Vera's Management Dispute Provides Rare Glimpse Into UFC Negotiations

March 27, 2008

Brandon Vera’s dispute with his former manager, Mark Dion, was recently settled in an arbitration hearing before the California State Athletic Commission. The commission ruled in Dion’s favor and the entire affair is documented on Dion’s website, CityBoxing.com. The myriad of documents made available by Dion provide a rare public glimpse into the UFC’s negotiation tactics.

The entire affair was detailed by the Canadian Press. The highlights:

  • Vera’s second three-fight UFC deal (renegotiated prior to the expiration of his original contract) started at $16,000/$16,000 (win bonus), $20,000/$20,000, and $24,000/$24,000. The deal also included a $100,000 signing bonus.
  • Two fights into that deal, following Vera’s knockout of Frank Mir at UFC 65 in November 2006, the UFC approached Dion to negotiate a long term deal. The UFC flew Dion to Las Vegas to meet with Dana White. White gave Dion two offers on a post-it note:
    • A three fight deal at $90,000/$90,000, $100,000/$100,000, and $115,000/$115,000 with an automatic upgrade to $150,000/$150,000, $170,000/$170,000, $185,000/$185,000 provided Vera became Heavyweight Champion, or
    • A four year deal worth $7 million. Dion testified that White made a verbal offer of a $100,000 bonus if Vera won the title.
  • Dion told the CSAC that the post-it note was standard operating practice:
    • “UFC doesn’t send no letters, period. They’ve tried to avoid all that stuff… This is all I got from Dana White. This is all I could show to Mr. Vera. There was no e-mails. Dana White likes to keep – keep himself covered on all aspects.”
  • Dion made an admittedly outrageous counter offer three days later in an effort to move negotiations. The two options presented were:
    • A one-year three-fight contract at $150,000/$150,000, $175,000/$175,000, and $200,000/$200,000 with a $1.5 million signing bonus, or
    • A guaranteed three-year ten-fight contract worth a total of $9 million ($3 million per year) plus a $1.5 million signing bonus. Vera would also receive a $1 million bonus if undefeated at the end of each year.
  • In response, Joe Silva, VP of Talent Relations, offered a three fight deal at $50,000/$50,000, $60,000/$60,000, and $70,000/$70,000, escalating to $90,000/$90,000, $100,000/$100,000, and $110,000/$110,000 if Vera became champion along with a $100,000 signing bonus.
  • Dion rejected the offer in an email to White at 4:46 PM on December 26. At 7:16 PM the UFC replies, saying it is exercising its right to extend the contract by three months per Vera’s refusal to fight in June due to injury.
  • Dion informs the company that Vera was never injured and was ready to fight as soon as possible. He hires a lawyer in January to contest the company’s three month contract extension.
  • In March Vera tells the UFC not to deal with Dion anymore.
  • Vera’s attempted to void his management contract with Dion goes to arbitration in September, claiming he was never informed of the $100,000 signing bonus offer.
  • In October, after an 11-month layoff, Vera returns to the UFC in a loss to Tim Sylvia with a reported purse of $100,000.
  • The CSAC ruled in Dion’s favor earlier this month, finding no illegal conduct,but severed the management contract (which ran through 2010) due to deterioration of their relationship.
  • Dion received one-third of the Sylvia fight purse as well as $100,000 in consideration of future fight purses.
  • Garcia said: “It seems to the arbitrator that the ambiguity of the Post-it note, which appears to be the root of the current dispute, could have been avoided if the UFC had put their offer in the form of a proposed contract and sent it to (the) manager.”

Vera subsequently re-signed with the UFC and will face Fabricio Werdum at UFC 85.

Drudge Report: MMA For Kids

March 27, 2008

This morning the Drudge Report is prominently featuring a story titled “Ultimate Fights Expand to Include Kids” from the AP.

4/5 Billboard DVD Chart & New IFL Release

March 27, 2008

Billboard Recreational Sports DVD Chart for the week of April 5:

  1. NFL: Super Bowl XLII Champions New York Giants
  2. WWE: The Legacy Of Stone Cold Steve Austin
  3. WWE: Undertaker 15-0
  4. WWE: The Best Of Raw: 15th Anniversary 1993-2008
  5. WWE: Royal Rumble 2008
  6. WWE: John Cena: My Life
  7. WWE: The Shawn Michaels Story: Heartbreak & Triumph
  8. UFC 78: Validation
  9. TNA: Final Resolution 2008
  10. WWE: Rey Mysterio: The Biggest Little Man

The IFL released “World Premiere Season: Road to the Championship” on Tuesday. The DVD is being distributed by Warner Home Video at a price of $19.98. From the box:

Renzo Gracie’s Pitbulls took their team from worst to first in 2007, but they’ll need every man on their roster to get through the league’s best. Hours of incredible action. Unbelievable MMA bouts. One fully loaded DVD.

Japan Update: Debut Disappointing for Dream; Successful Debut for WVR

March 26, 2008

According to The Wrestling Observer Newsletter, Dream drew 14,700 fans and did an 8.9 rating on the TBS network for its 3/15 debut show built around the return of Mirko Cro Cop. That number is considered very disappointing in the Japanese television climate. The broadcast peaked with a 12.7 rating for Cro Cop’s match with unknown Tatsuya Mizuno. Dream is currently the only promotion in the country with prime time television.

World Victory Road drew nearly 13,000 fans to its debut show on 3/5 which was considered a success, especially on a Wednesday night. The event featured Hidehiko Yoshida and Takanori Gomi in their first fights since the death of Pride. Gomi is believed to be earning approximately $190,000 per fight with Yoshida likely earning more than that according to Dave Meltzer. Without television, it remains to be seen how long the company can continue its ambitious plans producing frequent and expensive shows.

Pavlik-Taylor II Posts 250,000 Buys

March 26, 2008

The Kelly Pavlik-Jermaine Taylor rematch on 2/16 did 250,000 buys on pay-per-view. The number was considered disappointing, especially in light of speculation by HBO officials the day before the show that the fight could do 350,000-415,000 buys. Bob Arum blamed Taylor’s management for exercising an immediate rematch rather than taking an interim fight.

“[HBO] got what they deserved. They keep dealing with a guy (Haymon) who doesn’t have a manager’s license. He’s a so-called adviser. We begged them: Let’s do a tune-up fight (with) both guys on (the same card) and then we’d go in together… You don’t have a fight where one guy gets knocked out on regular HBO and then come back on pay-per-view and ask people to buy it. You don’t do that,” Arum told Yahoo! Sports.

Upcoming UFC Advances & Secondary Marketplace Strategy

March 26, 2008

Dave Meltzer reported in this week’s Wrestling Observer Newsletter that the advance for UFC 83 in Montreal is over $4.5 million. The event is officially a sellout, but in a somewhat controversial move, company is auctioning off some additional seats. The company also frequently auctions off fighter memorabilia from its events for-profit.

The secondary ticket market is an emerging force in sports business, however, it is usually seller to seller with the sports entity as the go between, keeping the transaction fee. In the game worn industry, when items are auctioned by the entity it is usually for charity with most for-profit deals done through licensing companies such as Steiner Sports. That allows companies to reap the benefit without attracting potential negative publicity.

Zuffa’s decision to handle these transactions itself appear to be consistent with the company’s standard operating procedures which seek to maximize profits by keeping things in house whenever possible. The practices are not illegal and would be considered by many to be sound business, cutting out the middle man and thus maximizing profits. However, you have to wonder if the potential damage to the company’s image/reputation is worth the extra financial reward.

Meltzer also reported that the advance for the company’s 5/24 show in Las Vegas is off to a strong start at $2.3 million. With two months to go, that figure is only 8% off the total gate ($2.5 million) UFC 81 drew in February. The event features a strong card that includes the last fight on Tito Ortiz’s contract. Ortiz has to be happy with the fast start as a strong gate and pay-per-view number, to go with a victory, would solidify his status as a top draw heading into the open market.

The company’s 6/7 return to London is also off to a good start with an over $2 million advance. Ticket prices for the event are up $50 across the board from the first show with the cheapest seats going for $90. There is a lot of attention being paid to the gate by industry observers as the company has historically had a tougher time the second time into markets other than Las Vegas.

Golden Boy Walks Away from Affliction Partnership?

March 25, 2008

MMAPayout.com has received unconfirmed reports that Golden Boy Promotions has walked away from a rumored promotional partnership with Affliction Clothing due to control issues. Affliction’s promotional effort has made a splash in the industry this year, reportedly signing several high profile free agents to lucrative contracts with large signing bonuses in addition to potentially working with Oscar De La Hoya’s Golden Boy Promotions.

It should be noted that MMAPayout.com has been unable to confirm the reports at this time. As a result, the above report should be considered rumor or informed speculation at best. It also bears mentioning that business situations such as this one are very fluid and can change quickly.

Iron Ring Rating

March 25, 2008

MMAPayout.com has learned that Iron Ring was the fourth highest rated series premiere in BET history. Despite an 11:00PM post prime time slot, the program posted a 20% increase in viewers over its lead-in. As a result, BET has moved the series to 10:30PM starting with tonight’s episode. The series will now follow BET’s highest rated series, College Hill.

Tonight’s half hour episode features three fights.

EliteXC 3/8 Rating

March 25, 2008

EliteXC’s March 8th broadcast on Showtime, featuring the return of Ken Shamrock, did a 0.7 rating (186,000 viewers) according to The Wrestling Observer Newsletter. That number is one third of the number drawn by Kimbo-Tank. The program also lost 273,000 viewers from its live boxing lead-in which drew a 1.0 rating.

Head-to-head HBO Boxing drew 1.24 million viewers for a heavyweight title fight, which would equate to a roughly 3.0 rating for the network.

IFL-FSN Set to Extend Partnership

March 24, 2008

MMAPayout.com has confirmed that tomorrow the IFL will announce an extension of its partnership with Fox Sports Net. Season three of the IFL’s weekly one-hour “Fight Night” program will air consistently on Saturday night at midnight local time across FSN’s affiliates. The new season will debut on April 19 featuring the IFL World Grand Prix Finals from 12/29.

While not as sexy as recently announced network television deals, the new consistent time slot is a significant upgrade for the company on FSN. Previously, the program was hard to find due to scheduling differences and preemptions across the network’s various regional affiliates. With a defined national time slot, the company can now promote its FSN programming more effectively. The Midnight Saturday night slot is also considered attractive because of its appeal to the 18-34 year old male demographic which is the key component of MMA viewership and the lack of competition from other sports programming.

Sources close to the deal have told MMAPayout.com that unlike speculation about other recent television deals, the IFL-FSN partnership is not a time buy, but rather a revenue sharing agreement. In comparison, NBC is reportedly offering a time buy at 2:00 AM on Saturday night for $2 million.

The IFL is also expected to add several more international clearances to its television portfolio later this week. The company’s programming currently airs in over 70 countries world wide.

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