Press Release: Strikeforce Sets Live Gate Record In Washington

February 27, 2008

TACOMA, WA.—With a live audience of 7,089 at Tacoma Dome on Saturday, February 23rd, “Strikeforce At The Dome” surpassed the dollar amount grossed by any boxing, mixed martial arts, or kickboxing gate in Washington State history.

“It’s an honor that the people in the Tacoma and Seattle area welcomed us with such open arms our first time there,” said Strikeforce CEO Scott Coker. “The public’s embracement of the event is evidence of its hunger to see a big mixed martial arts fight card live as well as its true understanding of the sport.”

During the live HDNet telecast of “Strikeforce At The Dome,” fans witnessed the transformation of Cory “The One” Devela (8-1) from local hero to national star as the 23-year-old Bonney Lake, Washington native and former junior college wrestling standout stopped Joe “Diesel” Riggs (27-10) with a textbook judo throw that rendered the far more experienced competitor on his back and unable to continue the contest.

Former UFC and K-1 North America Champion, Maurice Smith (74-20-4), also shined in front of his hometown fans as he quickly submitted fellow kickboxing legend, Rick “The Jet” Roufus (57-8) with an armlock at the 1:53 mark of the fight’s opening round.

Bodog Fight was the event’s Presenting Sponsor.

Mayweather Lands $20 Million WWE Deal

February 26, 2008

Floyd Mayweather has signed with the WWE for a match against The Big Show at Wrestlemania. The deal is reportedly worth $20 million.

WWE has made celebrity involvement at Wrestlemania an almost annual tradition. Last year’s event did record business thanks in large part to a celebrity angle involving Donald Trump. It will be interesting to see what Mayweather means to WWE on pay-per-view.

Press Release: IFL Live on HDNet This Friday

February 26, 2008

LAS VEGAS, February 26, 2008 – Three title bouts highlight the card as the International Fight League (OTC.BB: IFLI) stops at Orleans Arena in Las Vegas on Friday, February 29. HDNet will have live coverage beginning at 11 p.m. EST/8 p.m. PST and will feature six of the eight bouts on the card, including the championship defenses of lightweight Ryan Schultz (North Platte, Neb.), middleweight Matt Horwich (Portland, Ore.) and heavyweight Roy Nelson (Las Vegas).

Here are some quick notes on the event:

  • The IFL event will see the debut of “Fitestat,” the new custom-designed IFL statistical program that the league has designed with Stats Inc. “Fitestat” will provide over 20 statistical categories for fans for the first time.
  • Schultz, who defeated previously unbeaten Chris Horodecki in December to win the first IFL lightweight belt, will battle John Gunderson (Medford, Ore.), who now lives in Las Vegas and competes for Ken Shamrock’s Lion’s Den.
  • Horwich, who is to be married the following day in Las Vegas, takes on Ryan McGivern (Bettendorf, Iowa), who fights out of Miletich Fighting Systems
  • Nelson, a Las Vegas native, will be in front of his hometown fans when he defends against IFL newcomer Fabiano Scherner (Brazil), who trains with Matt Lindland at Team Quest
  • Under the revamped IFL format, the camp matchups include three bouts each between Las Vegas-based Mario Sperry’s World Class Fight Center and Xtreme Couture, and three between Team Quest and Lion’s Den
  • Several NASCAR drivers and team members, in town for the races this weekend, will be in attendance on Friday night
  • Actor Sean Faris, who stars in the upcoming feature film Never Back Down, will attend and will sign autographs for fans
  • Eight competitors will make their IFL debuts, including Josh Haynes (Las Vegas), who may be best known for his appearance on the popular “The Ultimate Fighter 3” television program in 2006
  • The next IFL event will be Friday April 4 at Izod Center in East Rutherford, New Jersey and will feature three title bouts, with a host of local athletes (including New Jersey’s Jamal Patterson and NYU’s Shad Lierly) looking to capture an IFL belt.

Full card here.

Never Back Down

February 26, 2008

David Mamet’s Red Belt may be the most anticipated MMA movie, but Never Back Down will provide movie goers with their first taste of MMA on March 14. The movie stars Dijimon Hounsou (Gladiator and Blood Diamond) and its targeted towards a children’s crowd, think Karate Kid not Blood Sport.

Promotional pieces featuring the IFL’s Bas Rutten are available here. The cast attended last weekend’s EliteXC event in Miami and will be at this Friday’s IFL event in Las Vegas.

Training for Warriors

February 25, 2008

On the heels of the news that Chuck Liddell’s memoir is a New York Times Best Seller, comes news of another upcoming MMA book release. In early March, Harper Collins will release “Training for Warriors,” authored by New Jersey-based strength coach Martin Rooney.

Rooney has worked with the NY Jets, Giants, and many top NFL Draft prospects in addition to working with Renzo Gracie’s top fighters in the IFL, UFC, and Pride. The book translates MMA skills to other sports and workout routines. MMA cross training has become quite the rage recently, particularly in college and professional football.

Birds of a Feather: Zuffa's Future in Light of WWE's 2007 Financial Results

February 25, 2008

World Wrestling Entertainment probably deserves more attention in the MMA industry than it receives. The company is the Zuffa’s closest corporate comparable, not to mention growing evidence that suggests pro wrestling, not boxing, is MMA’s true competition. Furthermore, Dana White is an admitted admirer of Vince McMahon and the similarities between the company’s promotional models is undeniable. In many ways WWE is what Zuffa aspires to be.

This month WWE announced its results from the fourth quarter and full year of 2007. The headline number was an all-time record $485 million in full year revenue. That number represents a 17% increase over 2006.

The company posted a EBITDA of $77.8 million, up from $74.3 million last year. Excluding the $15.7 million loss the company took on a feature film, EBITDA would have been $93.5 million, a 26% increase over last year. For comparison, Zuffa is believed to have grossed $190 million in 2006, with an EBITDA of $76 million.

In looking at WWE’s finances, compared with what we know about Zuffa’s, it’s interesting to see just how diversified WWE has become, which is perhaps an indication of where Zuffa’s future lies. The company began, much like Zuffa, as primarily a live events and pay-per-view company, however, today those two sources account for only roughly 40% of its total revenues, compared to 75% for Zuffa.

Consumer products and digital media were WWE’s growth leaders with each posting its own 24% increase in revenue over last year. Live and televised event revenue was up 8% with much of the increase attributable to increased international touring. Pay-per-view was relatively flat at $94.3 million compared to $93.6 million last year. That number includes Wrestlemania 23 which drew 1.2 million total buys and over 750,000 domestic buys.

The most obvious under developed revenue streams for Zuffa are in the area of merchandising and licensing. Zuffa appears to be moving in that direction with a video game in development and the mass mailing of a merchandise catalog last fall. However, it will be interesting to see how the company handles what may become a difficult situation moving forward as it tries to develop its merchandise business. Unlike WWE where performers get a cut of merchandise sales, Zuffa pays no merchandise royalties to its fighters per the exclusive ancillary rights clause in the standard Zuffa contract. That played a significant role in Randy Couture’s dispute with the company and will become an increasingly sensitive issue as merchandise revenue accelerates.

Zuffa also has the potential for substantial growth of its television rights fees, especially if the company is able to establish a successful live weekly format scheduled to debut in 2010. WWE took in $92 million in television rights fees last year, principally for four hours of original weekly programming. In contrast, the UFC is believed to receive roughly $33 million per year in television rights fees from Spike for two seasons of the Ultimate Fighter, four live events, and a handful of new episodes of Unleashed under the terms of its recent contract extension.

Diversifying its revenue streams is particularly important for Zuffa because there doesn’t seem to be much room for significant growth on pay-per-view, at least not domestically. It’s hard to imagine the company can do much better than the 500,000 per show it averaged in 2006. In fact, many believe that is is unlikely to be able to merely sustain those numbers. Pay-per-view in the United States at this point is simply not a growth business.

Buys for typical shows should flatten out at best over the long term while there is room for growth on the mega shows (with two million looking like the ceiling base on Oscar De La Hoya’s last fight). The realities of domestic pay-per-view are likely a big factor in the company’s international push. WWE has already developed a very strong international pay-per-view business.

Like WWE, new media and international expansion are also key growth areas. For Zuffa, international expansion still seems a bit premature given that by White’s own admission the company has only scratched the surface of its potential in the United States. However, it is becoming obvious that part of the company’s urgency regarding international expansion relates to its major new media initiative with Yahoo!. White has consistently associated the two together in public, including in last week’s announcement of Yahoo! as the UFC’s online pay-per-view distributor.

As discussed before, internet pay-per-view has the potential to change the entire industry, a subject worthy of a discussion all its own.

The comparison between WWE and Zuffa takes on even more significance given a recent report in the Wrestling Observer Newsletter that WWE is at least investigating the possibility of entering the MMA space. This is not a new development, however, it has taken on increased scrutiny in light of rumors that the UFC may be for sale. The company has flirted with MMA before including a meeting with Dream Stage Entertainment about purchasing Pride last year and being solicited by Dana White in 2004 when the Fertitta’s were considering selling the UFC.

It is interesting to consider the value of Zuffa in light of the recent sale rumors and the closely comparable relationship between the two companies. WWE has a market cap of $1.28 billion, roughly 16.4 times its 2007 EBITDA. Therefore, using Zuffa’s reported 2006 EBITDA of $76 million, Zuffa would be valued at roughly $1.25 billion.

However, it should be noted that 2006 represented the company’s best year and all indications are that 2007’s EBITDA, and thus value, was significantly lower, perhaps as much as 50% lower. The company has also secured a $350 million secured credit facility since that time, which must be factored into valuation.

Perhaps most importantly, it remains to be seen whether or not Zuffa’s current business model, the one that closely resembles the WWE, can be maintained going forward. Most within the industry believe that a model more closely resembling boxing is inevitable and there are growing signs that the company’s current promotional model is under attack.

If true, Zuffa’s window to become the WWE of MMA may be closing before it was ever really opened.

WEC 2/13 Rating Flash

February 24, 2008

The Wrestling Observer Newsletter reported that the WEC Live on Versus on 2/13 did a 0.5 rating (468,000 viewers). While lower than the 0.7 the stacked December show drew, it is considered a success, besting the 0.4 most of the shows had done and doing so without top draw Uriah Faber.

Update: Zuffa v. Couture

February 22, 2008

While MMAPayout.com has been focused on HDNet Fights v. Zuffa in Texas, there have been fresh, albeit expected, developments in Zuffa v. Couture in Nevada. Randy Couture filed a motion to dismiss this week in response to the complaint, while a hearing regarding Zuffa’s motion for an injunction was moved from 3/5 to 2/26.

The hearing next week will determine Couture’s availability as a cornerman on next Friday’s IFL event in Las Vegas.

UFC Partners with Yahoo! For Internet Pay-per-view

February 21, 2008

Today the UFC announced Yahoo! as its new online pay-per-view distributor:

“This relationship with Yahoo! is an important step for the UFC to build its global distribution platform for live pay-per-view events,” said Dana White, UFC President. “We are looking forward to working with Yahoo! Sports to expand our reach and bring the sport of mixed martial arts to fight fans in every corner of the world in every possible language.”

Perhaps in a sign of where the industry is heading, the title of the press release is simply “UFC Announces Yahoo! As New PPV Provider,” with no qualifier such as “internet” or “online.”

SEE ALSO:

Liddell Cracks NYT Best Seller List

February 21, 2008

Chuck Liddell’s memoir, Iceman, is number nine on the New York Times Best Seller List for Hardcover Nonfiction. This is the book’s second week on the list, it debuted at number nine last week.

“MMA is the new big realm in publishing right now,” Gersh Literary Agent Margaret O’Connor recently told FIGHT! Magazine (SEE: MMA Goes Hollywood). “The sport is becoming part of the cultural zeitgeist, it’s infused in popular culture. It’s not a direction comparison, but seven or eight years ago there was this huge flurry of books on the personalities of the WWE. This is like the next wave.”

O’Connor is currently working on books with Randy Couture, Sean Sherk, and Rich Franklin.

“It’s opening up a whole new arena in publishing. It’s very exciting,” O’Connor said. “This reaches a part of the market that doesn’t typically buy books, males 18-34. They usually go out and buy DVDs and Xbox games, but like with Randy Couture’s book, this is the one book that they will buy. So this is appealing to that part of the market, they’re looking for something that speaks to them.”

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