CBS Exec: EliteXC Reaching New Advertisers

May 31, 2008

While the MMA and television communities await tonight’s EliteXC card and the ensuing release of ratings to judge the event a success or not, using some other metrics the event can be deemed to be a minor success already. One such area is in bringing new advertisers to the table for it’s corporate partner, CBS. Kelly Kahl, Executive Vice President of Program Planning & Scheduling for CBS, elaborated on this to AP:

“We’ve reached some advertisers we don’t typically speak to,” Kahl said, noting that ads for beer, fast food and video games would air during Saturday’s bouts. “Those are the kind of things that don’t really show up on CBS on Saturday night.”

EliteXC’s ability to bring a younger demographic and the advertisers that cater to them to Saturday nights bodes well for them if they don’t hit a home run right out of the box ratings-wise. With Saturday night being a virtual Dead Zone when it comes to Network television, bringing in strong 18-34 and 18-49 male demographics may be enough to ensure the continuation of EliteXC cards on CBS.

Cuban & Simon on CBS Debut and More

May 31, 2008

On the eve of MMA’s network television debut, MMAPayout.com reached to executives around the industry to find out how and where they would be watching tonight’s show and to get their impressions on a number of issues facing the sport.

Billionaire businessman Mark Cuban created HDNet Fights and has since made mixed martial arts programming a cornerstone of his high definition channel, HDNet. Andrew Simon was hired by Cuban as CEO of HDNet Fights last fall.

The following questions were submitted via email.

Andrew Falzon: Will you be watching the EliteXC event? If so, where? Live or taped/ “DVR”ed?
Mark Cuban: Yep, but DVR’ed on my 102 inch Panasonic!
Andrew Simon: Yes. On the road Saturday. So, will DVR and then use slingbox to watch it late Saturday night.

AF: What do you expect the response from the general public to be? Especially those seeing the sport for the first time?
MC: I honestly have no idea

AF: A lot of people are saying that the success or failure of the sport hinges on the EliteXC event, especially for organizations trying to grow a non-UFC audience. Do you agree? Why or why not?
MC: Thats ridiculous. MMA is a great sport that can and will stand on its own for a long, long time.
AS: No. The fastest growing sport in the U.S. doesn’t depend on any one entity. HDNet will have over 25 LIVE events this year in addition to nearly 50 episodes of Inside MMA on our network. We are seeing incredible demand for MMA action.

AF: We’re beginning to see grandstanding from some of the athletes involved in the sport, griping about their paychecks (Tito Oritz in the UFC and Ben Rothwell holding out on and then leaving the IFL). What do you think of this?
MC: Its part of any growing sport. Just ask Curt Flood. If anything, movement between promotions opens the doors for new and exciting matchups. We are seeing great fighters in Dream, StrikeForce, EliteXC, Affliction, Adrenaline, IFL, XFL, MFC and others. I think it ends up helping the sport.

AF: For athletes outside of the UFC, are big money contracts a realistic expectation?
MC: From the looks of the UFC 84 paydays, it looks like the biggest checks are outside the UFC. When Keith Jardine only makes 10k, thats ridiculous. When Sean Serk makes, what 35k fighting at the top of the card against BJ Penn, is that the best fighters making the most money? UFC 84 was a good card, and there was a fighter making $3-thousand. Three thousand dollars in UFC is not making big dollars in the UFC.

AF: Initial reports are that MMA has not been a profitable venture for you early on. Is this true?
MC: Thats nobody’s business but mine. I’m in this for the long run. Its a great sport and we are going to grow it via HDNet Fights and HDNet.

NY Times Sets the Stage for EliteXC's CBS Debut

May 31, 2008

New York Times reporter Ross Schneiderman does a nice job of succinctly setting the stage for EliteXC’s CBS debut tonight. I spoke with Schneiderman earlier this week for the piece and was impressed with his grasp of the sport. Hopefully this will be the start of a more robust presence for MMA in the Times.

The piece, titled New League Sees Potential in Backyard Brawler, focuses on the man CBS and EliteXC are counting on: Kimbo Slice. Key quotes:

On Kimbo’s background:

A former college student turned strip-club bouncer turned pornography-company bodyguard, Ferguson found his calling five years ago when he earned several thousand dollars in a backyard boxing match in Miami. A friend put a video of the fight on a pornographic Web site, and millions of people watched it.

On the network’s goal:

“What CBS is trying to get out of this is some low-cost programming that will attract a younger demographic,” said Alan Gould, a media analyst for Natixis Bleichroeder, a research firm based in New York.

On Kimbo’s mainstream appeal:

“Kimbo is tailor-made for the age we’re living in,” said Adam Swift, the editor of mmapayout.com, a Web site devoted to the business of mixed martial arts.

“We’re an Internet-driven culture, a reality-driven culture. He has a natural charisma and a marketable look.”

On expectations:

If Ferguson improves to 3-0, Elite XC and CBS may also feel victorious. “Saturday night is a graveyard slot,” said Tuna Amobi, a media analyst for Standard & Poor’s Equity Research. “Most of the networks will really take anything. If they can get anything working, it will only do them well from a financial perspective.”

Media Analysis: Paradigm for Profit

May 31, 2008

The Analogy:
You remember those annoying word analogies from the SAT? Well’s here’s one for the MMA world:

Spike TV : UFC :: CBS : Mixed Martial Arts

(Translation for those like me, who despised the SAT: Spike TV is to UFC what CBS is to Mixed Martials Arts.)

When EliteXC hits the airwaves on CBS this Saturday, it could trigger an explosion in popularity of mixed martial arts, the same way The Ultimate Fighter (TUF) turned one brand, the Ultimate Fighting Championship, into a very lucrative venture.

CBS and EliteXC could follow a similar path that will not only benefit the EliteXC brand, but take the entire sport of MMA to the next level.

Before It Was TUF:
From most published accounts, back in January of 2005, the UFC was a struggling organization, trying to carve out its identity in a crowded sportscape. It was trying break out of what was believed to be a failing pay-per-view based business model. Stuck in a niche somewhere between the legitamacy of boxing and the pagentry of pro-wrestling, more people associated the UFC with the term “human cockfighting,” than mixed martial arts.

After spending years and losing millions to transform the UFC from spectacle to sport, success happened almost overnight. The UFC’s partnership with Spike TV on The Ultimate Fighter reality series turned things around.

But, before The Ultimate Fighter, there wasn’t much MMA to be viewed without forking over about 30 dollars for a pay-per-view event.

Not really a great business model for a sport that at the time, still had such an unpalletable connotation. Add to that a cultural affinity for striking-based combat sports like boxing and unfamiliarity with the techniques of submission grappling and Brazilian jiujitsu and you end up with pay-per-view price tags that were too high for potential fans to sample the sport.

Why It Worked:
The Ultimate Fighter was like the free samples they pass out at your supermarket. Most people think twice about shelling out $6 for a bag of teriyaki chicken, let alone five or six times that for a pay per view. But TUF built a strategic bridge between the UFC and its potential fans.

In partnering with Spike TV, the UFC received the additional advantage of “fan-base crossover” since World Wrestling Entertainment still aired its RAW show on Spike at the time. Spike seized on this and cross-promoted the TUF debut during WWE RAW shows.

According to media analyst SNL Kagan, cable penetrates nearly 58% of US households, roughly 65-million homes. Combined with satellite, Spike TV claims it reaches 96-million homes. So in launching TUF, the UFC provided a hugh potential fan base with a free sample of what they could see on the pay-per-view.

As pay-per-view sales steadily increased, what made the UFC so powerful was not necessarily how many people were watching, but who was watching. The UFC-Spike tag-team became a synergetic force that catapulted the UFC into the wallets and minds of the much coveted 18 to 36 year old male demographic.

Too TUF?:
With the Writers Guild of America strike in full swing, network executives looking for fresh programming came knocking at the UFC’s door. Despite negotiations with CBS and HBO, a deal was never reached. While CBS or HBO understood the power and saw the potential of UFC brand, there were certain concessions they just would not make.

Much speculation abounded as to why, and a big part of that was believed to be the UFC asking for too much money and their desire to control/ produce the broadcasts and use their own broadcasters.

Filling the Void:
Since the UFC couldn’t come to terms with the networks, the networks instead decided to play ball with some of the other promotions that had sprung up as a result of the UFC’s profitability.

The big winner became EliteXC, that on 2/28 announced they had reached an agreement with EliteXC.

CBS realized that instead of submitting to the UFC, they could instead throw their own muscle and money behind EliteXC, a brand which it partially owns. EliteXC President Gary Shaw had also secured what the promotion needed. A center-ring attraction that could appeal to a broader spectrum than the UFC fan-base. Regardless of Kimbo Slice’s fighting ability, he is a curiousity to which potential fans are attracted.

Selling Mixed Martial Arts:
Unlike pay per view or even Spike TV, the CBS EliteXC broadcast will reach virtually every home in America with a television. According to SNL Kagan, that number is over 112-million homes. Consider that the UFC does between 400,000-600,000 pay per view buys, and you get an idea of how big of a stage CBS provides.

If the UFC had that stage, it would go about business as usual, protect its market dominance and mention only its brand of mixed martial arts. Since that is the believed to be among the very reasons the UFC did not get a network deal, what will surprise UFC fans most about Saturday night’s CBS coverage of EliteXC is its openness.

CBS play-by-play personality Gus Johnson says he has not been approached by anyone, at EliteXC or CBS, about ground rules for the broadcast, or making it an “EliteXC-only” show.

He told MMAPayout.com, “We’re not going to pretend that the UFC doesn’t exist. The UFC has some of the best fighters in the world. We’re going to sell what we have to sell, but we’re not going to the cheat the fans and pretend like that fighters in another company don’t exist. Eventually we want to get to a situation where the best fighters fight the best fighters.”

That open coverage of the event will lead to more open coverage in the sport.

Even more compelling is the “lock and key” nature of pay per view, where the programming is locked until the key, in the form of your payment opens it up. Whereas, you can actively seek out CBS programming, or just stumble upon something “that looks interesting” in your program guide or by channel surfing.

The Bottom Line:
If all goes right according to the CBS/EliteXC plan, MMA fans will wake up to a very different world on Monday morning. Suddenly, people who never showed interest in the sport will seek them out to talk about “that Kimbo guy.”

In all the quotations, pictures and sound bites from the press events leading up to Saturday’s show, Mauro Ranallo gave, perhaps, the most telling quote. It summarizes the needs of the sport, the need for open commentary from broadcasters during events and the need for promotions to work together.

Ranallo told reporters, “I am just glad that CBS and ProElite are going to promote the sport of

20/20 Tackles MMA

May 30, 2008

Tomorrow night live MMA will make its major network television debut on CBS, but tonight ABC’s 20/20 will air a segment on MMA called, “Ultimate Fighting: Kids in the Ring.” ABCNews.com has a companion feature by John Stossel and Andrea Canning titled “Parents, Politicians Clash Over Mixed Martial-Arts.” The program airs at 10PM EST on ABC.

Objective/ Analysis: EliteXC and IFL Co-promotion?

May 30, 2008

OBJECTIVE:

Five Ounces of Pain’s Sam Caplan is reporting that Kimbo Slice’s next opponent could be the International Fight League’s heavyweight champion, Roy “Big Country Nelson.”

According to Caplan, IFL CEO Jay Larkin has said that informal talks have begun. Pending the outcome of Slice’s fight this weekend, more formal talks could begin as early as Monday.
Larkin and EliteXC President Gary Shaw were 20-year colleagues at ShoTime, where the two worked together on boxing promotions and helped create ShoBox.

ANALYSIS:
From an industry stand-point, this would be a much needed co-promotional event and would benefit both organizations as they look to find new opponents for their top stars.
Slice and Nelson are question marks in the MMA world. Hardcore fans say they are waiting for Slice to fight a major opponent, and many underestimate Nelson because of his less than athletic physique.
IFL Vice President of Fighter Operations Bas Rutten knows these men rather well, as he has seen the majority of Nelson’s fights while color commentating for the IFL, and is training Slice.
Earlier today, Bas Rutten told MMAPayout that it would make for a great matchup.
“Nelson is a great all around, hits hard, great wrestling, submissions and ground and pound,” said Rutten. And despite Nelson’s shape and size Rutten says, “he is well conditioned and in great shape.”
While Slice’s meteoric rise has attracted the scorn of others in the business, Rutten says he’s a monster in the making.
“I think his hands are better than 80 % of the MMA guys out there, his take down defense is good and on the ground he’s getting better and better. People saying he’s not good on the ground is absolutely nuts, how on earth do they know this?”
Slice’s next test comes against James “The Colussus” Thompson this Saturday night on EliteXC’s CBS debut, but most fight analysts are saying that “test” isn’ the right word and expect a dominant performance, if not first round KO, from Slice. Nelson has himself proved to be quite the KO artist and is coming off of an impressive first round TKO (strikes) victory over Ultimate Fighter finalist Brad Imes.

MMA fans who consider a “boxing-style slugfest with the occasional takedown attempt” to be their favorite style of fight, would enjoy a Nelson/ Slice throwndown.
The IFL website has also linked to the Caplan article and says this would be the “first-ever co-promotional event in the history of American Mixed Martial Arts.” While I am purely speculating, since the article says first co-promotional “event” instead of “fight” it leads me to believe that we may be looking at a full card of EliteXC and IFL fights, because the IFL has already held a co-promotional fight when Tim Kennedy fought Jason “Mayhem” Miller on HDNet Fights.

Dana on Revenue Sharing

May 30, 2008

Last week in the run-up to UFC 84, Dana White was asked specifically about Tito Ortiz’s statement that fighter’s should receive 30-40% of gross revenues in an interview with Sergio Non of USAToday.com. His response:

We changed the entire fight business because it needed to be changed.

Look where boxing is now. Look where it is now: the sport is completely f***** up and ruined. You had Don King and Bob Arum who would put on these fights, you’d put on one fight. You’d make a main event fight and build a s***** card underneath it.

We do the complete opposite. We build an entire card. Our stuff is getting so stacked that great fighters end up on prelims now.

The other thing is, inside this brand, there’s an infrastructure. We never stop. I have a hundred employees that work for me.

I’ll use Tito Ortiz as an example. This kid hasn’t fought in a year because he was out doing reality shows and all the other b******* because this guy doesn’t want to be a fighter anyway. He fought a year ago, but we never stop promoting the fighter after he fights. The whole promotion keeps going on.

And we run a business. This is a business. This isn’t boxing. If that’s the way Tito thinks, then f****** go fight for Bob Arum, Tito.

UFC Roster Moves Could Make Dollars and Sense [Part 2 of 2]

May 30, 2008

CONTINUED FROM: UFC Roster Moves Could Make Dollars and Sense – Part 1

Signing prospects to initial fight contracts is only part of the prospect strategy; development and promotion are the other two intangibles at work here. In order to make the most of the talent they sign, the UFC will also need to develop these fighters through intelligent match-making and steadily increasing levels of exposure. Josh Koscheck, a former NCAA Division 1 wrestling champion and TUF alumnus, is a textbook example of how to properly develop a prospect with serious upside.

Koscheck’s Fight Record since 2005:

  • TUF Finale (April 2005) – Chris Sanford (Win)
  • Ultimate Fight Night (August 2005) – Pete Spratt (Win)
  • Ultimate Fight Night 2 (November 2005) – Drew Fickett (Loss)
  • Ultimate Fight Night 4 (April 2006) – Ansar Chalangov (Win)
  • Ultimate Fight Night 5 (June 2006) – Dave Menne (Win)
  • Ultimate Fight Night 6 (August 2006) – Jonathon Goulet (Win)
  • Ultimate Fight Night 7 (December 2006) – Jeff Joslin (Win)
  • UFC 69: Shootout (April 2007)- Diego Sanchez (Win)
  • UFC 74: Respect (August 2007)- George St. Pierre (Loss)
  • UFC 82: Pride of a Champion (March 2008) – Dustin Hazelett (Win)

The key to developing a fighter is not to protect him, nor is it to throw him to the wolves. Rather, it means wisely matching him against opponents to push his level of development while not significantly overmatching him in any one particular aspect. If you look to recent UFC cards, including 84, you’ll see that many of the rookies faced solid challenges, but none were in over their heads. Brock Lesnar, of course, may be the only exception to the recent string of great debuts and match-ups.

The second critical element involved with helping a fighter achieve his potential is exposure. The last scenario the UFC ever wants to encounter again is a talented fighter like Nate Marquardt thrust into title contention with little to no mainstream exposure. Although, if UFC 84’s eight televised fights are any indication, Dana White might be having a change of heart in regards to the number of fights that PPV fans deserve to see.

Additionally, the trimming of the UFC roster means the organization has fewer obligations and fight commitments than it did before, which increases the likelihood of seeing young prospects on Fight Night cards or PPV undercards. As MMAPayout.com reported in April, a network TV deal is also expected to come within the next 6-moths, giving the organization an even bigger stage to expose its stars.

With all of that said, the UFC’s roster strategy isn’t without its question marks and potential problems. First and foremost, there is the lingering question that always must be raised in regards to the psyche of the North American sports fan: will they support a non-American superstar the same way they would a Chuck or Tito? Current evidence seems to indicate that non-American fighters do not have the same support and following as Americans. The world’s best pound-for-pound fighter Anderson Silva draws nearly half the PPV buys of Chuck Liddell or Tito Ortiz when headlining a fight card.

The UFC is currently trying to hedge itself against this xenophobia with plans to continue its expansion into the UK and Canada, while also seriously considering Mexico and Brazil among others. It’s necessary to caution on a diversified strategy, however, because while diversity is a good bet in any business, you cannot spread yourself too thin. S&P’s last report indicated that the company was faced with decreasing margins in 2007 due to the increasing costs largely due to holding events oversees.

Perhaps, then, the UFC’s greatest challenge in the future will not be signing, matching-up, or even finding airtime for its fighters, but rather finding the right kinds of exposure for them. Not every person has the mainstream appeal of a Tito Ortiz, or intimidating, must-see edge of a Chuck Liddell. The UFC will have to work around those inabilities with fighters; especially the ones with little to no English or the personality of vanilla ice cream.

What does this all mean? The UFC is going to have to think outside the box, and possibly undergo a shift in its higher-level positioning strategies. For years, the organization has maintained a brand building strategy: organization first. Although it has served the company well – MMA and the UFC have largely become synonymous in North America – the strategy is probably outdated.

If you look at the rest of the professional sports making headlines with the major publications you’ll notice that they’re all driven by the individuals. Nobody is in love with the NFL or NBA or Major League Baseball and certainly not the NHL. The fans are in love with the teams, players, and personalities associated with the league: the Brett Favre’s, Lebron James’, Derek Jeter’s, and Sidney Crosby’s of the sports world. Thus the next step towards true mainstream acceptance lies within creating the bigger, badder, and ultimately better Chuck Liddell’s and Tito Ortiz’s of the future.

The ducks are essentially in a row for the UFC at this point in their life cycle: they’ve got the right roster building strategy and are beginning to develop some great fighters. The question is whether or not they’re truly going to push the fighters and allow them to bring the sport into the mainstream. That type of complete roster building strategy could truly make dollars and sense for the organization.

Mailbag: UFC Credential Follow Up

May 29, 2008

In response to this post on the UFC’s credentialing process, MMAPayout.com received the following response:

“I love your articles… I particularly appreciate how you strive to keep your personal opinion out of most topics. In this case I would love to read how YOU feel about this topic.

You closed your article with what it took to receive credentials from other organizations, which along with the signature, made it clear to me that the UFC was being ridiculous in what they were asking from Abowitz.

Here’s what I’m getting at. It seems like you’re more than qualified to call “BS” on this situation, or agree with it, and I would like to hear your thoughts explained further.

Keep up the good work.

James Weber

RESPONSE:

James,

First off thanks for writing. We love feedback and read each one we receive.

While I have done lots of work with media credentials, I’m not sure that I’m “qualified” to call the UFC out on this one. You basically have to look at it from both sides, the UFC’s side and the Abowitz’s/ journalists side.

From the UFC’s point of view, in the age of information overload, where everyone is a personal printing press (with dual-core processor and a 300 gigabyte hard drive), it can be hard to discern who is a legitimate journalist or blogger.

Part of the problem with credentialing MMA events in particular is that the majority of its current core fan base has evolved from loyalists who packed online forums long before the sport became pallet table to the mainstream media. All you had to do in the early days, was start a blog, fill out a form and you were in. Only a few months ago when I attended EliteXC’s ShoXC event in Atlantic City, the majority of folks I was sitting with weren’t writing for the NY Times or USA Today. It was mostly dot-com writers and bloggers.

Futhermore, media credentials are pretty powerful pieces of plastic (that usually come with a snazzy free lanyard). They let you into places that most people can only dream. For UFC events, it usually means a cageside seat (which for UFC 85 would cost about $600 each). And instead of debating the finer points of say, Wanderlei Silva KOing Keith Jardine with your friends at the bar, you can ask the “Axe Murderer” himself how sweet it felt to get the KO coming off a loss to Chuck Liddell.

So I hope you understand my point that folks at the UFC need to weed out the legit journalists and bloggers from folks who might be looking for a freebie. (And I am not trying to imply that Abowitz was looking for a free ride, just giving you a hypothetical as to why the UFC needs to be stringent.)

From my own experience in applying for credentials, there are varying levels of scrutiny. As I previously mentioned, for MLB and NHL games, a request on company letterhead sufficed. However, when I covered the Democratic National Convention, I was asked about everything short of my shoe size. In preparation News12’s coverage of the Pope’s recent visit to New York City and Westchester, I had to submit a passport style headshot and my social security number.

Asking for a signature isn’t the end of the world either, if it’s for some simple clause like: “The holder of the credential agrees to abide by the rules set forth…” Also, many media organizations will print the guidelines for using a credential on the back. Typical clauses include:

  • No autographs
  • No giving your credential to someone else
  • Media/ broadcast release (in other words, you might be seen on-camera or in a photo and waive any right to compensation)

However Abowitz’s allegation that the credential form dictated, as he put it, “controlling where and when I was allowed to write about the event forever more,” is a major issue for journalists.

I’ve never been asked to sign anything regarding how or when I covered a story. Asking any journalist to do so tramples on the basic principles of objectivity and unbiased coverage that are taught in high school journalism classes.

I have not actually looked at the credential application that Abowitz filled out. However, if what he alleges is true, the UFC pushed too far. The UFC does have a right to control it’s brand, but typically, acceptable sports journalism practices do not involve telling a journalist how to cover an event.

This begins to touch on the UFC’s media strategies, which I hope to blog about at some point in the future.

Thanks for your email, James!

–Andrew Falzon

Updated 5/31 EliteXC Advance

May 29, 2008

Adam Morgan with Five Ounces of Pain gave a quick update to the advance sales for EliteXC’s 5/31 show in New Jersey:

Gary Shaw also estimated that “roughly” 7,000 tickets have been sold for Saturday’s EliteXC: Primetime event on CBS.

Sales seem to have been solid but not overly strong since our last update on the advance figures, which were around 5,000 as of 5/16. Elite will need a strong walk-up and possibly some papering of the crowd if they are looking to fill-up the scaled to 12,000 seat capacity.

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