MMA Business Week: 10/26 – 10/30

October 31, 2009

It wasn’t really a huge week in MMA business, but here are some of the bigger news items of the last few days.

 – Machida needs surgery, out of 108

The bad luck continues for the UFC as they won’t be able to capitalize on the heated controversy that was Machida-Rua I, with an immediate rematch.

Anticipation building for Fedor vs. Rogers on November 7th

CBS/Strikeforce have released a series of promo commercials in the past week in order to help build the fight.

– Legalization moving forward; Rhode Island ready, Massachussets soon

It’s expected that Massachussets will get the final seal of approval from the governor by the end of November.

Lesnar out of UFC 106

The bout has tentatively been rescheduled for UFC 108, but who’s to say when he’ll be back at 100%. Carwin also divulged that he’d been suffering from H1N1 early in the training camp.

UFC 104 Predicted Buyrate: 398,000

Using regression analysis across two variables, MMAPayout.com has predicted a buyrate of 398,000 for the event.

ProElite purchased for $2 million

Stratus Media Group, looking to diversify their holdings, acquired the organization. Time will tell whether they can effectively leverage their own experience to make the organization successful.

McNeil: UFC 104 Called As Seen

October 30, 2009

Franklin McNeil over at ESPN makes the case for UFC 104 judges Peoples, Rosales, and Hamilton:

Each judge has scored hundreds of MMA bouts, professional and amateur. They have met every requirement set forth by this country’s most influential athletic commissions, and each attends judging seminars regularly. Hamilton, Rosales and Peoples are more than qualified to score fights.

 

On Saturday night, they had a very difficult one to score. Machida-Rua was a strategic, carefully contested bout. Several rounds could have gone either way.

 

When the fight was over, all three judges scored it 48-47 for Machida (ESPN.com had Rua winning 48-47). The judges, however, weren’t totally in sync. They didn’t agree on how the champ won.

 

Peoples and Rosales gave the first three rounds to Machida. However, Hamilton had the champ taking the middle rounds. Round 5 was the only one in which all three judges favored Rua.

 

While most observers disagreed with the judges’ scorecards, they also didn’t see eye-to-eye on which rounds to give Rua.

 

“I noticed that a lot of people on the Internet gave the first, second and third rounds to Machida,” Nevada State Athletic Commission Executive Director Keith Kizer told ESPN.com. “Almost everybody gave the fourth and fifth rounds to Rua.

 

“There were also a lot of people who gave the first, second and third rounds to Rua. You could have went 50-45 for Rua or 48-47 for Machida and not have been wrong.

 

“Some fans are under the impression that if two judges scored it the same, then the third judge must be wrong. Not necessarily. It depends on the angles from which the judges saw the fight.”

 

Where a judge is seated at a particular time during the action must be taken into account. Judges have the best seats in the house, but they don’t always have a clear line of vision.

Payout Perspective:

The MMA community – perhaps more accurately, the MMA media – have in the last week done what they do best: sensationalize. Machida-Rua was a close fight, and different view points were bound to lead to different opinions and perceived outcomes.

The MMA community needs to come to terms with the fact that mistakes are going to happen, controversy is going to ensue, and there just isn’t always going to be a right answer. All the promoters, fighters, and fans can do is continue to support the sport – whether MMA reaches the pinnacle of mainstream acceptance is in some respects very much out of their control.

—-

Regardless of your opinion on sensationalism within the MMA community, the issue of judging in MMA has yet again been raised. Should they change the scoring system? Is it a judge quality issue? Or might this simply be a part of the subjectivity inherent within the fight game?

MMAPayout.com has advocated before that a new scoring system is probably in order – one that involves greater usage of 10-10 and 10-8 rounds – but that’s a very large undertaking.

If MMA makes any alterations to the way matches are judged or officiated, they must be for the better, and they musn’t be done on a whim because a few fights stirred up some controversy.

Rhode Island Legalizes MMA

October 30, 2009

The State of Rhode Island has passed a bill legalizing the sport of mixed martial arts:

PROVIDENCE, R.I. — The House Corporations Committee has passed a bill that would prohibit driving while text-messaging.

 

The bill, which already has passed the Senate, now goes to the full House for a vote.

 

Supporters of the measure say drivers who were text-messaging have been responsible for several accidents, including some fatal crashes. Some committee members had concerns about how the police will be able to determine whether drivers were texting before a crash, but voted for the bill nonetheless.

 

Text-messaging while driving is already banned in at least 10 states — including Connecticut — and the District of Columbia.

 

The committee also passed a controversial bill that would allow mixed martial arts fighting in the state. The form of hand-to-hand competition combines wrestling, boxing and other fighting forms.

Payout Perspective:

The bill passed and word has finally made its way through MMA channels in the last day or so.

Here’s a rather interesting take from Bloodyelbow forum member, Cyke:

A cursory reading of the bill shows it to be surprisingly well written. One aspect that I loved is that even though there’s a 10 point must system, it allows for rounds to be scored as draws.

 

The bill’s passage is monumental because of Rhode Island’s strategic location as a halfway point between New York and Boston and it’s proximity to Connecticut. Add Providence’s reputation as a fight town (see Pazienza, Manfredo and more recently Andrade) as well as the fact that its a fun place to be in to it’s locational advantages , and there is serious potential for Rhode Island to be a major MMA staging ground.

TUF 10, Episode 7: Ratings

October 29, 2009

MMAPayout.com has confirmed that episode 7 of The Ultimate Fighter 10: Heavyweights generated a 1.9 household rating for an average viewership of 2.5 million. The show also drew a 3.6 and 2.8 in the M18-34 and M18-49 demographics, respectively

Payout Perspective:

Episode 7 is the first time the household rating has dropped below 2.0 on the season, and the ratings without Kimbo, as expected, have been falling ever so slowly week by week.

   TUF 10 Overall M18-34 M18-49
  Episode 1 2.9 5.3 4.3
  Episode 2 2.2 4.2 3.2
  Episode 3 3.7 6.9 5.4
  Episode 4 2.2 3.8 2.4
  Episode 5 2.2 3.3 2.9
  Episode 6 2.1 3.3 2.8
  Episode 7 1.9 3.6 2.8

 

As was commented on via Twitter last night, it was surprising to see Lesnar-Carwin ads airing over the TUF 10 commercial slots. It was a slight oversight on the UFC/Spike’s part as they’ve only got three weeks to promote UFC 105, which is an integral event for them in terms of generating buzz for the organization through to the end of the year.

It’s no surprise that Dana and the UFC are so upset with Rampage. The type of dislike that Rampage and Rashad have for one another comes off as very legitimate through the episodes, and the feeling probably was before the airing that they were sitting on a gold  mine with both Kimbo and the coaches on one show.

How much of this intensity will be forgotten by the casual fan, if and when Rampage gets back into the Octagon?

There’s been so much speculation about who Kimbo is going to fight on the Finale, but given the circumstances might it be a good idea for them to bump him to the main card of 107 or 108?

Does the UFC even consider such a move given what Dana has said about Kimbo in the past, how Kimbo has performed over the last couple of months on TUF, and all that has been said about his ground game in the wake of the reality series?

There’s a trade-off there: integrity vs. short-term revenue.

I’m not sure it’s such a good idea. If they want to continue to establish themselves as the best organization in the world, sticking to their word is crucial. Kimbo fighting on the main card of the Finale makes sense because it was essentially HIS show, but placing him on the main card of a PPV would be nothing other than a ratings grab.

Interesting conversation nonetheless. Comments section below.

Brock Lesnar is Too Ill to Fight, Take it From One Who Knows

October 29, 2009

As everyone surely knows by now, Brock Lesnar has been sick for over three weeks and was forced to pull out of his scheduled November 21 title defense against Shane Carwin at UFC 106.

In the latest issue of the Wrestling Observer Newsletter (subscription required, and recommended), Dave Meltzer reports that Brian Stegeman, a Lesnar manager, says Lesnar has “been bothered by upper respiratory issues, a fever and extreme fatigue.”  Stegeman goes on to say that Lesnar recently took a week off of training, hoping that would cure his ills, but that his health still did not improve.

Payout Perspective:

When news broke of Lesnar’s illness, there was almost immediate skepticism regarding whether he was ill at all, which was reinforced when the purportedly sick UFC heavyweight champion showed up as scheduled at a Minnesota Vikings football game.  Some suggested that if Brock felt well enough to attend a football game, he was well enough to train for his scheduled November fight against Shane Carwin.  I can tell you from personal experience that this is simply not true, not at all true.

I hope and believe that Brock is merely suffering from a bad case of the flu, but reading Dave Meltzer’s report literally gave me goosebumps, taking me back to the winter of 1996, when I suffered the first attack of what I would learn (six long years later) was something known as fibromyalgia or chronic fatigue syndrome (I will refer to both simply as “CFS”; mine has been under control for more than five years). 

I was working in a movie theater as a cashier and had gotten ill with what I believed to be the normal winter bug.  Two weeks passed, however, and I still felt extremely sick, with a terrible fatigue accompanying the strangest kind of soreness on my calves.  It was all I could do to just stand during my shift: here I was, a heretofore strong and healthy bodybuilder, and I felt like I was 80-years-old.  I had just begun working at the theater and one of the managers asked me whether I was “sickly.”  I was stunned, didn’t know how to respond.  I said, “not until now.”

Anyway, for eight years I suffered on and off from this devastating illness, and indeed, even attended a Jets game with my then girlfriend in 1998, during one of the CFS outbreaks.  I couldn’t even stand during the national anthem.  I actually believed I was suffering from some sort of terminal illness that was yet to be diagnosed.  I went to a ton of doctors until it finally was diagnosed as CFS, and nobody could say what was going on, despite my having taken a battery of tests, many of them multiple times under several different doctors.  In fact, many lay and professional people believed (and probably still believe) that CFS exists only in the mind; news that broke weeks ago, however, links CFS directly to the same sort of virus responsible for HIV.  My response to the news is basically, “it should have been obvious to the experts all along.”

Anyway, there was an extended two-year period in which I couldn’t even lift weights at all, the CFS was so bad.  And when I read that Brock is suffering respiratory problems along with extreme fatigue, and that  it’s lasted over three weeks, it makes me worry, but then again I was raised by a very Jewish mother, and I have the worry gene.

The thing I can state with certainty from experience is that Brock is suffering right now, and being the active person he is, I’m not just referring to a physical suffering.  Being unable to train for a full month is psychologically devastating to someone as active as Lesnar.

Be happy Brock is not fighting on November 21.  (Except for all you haters who want to see Brock lose any way possible, even if he’s not nearly at his best.  You know the type, the kind of fan who was begging the referee for a stand up five seconds before Brock was pulled off of Frank Mir at UFC 100).

Early 2010 UFC Schedule Intense and International

October 29, 2009

Dave Meltzer of the Wrestling Observer comments on the intensity and apparently international aspirations for the UFC’s early-2010 schedule:

Moving the Lesnar fight gives UFC breathing room, as before this weekend, there seemed to be no back-up if Anderson Silva couldn’t fight on that show, as they didn’t figure on coming back with a light heavyweight title match that soon. The show in Las Vegas was figured to be headlined by Georges St. Pierre against an opponent to be determined, possibly the winner of the 11/14 match with Mike Swick vs. Paul Daley. Either of those opponents against St. Pierre on their own could be a tough draw, because as popular as St. Pierre is, nobody would give either much of a chance against him. But St. Pierre in a title defense on a show combined with either a Machida or Silva defense would pull in strong numbers. There is also the 2/21 show in Sydney, Australia that needs a main event (Yoshihiro Akiyama vs. Wanderlei Silva may be a good main event for Japan, but not for the UFC PPV audience, and is not planned as the main event).

 

During the past week, Dana White said things were looking good regarding a show in April in Mexico City. While things probably won’t work out timing wise, there was talk this past week that if everything worked out perfectly, the main event they’d want for that first show would be Lesnar vs. Cain Velasquez. If Lesnar beats Carwin and comes out unscathed, that could be doable, but it would leave Antonio Rodrigo Nogueira, who up until this weekend was presumed to be the next heavyweight title challenger, waiting for the winner and needing a fight.

Payout Perspective:

The winter schedule really highlights the increasing difficulty the UFC is experiencing in booking main events. It’s become a delicate balancing act between booking solid headliners for international events in order to help expand the brand, but also saving solid headliners for the higher revenue domestic shows.

Title events draw significantly more than non-title events – the average by our estimates is nearly 70% higher – and it appears as though the UFC needs to make a decision:

A.) Limit themselves to one title fight per event in the hopes of saving a title fight for each show.

or,

B.) Accept that some, if not many, events are going to go without title events, and as a result their PPV numbers will be quite volatile.

Ultimately, their decision will, or should be, rooted in the prospective payoff in either situation. Does doubling up on title fights in one event really add that much more to a PPV than a single title fight? By the same token, does a non-title fight draw close to what a title fight should?

Additionally, there are certain factors that will likely influence those payoffs:

  • The propensity for injury – or extracurricular activity – to postpone fights within the UFC. If the organization uses two titles in one event, that means they’ve got three titles left for the next 2-3 months (4-5 events usually). An injury to another one of their title holders could really nix their plans (and it has, Lesnar and GSP are two examples).
  • Top-end UFC contracts that do not incentivize fighting on any event. Fighters with PPV cuts have openly refused certain fights, because their share of the PPV would be less in an international market.
  • Can the UFC PR and marketing teams cultivate a consistent strategy to generate significant interest in non-title fights such that holding them no longer becomes an issue for the organization?

Importance of UFC 105 Growing

October 29, 2009

It’s been rumoured on Twitter and various other websites that Lesnar-Carwin and/or Machida-Rua II are being considered for UFC 108; a card that has effectively become the organization’s New Years event.

While the postponement of UFC 106’s main event is more bad news for the UFC, things could have certainly been a lot worse for the organization. Lesnar could have waited until two weeks before the fight to announce that he was pulling out, and really left the organization in a promotional quandry. Worse still, he could have toughed it out and greatly diminished his chances of retaining the belt.

Lesnar may ultimately lose anyway, but the UFC wants its biggest cash cow at his best on fight night.

On the bright side, the UFC is now likely to have one, maybe two, main events for the New Years card, which is usually their biggest event every year – buyrate or otherwise. They’ve also got time to more heavily promote  the rematch between Ortiz and Griffin for 106, which is the new main event of that card.

A good strategy for the company might be to really leverage the appearance of Randy Couture on SpikeTV in the week prior to UFC 106. If the UFC’s PPV success is partially dependent upon momentum swings of casual fan interest, a great push of the UFC 105 card featuring Captain America could be enough to generate additional buzz and some “piggy-back” effect for the UFC 106 event to follow one week later.

The success or failure of UFC 105 and its ability to generate a buzz for the return of Tito to the octagon will go a long way towards determining the success of the UFC’s 4th quarter of 2009.

Massachusetts One Step Closer to Legalization

October 28, 2009

Mike Chiappetta of MMAFanhouse is reporting that the Massachusetts House of Representatives unanimously passed a bill supporting the legalization of mixed martial arts on Wednesday.

Sanctioned mixed martial arts fights are one short step from becoming legal in Massachusetts after a bill on the sport sailed through the state’s House of Representatives in a 144-10 vote Wednesday afternoon.

 

The state senate passed the bill 34-1 in July, leaving a signature from Gov. Deval Patrick as the only roadblock from passing it in to law. That is expected to be a formality.

 

The UFC has all but promised to bring an event to the Bay State — specifically Boston — shortly after sanctioning; UFC President Dana White lived in the city for much of his youth and has spoken enthusiastically about staging an event there, even mentioning the possibility of using the fabled Fenway Park as a venue.

Payout Perspective:

Massachusetts, and more specifically Boston, is an important piece to the MMA puzzle, because it represents another strong sports and media hub to host and help spread acceptance of the sport.

Mass is one of the three key regions within North America that remain unsanctioned for mixed martial arts – hopefully if and when Massachusetts comes on board, New York and Ontario won’t be far behind.

EA MMA First Look

October 28, 2009

Sherdog’s MMA Blog has the first look at EA Sport’s up-coming MMA video game, here.

CBS recently announced that a first-look preview of the game will be featured during the broadcast of Fedor vs. Rogers on November 7th.

MTX Audio Talks Fighter Sponsorships

October 28, 2009

Ben Henderson’s recent victory over Donald Cerrone to win the WEC interim Lightweight Title was a great moment in the career for Henderson and a great win for his sponsor, MTX Audio. During the fight, which is widely regarded as a fight of the year candidate; many noted the numerous logos worn by Cerrone. On the other hand, Henderson’s MTX Audio logos were clearly visible, unobstructed by any other competing logos.

While most sponsors (e.g., Tapout) directly relate to MMA, MTX Audio’s main business is car audio. MMAPayout.com had the opportunity to ask Joe Trentacoste, Marketing Manager for MTX Audio, about its marketing strategy in MMA.

JC: Why did MTX Audio get interested in MMA?

MTX: MTX Audio got interested in MMA because the owner of our company, Loyd Ivey, and a lot of the employees at MTX were big fans of the sport. Loyd felt that MMA was something he’d like to get involved with and would be a great way to introduce the MTX brand to a passionate audience. Helping people accomplish their goals in a sport that you love was great and being able to tie in the brand made it a no-brainer and MTX hasn’t looked back since.

JC: I understand you sponsor several MMA fighters in UFC/WEC?  Who are they and how do you pick your fighters to sponsor?

MTX: The MTX MMA Team supports Benson Henderson, Efrain Escudero, Ryan Kelly, Dale Hartt, Danny Martinez, and Edgar Garcia who are all veterans of the WEC or UFC but we do not limit our sponsorship to solely fighters in these big shows. We also support martial artists like Hillary Williams who recently won 3rd place in her first ever ADCC (Abu Dhabi Combat Club) appearance as a purple belt in Brazilian Jiu Jitsu. Support from MTX enabled her to travel the world and grapple with the best to prepare her for this competition. These are all MTX MMA Team fighters, but MTX also supports other fighters on occasion such as Shane Carwin who will be fighting Brock Lesnar at UFC 106, Clay Guida, Nate Diaz, Elliot Marshall, Joachim Hansen, Kaitlyn Young, and Thales Leites.

Like MTX, which Loyd Ivey founded in his garage over thirty years ago, MTX MMA believes in helping up-and-coming fighters accomplish their dreams from the ground up by molding them into champions rather than “buying” a champion.  We are lucky to work with a solid MMA management company that Loyd co-founded called Magnetic Marketing Associates. His partner, Jason Genet, works through direct contact with fighters around the world via our social networking site for MTX MMA, www.mtxmma.com.

JC: Can you tell me the range of salary that your sponsored fighters make?

MTX: Fighters on the MTX MMA Team are supported so they can focus on becoming the best fighter they can be. Whether it is a salary to offset their living expenses so they can train full time, a place to live, a car to drive, or whatever, MTX does what it can to allow its fighters to be 100% focused on accomplishing their dream to be an MMA Champion. Fighters are provided with MTX MMA clothing

JC: Are there benchmarks that the fighters must meet for them to continue to be on the MTX Audio payroll? (e.g., Do they have to have X amount of fights per year and X amount of wins)

MTX: We do not require that our fighters reach any sort of benchmarks in order to retain our support.  We realize that the sport is exploding and there are a lot of fighters getting into the sport and that life happens and a fighter may have other commitments that come up that they need to attend to. We only ask that they hold themselves to a high standard and continue to work hard whether they have an upcoming fight or not. We ask that they represent our brand the way that they would want us to support them.

JC: What is MTX Audio’s strategy in reaching out to MMA fans? Is there a certain audience you are trying to reach? Was this based on research or were you just MMA fans?

MTX: Our strategy in reaching out to MMA fans is to not only generate interest in our brand but also to be a part of one of the coolest sports in the world.  It is really our pleasure to be associated with the warriors that get into the cage or on the mat and put it all on the line every time.  It is undeniable that MMA shares a similar demographic to car audio and we believe that like our fighters, MMA fans will come to know that our audio products, like our fighters, are built from the ground up. Unlike other brands, we aren’t a company that buys its products from a company overseas. We design, engineer, manufacture, service, and sell our own products.

JC: How much public relations/publicity does MTX Audio get out of sponsoring MMA fighters?

MTX: You can’t just put your logo on the shorts of a fighter on a UFC PPV and expect the MMA demographic to visit your website and buy your products. MMA is a lot like a brotherhood, you are either in it or you’re not. The ultimate goal is helping our fighters achieve their dreams. If we do everything we can to help, that’s all we can do, the rest is on the fighter. But so far, we’ve got a good record for helping that happen. The publicity comes naturally. There are times when our network of customers around the country invites our fighters to an event at their stores to sign autographs and meet with MMA fans from their city and our fighters are always happy to do this for us because they are good people and we have mutual appreciation for what each side is offering the other.

JC: What is MTX Audio looking for when they sponsor a fighter?

MTX: MTX looks for fighters that are dedicated and determined are willing to put the time in to become their best. We want to help people that have the skills to be a contender but just need that little extra help. They have to be extremely driven and know exactly what they want.

JC: Is there an exclusivity of sponsorship?  Are the fighters limited to wearing MTX Audio gear when they fight?

MTX: We are generally exclusive with our fighters but we basically take each situation and address it individually based on the fighters’ needs. Of course we want to have as much branding on our fighters as possible but ultimately, its about supporting what is best for these fighters and when situations come up which are good for our fighters, we try to work out deals that can help them. We know that what’s good for our fighters is usually good for us too.

JC: Can you share with us if the marketing strategy is working?

MTX: We are in the third year of our affiliation with MMA.  From a branding perspective, our sponsorships have been very successful.  Millions of viewers have been exposed to the MTX Audio brand and logo during live and televised events. From the human perspective it has been extremely successful. In only three years we have helped three different fighters train to get to the UFC and helped two fighters become champions in the WEC. That is the most rewarding part, seeing these athletes realize their dreams and knowing that MTX Audio helped them get there. MMA fans are very loyal and very smart. We feel that by supporting the sport and being genuine in our efforts, the rest will come by itself. We love MMA just like our customers. MMA has become part of the MTX culture.

Payout Perspective:

For an MMA fighter, sponsorship is important to supplementing their income and allowing the fighter to focus on training full-time. Based on its passion for the sport, MTX Audio sponsors fighters. It has partnered with a marketing agency to work on the sponsorship deals so it is not like they entered into the sport blindly.  It is interesting that MTX Audio decided to get into MMA due to its personal interests in the sport more so than its fit into a marketing plan. While it does make sense that males in their 20s and early 30s are a target market for a car audio manufacturer, it was not the primary reason.

As discussed here, sponsors look for a return on its investment (ROI) when it puts its logo on a fighter’s shorts, shirt and hat. Most viewers will recall only 1 or 2 logos worn by the fighters. MTX Audio’s exclusive sponsorship of Henderson paid off. Not only did Henderson win the WEC’s interim Light Heavyweight title but the fight lasted the full 5 rounds allowing the visibility of the MTX Audio logos.

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