UFC 306 ‘even more expensive’ than anticipated, but Sphere event could produce largest live gate ever
Dana White wasn’t kidding when he teased that UFC was breaking the bank to produce the first ever live sporting event at the Sphere in Las Vegas.
The UFC CEO disclosed recently that the promotion has already spent at least $17 million on production for UFC 306 — also known as Noche UFC — at the Sphere, which takes place on Sept. 14. While total cost for the event hasn’t been revealed, TKO Group Holdings chief financial officer Andrew Schleimer stated on Thursday that costs are even higher than the company expected.
That being said, Schleimer believes UFC 306, which is headlined by bantamweight champion Sean O’Malley defending his title against Merab Dvalishvili, could also end up as potentially the most successful event in history in regards to ticket sales.
“Look, we’re bullish,” Schleimer said of the event. “We’ve talked obviously about this being a cultural event and Dana has publicly stated how much more [invested UFC is] in this event, and obviously this is going to be a massive spectacle for those in the arena and for those at home. On the top side, this will be one of the largest gates if not meaningfully the largest gate that we’ve ever done, and on the cost side, it’s going to be the single largest investment that we’re making in an event. It’s even more expensive than we originally anticipated and that’s reflected in our new guide.
“We talked about some tailwinds going into the balance of the year, but if there’s one meaningful headwind that has a direct dollar-for-dollar impact on EBITDA (earnings before interest, taxes, depreciation, and amortization) it’s the incremental expense we’re seeing at the Sphere.”
Both TKO executives and White have stated that UFC 306 at the Sphere is a “one and done” live show, which means the promotion won’t be putting on another card there again — at least not any time in the near future.
The Sphere, which cost $2.3 billion to construct, features a 160,000 square foot LED screen that wraps around the entire arena. Approximately 20,000 fans are able to pack into the structure when including standing room only seating. Unlike most arenas where UFC hosts events, the Sphere features a stage setting where the octagon sits at the end of the venue with the majority of seats cascading up the structure like a movie theater.
Limited seating is available closer to the octagon, but the setup for UFC 306 is vastly different from the majority of live events UFC produces.
While the astronomical cost goes far and beyond what UFC usually spends on a live event, TKO Group Holdings president and chief operating officer Mark Shapiro believes the juice is worth the squeeze in the long run.
“[TKO Group Holdings CEO] Ari [Emanuel] and I held a dinner in Paris for the Olympics for our premiere ad partners — one of them made a comment about us being in a position and always sort of having a history, and I credit Dana with this more than anybody else, of not making every decision based on the dollar,” Shapiro said. “We are committed to growing the brand. We are committed to growing the audience, and sometimes we will make investments that short term won’t necessarily pencil out but long term, there will be a big win for us and play out tenfold.
“That’s what the Sphere is when Andrew talks about a spectacle. This event is going to be very positive for the UFC brand and business long term. If we have to spend more than we’ve ever spent on an event — and believe me, we’re doing that — it will pay off long term. We expect to use this event to grow our fan base, to increase fan engagement, and most importantly, to capitalize on the growth area that is the Latin market for us.”
As far as the live gate goes, UFC won’t get those final numbers until the event actually takes place, but the launch of ticket sales saw huge interest with prices reaching as high as $12,000 per seat. There are still tickets available now, with the lowest price available (not based on resell tickets) at just over $1,300.
