UFC Hires Washington Lobbying Firm

May 28, 2008

While the UFC has been highly active on a state by state basis in trying to shape the regulation of mixed martial arts, the UFC entered the fray on a national level recently by hiring Brownstein Hyatt Farber Schreck to lobby on Capitol Hill.

“UFC is at the point where they are one of the fastest-growing sports leagues, and we want to make sure members of Congress are aware of the changes MMA has undergone,” said Makan Delrahim, a former top Justice Department official who is now a lobbyist at Brownstein Hyatt.

The UFC also looks to use the lobbying firm to resist efforts to place the UFC under regulation relating to professional boxing. In short, they are looking to do everything they possibly can to not be listed under the Muhammad Ali Boxing Reform Act of 2000 and Professional Boxing Amendments Act of 2007, regulating among other things contracts between fighters and promoters.

“Sometimes those types of laws can become vehicles for other things, affecting other sports,” Delrahim said.

“Boxing has a whole different story and certain laws may have been appropriate, but it is a whole different operation for MMA; it wouldn’t make sense to apply the same rules.”

Inclusion of the UFC under the two aforementioned boxing reform acts would basically turn the standard UFC fighter contract on it’s ear. The standard UFC contract is largely seen as one-sided, favoring the corporation to an almost draconian degree.

Hiestand Weighs In On MMA

May 28, 2008

Influential media maven Michael Hiestand’s most recent column casts an eye toward mixed martial arts and EliteXC’s network debut. Hiestand is the the sports media columnist for USA Today, a column widely read by those in the television business and seen as a taste maker in the industry. In what can best be described as a fairly even handed take on MMA’s broadcast debut, Hiestand illuminates the mindset of Network execs in giving MMA the greenlight:

The debut of CBS’ four-part CBS EliteXC Saturday Night Fights (9 ET) is just the latest experiment of taking something that’s drawing niche audiences on cable — such as Arena Football or so-called action sports — and seeing what it can do for broadcasters. It’s also another attempt — such as NBC’s quickly defunct XFL and ABC’s expanded prime-time Saturday college football — to give broadcasters some pop on TV’s least-watched night, especially with the largely absent young viewers advertisers covet.

The column does give voice to those with negative views of the sport on broadcast television (Redstone, Goren), but generally puts the sport over as legitimate and not that different than some of the reality programming offered at the networks.

UFC 84 Payouts

May 27, 2008

The total disclosed payroll for UFC 84 (including disclosed bonuses) was $1,323,000. Assuming $8,990,000 in pay-per-view revenue (400,000 pay-per-view buys at $44.95 with 50/50 revenue split with pay-per-view companies) and including the $3.7 million live gate, the event would generate $12,690,000 in total revenue for Zuffa.

That would put the disclosed payroll at roughly 10.4% of revenue generated. However, it is important to note the company regularly pays substantial undisclosed bonuses.

Unless otherwise noted all winner’s payouts reflect a 100% win bonus:

  • B.J. Penn ($250,000) d. Sean Sherk ($35,000)
  • Wanderlei Silva ($225,000*) d. Keith Jardine ($10,000)
  • Goran Reljic ($81,000#) d. Wilson Gouveia ($93,000#)
  • Lyoto Machida ($100,000) d. Tito Ortiz ($210,000)
  • Thiago Silva ($50,000) d. Antonio Mendes ($4,000)
  • Rousimar Palhares ($85,000^) d. Ivan Salaverry ($20,000)
  • Rameau Thierry Sokoudjou ($80,000) d. Kazuhiro Nakamura ($20,00O)
  • Rich Clementi ($40,000) d. Terry Etim ($10,000)
  • Yoshiyuki Yoshida ($12,000) d. Jon Koppenhaver ($8,000)
  • Dong Hyun Kim ($40,000) d. Jason Tan ($3000)
  • Shane Carwin ($12,000) d. Christian Wellisch ($10,000)
* – $150,000 base pay plus $75,000 bonus for KO of the Night
# – includes $75,000 bonus for Fight of the Night
^ – includes $75,000 bonus for Submission of the Night

TUF 7 Rating – Week 8

May 27, 2008

MMAPayout.com has learned that the 5/21 episode of the Ultimate Fighter on Spike drew a 1.0 rating (1.3 million viewers). The program drew quarter hours of 0.88 0.98, 1.05, and 1.14. The key demographic numbers were a a 1.5 in M18-34 and a 1.37 in M18-49, both up significantly from the previous episode.

The audience was 73% male with an average age of 33.

ESPN: MMA Live, 2nd Edition

May 27, 2008

ESPN.com published the second edition of its online mixed martial arts news show, MMA Live, this past Thursday. Though the show briefly touched on the three International Fight League championship bouts from Mohegan Sun and the results from the Sengoku event, it mainly focused on UFC oriented news.

As MMAPayout.com previously reported, the UFC lobbied for the show to be exclusively about the Ultimate Fighting Championship, and excluding the larger MMA world. The true test of the show’s willingness to digress in coverage from the industry giant, UFC, will come this week when they will be tasked with recapping UFC 84 and previewing the network debut of EliteXC on CBS.

Many non-UFC entities within the sport have expressed their delight that the world’s largest sports network is testing the waters on an MMA show that could potentially transition to television. Given overwhelming dominance of ESPN in sports news, the network is effectively creating a spotlight in the dark tunnel of MMA, where the competition is cast in the shadows of the UFC.

By powering up that spotlight, and potentially shining it on the lesser known promotions, ESPN is quickly becoming a major player in the world of MMA.

Stadium Shows In UFC's Future?

May 26, 2008

Dana White made comments after UFC 84 about possibly doing a show in Hawaii and put forward the idea of doing a stadium show:

Well the (regulations) won’t be done there till 2009, and when we do, do an outdoor, big stadium, it will definitely be Hawaii.

The ability to do stadium shows would be somewhat limited for the UFC. There are probably only two guys in the UFC that would be able to draw on that level – Georges St Pierre and BJ Penn. Both men are akin to national heroes in their home regions – Penn in Hawaii and St Pierre in Canada – and strong geographic ties are the key to filling up a stadium at this stage of the UFC’s growth. A Chuck Liddell may draw more PPV viewers but he lacks the geographic fan base to fill up a stadium for one of his fights. Even a card loaded with top shelf match-ups would be hard pressed to draw on a stadium level.

Along with the small number of fighters who could plausibly sustain a stadium show, you can count on one hand the number of fights that could be expected to draw on that level. For BJ Penn there only two fights that he could fill up Aloha stadium with – GSP and Matt Hughes. For GSP, only fights with BJ and Anderson Silva could be expected to draw on a level that would fill a venue like Olympic Stadium in Montreal.

If the stadium shows do come off, some adjustment to the payscale would probably be in order for the headliners, GSP and Penn. The fights would have significant gates, generated not off the UFC brand but due to the local fighters mythic status. The agents for Penn and St Pierre would drive a hard bargain before signing on for one of these stadium shows.

UFC International Expansion In-Depth

May 26, 2008

Dana White has recently spoke about ongoing efforts to branch out into the international market with live events. Brazil, Germany, The Philippines, and Brazil are some of the areas mentioned by Dana as possible sites for future UFC cards. Each area has it’s pluses and minuses but one tool at the UFC’s disposal – international television distribution – will be vital to the long term success of these efforts.

Television is Key

One key ingredient to international expansion will be getting strong television in a country before expending the resources to put on live cards there. The UFC has drawn strong crowds in England, with help from a constant TV presence over the past few years on Bravo UK. The UFC business/promotional model has taken several pages out of the WWE playbook, and that would be true in this case as well.

The WWE is drawing significant portions of overall revenues from int’l ppv and touring. They are able to do this because they have had a strong int’l television network in place for years before trying to do live events overseas. Strong UFC television prior to launching these live shows will help to ensure success and make the markets viable long term as opposed to just being a one-off.

Germany: A Continental Play

Dana White has mentioned Germany as one possible area for expansion. I see this as more of a continental play rather than seeing Germany as a market in and of itself. Establishing a base in Germany will draw other folks from the region, a Pan-European market if you will. France with it’s Savate scene, the former Eastern Bloc with players like Goran Reljic, and MMA holy ground Holland are some of the areas from which they can draw upon for local talent to drive strong gates.

The German/EU market is attractive as an expansion target because it’s a mature and stable economy with a high standard of living, which isn’t the case with some other expansion candidates mentioned by Dana White. Germany itself doesn’t have a big MMA scene but serves as a regional mecca for those in the Euro Boxing scene, as home to many an expat fighter (Dariusz Michalczewski, many of the Russian heavyweights). Having strong local talent (Cheick Kongo, Reljic, Holland Resident Heath Herring) will aide in converting some of those boxing fans over to MMA.

The Philippines

Dana’s mentioning of The Philippines as a possible area of expansion is a bit perplexing. The country has shown overwhelming support for favorite son Manny Pacquio and is very much a boxing country. I think Zuffa may be reaching a bit, though, if they are banking on a boxing-hungry culture equating to a wide ranging combat sport culture. There would need to be a significant time period of cultivating that market before it could become viable for live events. Without a homegrown fighter to use as the face of the promotion, I have to think that the UFC would be facing an uphill battle in making money in this market. One also has to wonder about the economic viability of The Philippines as a market.

Brazil

Brazil would be a very enticing market for UFC to make moves in. They have a bevy of Brazilian talent that can be marketed easily and would be substantial draws. Superstars like Shogun Rua, Wanderlei Silva, Anderson Silva, and Antonio Rodrigo Nogueira would provide for excellent gates. The UFC also has a nice crop of Brazilian prospects – Rousimar Palhares, Demian Maia, Thiago Silva, Thiago Alves, Thales Leites – that could be built into future draws in the country. Brazil is very much a combat sport embracing culture, also, essentially giving birth to the modern MMA scene. There wouldn’t be the up hill battle in Brazil that they would face in other international markets, saving both time and money.

The one drawback I would see to the Brazilian market would be the sometimes uneven economy. The Brazilian economy has a history of hyper-inflationary spikes, though that has been reigned in recently. The per capita income is still low but if Zuffa sticks to the larger Metros like Rio and Brasilia, they should have a large enough group of favorable demographics to support their product.

Mexico

Dana has also mentioned Mexico as another area for expansion. Dana seems to be making the right moves here, launching Hispanic-specific programming in order to generate interest and foster the entry of more Hispanics into the sport. The UFC is launching “El Octagono,” an hour long Saturday night series on Galavision and currently have Guerreros Del UFC every week on Fox Sports en Español.

Launching these shows is a two pronged approach – helping to reach a growing Hispanic demo in the US while at the same time cultivating Mexico and Latin America as a future market for fighters and shows. They certainly get more bang for their buck by expanding in this area as opposed to others. The company does have a few marketable stars to push – Roger Huerta in the UFC, Miguel Torres in the WEC – until there is a larger influx of Hispanic fighters to the sport.

Memorial Day News Wrap

May 26, 2008

Recent stories of interest in the business of MMA:

UFC 84 Review: According to Plan

May 26, 2008

Everything came up roses for the UFC last night at UFC 84 as all the company’s “favorites” came through with flying colors (Dana White couldn’t have hand picked the winners any better from a business perspective) in another entertaining event that saw only two out of twelve fights go to a decision. BJ Penn made a strong case for consideration along side Anderson Silva and Georges St. Pierre as the company’s best pound for pound fighter in the main event, but the story of the night took place on the undercard.

It was there that the changing of the guard was again in full swing as the company seems to have bid farewell to Tito Ortiz, the second of the company’s four original superstars to leave in the last year, while three newcomers that the company has high hopes for made impressive debuts. Given Matt Hughes’ recent outings, Chuck Liddell arguably now remains as the last of the old guard and even the Iceman appears to be in the middle of his final run.

The current changing of the guard and the company’s ability to create new stars is its biggest test moving forward. Based on the early returns of GSP at UFC 83 and Brock Lesnar at UFC 81, the process is progressing nicely, however, the first true test of the new guard won’t come until July when Quinton Jackson and Forest Griffin square off for the Light Heavyweight Title in a battle of two of the company’s most heavily pushed successors.

But before the ascension of the next generation is even complete, the company debuted three more stars in the making at UFC 84, fighters who may be in the mix sooner rather than later in an industry where stars appear to have a short shelf live. Shane Carwin (HW), Rousimar Palhares (MW), and Goran Reljic (LHW) all made decisive debuts and have the look of future players in their respective divisions.

The main blemish on an otherwise flawless night was the company’s handling of the issue of Ortiz’s departure. It was handled about as well, actually even better than was expected, on the live broadcast. However, the decision to give Ortiz a live mic on the television broadcast only to attempt to deny him a spot at the post-fight press conference was puzzling to say the least.

The fiasco that followed, combined with White’s skipping of the weigh-in and reportedly the fight itself, made the UFC look defensive and heavy handed, not an unfamiliar position for a company mired in an outdated media strategy that attempts to tightly control information while the rest of the world embraces the information revolution. The incident capped a tough week for the UFC President which also saw his hometown newspaper feature an unflattering column comparing him to Don King.

OTHER NOTES:

  • The main event featured another breaking kayfabe moment. Immediately after the fight Penn told Sherk (in a “private” conversation overheard by the production) that he told him he was going to make this the biggest fight in history, that he respected him, and to come train with him anytime. This was coming on the heels of a promotional campaign that explicitly focused on how each man hated the other (SEE: UFC 83 Review: Breaking Kayfabe).
  • Lyoto Machida’s style continues to frustrate opponents, fans, and promoters alike. While the UFC got what it wanted when Machida beat Ortiz, the Dragon and his elusive style are now dangerously close to a Light Heavyweight Title shot.
  • Wandelei Silva’s win was the best news of the night for the company. Silva looked like his old self in a dominant mauling of Keith Jardine. One more win for the ax murder would appear to setup a highly anticipated rematch with the winner of December’s presumed Jackson-Liddell III. Of course in a sport where nothing is for certain, long term plans rarely work out.

Andrei Meets The Press?

May 25, 2008

MMAPayout.com received an unconfirmed report that free agent heavyweight superstar Andrei Arlovski will be holding a media day/work out session this coming Tuesday the 27th in Los Angeles. Wild Card Gym in Hollywood will be the site of the presser/workout as Arlovski will reportedly work out with famed boxing trainer Freddie Roach and strength and conditioning coach Alex Ariza for members of the media.

It is possible that this media day will announce Andrei’s future plans, heavily rumored to be a contract to fight for Affliction. Speculation has been rampant that Arlovski will sign with the Affliction promotion to face Ben Rothwell on their July 19th card at the Honda Center in Anaheim, California.

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