Zuffa Suing Pavia, Bellator

July 30, 2010

Kevin Iole of Yahoo! Sports MMA is reporting that Zuffa has filed a lawsuit against MMA agent Ken Pavia and Bellator Fighting Championship alleging the theft of trade secrets.

According to the suit, filed Wednesday in Clark County District Court, Pavia delivered confidential contracts, including fighter agreements, to Bellator after being asked to do so in a July 4 email to him from Bellator founder Bjorn Rebney.

Payout Perspective:

Here’s where the financial size and scale of Zuffa becomes a huge advantage for the company. Zuffa can afford to absorb the cost of a court battle, but can Bellator? It really doesn’t even matter what the outcome of the lawsuit is, because from a competitive standpoint this is probably going to harm Bellator.

The question now is whether this is a good thing for Zuffa. I’m with the company on protecting its intellectual property, and I tend to agree with the notion that it is the one laying the ground work that others are trying to capitalize on. Zuffa undoubtedly feels like it’s being hit on all sides: pirating and illegal distribution of Zuffa programming; trademark infringement; careless promoters damaging the sport’s reputation through cutting corners on things like safety; theft of intellectual property, etc.

However, this lawsuit may also prove to be counter-productive in one area. Dana White often talks about needing these “other guys” to act as feeder organizations, but in suing Bellator, Zuffa may end up eliminating a great feeder system.

Bellator is not a competitor to Zuffa. It’s got an unattractive television deal, poor production quality, zero capital for marketing or PR and a host of fighters looking to use the organization as a stepping stone. It’s not a threat to Zuffa.

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This isn’t the first time that Pavia and the UFC have butted heads. Some of you may recall that Pavia was the source behind a story that Loretta Hunt wrote about managers and agents losing backstage credentials. The story turned out to be inaccurate, but more notably it was also the subject of Dana White’s now infamous Youtube tirade against Hunt and Pavia in which he derided the pair with a host of discriminatory slurs.

RDA TV Sells More UFC Programming

July 30, 2010

UK-based sports programming distributor RDA TV has reportedly sold a host of new MMA programming content to television networks in France, Turkey, and the Ukraine.

The company has recently licensed UFC programming to ESPN Classic for France, Digiturk in Turkey and QTV in Ukraine. RDA TV previously licensed UFC programming to ESPN for the U.K., TV4 for Sweden, Canal 9 for Denmark, MTV3 for Finland, RTL7 for Holland and Orbit-Showtime for the Middle East.

Payout Perspective:

These may not all be the biggest networks in each of their respective countries, but they serve the UFC’s purpose of getting a foot in the door within each market. The goal is to establish the television product in the market to grow awareness, which then facilitates the introduction of merchandise (also further boosting awareness and interest). The end-game, of course, is to generate enough interest that the UFC can put a live show into the market.

Note: I haven’t found the announcement in English yet, but the UFC also reportedly signed a television deal in Poland about a month ago.

K-Swiss Purchases FORM Athletics

July 30, 2010

Yesterday, it was officially announced that K-Swiss has purchased FORM Athletics from founder and CEO, Mark Miller.

California Sports Company K-Swiss (Nasdaq: KSWS) announced today the acquisition of Laguna Beach-based FORM Athletics. Terms of the deal were not disclosed.

FORM Athletics will operate as a division of K-Swiss led by Mark Miller, FORM’s incumbent founder and CEO. Under the agreement, Miller will become President of FORM Athletics, and has also been appointed President of K-Swiss Orange County (KSOC), where he will establish and lead a new division of the brand focused on the youth consumer. A force in the action sports industry, Mark Miller has built businesses for iconic brands for nearly three decades, launching M3 Snowboards in 1996, and more recently, playing a key role in the growth of DC Shoes, as SVP and General Manager in the Americas Region.

“Mark has incredible experience leading some of the most prominent action sports companies in history, and we are confident that he will create a progressive and successful program for K-Swiss,” said Executive Vice President of K-Swiss, David Nichols. “FORM plays well as a growth opportunity for our portfolio as Mixed Martial Arts is one of the fastest growing, and most relevant new markets in sports today. Viewership and participation in Mixed Martial Arts events is explosive, as is the market for Mixed Martial Arts consumer brands.”

Miller launched FORM Athletics in early 2010 in conjunction with MMA/WEC athlete and former Featherweight Champion Urijah Faber. The brand has quickly established itself as a successful and progressive Mixed Martial Arts (MMA) and lifestyle brand with a distinct surf-and-skate inspired aesthetic. Since its January debut, FORM has formed a global fan following, adding powerhouse athletes including Mark Munoz, Joseph Benavidez, and Jon “Bones” Jones to its roster.

Payout Perspective:

Just a few weeks ago, Billabong acquired RVCA and some people were questioning whether the company would be able to continue it’s commitment to the sport of MMA. Those concerns seem to be unfounded as Billabong is intent on maintaining the core essence of RVCA and its “artist network”.

I had the same concern when I first heard rumors that K-Swiss was looking to purchase FORM. Fortunately, the management team at K-Swiss seems to be saying all the right things about FORM’s continued participation in MMA. I am also intrigued by the possibility of K-Swiss using FORM as an entry point into the sport for the larger K-Swiss brand.

There’s a strong target market fit between K-Swiss and MMA. I also tend to think the brand aligns pretty well with the sport from an image perspecctive; both have that new generation swagger going for them. FORM affords K-Swiss the opportunity to dip its toes in the industry and learn the ins and outs before jumping in with its own, more established brand.

UFC on Versus 2 Gets Split-Screen Commercials

July 29, 2010

John Ourand of the Sports Business Daily is reporting that Versus will experiment with the use of split-screen commercial breaks in its broadcast of UFC on Versus 2 this Sunday.

Versus will run “five or six” of its commercial breaks in a split-screen format next to its live coverage of Sunday’s UFC2 on Versus at 9:00pm ET. Versus during these ad breaks will leave its content in a box on the upper left-hand side of the screen. The ad will run in a bigger box on the right and center of the screen, similar to how Versus handles commercial breaks during its Izod IndyCar Series telecasts.

Payout Perspective:

This does not mean that commercials will now run during the fights. Versus will still only air commercials throughout the breaks in action such as between rounds or between fights.

I like the idea, because it gives the viewer an opportunity to continue watching the fighters as they go to their corners and helps maintain the relatively undisrupted feel of a PPV event.

However, I question how much value the split-screen will add to the viewing experience without any sound. The commercials will undoubtedly command control of the audio output for the duration of the break, which means the fans won’t be able to hear what’s happening in the corners or listen to Mike and Joe give their opinions.

I can’t image that advertisers are paying anywhere near the same amount for a split-screen ad as they are for full-screen (a Versus issue). This leads me to believe that Versus is likely to incorporate some in-program advertisements or presentation features for those taking part in the split screen commercials as a way to add value to their media buy.

MMA Sponsor News

July 29, 2010

Nutritional supplement company MusclePharm has announced the signing of an exclusive distribution deal with PSI Distribution in Australia and New Zealand worth an estimated $2 million.

“Securing an exclusive partnership with PSI in the Australian market is a strategic move in taking advantage of the exposure the UFC partnership has created for MusclePharm,” MusclePharm Executive Vice President Leonard Armenta said. “We hope to leverage the popularity of the sport, expanding our distribution networks, resulting in increased brand awareness and sales. The UFC audience shows the passionate and loyal qualities that we are targeting for our products.”

 

Australia is home to the second-fastest sellout in UFC history, as more than 16,000 tickets were sold on the first day for UFC 110 in February and is the third largest pay per view country for UFC events. It quickly has made Australia an annual destination for UFC events and that surge in popularity has helped grow the MusclePharm brand, which has aligned itself closely with the UFC and the sport of MMA.

Suffer MMA, the apparel company that created Frank Mir’s UFC 111 walk-out t-shirt, has finalized its brand launch plans for August 7th – the same day as UFC 117.

The launch will take place at 3 p.m. in Tito Ortiz’s Punishment MMA Store and Frank Mir will be signing autographs.

 

The launch will be followed up with Frank Mir and SUFFER hosting a UFC 117 party starting at 6 p.m. in the IOWA THEATER & PORCH DOG’S located within Hooters.

MMAPayout.com has made a long overdue update to its Sponsor Blue Book.

Payout Perspective:

It’s interesting that the MusclePharm press release highlights its partnership with the UFC when MusclePharm’s deal is actually with the WEC. I tend to think the VP is simply using UFC as a synonym for MMA, but it’s an overstatement nonetheless.

[Pardon this brief tangent, but I’m intrigued by the UFC/MMA dichotomy. The sport is probably better known as UFC, which puts it in the same position as other popular brands that have managed to name their own categories (Kleenex or WD-40 come to mind). Sometimes there’s a risk that the ubiquitous use of a brand name can lead to the loss of its trademark – like Aspirin or Kerosene, for example – but so long as the UFC continues to protect against the broader uses of its intellectual property, it should be fine.]

I’ve also begun to wonder what’s happening in the UFC’s supplement category. BSN currently holds the rights as official supplement provider, but seemingly does not own exclusivity: competitors like MP, Nutrabolics, Bodybuilder.com, and more, all see their brands enter the Octagon. This differs greatly from the approach in other categories like beer or energy drinks – there’s no way we’d see Coors Light or Rockstar in the Octagon – although it’s not dissimilar from the apparel category which Tapout owns.

If I’m correct, the BSN-UFC deal has just under a year left. I wouldn’t be surprised if, at the end of the deal, MusclePharm made a large bid for the UFC’s rights and also paid for exclusivity. MusclePharm has made a point of leveraging its association with MMA to build its own brand; I can’t say the same for BSN.

Unlike Tapout in the apparel category, BSN simply hasn’t done a whole lot with its sponsorship benefits: some activation that was paid for as part of the deal (PPV “Finish First” segments and UFC.com ads), but nothing on its own other than the periodic ad in Men’s Health or like magazines. We haven’t seen much, if any, unique activation such as point of sale material, fan contests, digital content, commercials, etc.

What’s the point of paying in the millions for the rights fee, then?

HDNet and MFC Renew Contract

July 28, 2010

Yesterday, HDNet and the Maximum Fighting Championship officially renewed their partnership with a six-event television distribution contract that will take both companies through to the end of 2011.

The Maximum Fighting Championship will remain a frontrunner in showcasing live mixed martial arts to a massive international audience with a new six-event contract teamed with broadcast partner HDNet.

Since partnering with HDNet in 2008, nine MFC events have been featured live on HDNet Fights, beginning with MFC 15: Rags to Riches and through to the most recent MFC 25: Vindication. During the partnership, viewers from the United States , Canada , and Mexico have tuned in live on HDNet to see the Maximum Fighting Championship and its power-packed lineup of talented fighters.

The newly signed deal, which runs through the end of 2011, includes the fast-approaching MFC 26: Retribution to be held in Westman Place at the Keystone Centre in Brandon , Manitoba , Canada , on Friday, Sept. 10.

“I am even more excited about this new agreement between the Maximum Fighting Championship and HDNet than when we signed our initial partnership,” said MFC Owner/President Mark Pavelich, who personally welcomed HDNet Owner and renowned entrepreneur Mark Cuban to the Maximum Fighting Championship at MFC 17.

“We have learned so much since then thanks to our business relationship. We have gone very far in improving our product and we are ready to take things to the next level to become real players on the worldwide stage.”

Predicting the Business of UFC 117

July 28, 2010

Damon Martin of MMAWeekly reports on yesterday’s UFC 117 media conference call in which Chael Sonnen tore into Anderson Silva yet again.

In one of the most memorable conference calls since Rashad Evans and Quinton “Rampage” Jackson took over the UFC 114 call a few months ago, Sonnen let everyone know how he felt about Anderson Silva, while the champion answered with a bizarre nature, much like some of his recent performances.

Early in the call, Silva answered several questions with a simple ‘yes’ or ‘no’ statement, without expanding on his thoughts on whatever subject was broached, and Sonnen called him out for it.

“I’m a partner with the UFC; Anderson’s an employee,” Sonnen said. “There’s a big difference. That’s the reason all the questions keep coming to me because I give a coherent and clear answer that somebody wants to hear, and he sits on a speakerphone in a car somewhere and says ‘yes’ and ‘no.'”

Sonnen took the opportunity to make clear his feeling towards Silva. He believes that Aug. 7 will be the Brazilian’s curtain call in the UFC.

Payout Perspective:

We’re only two weeks out from UFC 117, but there’s still some uncertainty as to how this PPV card will shakeout on the business end.

I’m sure there are a number of scorned fans that plan on boycotting the event due to Silva’s performance at UFC 112, but we’re also likely to see a number of people tuning in for that very reason – UFC 112 ticked them off and now they want to see someone put Silva in his place. There’s probably also going to be a part of the crowd that is willing to forget UFC 112, or simply willing to risk 117 being a dud, on the off chance that Silva can deliver another masterful striking performance.

Just about the only thing we do know is that Silva hasn’t had a stellar drawing record in the past. It’s unlikely that his last performance is going to help – no matter the number of people tuning in to see him get beat.

——-

Fight week will obviously play a large role in how this fight plays out at the box office. This is where we’ll get to see whether Chael Sonnen’s persistent trash talk has been effective or fallen on deaf ears.

I’m inclined to think that Sonnen’s promotional efforts have been hindered by the lack of response out of the Silva camp, but also the over-the-top nature of his comments in general. It often feels like a bad pro wrestling promo when Sonnen hits the mic; the fans aren’t getting the real Sonnen and that turns them off.

Nonetheless, I would make every effort to get Sonnen on ESPN and in USA Today over the next week. Let this be a case study and help the UFC determine where that line exists between good hype and detrimental hype.

I suspect this Sunday’s UFC on Versus 2 will also play a small role in generating hype for Silva-Sonnen, especially if Jones performs to his own expectations. A good piece of corollary programming like a free Spike/Versus card that delivers exciting match-ups is always a useful tool for building a PPV event, because it engages the fans and increases the influence of promotional content during that engagement.

Strikeforce: Sarah Kaufman vs Roxanne Modafferi Build Up and Aftermath

July 28, 2010

MMAFighting and E. Casey Leydon from AllElbows collaborated on a three-part behind-the-scenes series featuring this past weekends title bout participants between Strikeforce 135 lbs champ Sarah Kaufman and #1 contender Roxanne Modafferri.

Part 1:

Part 2:

Part 3:

ESPN Features Sarah Kaufman’s Slam as the #4 “Top 10 Play of the Weekend”:

MMAPayout Perspective:

As previously reported, the Strikeforce Challengers 9 event drew 197,000 Showtime viewers this past Friday night.  The peak audience of the show took place during the Kaufman vs Modafferi co-main event which drew 254,000 viewers.  In fact, the main event between Shane Del Rosario and Lolahea Mahe saw a drop of 28,000 viewers for the nights headliner.

A big storyline coming into and out of the event was the decision made by Strikeforce to relegate the women’s title bout as the co-main event on a Challenger’s card. Sarah Kaufman was outspoken about continuing to fight on Challenger cards as the Strikeforce champ, and felt it was time for her to start fighting on the bigger Strikeforce events.  It was a great storyline in hindsight considering how emphatically Kaufman was able to finish the fight and how fans have gathered around her and supported her, in the process becoming a flag bearer for women’s MMA in the North American scene.

What most likely prompted Strikeforce to make the decision was what occurred during the last Strikeforce Challengers card in San Jose which was headlined by Sarah Kaufman and Takayo Hashi.  Although the ratings peaked at 189K for that nights main event between Kaufman and Hashi, the audiance at the San Jose Civic Auditorium started to exit the venue half-way through the fight, and was nearly empty when the winner was declared at the end of the 5th round.  Some blame was given to Kaufman by median and fans after the event for not doing enough to finish her over-matched opponents, similar criticism that UFC MW champ Anderson Silva received for his previous performance against Demian Maia.

The good news to all parties involved here is that with all the buzz coming out of the event (ESPN featuring Kaufman’s slam in SportsCenter and also trending on Twitter), Strikeforce and Sarah Kaufman received some very valuable mainstream attention this weekend.  In fact, SportsCenter host Stuart Scott mentioned Strikeforce 145 lbs female champ Cristy Cyborg as someone he would want to see take on Kaufman:

“I want to see her fighting Cristy ‘Cyborg,’ though” said Scott, referring to Strikeforce’s women’s middleweight champ  Cristiane Santos. “I’m just saying.”

Strikeforce is picking up momentum for their women’s division, and whether you are an advocate of it or not, you can’t deny that what happened this weekend was good for Strikeforce, Kaufman, Modafferi, and women’s MMA.  Their upcoming August Challengers event in Phoenix will feature some other standouts in the 135 lbs division like Miesha Tate and Hitomi Akano.  The winner of the 1 night GP will be a contender for the belt after Kaufman makes her next title defense against Marloes Coenen (if she is able to cut the necessary weight) in the near future.  Keeping the division flowing with worthy contenders is a must for Strikeforce, which can now boast of having 3 female fighters that have recently surfaced in the mainstream: Gina Carano, Cris Cyborg, and Sarah Kaufman.

Using these behind the scenes videos not only builds up buzz leading up to the fight, but it’s another way for Strikeforce to communicate to their fan-base, the media, and to the general public.  Creating more of these videos helps improve the product and creates more awareness for their fighters, aspects that fans feel could be greatly improved by the promotion.

Strikeforce Challengers 9: 197,000 Viewers

July 27, 2010

The Staff at MMAJunkie are reporting that Strikeforce Challengers 9 drew 197,000 viewers on Friday, July 23, but peaked at 254,000 for the night’s co-main event between Sarah Kaufman and Roxanne Modafferi.

Ratings for this past weekend’s Showtime-televised Strikeforce Challengers 9 event proved solid as the show averaged an audience of 197,000 viewers, an industry source today confirmed with MMAjunkie.com.

The peak audience actually came for the night’s co-main event, a title fight between women’s welterweight champ Sarah Kaufman and challenger Roxanne Modafferi that spiked with 254,000 viewers.

Payout Perspective:

These Challengers shows have so much potential to help Strikeforce build its roster and hype its fighters. I’m still not sure what the hang-up is in terms of delivering the additional marketing and PR needed to create a buzz and tell the story of some of these fighters. If it weren’t for the slam by Kaufman, no one would be talking about this event.

——

Perfect timing, isn’t it? Here I am saying yesterday that there probably isn’t enough interest in women’s MMA to make it commercially viable, but then Kaufman-Modafferi turns out to be the peak of the event.

Does this fight change anything? I’m not yet convinced it does. The peak for a women’s title fight was still only 254,000. If we look to women’s boxing as some sort of parallel (with a much longer track record), it never became the type of commercial entity that men’s boxing did.

If anything, the slam is further support for the idea that women lack much of the speed, strength, and damage threshold that make MMA so dynamic and exciting. The Kaufman slam pales in comparison to Rampage-Arona (or even Harris-Branch), which perfectly summarizes the difference between the two sports and why women’s MMA has such a tough row to hoe.

SBJ Profiles UFC’s Tom Wright

July 26, 2010

This week’s Sports Business Journal uses its industry spotlight feature to profile the UFC’s new Director of Canadian Operations, Tom Wright.

In trying to secure regulation and sanctioning in Canada, is there an order of provinces or some provinces that are top priority?
No. 1 would be Ontario, where Toronto is located. We are working on that process right now. After that, there is a federal process that we are going through which is tied to Bill 83 of the Criminal Code and trying to get that changed so that it is legal in all 10 provinces without having to have provincial sanction that would follow.

Payout Perspective:

The fact that SBJ is profiling Tom Wright speaks volumes about his standing in the sports industry. He’s got a wealth of experience and is well-respected throughout Canada and the US. This should bode well for the UFC moving forward.

The only question I have regarding Wright is whether he knows the sport. This is something that really wasn’t broached at the press conference in May, but important nonetheless. If Wright is to be the man educating decision makers, he’ll need to know the sport inside and out (the sport, the fans, and the business).

I’d assume he’s got a pretty good handle on things by now; to my knowledge he’s been to quite a few events dating back to last year. But whatever he doesn’t have, he’ll have to pick up pretty quickly.

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