WSOF set to renew agreement with NBC

May 26, 2014

MMA Junkie reports that the World Series of Fighting will make it to network television on NBC.  As part of a new multi-year deal with NBC Sports Group it will make an appearance on the network.

In addition, the new deal will have WSOF on other platforms which likely include NBC Sports and its App which has streamed WSOF events in the past.

Junkie reports that the first event under the new deal is WSOF 11 which takes place on July 5th.  If you were wondering if that date sounds familiar, it is as it’s the same day as UFC 175.

There were no financial terms released, but the agreement runs through 2017.

UPDATED: 5/27/14 Per John Ourand at the Sports Business Journal the 4 year extension is “not a time-buy, but it does not involve a rights fee either.” NBC will cover some of its production costs.

Payout Perspective:

Hopefully the July 5th show will be an afternoon show otherwise it will run opposite the biggest UFC show of the year.  The new network deal is a step in the right direction for WSOF as well as the opportunity to appear on NBC.  We’ll see how it will do.  According to the Junkie article, it is scheduled to be on NBC on December 27th.

UFC 173: Payout Perspective

May 26, 2014

Welcome to another edition of Payout Perspective. This time around we take a look at UFC 173 at the MGM Grand Garden Arena in Las Vegas, Nevada where T.J. Dillashaw pulled off the upset of Bantamweight Champion Renan Barao.

Dillashaw upsets Barao

Renan Barao was thought of as one of the best pound for pound fighters in the UFC.  He had his way in the Bantamweight division and going through Dillashaw seemed like a sure thing especially with most odds having the former TUF cast member as an 8 to 1 underdog.  However, Dillashaw controlled the whole fight from the first round and left no doubt by finishing Barao in the fifth.

I would say Serra-GSP still is the top upset in the UFC simply because Serra had to win a reality show to get the title shot.  Dillashaw was an injury replacement but was still on the radar in the division.

The good news here is that the UFC now has a marketable U.S. Champion.  No offense to Barao, but one of the unfortunate knocks on him was that he was from Brazil and his lack of English limited his ability to reach out to the U.S. fans. Now, the UFC can rally around the underdog story of Dillashaw and maybe revive the division.

UFC 173

Cormier dominates Hendo 

Daniel Cormier served notice that he will be a formidable opponent for Jon Jones when and if Bones gets past his rematch with Alexander Gustaffson.  Henderson fought without TRT but that would not have mattered as Cormier totally dominated Henderson.  After winning, Cormier called out Jon Jones in a tasteful, pro-wrestling style way.

Attendance and gate

At the post-fight press conference it was announced that the attendance at the MGM Grand was at 11,036 for a gate of $1.7 million (via MMA Junkie). The number will be confirmed by the Nevada State Athletic Commission later in the week.

As we reported on Saturday, ticket demand on the secondary market was sparse.  Since 2011, it was the second least expensive ticket ($239) for a UFC event at the MGM Grand Arena.  Thus, not much demand from people that couldn’t buy (or did not want to buy) a ticket through the box office or Ticketmaster.  For those wondering, the least expensive ticket ($168) since 2011 was UFC 141 which featured Brock Lesnar versus Alistair Overeem. You may recall that it was on a Friday due to New Year’s Eve.

Bonuses

The bonuses were $50,000 each and Dillashaw received two for Fight of the Night with (Barao) and Performance Bonus of the Night.  Mitch Clarke won the other bonus with his submission over Al Iaquinta.

Pre-Fight Promotion

The UFC started new shoulder programming taking viewers behind the scenes with a series called, “Embedded.”  The series is in the same vein as HBO’s 24/7 or ESPN’s “The Life” for those that remember that show in the 2000s.  I am a fan of these behind the scene shows so I thought they were interesting although I can understand folks that think them a little tedious.

In addition, FS1 aired its usual “UFC Countdown” show along with “UFC All Angles” which was another behind-the-scenes show featuring Daniel Cormier.

Dana White was a recipient of a UFC friendly feature in the Washington Post.

Sponsors

The octagon sponsors included MusclePharm, Alienware, MetroPCS, Ultimate Poker, Air Force Reserve, Toyo Tires, EA Sports’ UFC video game (which comes out in June), Harley Davidson, the video game by Ubisoft, “Watch Dogs,” and Bud Light had the center.

Ultimate Poker had the fighter prep point.

People Finder and The Memory Tag were notable sponsors for T.J. Dillashaw as he won the Bantamweight Championship.

Odds and Ends

Popeyes Chicken crept into UFC 173 talk with the light-hearted dig at DC’s favorite fast food stop.  One of the behind-the-scenes UFC spots had Hendo delivering Popeyes to DC during a training session.  DC took it as a joke and did not seem to take real offense to Hendo’s “gesture.”  For his part, Hendo seemed to do it as a joke and less of an insult on DC’s chicken habit. There was debate as to whether the subtle undertones of racism could be scene (and used) by opponents of MMA (i.e., Culinary Union).  This seems unlikely as Cormier did not seem offended and he had admitted to liking Popeyes.

KFC, a UFC sponsor on TUF, cannot be happy with Popeyes being talked about without even having to pay.

Chico Camos sported Nike Foamposites at the weigh-ins.  It’s the second PPV in a row someone has sported the sneaks at weigh-ins.

Dana White had the most unfortunate auto-correct in a twitter debate when trying to explain that Renan Barao finishes people.  His tweet read “fishes” people. Of course, this was picked up on quickly.

It looked like slicker inset promos during the PPV hyping future events especially UFC 175.

According to Google Trends, Canada, Brazil and the United States were the top regions (in that order) searching for UFC 173.  On another note, TI-Mayweather was generating more hits than any UFC search term on Sunday.

Great scene after with Duane Ludwig and T.J. Dillashaw embracing after Dillashaw ended Barao.

Conclusion

The Memorial Day Weekend show for the UFC had been one of the company’s bigger shows of the year.  Even with last year’s big Heavyweight fights, it did not live up to expectations.  In fact, last year was down in attendance and PPV buys.  One might expect the same here.  Barao-Dillashaw was not a marquee fight going in despite the great action that occurred and Cormier-Hendo is not a main draw.  So what for the PPV buys?  It’s hard to say but 200,000 buys would be a good estimation here.

UFC 173 attendance, gate and bonuses

May 25, 2014

MMA Junkie reports on the attendance, gate and bonuses for Saturday’s UFC 173 at the MGM Grand Garden Arena in Las Vegas where T.J. Dillashaw defeated Renan Barao in a huge upset.

Announced at the post-fight press conference, the reported attendance for Saturday’s event was 11,036 for a gate of $1.7 million.  A modest gate for Vegas standards, it still did better than UFC 170 which was at the Mandalay Bay Events Center and featured Ronda Rousey .

The bonuses saw the night’s big winner, awarded two bonuses:

Fight of the Night: Dillashaw-Renan Barao

Performance Bonuses:  Dillashaw and Mitch Clarke

Clarke pulled off a slick D’Arce choke on Al Iaquinta on the Prelims show.

Payout Perspective:

It was a good night of fights despite the lack of buzz for the main event.  T.J. Dillashaw put on the performance of his life as he dominated what many argued was the pound for pound best fighter in the UFC.  As a result, he was the recipient of $100,000 in bonuses.  On Saturday, ticket demand was sparse with tickets still available as of yesterday afternoon and it may have been reflected in the attendance and gate.  There is nothing official on the gate until verified by Nevada later this week.  As for the bonuses, Tony Ferguson, Robbie Lawler and Daniel Cormier were shut out for bonuses although each could have had a claim for a Performance Bonus especially Cormier who made a statement with  his “rag dolling” of Dan Henderson and a pretty good promo post-fight.

MMA Payout will have more on Foamposites, Popeyes and “fishing” people in its Payout Perspective.

UFC 173 ticket demand not there

May 24, 2014

MMA Payout has learned that UFC 173 is the second least expensive ticket on the secondary market at the MGM since January 2011.  This is according to SeatGeek, an online event ticket search engine.

The average ticket price on the secondary market for UFC 173 is $239.  Only UFC 141, featuring Brock Lesnar and Alistair Overeem ($168) had cheaper tickets at the MGM Grand Garden Arena and that event was held on a Friday night due to New Year’s Eve.

The average ticket price from UFC 173 is down $51 and 17.6% from UFC 172 in Baltimore.

There were still tickets available as of Saturday afternoon with $98 being the cheapest on the secondary market to get in.

Bear in mind that this is the secondary market and does not include tickets purchased directly from either the box office or Ticketmaster.

Payout Perspective:

As many have commented, the event may lack the pop of past Memorial Day weekend UFC shows.  The last couple Memorial Day shows has featured Heavyweights but this year features Renan Barao against T.J. Dillashaw and Daniel Cormier against Dan Henderson.  These are fun matchups but the star power may be lacking from a Cain Velasquez or Junior dos Santos in the main event.  We will see if the lack of demand equates to fewer fans tuning in.  You may recall attendance and gate from last year’s UFC 160 which featured Cain/Bigfoot and JDS/Hunt was down from 2012’s show and only did 380K PPV buys which also was a decrease from the prior year.

WaPo features White for 173 fight week

May 23, 2014

The Washington Post featured UFC president Dana White in lead up to this Saturday’s PPV.  The piece focuses on White’s past and how he’s got to where he is today.

The article follows White during UFC 172.  The feature does a good job in painting the picture of White’s personality.  In addition, it gave the background of how the UFC came to be the organization that it is now.  It also provided the demos from Fox Sports which shows why the UFC is important to Fox.

According to research by Fox Sports, the major rights holder in the United States, more than three out of four men ages 18-34 say they’re fans of UFC. The sport’s Fox Sports 1 audiences have a median age of 39 and are spread pretty evenly across the country. Seven in 10 viewers are men, and the UFC enjoys the youngest median age and the highest concentration of Hispanics among all major sports. Now the UFC can be seen in 147 countries, in 23 languages.

The article pointed out the downturn in PPV buys but put a positive spin on the issue:

With some top stars out with injuries, recent pay-per-view numbers have been down, but even if 350,000 fans pluck down $50 for a pay-per-view, that’s a $17.5 million payday. Gate revenues typically add another few million and sponsorships much more. The UFC will have more than three dozen televised events this year, including 11 pay-per-view shows.

Payout Perspective:

WaPo is the latest to provide the UFC with some mainstream placement prior to its next big event.  The article is nothing new to those that follow the UFC.  However, the underlying strategy of article placement with outlets with high readership is noteworthy. The New York Times has written several articles about the UFC (at least two on Jon Jones) leading up to its PPVs.  It’s not a bad strategy.  For UFC 173, the focus was on White rather than any of the fighters on the card.

Pacquiao-Top Rank renew contract

May 22, 2014

ESPN reports that Manny Pacquiao has signed a two year extension with Top Rank Boxing.  The deal will go through December 2016 and likely ends talk of a possible Pacquiao-Mayweather fight.

Top Rank Promoter Bob Arum indicated that the financial terms were not disclosed due to a confidentiality agreement.  The deal also extends MP Promotions which co-promotes Pacquiao along with Top Rank.  Mayweather is halfway through a six fight deal with Showtime.

Payout Perspective:

The new deal apparently closes the door on the biggest fight in boxing that never happened.  Let’s face it, the fight everyone wanted to see went away years ago.  Pacquiao will be 38 when this contract ends and it would be prudent for him to retire at that point.  Mayweather has expressed interest to walk away as well after his Showtime contract is up.  While Arum has stated that there still may be a chance for a Pacquiao-Mayweather fight, its unlikely we would want to see it at the end of their respective careers.

Popeyes Chicken center of PR issue?

May 22, 2014

Dan Henderson delivered Popeyes Chicken to Daniel Cormier as a joke with the knowledge that Cormier is in the midst of cutting weigh but is fond of the fast food restaurant.  However, the seemingly innocuous rib may be seen as a prospective PR gain for opponents of MMA in New York.

If you missed it, in the UFC’s new “Embedded” series Cormier was delivered the tasty treat by Henderson.  Cormier is in weight cut mode and Popeyes would be a definite weight gainer.  Cormier told the story of eating Popeye’s for comfort after learning that his fight earlier this year with Rashad Evans was off.  As we know, the UFC found a replacement for Evans and Cormier returned to a diet without Popeye’s before he destroyed Patrick Cummins.  It a bit of gamesmanship Henderson personally delivered the chicken to Cormier.  It did not appear form the video that Cormier was personally offended by Henderson’s delivery.

Bloody Elbow points out the potential PR faux pas by the UFC.  Cormier is African American and Henderson is Caucasian (UPDATED: Hendo is part Native American).  Most of us knew this.  The stereotype that African Americans like Chicken is unintentionally perpetrated here.  BE indicates that this will likely be picked up by the Culinary Workers Union 226, the prime organization behind the efforts to block the efforts to legalize MMA in New York, as ammunition to persuade legislators to vote against MMA.  The belief is that it would use this episode as painting the sport as racist.

Payout Perspective:

An underlying issue in this whole Popeyes Chicken delivery is that KFC has been sponsoring TUF this season.  Certainly, KFC can’t be happy its competitor is getting more publicity than the actual UFC sponsor.  As for the PR issue, certainly BE has made a case for this joke to be a credible PR problem.  While we know the context of how the joke was made, put in a snippet to someone already weary of MMA and a bias is born (i.e., MMA is racist).

UPDATE:  05/23/14  A reader pointed out that Hendo is part Native American.  Still, the issue that someone giving Cormier chicken perpetuates some stereotype is the issue.  I think its hard to utilize this since Cormier has admitted to liking Popeyes and the joke was taken without much offense by Cormier.

JMM-Alvarado on HBO score 1.2 million viewers

May 21, 2014

Kevin Iole of Yahoo! Sports reported via Twitter that Saturday night’s HBO Boxing event featuring Juan Manuel Marquez and Mike Alvarado averaged 1.2 million HBO subscribers.  The peak for the event taking place at the Forum in Inglewood, California was 1.3 million.

To be exact, Iole reports the fight averaged 1.198 million and the peak was 1.322 million.  The undercard featuring Viktor Postol and Selcuk Aydin scored an average of 1 million viewers with the peak for Postol’s victory at over 1.1 million.

For those wondering, JMM made $1.4 million this past Saturday while Alvarado made $650,000 according to the California State Athletic Commission (via Bad Left Hook).

Payout Perspective:

Solid numbers for HBO as it competed for sports viewers with NBA Playoffs and the Bellator PPV. Juan Manuel Marquez is still a name that can draw viewers (especially the strong Mexican fan base) and with the winner potentially facing Pacquiao next, there was some added interest.  The fight did not disappoint as both fighters went down in consecutive rounds.

An update on Net Neutrality and potential implications for the UFC and WWE

May 21, 2014

Last week the Federal Communications Commission voted 3-2 to open for public debate new rules to guarantee an open Internet.  With the UFC and WWE online networks, both may have an eye as to what may eventually transpire.

Net neutrality is the concept that all Internet content should be treated equally.  The issue here is that Broadband providers might be able to prevent or inhibit end-users from accessing certain content simply because it could.  In January, we reported on the court ruling that precipitated last week’s vote.

The FCC indicated that it would propose new rules that would allow companies like Disney, Google and Netflix to pay Internet service providers for “fast lanes.”  These special, faster lanes would presumably allow for content to flow much quicker than normal.  Broadband companies have pushed for this right.  This would come into play with services like online streaming.  Thus, UFC Fight Pass and the WWE Network would be affected if such fast lanes require extra cost.  Thinking along these lines, extra cost for the UFC and WWE would likely mean that it would get passed along to subscribers.  However, this proposal has drawn the ire of consumer groups citing it would favor big business and stifle innovation.

There will be much more political wrangling as the sausage is made for net neutrality rules.

Payout Perspective:

It may not necessarily be an issue on the top of the minds of anyone in combat sports, but with business expansion for both UFC and the WWE, each company’s network would be affected by new rules regarding regulation of the Internet.  As we know, the WWE finds itself in corporate distress with a declining stock price with a disappointing television deal and news that the network’s cannibalization of its PPV product will affect revenue more than originally thought.  Additional distress made by extra “faster lane” fees would increase already hefty network costs and passing them along to subscribers may cause a tipping point.  With the WWE already setting network earning expectations for end of year 2015 based on 2 to 2.5 million subscribers, additional “fast lane” fees could make it tough for it to reach its OIBDA goal.

On the other hand, UFC Fight Pass has been a success from all indications.  It has already been made available abroad which we assume has increased the number of its subscribers.  Still, additional fees to allow for its live streaming could be a concern.

As UFC and WWE online networks depend on unfettered live streaming of its content, one suspects that each company is interested on how the net neutrality debate develops.

WWE in damage control after disappointing TV deal

May 21, 2014

The WWE conducted a special conference call on Monday in order to mitigate some of the damage that occurred with the announcement of its deal with NBC Universal.  Although terms of the deal were not divulged, investors took the news as bad and the stock has tumbled.

The conference call did not reveal anything new except for the fact that WWE CEO Vince McMahon stated he was “a little disappointed” in its new deal with NBC Universal.  He indicated that the deal altogether was “at about $200 million.”  McMahon was frank on the conference call stating that the deal was not what the company wanted or what its researched showed with respect to its domestic television deal.  He also admitted in the Q&A portion that launching the WWE Network had a negative impact on negotiating its TV rights deal.

One of the takeaways here is that the WWE may have underestimated the impact the loss of its PPV revenue may have on its core business.

It still projects that it will have 1 million network subscribers at the end of 2014 and the possibility of 2 to 2.5 million subscribers at the end of 2015.  With the subscriber projection of 1 million at the end of 2014, it would have an estimated 2014 OIBDA (Operating Income Before Depreciation and Amortization) loss of $40 million for the network alone and $35-$45 million for WWE.  If the WWE achieves its 2 to 2.5 million subscribers number by the end of 2015 it will have turned around the loss to an OIBDA of $105 million to $160 million for the network and $125 million to $200 million for WWE.

Despite the promising outlook, investors are not happy right now.   Marketwatch reports that the Former Attorney General of Louisiana has commenced an investigation into the WWE.  The crux of the investigation will seek “whether WWE and/or its officers and directors violated state or federal securities laws.”

Unless the investigation produces material information that the officers and directors knew that it was misleading investors, it’s unlikely that the investigation would produce much.  McMahon alluded to the fact that the company’s research reflected the fact that a TV rights deal could garner double the WWE’s current deal.  Obviously, if the research was flawed and/or not sound in its conclusions, there may be an issue.  But, I would not suspect any criminal or civil penalties as a result of a disappointint TV deal.

Payout Perspective:

Monday’s Business Outlook Conference Call was a way for the WWE to calm its investors.  But the conference call probably did not make any holder of the stock happy considering McMahon expressed his own dismay on the new deal.  Earlier this year, the rights fee deal was thought to be a big boon for the company based on other sports’ rights deals such as NASCAR, but  it did not come to fruition.  Based on the huge hit the WWE took after news of its domestic television deal and the news that PPV revenue will contribute more than expected to the company’s losses, many investors are cutting their losses.  The steep decline in stock price caused an investigation and the possibility that executives will be removed to satiate angry stockholders that saw their portfolio take a huge hit.

Just a few months ago, the WWE stock was trading above $30 and now (at the time of this writing) it’s trading below $11.  The stock has been downgraded by analysts which can’t help foster confidence right now.  Now, analysts will take aim at its network to see if the company can come through with its projections.

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