Well there are difficulties of doing a tournament, but that’s kinda my point. Hardcore fans are buying the PPVs regardless, so take a few of those good (or at least marketable) fights from the PPV and put them on TV for free to get casual fans to tune in. Casuals aren’t going to tune in to watch 2 guys that have 1 fight in the UFC and are 5 wins away from being in title contention. They want to see fights, at least the main event, that have some significance.
The most important thing for them are to get eyeballs on the sport. Having a marketable fight as the main event is step one. It can be a legend like BJ Penn, a fighter people from outside the fight world might recognize like PZV, or a title fight like the TUF finale this year. Once you get people to tune in, they start to learn the fighters, see how exciting the sport can be, see all the promotion for the next PPV, etc. For casual fans, you don’t do that with up and comers.
And before anyone says anything, I don't mean put Connor on Fox. There are obviously fights that need to be on PPV, but there are other good, marketable fights they can use for Fight Nights. I'm not saying that's what I want to see, but I understand why the UFC would do that.
First of all, they aren't getting similar revenue overall. Their revenue has been increasing for several years now. Second, I agree it’s not the best long term marketing strategy unless you are looking to sell….oh wait.