The rise of athletes on OnlyFans, UFC's extravagant $20m spend at the Las Vegas Sphere is worth it
The rise of athletes on OnlyFans, UFC's extravagant $20m spend at the Las Vegas Sphere is worth it
Today’s lineup:
The rise of athletes on OnlyFans
UFC's extravagant $20m spend at the Las Vegas Sphere is worth it
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The GWS Giants inked a long-term 5-year renewal with Toyo Tires, extending the partnership until 2029
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Netflix announced a third series of Full Swing
Cristiano Ronaldo became the 1st to reach 1 billion social media followers thanks to his recent YouTube channel launch
Sydney FC's new superstar recruit, Douglas Costa, has started an OnlyFans account
The move is a signal of an emerging trend where athletes are seeking to capture a larger share of the revenue generated by their online attention
There’s an ongoing tug-of-war between content creators (e.g. athletes) who produce the content and the platforms that distribute it over how much of the commercial return each party should receive.
Social media platforms make billions by monetizing the attention that athletes like Douglas Costa generates from fans and they have varying business models and ways of sharing revenue.
Facebook, Instagram and TikTok are well known as platforms that help creators generate income from 3rd-party’s via avenues such as brand deals and affiliate marketing
YouTube adopts a pay-per-view model where creators get paid according to the number of views they generate
Onlyfans is different. The platform enables athletes/creators to offer exclusive content behind a paywall, for a subscription fee. It provides creators with 80% of subscription revenue which can end up being a much more lucrative share than mainstream social media models.
Douglas Costa has played for some of the world’s biggest soccer clubs including Bayern Munich, Juventus and LA Galaxy and has a huge following - 6.1m Instagram followers and 2.4m on TikTok.
The Brazilian international now just created an OnlyFans account to offer fans exclusive, non-X-rated content to secure a bigger piece of the pie.
OnlyFans’ generous revenue-sharing model has helped attract other high-profile Australian athletes
Last year, Nick Kyrgios became one of the first professional male athletes to join. Olympic diver Matthew Mitcham and Opals star Liz Cambage also have OnlyFans accounts.
The big names entering, combined with the performance numbers signals that the business model works
Since launching in 2016 and as of May 2023, the site had:
220m+ registered users
3m+ content creators
Paid $15bn+ to creators
The upside is high but there's also risk for athletes entering the OnlyFans world as it's still widely known as a platform for adult content so aligning to the platform might inadvertently cause brand damage.
Some critics argue that it normalizes explicit content and that some athletes facing financial hardship may feel coerced into joining.
Can OnlyFans move to mainstream using sports?
Social proofing will likely play a role in the future onboarding process. Athletes and fans will be more likely to sign up as they see others doing the same.
There's signs that OnlyFans are implementing a strategy to pivot away from their X-rated roots and sports appears to be a key part of the plan as they help facilitate the growing trend of athletes using social media to intimately connect with fans.
They face competition though. Other recent examples worth noticing include:
Cristiano Ronaldo started a new YouTube channel called "UR"
NBA star Kyle Kuzma launched a newsletter call “Kuz Kontrol” on beehiiv
Washington Commanders running back Austin Ekeler launched an app called “Eksperience” enabling athletes to connect with fans directly
The UFC's extravagant $20m spend (10x more than normal) to host its latest event at the Las Vegas Sphere is worth it
Ultimate Fighting Championship pay-per-view events usually cost around $2m dollar to produce, but UFC306, also known as Riyadh Season Noche UFC cost $20m+ to host at the $2.3b venue.
Here’s why it’s worth it:
1. Ticket sales delivered a direct ROI
The hype of the event created huge-demand, and high ticket prices. The cheapest tickets reportedly listed were $800 and floor seats sold for $2,500 to $34,000+.
In total, the UFC generated $22m in gate sales, shattering the previous record of $17.7m set by UFC205 in 2016 at Madison Square Garden which featured Conor McGregor.
Although the event wasn't designed specifically to deliver a direct commercial return, it still managed deliver a significant one.
*The UFC also recorded a merchandise sales record for a single event.
2. Unprecedented global earned media coverage
The Sphere’s interior was transformed into a visually-striking UFC-themed experience by 300+ creatives which included multiple Emmy winners, Golden Globe winners and Oscar nominees who helped produce the run-of-show.
The significant investment into the immersive sports presentation paid dividends as fans and the media were left in awe. Footage quickly went viral across social and traditional media and the UFC received an unprecedented level of coverage well beyond what they’d expect from hosting it at any other venue.
3. UFC brand value boost
The futuristic nature of the Sphere helps elevate the event and UFC brand.
The world leading technology and innovation used to deliver the live sports experience reinforces the UFC as a premium code and world-class sport.
It was the first time a live sports event was ever held at the Sphere which helps create a perception of exclusivity & cultural significance, and it helps position the UFC as the global leader in live sports.
The mass reach generated by the one-off event (and post event coverage) increases UFC’s brand awareness, and enables them to reach new audiences who may not typically follow MMA.
4. Future commercial returns
The boost to UFC brand value is set to help deliver commercial returns via media rights, sponsorship and major event hosting rights.
The majority of the UFC’s revenue is generated by media rights and $20m is an insignificant amount when compared to the $851m it generated last quarter (two-thirds came from media rights).
The UFC is set to renegotiate their media rights, and attention-grabbing events like UFC306 will help drive up the value
The same applies to new & current sponsorships and major event hosting rights. The more attractive the UFC brand becomes, the greater the negotiating power.
Punchline
Hosting UFC 306 in partnership with the Sphere is worth it because it delivers short-term ROI, and positions the UFC well for major commercial success in the long-term.
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