company you can get from a cloud based TV provider like google, playstation etc... for a slightly lower cost.

People are cutting chords because of services like netflix, hulu, etc... most of the content on those services come from companies like twentieth century fox, time warner, disney, viacom, etc... essentially everyone who doesnt want bundling to go away.  All they have to do is pull their content from netflix and offer it exclusively through their cloud tv partners like they do with their cable and satelite partners.

In that world Fox wins. 

I believe opensource and direct to consumer ala carte content providers will compete with bundled providers... and the bundling cartel will simply buy out whoever is successful in the direct to consumer ala carte and free open source world to keep their stranglehold on the industry.  

in the end the same 100m or so households will likely have to continue to buy a cloud based tv package like they do a satelite and cable tv package to continue their Television experience.

So yes I agree Zuffa with a partner like Fox is the most prudent option and the more likely scenario going forward... but incase that's not the future of television and the direct to consumer ala carte content providers win  - I laid out the scenario above which is the more likely path for Zuffa which you disagreed with and which i still standby.

as far as piracy goes..  piracy has always been around.  People used to buy black boxes to get all the premium and ppv channels or pay the cable guy under the table to get the channels.    As most and more content moves through the internet the rate of domains being confiscated and shutdown and will be faster.  piracy will move more underground to things like usenet and shit.   

But yes, replacing ppv would be more ideal.  Because then you dont have to keep selling event after event.  The problem is coming up with something that will adequately replace the ppv revenue.  IF bundling doesnt go away I believe either Fox will eventually buy Zuffa out of the ppv business because they can make the math work or it could be a combination of Fox and subscription. 

1/12/14 9:53 AM
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Tad Ghostal
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nobones - 
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Haulport - 
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1.1 million is worrisome? That's awesome that they were able to pop a number that big.


It is extremely worrisome in the big picture. I was surprised at the number (I predicted 950k) but we'll see if 1.1mm is actually true. It would not shock me that it is inflated...

I dont believe so, thats one of Andersons highes PPV buys but this time it was because of Weidman, the two other biggest draws were Brock and Chuck. Having another dominant white american champ will mean a lot of ppvs buys. Jones is doing pretty well as well.

Cain is doing surprisingly low. Hendricks could be a draw. I dont think LW or below will ever be that much of a draw
Jones is sort of underperforming. He is barely above the average but for the amount of promotion put behind him Zuffa expected a bit more. Although if he rematches Gustaffson that should do huge.

Weidman is not a proven draw without a good foil. He might do well against Vitor in Brazil but assuming he wins that fight I don't think his fights with Machida or Jacare (assuming they are his next challengers) will do much above the average.

The biggest problem for Cain is that he has no good challenger. Phone Post 3.0

Jones is under-performing? 3.5M PPVs over 7 title fights is very impressive, especially when you consider that the UFC average is skewed by Anderson and GSP. Remove their numbers and the average is 330,000.

I'm surprised Cain doesn't pull bigger numbers, being HW champ, which has always been a big draw in boxing.
1/12/14 10:22 AM
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MMALOGIC
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nobones - 
MMALOGIC -
LDX -

 

with the significant growth in overseas revenues It may help Zuffa survive without ppv if it had to but that's not really an adequate replacement.

Revenue from brazil and other markets should be an addition not looked at as a potential replacement.

PPV revenue comes mostly from the United States and to a lesser degree Canada and an even lesser degreee australia/new zealand... so the replacement for Zuffa's ppv revenue has to come from those markets otherwise it's really a loss of a revenue stream.

6 million buys generates roughly 300m in total revenue (roughly half of that is zuffa revenue) but Im sure Zuffa values that revenue stream as what that product generates in total (300m) even if they only get half.

So Zuffa would be looking for up to 300m primarily from the USA to adequately replace that revenue stream... not from brazil or anywhere else.

Only a major domestic TV partner like Fox or an in house network like Fight Pass would be able to do that.

Mmmm...I think if they could do $200 million between fight pass and fox in the short term they would be more than happy. Without a doubt their cable/satellite PPV revenue will sink this year. No way to avoid it. Roughly 25% of the TV viewing public no longer subscribes to cable...By the end of this year it can be closer to 30% and by the end of 2015 it can be close to 40%. By 2017 it is almost certain that at least half the country will no longer susbscribe to cable or satellite tv packages but instead various streaming services that can play off multiple devices. Unless the major media companies buy everyone out but Netflix and Hulu ain't cheap anymore. Warner Brothers already took their content off Netflix and will be launching their own platform. FOX may buy out the digital library of the UFC...but then they will have to do that with various sports and that won't be cheap. And I don't think MMA is their #1 priority. And the NFL and MLS already have their own streaming services. I think FOX will offer to partner with the UFC on Fight Pass. Help absorb some of the cost and increase UFC presence on big fox since presence on FS1 and FS2 is basically worthless to the UFC. Instead of paying a lot more cash they will probably begin to offer more UFC on FOX cards more frequently maybe once a month. And they will advertise Fight Pass PPV on those cards. They will offer a little more cash but nothing crazy or else they would have to do that with all their sports partners and that will get way too expensive.

Also the UFC has lost or will lose several key PPV stars and have no immediate replacements. There is no way they will immediately replace the lost PPV revenue in the short term. They may be able to make up the difference over time with fight pass or a better deal with fox or a combination of the two. But it will take years not months. 2014 to 2016 will be transition years for the UFC. It can't be avoided. So the idea that they will get hundreds of millions more dollars between FOX and or fight pass to replace their PPV losses before 2015 just doesn't make sense.

The FOX deal didn't help them develop a single new PPV star over 2 years since the move to FS1 and FS2 messed up the momentum the UFC had been building on FX. They still have agreements so they can't undercut their partners yet and I think they are hedging their bets as well but the writing is on the wall.

WWE has already embraced this concept so they have already begun to sort of sever ties with the cable/satellite industry. They will accelerate the losses they have been experiencing in cable/satellite PPV but they don't care.

I really think 2013 the UFC dodged a bit of a bullet because of Anderson and GSP fighting 4 times between them. I think this year they will see some quite noticeable losses in revenue. Phone Post 3.0

 

I agree ppv will likely take a hit in 2014 but Zuffa's problem isnt Anderson and GSP going away.  Zuffa's problem is the cable channel audience going away since moving networks.  If the cable tv audience comes back Zuffa will be able to fill the anderson and GSP void in short order or atleast cushion the short term blow better.

 

25%?  I dont think that's accurate.  It's in the single digits right now but I agree it's increasing. Pay TV households (not including streaming services) is very high still.

Fox isnt going to wait for the initial deal to run out (in 2018).  They signed a new deal with nascar 2 years into the deal at a 50% increase... this was when Nascar had already been through bidding circle by the major networks.  The UFC has just got onto the stage with this fox deal.  Nobody bids for spike properties unless your tru tv.

ESPN and NBC SPORTS are going to want to drive the UFC price up on Fox whether they really want the UFC or not.  

Zuffa is looking at a major increase in rights fees.  if bundling doesnt go away fox can make the math work to buy Zuffa out of the ppv business.

The problem is nobody knows what the UFC inventory will look like 5 years from now. Zuffa doesnt want a new deal based on what the current inventory is... ZUffa wants a deal based on what the final inventory is going to be.  For the most part with Nascar, mlb, and the others the inventory is set.

It could be 100 UFC fight nights a year, 13 ppv quality cards, and a dozen tuf editions per year.  Zuffa doesnt know what it will ultimately be able to produce and what the market will be able to bear..

Thus we have fightpass.... a place for zuffa to park new content until it's tv partners buys them.   Rogers in canada, foxtel in brazil and sky in newzealand bought rights to the main portion of the singapore card those were 3 of the 4 markets fightpass launched in.

I suspect the only reason Zuffa didnt sell it to fox is because other tv deals like BT sport are tied into whatever is aired on fox/fsa1/fsa2 up to a certain amount of events.  Once zuffa sells these cards to BT and others then I suspect Fox will get them as well.

As Fox and other TV partners buys these events ZUffa will continue to add more fight nights to the schedule and make them "exclusive" to fight pass until fox buys those... rinse and repeat until Zuffa cant produce anymore or until it's TV partners stops buying them.

Once everyone has a better idea of what the final inventory is going to look Fox and Zuffa will enter into serious negotiations.  

If bundling doesnt go away then Zuffa will probably go with whoever is willing to do a joint venture on a UFC network (Fox, espn, comcast/nbc). 

if Bundling goes away then Zuffa will probably do it on it's own and transform fightpass into the UFC network.

1/12/14 10:35 AM
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Khabeer Rockley
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Rambo John J -

 

 

 
 
Lol holy shit!!! Vtfu Phone Post 3.0
1/12/14 11:27 AM
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FETT_GayFerPayNINJA
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Haulport -
Blazing Knees - 
FETT_GayFerPayNINJA - So has there been a single poster who actually agrees with OP that zuffas PPV model is "collapse"ing??? Phone Post 3.0

The only thing that collapsed is this thread and the OP's pride.


Yes, because a thread where:

- The same circle-jerk of shills screams bloody murder at the facts and then all agree with each other as they do on every non-favorable UFC thread;

- The level-headed fans get to see the facts;

- MMALOGIC actually admits that Zuffa would never consider international expansion a replacement for lost US revenues and would only accept new US rev streams as a replacement for the lost yearly (approximate) $135,000,000 in PPV revs;

- And people have legitimate discussion of the situation for pages upon pages

somehow translates into a collapse of my pride?

Only on the UG...........
By "the same circle jerk" do you mean everyone who has posted in this entire thread, even people who normally agree with you like D241?



Its okay pal. Phone Post 3.0
1/12/14 11:31 AM
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FETT_GayFerPayNINJA
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Even the people using your thread to have a legit conversation DONT agree with your premise at all.

Ill ask again to everyone;

Who agrees that the estimates shown by Haulport = the UFC PPV model has "collapsed"???

Bueller? Anyone? Phone Post 3.0
1/12/14 5:49 PM
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Haulport
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Gay and Prey you are easily one of the most boring trolls to ever waste people's time on the UG...
1/13/14 10:46 AM
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FETT_GayFerPayNINJA
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Haulport - Gay and Prey you are easily one of the most boring trolls to ever waste people's time on the UG...
Is that the only angle you have left to avoid your failure of a thread? Call me a troll?


Its okay. Maybe the next thread will succeed. Phone Post 3.0
1/13/14 12:42 PM
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Haulport
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FETT_GayFerPayNINJA - 
Haulport - Gay and Prey you are easily one of the most boring trolls to ever waste people's time on the UG...
Is that the only angle you have left to avoid your failure of a thread? Call me a troll?


Its okay. Maybe the next thread will succeed. Phone Post 3.0

Logical Fallacies

"The Argument from Repetition fallacy is where an argument is repeated over and over until no further progress can be made and all points are exhausted. Normally a person will have a belief or position that does not have evidence, is blatantly false, or is fallaciously structured. They will repeat this over and over no matter what contradictory argument is laid before them."

"Argument by assertion is the logical fallacy where someone tries to argue a point by merely asserting that it is true, regardless of contradiction."
1/13/14 1:12 PM
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dabigchet
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mmalogic - even if there were enough demand across the globe to put on 100 fight nights, there is a practical limit to the number of fighters that would take, and having something that fans can follow and maintain interest in.

i would think a weekly fight show would be the absolute practical maximum if you are talking about fight cards that are at least headlined by a notable fighter.
1/13/14 4:54 PM
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Haulport
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dabigchet - mmalogic - even if there were enough demand across the globe to put on 100 fight nights, there is a practical limit to the number of fighters that would take, and having something that fans can follow and maintain interest in.

i would think a weekly fight show would be the absolute practical maximum if you are talking about fight cards that are at least headlined by a notable fighter.

An weekly would be HARD imo...
1/13/14 5:37 PM
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Haulport
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Haulport - 
FETT_GayFerPayNINJA - 
Haulport - Gay and Prey you are easily one of the most boring trolls to ever waste people's time on the UG...
Is that the only angle you have left to avoid your failure of a thread? Call me a troll?


Its okay. Maybe the next thread will succeed. Phone Post 3.0

Logical Fallacies

"The Argument from Repetition fallacy is where an argument is repeated over and over until no further progress can be made and all points are exhausted. Normally a person will have a belief or position that does not have evidence, is blatantly false, or is fallaciously structured. They will repeat this over and over no matter what contradictory argument is laid before them."

"Argument by assertion is the logical fallacy where someone tries to argue a point by merely asserting that it is true, regardless of contradiction."

Kind of like you repeat, and assume, that everyone who disagrees with you is a troll?

Moron.

Another one...

You appear, accuse me of being a hypocrite and then call me a name, LOL!
1/13/14 9:31 PM
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Blazing Knees
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FinestScotch - 
Haulport - 
FETT_GayFerPayNINJA - 
Haulport - Gay and Prey you are easily one of the most boring trolls to ever waste people's time on the UG...
Is that the only angle you have left to avoid your failure of a thread? Call me a troll?


Its okay. Maybe the next thread will succeed. Phone Post 3.0

Logical Fallacies

"The Argument from Repetition fallacy is where an argument is repeated over and over until no further progress can be made and all points are exhausted. Normally a person will have a belief or position that does not have evidence, is blatantly false, or is fallaciously structured. They will repeat this over and over no matter what contradictory argument is laid before them."

"Argument by assertion is the logical fallacy where someone tries to argue a point by merely asserting that it is true, regardless of contradiction."

Kind of like you repeat, and assume, that everyone who disagrees with you is a troll?

Moron.

No, he calls them 'Trolls; and "Shills'.  Like there are really paid Zuffa posters on here-how stupid and paranoid is that?

1/14/14 12:12 AM
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FETT_GayFerPayNINJA
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FETT_GayFerPayNINJA - Even the people using your thread to have a legit conversation DONT agree with your premise at all.

Ill ask again to everyone;

Who agrees that the estimates shown by Haulport = the UFC PPV model has "collapsed"???

Bueller? Anyone? Phone Post 3.0
Bueller???????? Phone Post 3.0
1/14/14 12:59 AM
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FETT_GayFerPayNINJA
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Haulport -
FETT_GayFerPayNINJA - 
Haulport - Gay and Prey you are easily one of the most boring trolls to ever waste people's time on the UG...
Is that the only angle you have left to avoid your failure of a thread? Call me a troll?


Its okay. Maybe the next thread will succeed. Phone Post 3.0

Logical Fallacies

"The Argument from Repetition fallacy is where an argument is repeated over and over until no further progress can be made and all points are exhausted. Normally a person will have a belief or position that does not have evidence, is blatantly false, or is fallaciously structured. They will repeat this over and over no matter what contradictory argument is laid before them."

"Argument by assertion is the logical fallacy where someone tries to argue a point by merely asserting that it is true, regardless of contradiction."
Maybe since you know the definition, and you repeat it enough, you will convince yourself your little thread you spend days working on, is accurate?


Bueller....anyone? Phone Post 3.0
1/14/14 2:55 PM
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Haulport
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The only reason Anderson became a draw was a perfect storm of his spectacular finishes, his feud with Chael and the NON STOP push by Zuffa as the GOAT.

That is extremely hard to reproduce and without a massively charismatic athlete (like Brock or GSP) you are just not going to see PPV numbers for anyone currently imo...
1/14/14 3:58 PM
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dabigchet
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not sure i would say he is "such a draw". the re-match was huge and did double the business that the first one did, because he IS the GOAT and most people had never seen him lose. not to mention having rhonda on the card too. the takeaway with UFC 168 is that you can't really predict what is going to be huge a year out.
1/14/14 4:08 PM
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breakbeatbox
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The loss of Anderson and GSP almost guarantees a slump in 2014, I'll say that.

I think it'll be at least a few good years before UFC abandons the PPV market and goes the way of WWE. It's kind of a shame, because they have the opportunity to make a big splash here and now instead of waiting for things to fizzle out.
2/8/14 8:00 PM
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Haulport
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Here's a chart of the disaster that is the UFC on FOX ratings

 

2/8/14 8:05 PM
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Lazer MMA
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Edited: 02/08/14 8:07 PM
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TTT

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