UFC 125: Payout Perspective

January 2, 2011

Welcome to another edition of Payout Perspective! This week we’ll be taking at look at UFC 125: Resolution which was held on January 1, 2011 at the MGM Grand in Las Vegas Nevada. The event featured a lightweight title fight between Frankie Edgar and Gray Maynard, but the likes of Chris Leben, Brian Stann, Thiago Silva, and Clay Guida also appeared on the night.

Edgar vs. Maynard Ends in Draw

Frankie Edgar and Gray Maynard put forward a fight of the year candidate on the very first day of the year in their five round back and forth battle that featured a remarkable comeback by Edgar who was absolutely trounced in the first round. In the end, the fight was incredibly close and the decision of a draw was probably appropriate. Regardless, I think we’d all agree that this fight demands a rematch and the draw should facilitate that.

Dana White sent word through VP of Production, Craig Borsari, that Anthony Pettis would get the next shot at Frankie Edgar. White is probably looking to capitalize on the mainstream attention that Pettis garnered with his incredible kick two weeks ago at WEC 53. The promotional value of that kick is significant and there’s no doubt the UFC will be able to leverage it further on the PR front in the lead up to a title fight. Imagine Pettis doing a SportsCenter interview on the Wednesday morning before the fight; he’s introduced, talks about the fight, ESPN shows the clip, and then he’s asked to comment further. It will prove to be very effective (although it will need to be supported by a solid integrated promotional campaign).

I doubt very much that this is the absolute final decision, because there’s a strong argument to be made for giving Gray Maynard an immediate rematch: the fans want to see this score settled, a rematch would do bigger business than the first fight, the winner would certainly see his stock elevated to new heights, and few actually believe that Pettis can put up the same type of fight as Maynard. However, in this case, what is to be done with Pettis? He’s got the WEC belt and that unification needs to happen at some point (unless they just scrap the idea altogether. It doesn’t make sense for Pettis to fight someone else (and most probably lose). And, I’m not sure the UFC wants to see an exciting fighter like Pettis sitting on the sidelines for 8 months, either. Tough decision. Perhaps the UFC just scraps the unification idea altogether (they didn’t give Condit an automatic shot).

(Edit: Ariel Helwani tracked down Dana White late Saturday night. White has had a change of heart and Maynard will get the next shot.)

Regardless, I think they use the next lightweight title fight as the co-main event at UFC 129 to bolster that fight card and bring a little bit of added promotional press (either in the form of the Pettis kick or the Maynard rematch).

Stann KOs Leben

Brian Stann beat Chris Leben at his own game on Saturday night. It was an impressive display of precision and punching power, yet this style of fighting is often a very risky game of who can strike first. Stann will need to take on a more well-rounded opponent in his next fight to prove he deserves to be considered amongst the contenders in the division. While he’s asked to fight Wanderlei Silva, he’ll likely have to find a different opponent as Silva seems to be all but committed to fighting Chael Sonnen in the next few months.

Stann is an intriguing fighter because he’s got knockout power and some of the finer marketing attributes that could help make him an ambassador for the sport moving forward. In particular, the combination of his soft spoken, polite mannerisms and his military past make him an ideal regulatory asset. He’s definitely one to watch.

Prelims Broadcast on ION TV, Spike, Versus “Counter Program”

The UFC struck a deal with Ion TV to broadcast three live preliminary fights from UFC 125. The major draw of Ion is that it’s available in 100+ million households, but it’s hard to assess how well the UFC was able to leverage that fact on account of the following:

  • We don’t know how much advertising was done on the network prior to the broadcast
  • Many of the digital cable companies on the West Coast listed the program as starting at 9pm instead of 6pm
  • Those that did tune in at the right time were greeted by a blank screen for the first minute or two
  • Spike TV and Versus were both showing Zuffa-related content at the time of the preliminary fights (Spike had UFC’s Best Submission and Versus had Best of the WEC)

It seems clear that this Ion TV deal was less about expanding the UFC’s reach through network television and more about providing its existing fan base with an opportunity to watch the preliminary fights.

The UFC’s deal with Spike expires at the end of this year and it’s no secret that the UFC is looking to upgrade to a bigger and better network. This is going to make 2011 quite interesting because I don’t think we’re going to see nearly the same type of support for the UFC on Spike as we have in the past (e.g., preliminary card slots, live weigh-ins, etc.). Thus, you have to wonder what type of impact it’s going to have on the UFC’s ratings (and that’s the point if you’re Spike; to negatively impact the UFC’s negotiating leverage with other networks).

If you’re the UFC, you have to be careful here. This is the type of situation that can turn very ugly, very quickly. UFC brass must keep its composure because it doesn’t want to jeopardize the quality of its programming in a war of words or bad gestures.

UFC 125 Dominates Twitter

The following were all worldwide trending topics at some point during the night: UFC125, Frankie Edgar, Gray Maynard, Brian Stann, Chris Leben, Clay Guida, Grispi. Moreover, UFC125 was the topic trending topic in Brazil, Canada, the United Kingdom, and the United States at the end of the Edgar-Maynard bout.

This all leads me to wonder what type of buyrate the fight did. My own expectation was 400,000 given the headline and New Year’s day sports competition. However, the incredible response online leads me to believe it might have been higher. We’ll see in the next few weeks. Certainly, I think we’d all agree that the fight helped raise the profile of guys like Edgar and Maynard. If and when a rematch happens, it will sell.

Sponsorship Watch

MusclePharm made a surprising return to the Octagon at UFC 125. The company had previously failed to pay the money owed to Zuffa from its sponsorship of the WEC in 2010 (something in the range of $300,000). However, Zuffa sold that outstanding debt to a collections company and now it appears that MP has been given the okay to resume fighter sponsorships. It’s interesting to me that Zuffa has allowed them back in. There are any number of potential explanations as to why, but regardless, this is a good thing for the fighters (something the UFC is often criticized for).

Harley Davidson was the presenting sponsor of the UFC 125 Prelims on Ion TV. This is surprising to me because HD has gone through a leadership shake up recently and I’ve heard rumblings that its uncommitted to renewing with the UFC when the deal expires this year. Keep your eye on this situation moving forward.

Edit 2: I’d earlier commented that Tapout was not officially a part of the fight card, but this was incorrect. The brand did have some bumper signage on the top of the Octagon. It also continues to sponsor fighters, which has never been disputed. Please forgive the mistake.

The larger point still stands that Tapout has become much less active as an official UFC sponsor in the last few months. I suspect this reduction is due to ABG’s acquisition of Tapout (along with Hitman and Silver Star) and some reformulation of the marketing strategies for each brand. It may also be the result of a renegotiation between Zuffa and ABG that’s looking to explore new possibilities for a greater partnership. I’d expect an increase in activation quite shortly; an involved UFC-Tapout partnership is highly mutually beneficial. Perhaps the only way it doesn’t happen is if the UFC can swing a deal with a larger apparel company like Under Armour. UA is an incredible fit for the UFC, and it could provide the brand with a very competitive strike against the competition (Nike, Adidas, etc.). However, at this time, consider this just speculation.

7 Responses to “UFC 125: Payout Perspective”

  1. Jose Mendoza on January 2nd, 2011 1:57 PM

    Another thing to look out for here is how big the UFC’s hardcore fanbase is. The ION TV ratings and the PPV buys will give us a pretty good idea of an updated figure. The thought was that 300-350K was the average a year or two ago. I will keep an eye on those two numbers this coming week.

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  3. Brendan on January 2nd, 2011 4:44 PM

    Chris Leben was wearing Tapout warmups on his walk in. Were you actually watching the PPV?

  4. jzo29 on January 3rd, 2011 10:34 PM

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  5. EJ on January 4th, 2011 3:55 AM

    I think that’s quite a reach there when talking about the Spike TV/UFC relationship. There is nothing to support the claim that there is any friction or that the UFC is looking to get out of their deal. Both sides benefit from the deal and while the UFC will look for network TV they know how much their relationship with Spike TV means and vice versa. Spike on the other hand is the UFC network without them they have nothing TNA isn’t going to cut it, without the UFC they are SOL. I expect Spike and The UFC to continue their business relationship in the same way they have the past few years it simply makes zero sense for either side to mess with it.

  6. Diego on January 4th, 2011 6:45 AM

    Question for anyone with an answer – did the UFC advertise the PPV during the Vs and Spike broadcasts of UFC content that were “counter programming” the prelims on Ion?

    The point of the prelims is to get people to buy the PPV (although it’s debatable how well that has works), you can get same effect by heavy advertising during any UFC content shown leading up to the start of the PPV. Just wondering if that’s what the UFC did.

  7. CodeMaster on January 21st, 2011 11:58 PM

    As far as I know, the UFC has contractual limits to how many prelims (4) Spike or Versus (4) may show in a year. Spike does not always want to show the prelims.

    When you think about it, the prelims were never televised before, and did not generate revenue, but the UFC turned a sow’s ear into a silk purse by selling the prelims, and getting free advertising for the PPV. They have created fan demand for the prelims for every UFC event. They sold prelims to Ion which were in excess of contractual committments to Spike or Versus and the numbers were pretty good. The prelims were viewed also internationally.

    Seems like a smart business move to me.

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