Dream: Moves in the US Market

Japanese Promotion Dream has made news recently with several moves to shore up one of their secondary Markets, namely the United States. Dream announced a partnership with HDNet to air the first six installments of Dream on the high definition network. Dream and HDNet began their relationship with the New Year's Yarennoka card, or Fedor Returns as it was marketed here in the states. HDNEt is most likely paying a license fee for each installment of Dream, but not nearly the $1 to 1.5 million they paid for the Yarennoka card, as rumored by Dave Meltzer.

This relationship marks a new path of distribution for the hybrid promotion that combines remnants of the old Pride and Hero's organizations. FEG/K-1 never made any efforts to market their MMA promotion, Hero's, in the states and relied upon time buys on ESPN to promote their global Kickboxing brand in the US. Pride had much more aggressive marketing efforts in the US. Pride's main means of promotion in the US were through their semi-regular slot on FSN and on PPV. Pride went so far as to open up a domestic office and put on two US based cards before selling out to Zuffa. None of these avenues were able to raise Pride above a niche player in the US MMA market.

This new television path may be the most economical and effective one for Dream. With Dream still looking to get solid footing on Japanese broadcast tv, expending funds for a US timebuy would seem to be fool hardy. PPV was also an option but was generally not much of a money maker for Pride, even when they were at their strongest . Most Pride shows did in the neighborhood of 25k to 35k buys, so with their probable 60% take of the 34.95 list price of their PPV they were making around $600k to $700k a show on ppv before you factor in the costs of the ppv like their US Staff, satellite time, etc. The US shows weren't a significant revenue stream for Pride but instead were supported by the Huge Box office they were able to generate in their home market of Japan. As was the case for the IFL when they were on MyNetwork, their cost of television was probably higher than the licensing fees it received for the events, which is detrimental to the bottom line. The HDNet is giving them a solid revenue stream through licensing fees and visibility in the US market without a labor or resource intensive structure.

With Dream announcing a strategic partnership with EliteXC, this calls into question the future relationship between Dream and HDNet. Dream and Elite announced that they would continue with talent exchanges between their rosters and also co-promote fight cards with the other in their respective home markets. A natural extension of this relationship would be possible Dream cards moving over to Elite's cable home on Showtime. Dream's future television home in the US could come down to dollars and cents, depending upon which American partner can come up with the higher license fee.