The Driver of UFC's International Efforts

March 31, 2009

Friend of MMAPayout Ryan Harkness recently posted about the UFC’s plans for international expansion and raised some questions that were vexing him:

I’m still trying to figure out why the UFC pegged England and Europe for expansion first … I’d love to get the inside scoop on what Zuffa’s plan is. It might sound stupid hitting up Spain (Spain!!) before Brazil, but I have to hope that Dana and Lorenzo know what they’re doing and there is method to their madness.

I was going to just e-mail this to Ryan but since he threw it out there for consumption, I’ll share with our readers what I think the master plan is with regards to expansion.

The main prism through which to view the UFC’s international efforts is through a few words that Dana White once said. Dana is fond of saying “I’m in the PPV business, and every decision is centererd around making that bigger.” Lorenzo Fertitta echoed this sentiment in his interview with The Atlantic stating “We call it the wheel. The UFC wheel. You’ve got your core— the pay per view. That’s essentially your product, right? And then, you know, you have spinoff things.” While the UFC has added other facets to their revenue streams, the central profit center for the UFC are their PPV’s. That is the paradigm they know and are comfortable with, and one that they will look to replicate.

The driver of their international strategy is what augments their PPV revenues, to my eye. The UK and mainland Europe are the first targets in expansion because they represent the easiest path to implementing their template that has been so successful in the United States. The ability to get a market for their PPV’s up and running in a country and doing very good numbers will be the ultimate decider of where the UFC expands internationally. The UK was attractive for this very reason. The WWE with their Wrestlemania events and boxer Ricky Hatton have done impressive numbers on PPV in the UK, with the Hatton vs Floyd Mayweather Jr. PPV doing a rumored 1.4 million buys in the UK. The UK enjoy a high standard of livng and an advanced technological infrastructure that make it possible to reap windfall profits via PPV if the UFC are able to successfully market their product in the British Isles. It is this same reason that the UFC will expand further, from the UK into mainland Europe. In addition, with a UFC office and staff in the UK, the company can reach economies when doing shows in say Italy or Spain. Moving on the Asian or Brazilian market would require a full scale committal of assets, like with the initial launch in the UK. These cards in Italy or Spain can also be sold back to the UK PPV buyer to offset the cost of expanding. Much has been the case with US PPV buys of UK cards helping underwrite UK expansion. These economies are another major reason why the UFC is delving further into Europe rather than making a play in South America or Asia.

It is key to remember who they have placed as their chief man in the UK/Europe. Marshall Zelaznik is the UFC UK President, but his roots are in the PPV industry. Zelaznik was plucked from PPV heavyweight In Demand to head up the UK effort. He told Fighting Spirit Magazine that:

I don’t subscribe to the fact that it isn’t a PPV product here. We’re still getting people used to the idea of paying for the UFC, because for years they’ve had it free on Bravo. But by doing the UK events, which have a special appeal, I think over time that the UFC will become a PPV product in this market, and the revenue will be substantial.

Zelaznik was put in charge to boost the profile of the sport Ultimate Fighting in the UK and build an infrastructure. Both were needed but running parallel to these efforts has been the goal of making UFC a staple on UK PPV. Ryan asks why Spain or Italy over Brazil? I would venture to guess they see a bigger upside in selling their PPV’s in those countries in addition to the economies mentioned earlier. UFC pay-per-view events are shown on Globosat Programadora in Brazil, but sales in the country likely don’t generate the needed payback for a full scale expansion into the country to make sense. You also have to ask if there is the needed standard of living and technological infrastructure to to succeed in a big way via PPV. Iin the end that is what will motivate these initial stages of expansion: payback. How quickly can the country be made into a profit center via PPV?

GSP's G Moment

March 30, 2009

Fight Biz Quote: Dan Henderson

March 30, 2009

…..out of the blue question do you play poker on full tilt? if you do how often do you play. thx again

Hendo: I have poker parties at my house a lot. To be honest, I don’t play online too much. Am I still allowed to play at Full Tilt?

Dan Henderson, conversing with fans on the UG, using a bit of dry wit to address the Full Tilt Poker ban.

He also had a quip about his walk out shirt for his Rich Franklin fight, which we commented on here:

dan-henderson-ufc93-walkout

Henderson said, “I wish I had more sponsors for that fight. LOL.” Good to see Hendo has a sense of humor about the banality of that shirt.

BJ Penn Vs Florian Set for UFC 101

March 30, 2009

According to his website and local hometown paper, BJ Penn’s showdown with Kenny Florian will take place at UFC 101 on August 8 in Philadelphia. The contest should be an interesting gauge of the public reaction to Penn’s loss to GSP and the subsequent Grease-gate controversy. While there can be any range of scenarios that could take place, Penn’s challenge of the decision before NSAC may not be a bad thing for business after all.

All too often these controversies are overblown, online tempests in a teapot. To what degree the mainstream consumer of UFC PPV’s is even aware such a controversy is questionable. Penn will retain a large portion of the fan base he has built up to this point for this very reason. To the portion of fans that did follow Greasegate, it will be interesting to see what the fall out from the situation will be. You may see a good portion of fans that will turn on Penn, but that is not necessarily a bad thing for business. Whereas before you had a group of people that would pay to see BJ fight, ostensibly paying to see him win….you now have a group of fans that were turned off by his actions in challenging his loss. To a large degree if these people are buying the PPV, they will be paying to see Penn lose, not so much to see Florian win.

It is an odd dynamic, not unlike that experienced by Matt Hughes after his stint on The Ultimate Fighter. Hughes emerged from that show a much bigger draw, owing to the dichotomy of feelings from the UFC fanbase. In Penn’s case, it may take a deft touch by the UFC in playing up this duality, but if they do it right can end up being profitable.

XFC, Prisco On The Rise

March 30, 2009

Gulf Coast Business Review takes a look at the burgeoning XFC promotion and it’s leader Tampa entrepreneur John Prisco. Prisco looks to leverage his MMA gyms and TV packages to build up a viable network that not necessarily competes with an industry heavyweight like the UFC , but offers an alternative:

The product is multifaceted. There are the fighting shows, 11 to 12 matches of two barefooted men with small padded gloves battling in a caged mixed martial arts contest — boxing, kicking, wrestling, taking each other down to win points. Prisco has done nine so far in the Southeast, including three shows in Tampa.

XFC also makes money from franchising its XFC training gyms in Tampa and Brandon, which also sell its branded merchandise. And it makes money from its broadcast partners, who pay to get the fighting shows that XFC films.

XFC says it enjoys an advantage over its rivals because it has the two broadcast contracts with HDNet and ValCom. HDNet will broadcast XFC matches live.

And he sees an international TV audience. Prisco is negotiating with 12 countries to get them to pick up the XFC broadcast shows.

Prisco’s gameplan seems to be parlaying a HDNet deal into getting a finished product he can then shop around for other deals. Whether it is a deal like XFC cut with HDNet or with the moves of other groups like the UWC (who are using a multitude of distribution channels like Sherdog streaming and Regional Sportnet’s) these smaller promotions are thinking creatively to get their product in front of viewer eyeballs. More eyeballs means more, better, and bigger sponsors to aide the growth of the promotion.

UFC 2009 Undisputed: Sponsor List Revealed

March 30, 2009

As a follow-up to last week’s piece on in-game advertising, MMAPayout has obtained the full list of sponsors that have been approved for the UFC’s latest video game: UFC 2009 Undisputed.

While in-game advertising should be considered a potentially viable source of future ancillary revenue for the UFC, the consideration that in-game advertising could also provide the fighters with additional sources of revenue is equally intriguing.

Sources have intimated to MMAPayout that fighters have been given permission by THQ to select three or four sponsors from this list to appear on their fight gear and that some fighters are actively trying to sell these placements.

How much might each placement be worth? An estimated $20,000 to $75,000, depending on the popularity of the fighter.

So, I guess the better question might be: what represents fair value?

These things are always tough to gauge because it’s not an exact science – many intangibles must be considered to properly value fighter sponsorships, both in real life and within video games.

However, it seems to me that when you factor in the potential reach of this video game and the high rates of repeat exposure due to multiple playing sessions by any, one user, a $20k-$75k fee is reasonable.

Certainly the level of exposure through the video game is equal to that, or possibly even superior to, the level of exposure companies receive from fighters at live UFC events; and in this case, fighters on the main card (again depending on their popularity) are receiving at least $20k per placement.

Having said all of that, there are probably three things standing in the way as a fighter trying to sell placements on his in-game gear:

1.) Are a fighter’s sponsors on this approved short-list (one that only represents a fraction of the total number of UFC approved sponsors)?

2.) What impact might exclusivity agreements with a fighter’s current, real-life sponsors have on his ability to attract other sponsors on the approved list?

3.) Finally, have some or all of these potential sponsors already reached paid agreements with the UFC or THQ in order to appear in the game and under what conditions?

Camps (17)

10th Planet Jiu-Jitsu
Alliance MMA
American Top Team
Black House
Brazilian Top Team
Cesar Gracie Jiu-Jitsu
Extreme MMA
Greg Jackson’s Gym
HIT Squad
Minnesota Martial Arts Academy
Serra Jiu-Jitsu
Sityodtong USA
Team Nogueria
Team Penn
Team Quest
Team Takedown
The Pit

Commercial Sponsors (33)

American Fighter
And 1
Clinch Gear
Conquest
Death Clutch
Fairtex
FYT
Hayabusa Fight Wear
Harley-Davidson
Headblade
HITMAN Fight Gear
Hostility
Metabolic Adaptation
Microtech
MMA Warehouse
Nuvasive
NOGI
One More Round
On The Mat
Pain Athletics Inc.
Premier Fighter
RVCA
Sinister Brand
Skin Industries
Sprawl
Sucker Punch
Take A Nap Fight Gear
Tapout
Toe 2 Toe
Warrior International
Xyience
THQ
Yuke’s

There are several head-scratching additions and omissions within the list, but upon further investigation it appears as though the list of camps and sponsors reflects the UFC’s state of business as it was some months ago, prior to THQ’s programming freeze (a point in the game’s development where programming shifts from new additions to bug and game play tweaks).

It might explain the absence of prominent sponsors like BSN and Cage Fighter, while also justifying the inclusion of Premier Fighter (a brand distributed at the time through Hitman and TapouT, a relationship that has since been severed).

The omissions of Bud Light and Full Tilt Poker aren’t really any surprise considering the intended audience of this game is quite broad. Both would raise unwanted social issues regarding drinking and gambling; this even aside from the UFC’s current poker sponsor debacle.

One of the sponsors who worked out a deal for inclusion in the game couldn’t be happier with the results.

“We’re very excited to be an official in game partner for UFC 2009 Undisputed,” said MMAWarehouse.com CEO Mika Casey. “Not only is it one of the most unique marketing opportunities we’ve been involved with, but THQ has really put the time and effort into making an authentic, true to life experience with both look and feel. Even if we were not a partner, this is a game that as a gamer, I cannot wait to play.”

UFC 2009: Undisputed is set to hit store shelves on May 19th for the Xbox 360 and PS3 consoles. If you’ve haven’t read the game preview from MMAPayout’s Todd Martin on CBS, you should.

MMA Cage Newest Title With Designs on MMA News stand

March 27, 2009

A crowded field of MMA print media just got a bit more crowded with the announcement of the launch of MMA Cage:

MMA Cage is about to get into the ring with Fight!, Ultimate Grappling and all the other magazines that celebrate the sport of mixed martial arts. Punches, kicks and choke holds are allowed, but there’s no biting. Harris Publications—which will let MMA Cage loose on newsstands June 2—believes it has what it takes to win.

Harris plans to distribute 225,000 copies and reach paid circulation of 100,000. The title will be published quarterly for now. Despite the recession and print media’s collapse, Mr. Rheingold is also hoping to attract advertisers interested in reaching young male readers. “[MMA] is a fan-driven sport,” he says. “And it’s booming.”

Harris also publishes hip hop title XXL and basketball title Slam, so it may be able to yield some of the corporate synergies much like Fight! did with their off shoot from Bluff Media. The print media forum as a general rule is in a collapsing state, with big titles like Blender getting shuttered recently. MMA on PPV in the form the UFC has performed well while other sports have taken a dive in a down economy, and publishers launching new titles are hoping that MMA magazines can do the same.

Bellator Announces 4/24 Date in Colorado Springs

March 27, 2009

Los Angeles, Calif. – March 27, 2009 – Bellator Fighting Championships announced today that Bellator IV, the fourth event of the highly anticipated 12-week tournament series airing on ESPN Deportes, will be held in Colorado Springs, Colorado on April 24, 2009.  The event will take place at the World Arena in Colorado Springs, which rests just south of Denver in the shadow of the neighboring Rocky Mountains, a natural metaphor for Bellator’s combined feature events, “A Night of Heavyweights & the Semi-Final Round of the World Championship Lightweight Tournament.”

The commanding roster of heavyweight fighters will anchor an action filled evening of competition featuring some of the best fighters this weight class has to offer. This Bellator special event will also feature a Lightweight semi-final tournament match-up, with the resulting winner advancing as a finalist for Bellator’s $175,000 Lightweight World Championship Fight.

“The fight card is packed with great Heavyweight match-ups and what promises to be a compelling Lightweight World Championship tournament Semi-Final,” said Bellator Fighting Championships CEO Bjorn Rebney.  “Colorado MMA fans and our worldwide television audience should expect to see a night of powerful strikes, tactical submissions and crowd pleasing knockouts.”

Bellator IV will feature a collection of highly-competitive, action-packed Heavyweight bouts, a World Championship Semi-Final as well as a collection of spectacular special feature fights. The evening will also feature a bout between two top form female fighters, Molly Helsel versus Angela Hayes. The non-tournament Heavyweight bouts on show are detailed below:

Non-Tournament Bouts:

Heavyweight – Dave Herman (13-1) vs. Josh Barnes (5-1)

Heavyweight – Rauol Romero (3-1) vs. Dave Evensen (10-4)

Heavyweight – Eddie Sanchez (11-3) vs. Jay White (4-5)

Heavyweight – Tyler East (pro debut)) vs. Amedio Viola (0-1)

Heavyweight – Joey Beltran (5-2) vs. Sherman Pendergarst (11-12)

130 lbs. – Molly Helsel (7-7) vs. Angela Hayes (1-5)

Special Lightweight World Championship Semi-Final Tournament Match-Up

Based on the outcome of Bellator I, II & III

Bellator Fighting Championships’ premiere season consists of 12 two-hour events to be broadcast weekly in primetime on Saturday nights.  The nationally televised events will feature a combination of tournament and non-tournament special feature bouts. There will be four simultaneous tournaments taking place in season #1 over a three month period: one in each of the Featherweight (145 lb.), Lightweight (155 lb.), Welterweight (170 lb.) and Middleweight (185 lb.) divisions.

Tickets will go on sale at 12:00 pm MT Friday, March 27, 2009 and can be purchased at the ­­World Arena box office and through TicketsWest.

For more information on Bellator Fighting Championships, visit www.Bellator.com.  For the Spanish language version of the website, visit www.Espanol.Bellator.com.

About Bellator Fighting Championships

Bellator Fighting Championships is a Mixed Martial Arts promotional company with offices in Los Angeles and Chicago . Bellator’s founders, Bjorn Rebney and Brad Epstein, are experienced fighting sports and entertainment professionals with a deep commitment to the purity and integrity of the sport of MMA and its athletes.  Bellator Fighting Championships’ executive team is comprised of top industry professionals in the areas of live event production (including Rob Beiner, winner of 12 Emmy awards for sports programming), fighter relations, venue procurement, sponsorship creation/development, international licensing, marketing, advertising, publicity and commission relations.

HDNet Fights Presents: FieLDS K-1 World Grand Prix 2009 Yokohama

March 27, 2009

Event to be broadcast LIVE from Japan, Saturday, March 28 at 1:00 a.m. PT

WHAT: HDNet will broadcast LIVE coverage of “HDNet Fights Presents: FieLDS K-1 World Grand Prix 2009 Yokohama.”  This is the first event in 2009 of the much anticipated K-1 World Grand Prix.   HDNet’s partnership kicked off late last year with the K-1 World Grand Prix Finals and features the best kickboxers in the world.  LIVE coverage of this event will include, Alistair Overeem v. Remy Bonjasky, Peter Aerts v. Errol Zimmerman, Jerome Le Banner v. Ewerton Teixeira, and a four-man, one night tournament for the K-1 Heavyweight Title featuring Melvin Manhoef.

WHEN: Saturday, March 28 at 1:00 a.m. PT with an encore presentation on Saturday, March 28 at 9:00 p.m. ET.

About HDNet

HDNet (www.hd.net) is a network that is original, thinks independently and delivers

unique content and provocative, authentic programming that appeals to men of all ages, delivered in true high definition.

HDNet is the exclusive, high definition home for popular, original programming, including television’s only HD news feature programs “HDNet World Report,” and the Emmy Award winning “Dan Rather Reports,” featuring legendary journalist Dan Rather.  Only HDNet goes beyond the headlines to deliver real news that is redefining the way we look at our world.  HDNet News is provocative, sometimes controversial and always relevant  – telling the important stories of our time in-depth, with attitude and with independence.

HDNet presents championship sports coverage featuring the best of Mixed Martial Arts through HDNet Fights.  HDNet Fights partners with leading MMA promoters including Affliction, DREAM, Sengoku, XFC, M-1, K-1, K-1 Max, MFC, Adrenaline and more.  HDNet produces more live mixed martial arts events than any other network and HDNet’s “Inside MMA” is the hottest mixed martial arts program on television, giving MMA fans their weekly fix for everything MMA.

HDNet also delivers the world’s largest and most diverse concert line-up through the HDNet Concert Series.  The HDNet Concert Series features leading artists and bands including Coldplay, Gwen Stefani, John Mayer and more.  HDNet also features revealing lifestyle programming featuring “Art Mann Presents,” “Vegas Confessions,” “Deadline” and “Get Out!”  HDNet is also the exclusive high definition home to critically acclaimed and award winning documentaries as part of the InFocus series.   “NASA on HDNet” presents all live shuttle launches through 2010.

Only HDNet Movies delivers exclusive Sneak Previews of new movies before they hit theaters.  The HDNet Movies Sneak Preview series features top Hollywood stars in critically acclaimed performances including Gwyneth Paltrow, Joaquin Phoenix, Demi Moore, Michael Caine, Tom Hanks, Vera Farmiga, Parker Posey, Brian Cox, Matthew Broderick, Brittany Snow and Eric Bana.

Upcoming Sneak Previews include “The Great Buck Howard,”starring Colin Hanks, John Malkovich and Tom Hanks, and “HarlemAria,” starring Damon Wayans.

In addition to being the exclusive home of Sneak Previews, HDNet Movies presents viewers with over one hundred films and an average of twenty-five  “HD Premieres” each month.    HDNet Movies viewers enjoy the best films from the classics of the 1950s-1970s, to favorite films from the 1980s and 1990s, to recently released theatrical films.

HDNet Movies offers subscribers a premium movie viewing experience in true HD, and more original movies shot entirely in HD than any other network.

Launched in 2001 by Mark Cuban and General Manager Philip Garvin, the HDNet networks are available on AT&T, Bright House Networks, Charter Communications, Comcast, DIRECTV, DISH Network, Insight, Mediacom, Time Warner Cable, Verizon and more than 40 NCTC cable affiliate companies. For more information visit www.hd.net.

Fight Night From Nashville Nearing Sell Out

March 27, 2009

The Tennessean of Nashville reports ticket sales are strong for the upcoming Fight Night:

More than 8,000 tickets have been sold for Nashville’s first major ultimate fighting event, set for Wednesday at Sommet Center, and organizers are predicting the event will sell out.

Wednesday’s fights will be the first arena-scale ultimate fighting event in Nashville since the state legislature formed the Tennessee Athletic Commission last summer, a move that effectively legalized ultimate fighting in Tennessee.

Tickets for the Sommet Center event range in price from $20-$200.

The combination of sane ticket prices and the debut of the UFC in the market looks to yield a full house come fight time.

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