UFC 103: 400,000 buys (Meltzer)

September 30, 2009

Dave Meltzer of the Wrestling Observer reports in his latest newsletter that UFC 103 managed to reach the 400,000 plateau.

At press time, the numbers for the 9/19 battle look like the Floyd Mayweather vs. Juan Manuel Marquez fight did 1 million buys in North America, putting it No. 2 on the list of shows this year, while UFC 103, headlined by Rich Franklin vs. Vitor Belfort, looks to have done 400,000 buys.

 

The boxing match drew 525,000 on cable and 475,000 buys on satellite, according to HBO, for a total gross of $52 million. UFC 100 has been reported at 1.72 million buys (our estimate was 1.6 million), which would be, with lower prices, somewhere around $77.3 million (actually more if a significant number bought it at the higher HD pricing).

Payout Perspective:

 There are several interesting notes to take away from this buyrate figure:

  • UFC 103 was considered to be a potential candidate for the smallest UFC PPV event of the year considering its headliners, the strength of the overall fight card, and its external operating environment. Dana White has every right to be happy with 400k.
  • The estimate of 400,000 buys would now suggest – in tandem with 102’s estimated 435,000 – that the UFC’s new base line for North American shows is probably at the 400,000 buyrate plateau. European shows like 93 and 99 doing 350-375k aren’t far off, either. 
  • Rich Franklin had never headlined a card that sold more than 375,000 PPVs. His success as the top draw for 103 i’s likely a combination of the UFC’s increasing popularity and the push he’s received this year (he’s headlined three shows in 2009: UFC 93, 99, and now 103). All the more impressive is that he’s done his best figures without a belt. He’s being pushed as a member of that ultra tough UFC vanguard of yesteryear and his gatekeeper role seemingly hasn’t held him back.
  • Lastly, you may have noticed that the figure increased over the early estimate of last week (400,000 up from 375,000). The estimates tend to fluctuate based on the five or six metrics that Meltzer has access to.

Note: Meltzer is an honest and trustworthy source of information – someone who has built up his contacts within the cable industry over a number of years – while not 100% accurate, he’s almost always within range.

I’d again encourage everyone to sign up for his wrestling/mma newsletter, because there are a ton of gems included on a weekly basis.

Study Reveals Increased Dementia Risk in NFL Players

September 30, 2009

The New York Times reports that a study commissioned by the National Football League shows memory-related diseases appear more often in the league’s former players than in the population at large:

All rates appear small. But if they are accurate, they would have arresting real-life effects when applied across a population as large as living N.F.L. retirees. A normal rate of cognitive disease among N.F.L. retirees age 50 and above (of whom there are about 4,000) would result in 48 of them having the condition; the rate in the Michigan study would lead to 244. Among retirees ages 30 through 49 (of whom there are about 3,000), the normal rate cited by the Michigan researchers would yield about 3 men experiencing problems; the rate reported among N.F.L. retirees leads to an estimate of 57.

So the Michigan findings suggest that although 50 N.F.L. retirees would be expected to have dementia or memory-related disease, the actual number could be more like 300. This would not prove causation in any individual case, but it would support a connection between pro football careers and heightened prevalence of later-life cognitive decline that the league has long disputed.

Payout Perspective:

Here’s a study confirming what has really become obvious over the last several years:  repeated concussions seem directly related to the onset of early dementia.

Former WWE wrestler (and Harvard University graduate) Christopher Nowinski has been at the vanguard of this issue since having seen his own career end early due to multiple concussions; having an NFL-commissioned study as support for his cause could help at least in terms of visibility of the issue.  There was significant media coverage of the issue in the months following the Chris Benoit double murder-suicide in 2007 (Benoit, 40-years-old at the time, had a brain — due to its repeatedly being concussed —  akin to an 85-year-old Alzheimer’s patient’s), but coverage has waned as that tragedy faded from public memory.

The study’s implications for our sport are clear.  Although I believe Mixed Martial Arts is considerably safer than boxing (in large part because fights end in MMA as opposed to how boxing permits an already brain-injured fighter approximately ten seconds to recover in order to continue receiving punishment to the brain), KO’s are a big part of the game, and so therefore are concussions.

The best the sport can do is to create an environment making an inherently risky activity such as fighting as low-risk as possible.  That means giving serious attention — at all levels, from promotion to commission — to the issue.

If in the end that means forced retirements for (and I’m just pulling a name, not a random one by any means, but just by way of example) someone like Sean Salmon, a fighter who has suffered what would appear to be more than his fair share of devastating knockouts, it’s preferable to the inevitable tragedies (perhaps not at a Benoit level, but there would be more homicides, suicides and the like) the coming decades could bring.

The MMA world needs to heed these studies.

TUF 10: Kimbo vs. Nelson, Tonight

September 30, 2009

Just a reminder that Spike TV will be airing what is probably the most highly anticipated fight in Ultimate Fighter history – Kimbo vs. Nelson – tonight at 10pm/9 cst.

There’s been a lot of talk in recent weeks about what kind of ratings Kimbo’s fight might do; most agree it’ll likely set the TUF record and hit the 3-3.5 rating range (4.5 to 5 million viewers).

Although during a promotional stop in NYC, Dana White even jumped into the fray predicting the episode will push 6 million viewers.

One of the reasons why you are in town is to promote Wednesday’s TUF fight between Kimbo Slice and Roy Nelson. Are you surprised by how much buzz this fight — as well as the whole season — has generated thus far?
We knew it was going to be big, we just didn’t know how big it was going to be. We did 5.1 million viewers the first week, 4.1 last week, and this Wednesday we think that we’re going to do more than both of those.

 

I heard you predicted 7 million viewers for this Wednesday’s show.
No, I’m predicting 6 million.

 

So, 7 million might be a little aggressive?
Dude, if we do 7 million … I’m not going to say anything. I already put my foot in my mouth at UFC 100.

Dream 12: Caged Event, Kikuno vs. Alvarez

September 29, 2009

This week Japanese promotion Dream unveiled its design for a new hexagonal cage that it plans to use once every year for a special event.

Dream made the announcement at a press conference for Dream 12 in which it not only revealed the design of the cage, but that the event would feature two hotly anticipated lightweight match-ups: Katsunori Kikuno vs. Eddie Alvarez and Won Sik Park vs. Kuniyoshi Hironaka.

Additionally, the organization announced that they would be altering the time limits on each round: event bouts will consist of three rounds of five minutes each, as opposed to the usual Dream standard of one ten minute round and another five minute.

Payout Perspective:

Dream’s plans for a yearly cage show are interesting from a business perspective for a number of reasons:

  • I suppose first and foremost there’s always been the prevailing thought that a cage is better for the fighters, but that a ring is better for the fan experience. It’s very difficult to judge how the Japanese fan base will react, but the rise and fall of Japanese MMA tells me that those still following the sport are the die hards that will watch the event regardless; and at that point, it doesn’t hurt Dream to take a chance for one event and experiment a little.
  • Bloodyelbow’s Leland Roling also points out that Dream’s working relationship with Strikeforce could be the impetus for not only the switch to a cage usage, but also the adoption of three, five minute rounds. The organizations may be seeking to bring both organizations closer together – from a marketing and product perspective  – while maintaining their individual brands. It may benefit the fighters – and the fans – to see action inside the cage, and from that future opportunities may arise out of this partnership.
  • Finally, the move to a cage and adoption of the three rounds may ironically symbolize the fall of Japanese MMA. It’s a move designed to generate interest and help grow MMA within Japan once again, but in order to do so the country’s largest promotion will be switching from the original Japanese format to one popularized (and heavily monetized) in North America.

SBJ: Sponsorship In-depth

September 29, 2009

The Sports Business Journal released its highly anticipated sponsorship issue this week. The in-depth feature is highlighted by a roundtable discussion with numerous marketing executives from several big name companies including A-B Inbev, Pepsi, Turnkey Sports Management, and others.  

Here’s a snippet, but make sure you run over to the website and check out the entire thing:

SBJ: The economy and its impact on sponsorship and marketing budgets is foremost on everyone’s mind. Where are you relative to a year ago, when so many marketing and media budgets were just frozen?

 

Mark Wright (Anheuser-Busch InBev): In terms of sports and media in general, we are not backing off. There have been a lot of changes, but the new ownership believes, as we always have, in the value of investing in sports, sponsorships and media. Everyone around this table is in an environment where they have to look at cutting costs, but to get real top-line growth, we have to continue investing.

 

Ray Bednar (Bank of America ): I’m in the banking business and things have changed there, but we aren’t backing off either. We are starting to pay off the government, so we can get free of the TARP “embrace.” Specific to budgets, we are not spending any less; we are spending a little bit differently. With what has happened in financial services and some of the big brands like us and Citi Group, marketing is more important now than ever. We are investing quite heavily — more so than in the past.

 

SBJ: During the recession, sports marketing became a whipping boy. Does that notion have to change before spending in your industries resumes at prior levels?

 

Bednar: The peak in the February-to-April time frame is well off, but it was horrible. Companies that were most abused have changed quite a bit of what they do, especially on the b-to-b side of things. Overall, there has been a fundamental shift in sports. We had a bubble that was going to burst and it did. Some of the unrealistic things that were going on in sponsorship, mostly led by the biggest financial institutions, since they were among the biggest spenders, caused it to implode. What’s fundamentally changed is that now we have premier, iconic properties coming to us asking how they can drive our ROI. Now they don’t want to renegotiate contracts [up], they want to trade out assets — which is something we’ve engaged in quite a bit recently. The pricing of sponsorships is finally adjusting to more reasonable levels that better reflects their value.

 

Bill Glenn (The Marketing Arm): There’s just more scrutiny on where you are spending your dollars and how deeply you can pursue individual engagement with consumers. Are you really building a higher likelihood of them purchasing your brand? There’s more pressure on properties to deliver that and more pressure on us to ask for that. Measurement has moved well beyond awareness and our clients are looking at purchase consideration, purchase intent, purchase and use.

Payout Perspective:

I’ve been waiting on this issue for nearly a month, and the wait proved worthwhile. The roundtable confirmed a few of my assumptions about the sponsorship market, but also underscored some interesting points that I hadn’t heard or read anywhere else.

MMAPayout.com has made an effort to highlight the latest news from the sponsorship and advertising markets in the last few months, because of the impact that these segments have on the business of MMA. While advertising is generally down across the board, it was nice to get a confirmation that sponsorship has remained steady over the last year.

Perhaps the biggest takeway from the roundtable, however, was the new industry focus on measurement. It’s no longer a completely one-sided negotiation where clients are pursuing sports properties and doing everything they can to lock down exclusivity. Sponsors are now coming to the table with the expectation that properties can deliver measured value, and not just ROI but ROO (return on opportunity).

I’ve had the good fortune to read some of the UFC’s surveys and sponsorship material over the last couple of months, and I’ve observed the organization to be trending towards a more wholistic sponsorship approach. They appear to be working with potential clients to give them feedback about UFC consumers in order to help customize and tailor their partnership to be a more fulfilling, mutually beneficial experience.

It’s really important, too, and Mark Wright of A-B Inbev summed it up perfectly:

Wright: We still get a lot of properties, especially local ones, telling us things like “most of our adult fans drink Bud Light.” We’re glad they do, but most of America does, so that’s not really information we want or need. We still get a lot of sales pitches based on the property’s business model, as opposed to our business needs or strategy. That may be starting to break down; in a recent NBA team pitch they showed us sales taken from the team’s playoff run. So maybe they are starting to get what works for us and tie it to our brand and sales health.

If MMA can adopt the new, more co-operative sponsorship approach it’s going to pay dividends. Then again, I’m not convinced that it’s much of an “if” as much as it is a necessity; the operating environment for many of these companies has changed, and thus so too much the approach of MMA organizations looking to bring sponsorship.

New TV "Stickiness" Measurement

September 28, 2009

TVbytheNumbers sheds some light on television’s newest ratings index, “stickiness,” which measures the percentage of a TV program actually viewed against the average percentage of all other programs in the time slot category. The metric is designed to assess how well “tuned-in” viewers are to a particular program.

The system was developed by Rentrak and here’s a view snippets of their informational press release:

The “Stickiness” Index is based on the average percentage of the program viewed, divided by the average percentage viewed for all series of that duration during Monday-Sunday primetime (8pm-11pm) program series roll up air times. Programs with the most engaged viewers will have higher “stickiness” indexes.

 

“The correlation of ratings-to-engagement is an integral component in determining how “tuned in” viewers are when they are watching their favorite programs,” said Bruce Goerlich, Chief Research Officer, at Rentrak. “Rentrak’s large data sets allow for granular and consistent analysis of hundreds of networks, and the Stickiness Index shows the level of program engagement.”

Payout Perspective:

The release goes on to share the stickiness ratings for the week’s of September 9th and 14th, and here is how MMA and its competitors scored:

Stickiness       AT&T Rank                       Program                        Network       # of Telecasts     Stickiness Index
       10th       —         84th        —    Ultimate Fight Night   —         Spike     —                1             —             138
       15th       —         179th      —    The Ultimate Fighter  —         Spike     —                3             —             136
       21st        —         103rd     —    WWE Smackdown!       —         MyNet   —               1             —              130
       25th       —         64th        —    WWE Monday Night    —         USA       —                1             —              129

The stickiness metric could potentially add a lot of value to sports television, because it measures the degree of total viewership in a segement where advertising and sponsorship is most heavily activated during the programming itself.

Sports properties like the UFC can bring this metric to the negotiating table when meeting with advertisers and sponsors to show them exactly what they’re getting for their investment. And if those properties can further complement this metric with additional measurements or demographic information tailored to the specific client, they should then be able to increase the value of those advertising and sponsorship agreements.

It looks to be a wonderful tool, and the possibilities are seemingly endless. Keep an eye on it.

Please note: Rentrak is a publicly traded company, but I do not hold any of their stock. I’m a poor MBA student…my investments are tied up in my education. 🙂

Publicity at the Core of UFC Hype Machine

September 28, 2009

What are the keys to building an effective brand? Truth be told, there are probably too many to name or cover in a single sitting. Brand building, after all, is a complex, long-term endeavour with many different intangibles and moving parts.

However, if you were to underscore the key to building the UFC’s brand, what would it be? The answer is publicity.

UFC Owns Strong Competency in PR

The UFC is among the best in the world, regardless of sporting category, at generating publicity across all mediums – print, digital, television, or otherwise. A superior public relations competency has allowed the UFC to not only establish a sporting category of its own – mixed martial arts – but maintain a decisive leadership edge in that category.

The organization has also used an array of publicity – positive, negative, or indifferent – to tie its own UFC brand to that category. In fact, the organization has done such a good job at tying their brand to the sport, that the UFC has become nearly synonymous with MMA in the mind of the consumer – most casual fans actually refer to the sport as “UFC”.

It’s not the UFC, but UFC.

If you were to ask ten random people on a street corner what MMA was, you’d probably get at least eight very puzzled looks. Ask those same ten people what the UFC is and you’ll likely get at least eight correct answers. That’s the power and striking reality of what the UFC has been able to accomplish. The fact that the UFC was essentially the first-mover in North America has helped, but that doesn’t take away from the effectiveness of its public relations.

Publicity is an effective way to build a brand – especially for a controversial sport like MMA – because it’s an alternative way to communicate a message and reach the consumer that is more credible and legitimate than advertising. In a society where consumers are constantly inundated with the same messages every day, publicity can differentiate brands.

Consumers aren’t stupid. They understand the purpose of advertising and the complete lack of objectivity that some ads have. However, an article in the Washington Times or a video clip on CNN give the appearance of legitimacy, because of the third party nature and the absence of any sort of phony sales or elevator pitch.

There are other advantages of publicity, too. Probably the most significant is its cost: generally it’s free as most media outlets use it to their own benefit. On one hand the UFC needs publicity to communicate its message, but on the other, outlets understand that the UFC’s message draws interest in their own publications.

However, the use of publicity also has its disadvantages – specifically a distinct lack of control. While the UFC may have a message that it wants to communicate, it cannot guarantee how it will be conveyed. It’s forced to take the good with the bad.

And part of the UFC’s public relations effectiveness is spinning “negative” publicity into further interest that will draw viewers to the brand. The organization has also done a tremendous job to limit acts which might cross the line and threaten MMA’s pursuit of worldwide legalization and legitimacy.

White Understands His Role, PR

The UFC’s ability to generate such superior levels of publicity for the organization starts with UFC President Dana White. If PR is a strength of the UFC, PR is the strength of Dana White – very few corporate front men are as good as Dana White in terms of generating publicity (and as said earlier: good, bad, or indifferent publicity).

White uses the combination of his personal appearance and tell-it-like-it-is attitude to endear himself with MMA’s core demographic, while at the same time drawing the attention – and most often the ire – of the older, more conservative and traditional bases in the media landscape. He’s a polarizing figure that totes the UFC everywhere he goes, and media outlets seek him out to boost their own ratings (which in the process furthers his own cause).

It’s for this reason that Dana White is still irreplaceable. Despite his criticisms and occasional gaffes, he’s at the heart of the UFC’s public relations juggernaut, which is at the core of the UFC’s hype machine. Without the hype machine, the UFC’s PPV business model wouldn’t be nearly as strong as it is; and for an organization so heavily dependent on event-related revenue that’s critical.

Golden Boy Challenges UFC, White

September 25, 2009

Kevin Iole of Yahoo! Sports posted an interesting piece this afternoon detailing the results of Mayweather-Marquez, in addition to Golden Boy Promotions CEO Richard Schaefer’s challenge to the UFC in regards to their PPV figures.

Schaefer questioned the legitimacy of UFC pay-per-view results that were leaked. He said HBO is a publicly traded company that would face serious repercussions for releasing false numbers. The UFC, he noted, is a private company with no such concerns.

 

“I think the UFC and boxing should be able to co-exist and work together in this thing that we call (combat) sports,” Schaefer said.

 

“I don’t want to talk (expletive) about the UFC. But Dana White can’t do an interview without knocking boxing. If he thinks we’re idiots and don’t know anything about the pay-per-view business, I’ll make him a challenge.

 

“I am willing to hire one of the top three accounting firms, at my expense, and do an audit of his pay-per-view results. They are nowhere near what is put into the public. There is talk that UFC 100 did 1.6 million, but it barely broke a million. I am willing to pay to have the audits done to prove this.”

Payout Perspective:

In poking at the 800 lbs. gorilla in the room, Golden Boy is guaranteeing their latest PPV success a host of additional press coverage. GB also knew that White wouldn’t accept the offer, and as a result, it would make the UFC look weak or scared. Schaefer and Golden Boy really have nothing to lose here.

The challenge itself bears no real threat for the UFC – they can easily shrug it off – but there is an underlying what-if element here that could prove more troublesome in the future. This challenge may just be the first in a series of barbs meant to attack the credibility of the UFC and undermine the record year they’re having.

While the allegations could very well be true, the bottom line is still that they’re coming from Richard Schaeffer – the CEO of Golden Boy and chief combat sports rival to the UFC. He’s a promoter – just like White – and publicity is what he does best. Take it with a grain of salt just as you might with anything that White says.

TUF 10 Ratings Strong, Still Early

September 25, 2009

Yesterday, Spike TV released the ratings for the latest episode of The Ultimate Fighter: Heavyweights:

“The Ultimate Fighter: Heavyweights” on Spike TV continues to be the undisputed champion of young men on Wednesday nights. The 2nd episode of the 10th season of “The Ultimate Fighter” on Wednesday, September 23 (10:00pm-11:00pm) drew 2.9 million viewers and was the top-rated program in Men 18-34 (1.2 million) in all of television, beating many highly-promoted series on network television including the debuts of “Cougar Town,” “Modern Family,” “Eastwick,” and new episodes of “Glee,” “Dancing With The Stars,” and “So You Think You Can Dance.”

 

Overall, the episode drew a 4.2 in Men 18-34, a 3.2 in M18-49 (1.8 million) and a 2.2 household rating. Also impressive was the repeat telecast at 11:00pm, which delivered 1.1 million viewers.

Payout Perspective:

To give you a better understanding and some context as to why everyone is raving about these ratings here are some things to consider:

  • The only other TUF episode to garner a 2.0+ was the first episode of TUF 3.
  • The average rating for a TUF episode is 1.3, but from TUF 4 through to TUF 9 the average has been just a 1.14.
  • No TUF season has ever approached a 4.0 in M18-34, let alone the 5.3 or 4.2 TUF 10 has done back-to-back.

 Also, consider that with Kimbo Slice fighting next week – and the resulting piggyback ratings on following episodes – the season is likely going to experience an extremely strong start.

If Kimbo can manage to defeat Roy Nelson the season will more than likely smash the previous ratings record – 1.69, TUF 3 – and average out at somewhere over the 2.0 mark.

Strikeforce on CBS: Sears Centre, Chicago

September 24, 2009

Strikeforce Director of Communications Mike Afromwitz confirmed with MMAweekly that Strikeforce on CBS: Fedor vs. Rogers will indeed be held at the Sears Centre in Chicago, Illinois on November 7th.

The Sears Centre Arena in Hoffman Estates, Ill. will host the CBS network debut of Strikeforce: Emelianenko vs. Rogers.

 

Strikeforce Director of Communications Mike Afromowitz on Wednesday afternoon confirmed the news to MMAWeekly.com. The CBS telecast will air between 9 p.m. and 11 p.m. E.S.T.

 

“We just got approved,” he said.

 

The suburban Chicago venue was rumored to be in the running for the event as early as last Thursday, however, the promotion was waiting on approval from the Illinois State Athletic Commission.

Payout Perspective:

I like the venue choice. Chicago is a great MMA city and should provide a strong hardcore base for Strikeforce to draw upon.

Moreover, the fact that the city remains one of the country’s strongest media hubs is also very beneficial. This event – as it stands right now – is going to have the entire weekend to itself and should be able to leverage its exposure through CBS and Showtime to market the fight properly.

It’s not enough to advertise this fight. Strikeforce really needs a relentless PR campaign through the media in order to build Fedor’s legitimacy and build his brand within the United States.

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