Declining Bonuses Sign of Belt Tightening for UFC?

January 31, 2008

Dave Meltzer reported in this week’s Wrestling Observer Newsletter that bonuses for best match, submission, and knockout at UFC 80 were $35,000. At UFC 78 the bonuses were worth $55,000 while at UFC 79 the bonuses paid $50,000. Meltzer cited the decline as symptomatic of across the board belt tightening for the company.

It should be noted that the disclosed performance bonuses have fluctuated greatly over the last year as the company attempted to find the right price point to incentive fighters into pushing the action. There are some indications that the bonuses are being priced based on the profile of the show, however, the decline of bonuses from UFC 78 to 79 is inconsistent with that theory.

Sources have told MMAPayout.com that the cuts have also affected the undisclosed discretionary bonuses typically given to top fighters following their fights. However, in recent media appearances White had given some indications that the company would be moving away from undisclosed bonuses in the wake of the Couture dispute.

WWE Survivor Series Buy Rate Down 16%

January 31, 2008

WWE Survivor Series 2007 posted 320,000 buys on pay-per-view for an estimated $5.54 million in revenue according to The Wrestling Observer Newsletter. In 2006, the event posted 383,000 buys for $6.64 million in revenue.

The event was expected to do better based on a stronger lineup than the year before, but may have been hurt by UFC 78 which aired on pay-per-view the night before.

UPDATE: Bevanda Magica LLC

January 30, 2008

MMAPayout.com has confirmed through filings with the Nevada Secretary of State’s Office that Bevanda Magica is a registered LLC. According to the filings, the company was formed on May 17, 2007. The managers of the company are Lorenzo and Frank Fertitta.

Sherdog Radio

January 30, 2008

I joined Josh Gross and TJ De Santis on Sherdog Radio this afternoon to discuss the latest on the Xyience-Zuffa story.

Click here to listen.

'Bevanda Magica': Xyience Bankruptcy Filings Reveal Deep Ties to Zuffa

January 30, 2008

I have a new story at Sherdog.com on Zuffa’s relationship with Xyience:

Bankruptcy filings obtained by Sherdog.com suggest a much deeper relationship between Xyience and Zuffa, parent company of the UFC, than merely a lucrative sponsorship agreement.

FULL STORY: ‘Bevanda Magica’: Xyience Bankruptcy Filings Reveal Deep Ties to Zuffa

UFC 81 Preview: The Pro Wrestling Push

January 29, 2008

In case you haven’t noticed, UFC 81 is shaping up to be something of a major marketing test in the MMA industry. One of the biggest questions in the industry today is where does the sport draw it’s burgeoning audience from? Despite the media’s preference of the boxing v. MMA narrative, which is enthusiastically embraced by some of the sport’s most ardent fans, there is a growing body of evidence to suggest that pro wrestling is MMA’s closest comparable and biggest competitor.

The results of UFC 81 will go a long way towards answering that question with the event’s marketing built on former WWE Superstar Brock Lesnar’s ample shoulders. The UFC has chosen to explicitly target the pro wrestling audience, reaching separate deals with the two largest companies in the professional wrestling industry, WWE and TNA.

The company purchased footage of Lesnar as well as a promotional push on WWE.com from the WWE for what was reportedly a nominal fee, while TNA has aired a series of vignettes with Kurt Angle, pro wrestler and former Olympic Gold Medalist in wrestling, promoting the Lesnar-Mir matchup. Additionally, commercials for UFC 81 will be in heavy rotation during WWE RAW and Smackdown and the company distributed promotional materials at last night’s WWE Royal Rumble in Madison Square Garden.

The UFC’s motive’s are obvious as Lesnar is a virtual unknown outside of the WWE audience. Despite Dana White’s public reluctance to fully embrace pro wrestling, he is obviously betting that the UFC does draw from the pro wrestling audience and that Lesnar can expand that segment of the audience. It’s a fairly low risk opportunity for the UFC to expand its audience, although there has been some backlash from the “hardcore” fan base at the promotion of a pro wrestler, especially at the expense of an interim Heavyweight Title fight pitting two top five fighters.

TNA’s participation is easily explained by the fact that it is a fellow Spike property and depends on the network’s support for its continued meager existence. It’s not hard to imagine that if White went to Spike and wanted time on TNA, TNA had little choice but to be more than willing to give it. The WWE on the other hand is harder to explain.

It was McMahon’s blessing that allowed the UFC onto Spike in 2005 and thus launched the company’s current run. Hindsight being 20/20, with growing evidence that the WWE’s declining pay-per-view numbers may be correlated to the UFC’s increasing numbers, the conventional wisdom is that McMahon might regret that decision. However, on it’s face, cooperating with the UFC’s push of Lesnar certainly doesn’t suggest much heart burn on McMahon’s part.

The other interesting storyline of UFC 81 will be the promotion’s handling of Tim Sylvia-Antonio Nogueira. The fight is officially for the Interim Heavyweight Title despite the fact that the company has still not acknowledged Randy Couture’s resignation which precipitated the interim title match. If the past four months are any indication, the odds of a frank discussion of the Couture situation are slim to say the least.

However, the company’s handling of Sean Sherk’s steroid suspension during UFC 81 was mildly encouraging. The issue was addressed frankly on the Countdown show, but was completely glossed over on the pay-per-view, despite the fact that Sherk did commentary for the Lightweight Title fight. Depending on your perspective the combination was either a small step forward towards a legitimate sports approach that acknowledges inconvenient truths or a muddled compromise that leaves everyone unsatisfied and confused.

The key difference between Couture and Sherk is that Sherk is still with the company and his suspension will inevitably be a big part of the build for his fight with Penn, whereas Couture is no longer with the company, is embroiled in a bitter legal dispute, and by all indications intends to fight elsewhere as soon as possible.

In other words, the company was essentially forced to acknowledge Sherk’s situation, whereas if they can get through the build for Sylvia-Nogueira without acknowledging Couture, they can arguably simply pretend he never existed from here on out with little consequence to business. They have made it almost four months without confronting the issue, stopping now would almost be a waste, creditability with its audience does not seem to be a commodity that the UFC values.

The rest of the live card is rounded out by Jeremy Horn v. Nate Marquardt and Ricardo Almeida v. Alan Belcher in a pair of fights that could quickly put the winners in contention in the thin Middleweight division. The swing bout has the potential to be the best fight of the night as Gleison Tibau faces Tyson Griffin in the 155-pound division.

Trinidad-Jones Posts 500,000 Buys

January 26, 2008

Last Saturday’s Felix Trinidad-Roy Jones Jr. fight beat expectations, posting 500,000 buys on pay-per-view for HBO Boxing’s first event of 2008. The show had been ridiculed, by UFC Vice President Marc Ratner among others, as being several years too late. Jones had been inactive for the better part of three years coming into the fight, while Trinidad had been retired for two and half years.

Similar complaints were raised in 2006 when Royce Gracie fought Matt Hughes and both times Ken Shamrock fought Tito Ortiz. At the time the hardcore fan base blasted the booking as one sided, asking “who wants to see that?” The events went on to do 620,000 and 775,000 buys respectively, not to mention a then record 5.7 million viewers for the final Ortiz-Shamrock fight on Spike.

The lesson is clear: casual fans like to see stars, even if they are past their prime.

Fertitta's to the Rescue: Xyience Recieves Emergency Loan

January 26, 2008

The Las Vegas Review-Journal reported today that Zyen, a company controlled by the Fertitta family, has been granted permission by the judge handling Xyience’s bankruptcy proceeding to issue an emergency $1 million loan to the embattled beverage maker. According to filings with the Nevada Secretary of State’s office, Zyen was formed in September of last year. The company already holds $12.5 million in unsecured claims and $5.3 million in secured claims against Xyience.

UFC Fight Night 12 Payouts

January 24, 2008

MMAJunkie.com reports the following payouts from last night’s Ultimate Fight Night event:

  • Mike Swick ($20,000) d. Josh Burkman ($10,000)
  • Patrick Cote ($28,000) d. Drew McFedries ($10,000)
  • Thiago Tavares ($18,000) d. Michihiro Omigawa ($5,000)
  • Nate Diaz ($30,000) d. Alvin Robinson ($7,000)
  • Kurt Pelligrino ($20,000) d. Alberto Crane ($4,000)
  • Gray Maynard ($16,000) d. Dennis Siver ($7,O00)
  • Jeremy Stephens ($10,000) d. Cole Miller ($8,000)
  • Corey Hill ($16,000) d. Joe Veres ($3,000)
  • Matt Wiman ($16,000) d. Justin Buchholz ($4,000)

Total disclosed payroll was $232,000. Bonuses for Fight of the Night, Submission of the Night, and Knockout of the Night are not yet available.

Zuffa Promotional Model Under Attack: Ortiz to Follow Couture?

January 24, 2008

In another potential blow to Zuffa’s exclusive promotional mode, Tito Ortiz announced this week his intention to leave the UFC following the completion of his current promotional agreement with the company. Ortiz’s last bout is schedule for May verses the undefeated Lyoto Machida. MMAPayout.com predicted that tense labor relations and the departure of top talent would characterize 2008 for the UFC.

Ortiz has never been the model employee, frequently frustrated with his pay during his on-again, off-again ten year relationship with the company. In particular Ortiz and Dana White have had a well documented love-hate relationship, but they have always managed to put aside their personal differences for the sake of business. However, Ortiz finally appears to be ready to follow in the footsteps of Randy Couture in walking away from the undisputed leader of the MMA industry:

“They said I wasn’t worth the money,” said Ortiz. “I was worth no more than what I’m getting paid now, and I’m not a commodity to them anymore. I’m not as viable to them anymore. That was a sign of disrespect.”

“UFC is caring so much about the brand itself,” said Ortiz. “They could care less about the fighters. Fighters are a dime a dozen. They’ll keep coming. Dana is really out for himself and the company. He doesn’t give a s–t about the fighters.”

Combined with the resignation of Couture and the rumored exit of Andre Arlovski, Ortiz’s departure would represent a growing attack on Zuffa’s promotional model. The demise of the company’s exclusive promotional model is inevitable. As the sport continues to grow it will become financially prohibitive to maintain exclusive contracts with all of the top fighters. Once the stars begin to disperse, co-promotion will become vital to the industry’s continued growth.

As MMAPayout.com has stated before, co-promotion is where the sport is headed, if not this year then sometime in the not too distant future. The UFC can either lead the way or face the possibility of being left behind. In a developing industry such as MMA, today’s dominant leader can easily become tomorrow’s forgotten legend. One need look no further than the dramatic rise of the UFC coupled with the equally remarkable demise of Pride to see this truth illustrated.

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