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Viacom buys Bellator, plans 2013 start on Spike

    Tue, 2011-10-25 22:43 — News

    MTV Networks' Spike TV channel is getting out of the Ultimate Fighting Championship's business, but the broadcaster has increased its ties to mixed martial arts.
    Viacom, parent of MTV Networks, bought a majority stake in Bellator Fighting Championships and will start airing the promotion's bouts on Spike in 2013, the companies told USA TODAY this week. They've had ongoing talks for about a year as they finished up various deals, and over the past month finally reached the point where they could announce the news, Bellator CEO Bjorn Rebney said.
    Selling to Viacom's entertainment conglomerate guarantees a stable future for Bellator, said Rebney, who will remain in charge of Bellator.
    "It puts all of those cornerstones of ownership in place for us," he said. "Which is something that's been so seriously lacking in the MMA space with so many different companies, including Strikeforce and the IFL and Affliction and all the different failures that have occurred. … It alleviates those issues."
    Bellator is the No. 2 promotion in mixed martial arts behind market leader Zuffa, owner of UFC and Strikeforce.
    The experience and cachet of Spike in broadcasting mixed martial arts over the last six years makes it the ideal partner for Bellator, Rebney said. Spike became the first channel to embrace the sport when it started airing Zuffa's programming in 2005, including The Ultimate Fighter reality show and live UFC Fight Night events.
    Although Spike's agreement to carry new material from UFC ends in December, the channel still has rights to the promotion's library through 2012. As a result, fights from Bellator won't air on Spike until 2013, said Kevin Kay, Spike TV president. In addition to continuing Bellator's current practice of having two seasons annually, Spike expects to run additional programs such as highlight shows and related content, both on TV and online.
    MTV2 has been airing Bellator's main cards since March. MTV Networks increased its Bellator programming in September by streaming preliminary fights on Spike TV's website.
    As early as last year, executives for Viacom saw little hope for reaching another deal with UFC.
    "We had a great relationship with UFC and we still do," Kay said. "We helped each other to build each other's brand. Like all good things, you know that at some point it's going to come to an end."
    Advantages of ownership
    Owning its own promotion allows Spike to take a longer view and commits it more firmly to the sport, he said.
    "As we realized that our relationship with UFC was likely to come to an end, our Viacom mergers and acquisitions folks, and us, started to have conversations with MTV2 about getting invested in a mixed martial arts promotion and become owners as opposed to renters," Kay said. "You're building value in something that you own, and you own it for the long term. You're not in a constant state of negotiation."
    Other brands in mixed martial arts have been sold over the past year, most notably Strikeforce, which Zuffa bought in March. But Bellator's organizational ability, knack for exciting fights and unique format made it stand out, Kay said.
    While most MMA companies put together cards based around single fights, Bellator has weekly shows built around eight-person tourneys to produce title contenders.
    "The tournament format (is), we think, a great way to get the audience invested in the fighters as personalities, as characters," Kay said. "I think we can help, with the expertise we have in building fighters as fighters that people want to see and come back week to week."
    Since starting in 2009, Bellator has built up a roster that includes a number of ranked fighters. Lightweight champion Eddie Alvarez, featherweight contender Pat Curran and featherweight Marlon Sandro are in the top six for their weight classes in the USA TODAY/MMA Nation consensus rankings. Middleweight champ Hector Lombard and featherweight titleholder Joe Warren are No. 13 for their divisions.
    Other top-20 Bellator names include heavyweight champion Cole Konrad, welterweight champion Ben Askren, welterweight contender Jay Hieron, bantamweight champion Zach Makovsky and bantamweight tourney finalist Alexis Vila.
    Bigger audience, more resources
    The overall reputation for Bellator's assembly of talent remains far behind UFC, by far the largest and richest organization in the sport. But adding Viacom's financial muscle could help Bellator retain its biggest stars, or at least make it much harder for others to sign them away.
    "They'll have a ton of more money to negotiate with," said Alvarez, who has three to four fights left on his current contract. "As long as I keep doing well and do what I'm supposed to do, the future looks bright."
    He's been with Bellator since it started with delayed airings on ESPN Deportes in 2009. The brand has expanded its TV presence each year, with live shows on the scattered affiliates of Fox Sports Net in 2010, and a consistent presence on MTV2 this year.
    "We both grew together," Alvarez said. "I'm sort of peaking in my career, and it seems like so is Bellator. … I was with a lot of promotions that failed, that flopped, and this is actually working. Everything's coming to fruition."
    Moving to Spike all but guarantees a much larger audience for Bellator. Spike says it's available to almost 100 million cable and satellite subscribers, compared to roughly 80 million for MTV2. Spike is also easier to find in channel line-ups because it generally gets a lower number in the vicinity of other popular cable/satellite offerings such as FX, TBS, TBS and USA Network.
    Spike also has high-definition broadcasts, these days a benchmark for sports programming. Bellator currently appears on HD only through Epix, which is not carried by some large cable providers.
    "The goal is HD all the time and once we get to Spike, it'll be that way," Kay said. "When you're looking at an organization like Bellator, what you see is the opportunity for growth and to grow ratings. We have big expectations."
    Fighters and managers will raise their sights too. Exposure to more viewers should help athletes land sponsors that can add a sizable amount to their income.
    "I'm smiling ear-to-ear right now," Alvarez said. "I couldn't be any happier. Endorsements are hard to come by when you're on ESPN Deportes and these other smaller channels."
    Audience expectations
    Bellator's largest audience for a live broadcast on MTV2 was an estimated 325,000 viewers for a show in May. Spike has generally drawn between 1.2 million and 2.2 million viewers for UFC Fight Night shows.
    TV ratings and pay-per-view buys for UFC have flattened or declined this year. Spike's executives dismiss concerns that the sport's popularity has peaked. Injuries to big names beset several UFC main events since March, which Kay describes as a short-term problem.
    MTV2 airs Bellator on Saturdays, often pitting it head-to-head with UFC's live programs. Executives haven't decided what night will work on Spike, but next year's run on MTV2 gives them a platform to test ideas. The effect of not only UFC, but other sports, needs to be measured, Kay said.
    "There's a lot of factors we're going to analyze and figure out," Kay said. "Also, where's our audience used to watching it? … We've got a lot of good research and data to think about where it goes. I don't know that you want to program football against football or baseball against baseball. We'll look at all of that."
    Bellator deserves at least two years on Spike before its success can be evaluated, he said. The channel has been willing to give its shows time to develop, especially when it owns the content and is investing in its development. Kay cited Spike's patience with comedy Blue Mountain State, which started with unimpressive ratings before blossoming.
    No one expects Bellator's numbers on Spike to match UFC right away. Losing UFC's cachet as the industry leader has risks, but Spike's experience moving from World Wrestling Entertainment to Total Nonstop Action Wrestling in 2005 shows that long-term exposure eventually can boost numbers when switching from one brand to another, Kay said.
    "I had the same fear: 'Are people going to watch another wrestling organization on Spike?' " Kay said. "That first year or so, we had probably (an average of) 600,000 viewers. Last week we had 2 million; it's the highest-rated TNA in the history of Spike."
    Competing or complementary?
    Zuffa over the last few years has been pushing into other countries aggressively, going so far as to sell a 10% stake to an arm of the Abu Dhabi government because of that entity's ability to open new markets. Viacom's resources will also fuel expansion plans outside the United States and Canada, Rebney said.
    "The timing remains to be seen in terms of when exactly that occurs, but that will occur," he said. "International expansion of live Bellator events will absolutely occur."
    Even though Bellator will replace UFC on Spike and occasionally try to go after the same talent, Rebney and Kay declined to characterize themselves as direct competitors with UFC.
    "They're No. 1 in the space, there's just no question about it," Kay said. "Who's more competitive than Dana White? I am, but that's not a horse race we really want to run around here. I think we respect that organization tremendously."
    Bellator and Zuffa have occasionally butted heads over talent -- even suing each other over fighter contracts -- but executives from both companies steer clear of harsh words. Even UFC President Dana White, who has never been shy about disparaging other promoters, maintains a mild tone.
    "The people from Bellator have never said anything about us," he said recently. "I have nothing to say about them either. They're out there. They're doing their thing. Good for them."
    Spike taking over Bellator could help Zuffa in terms of public perception. Critics argue that Zuffa has become a monopoly by acquiring other brands such as Pride Fighting Championships and Strikeforce, making it difficult for other companies to break into the space and taking away options that might give fighters negotiating leverage. A thriving Bellator would erode that argument.
    At the same, UFC's continued growth and success would help Bellator and Spike because it would expand the sport as a whole, executives said. Bellator's announcement with Spike comes less than three weeks before UFC makes its debut on Fox.
    "It's a very, very good day for mixed martial arts as a whole," Rebney said. "Because now you have two groups in the space that have a very substantial presence that obviously isn't going to go anywhere for a very, very long time."
     

    http://www.usatoday.com/sports/mma/post/2011-10-26/viacom-buys-bellator-...

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