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Welcome to a new episode of Office Hours: a podcast with Front Office Sports CEO Adam White and figures in the sports industry that’s centered around three basic questions: “What’s on your mind today?”, “What are you excited about?”, and “Any big ideas or theories you want to share?”
On today’s episode, White is joined by Donn Davis, chairman and co-founder of the Professional Fighters League. A lifelong entrepreneur, Davis proved successful in technology, hospitality and entertainment before embarking on his latest venture: starting a professional sports league. Heading into its third year, Davis’s ambitions for the PFL include global expansion and betting integration. Having raised $100 million, Davis is bullish on the PFL becoming the next billion-dollar league.
Edited highlights appear below:
On the PFL’s growth on television/ESPN (8:00)
Davis: “You can have minor sports on a minor budget and you can have major sports on a major budget. So we’re producing at the PFL already 25% of the UFC audience. Think how insane that is. So the UFC has been around 25 years. The UFC’s marketing budget is $150 million. Ours is zero. They’re on ESPN on Saturday nights, we’re on ESPN2 on Thursday nights and we’re already doing 25% our TV audience. That’s how good the product is and how differentiated it is and how much demand there is for MMA out there. And we’re growing 25% a year for our worst fight, 95% a year for our best fight…So we’re on our way yet we’re still extremely affordable producing major engagement, major audience.”
On gambling integration in the PFL (13:08)
Davis: “In my role as founding partner of Revolution, we had done a lot of investments, on the gaming side. Sport Radar, DraftKings…So I’ve been aware of how important gaming is and gambling is for a long time really on the engagement. From the very beginning, what we did at PFL is say, ‘what if you’re starting a new sports league to be digital first, mobile first?’ That doesn’t mean you’re not going to be on TV. That just means what would you build into the product. So it was very engaging…So one thing we did is we wired the cage, we call it the PFL smart cage. We work with the people created the yellow line SMT, and we’re the first to get full clearance from all the commissions to essentially put technology in the cage…What that does is collect the biometrics and all the data and all the statistics, real-time in the fight. We’ve displayed some of those this year. Heart rate, punch impact, distance traveled…The pressure on a mat…So the more we can start to display these analytics on TV, people go, ‘huh, I’m amazed.’…That also becomes prop bets on the mobile phone as we get to 20 States and 30 States and we get more consumers with real time mobile gambling.”
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On the path to profitability (41:01)
Davis : “it’s surprisingly close. Look, MMA is not that expensive. Very inexpensive. As a startup, we have raised $100 million, but in the scheme of building a very big company to put on a great product. We can breakeven on our next media deal so we can breakeven in 2021, 2022 at the very latest. So we’d breakeven in our fifth year. It’s pretty good…Building a big company takes a lot of capital. This is a big amount of capital, but in the scope of what we’re building, reasonable and I think in the fifth year of operations to be breakeven on that biggest scope, that’s a great business model.”
On pitching the PFL to potential partners (44:14)
Davis: “It’s interesting, it’s a great pitch, but think of it as the Olympics pitch versus a event pitch so you can integrate your brand for the entire season in any way you want…We own all the property, we centrally control the league. There are no teams that we have to deal with. So if if you’re Geico or Anheuser-Busch, how would you like the athletes to activate? We can create modules on TV or in stream, in social, in digital throughout the season, over the 10 events we can create custom campaigns because all that intellectual property is owned and centrally controlled. So you’re not dealing with a league, a team, and a star player. All three of those are the same. So we can create custom campaigns and integrate them like never before. And also we do our own TV production, not just on social and digital, our own TV production. So it’s not just the ancillary content, but it’s the main feed. So that allows you to do things that other leagues cannot do..”
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