UFC-Fox sever ties with Sonnen

June 30, 2014

MMA Junkie reports that the UFC and Fox are severing ties with Chael Sonnen after he failed a second drug test.  Sonnen will no longer serve as analyst for Fox and MMA Junkie confirmed with the UFC that he is no longer under contract with the company.

MMA Fighting’s Ariel Helwani first reported that Sonnen failed another drug test after his initial drug test revealed he had taken banned substances.  After the first failed drug test earlier this month, Sonnen immediately defended his position on FS1 television.  Later that week, on the show he served as co-host, he announced his retirement on FS1’s “UFC Tonight.”

In his second test, it was discovered that there was presence of human growth hormone (HGH) and recombinant human erythropoietin (EPO).

Via MMA Junkie:

“The UFC and FOX Sports organizations announced today the termination of their respective broadcasting services agreements with analyst Chael Sonnen,” the statement read. “This decision comes in light of Sonnen failing a second test conducted by the Nevada Athletic Commission for banned substances in June. Sonnen was previously under temporary suspension by the Nevada Athletic Commission for failing an initial test conducted in May.”

Payout Perspective:

It will be interesting to see how Fox handles this news.  FS1 did not mention it on Saturday night during UFC Fight Night.  Certainly, something will have to be said when UFC Tonight returns.  Although we could point to ex-athletes that have been in trouble still having studio jobs, this one is different.  Severing ties with Sonnen was the only thing to do in this instance especially with the use of HGH and EPO.  MMA is a sport that many mainstream people are not comfortable with due to the perceptions of it being extremely violent.  The news that its fighters are taking PEDs would only confirm to some that the sport is dirty.  Having Sonnen continue on air on FS1 or with the UFC would tacitly convey that the UFC and Fox are ok with Sonnen taking PEDs.

Even if the UFC wanted to continue working with Sonnen, its working relationship with Fox compelled them to make the decision.

Main Events sues promoter, Schaefer and Stevenson

June 30, 2014

MMA Payout has obtained a copy of the lawsuit filed by promoters Main Events as it is suing the promoter for Adonis Stevenson for bowing out of an intended fight with Sergey Kovalev.  The lawsuit centers around the involvement of boxing insider Al Haymon.  It was filed last month with little occurring in the lawsuit so far.

The lawsuit was filed last month and has not seen much movement in the initial filing at this point.  The plaintiff is New Jersey Sports Productions, Inc. which does business as Main Events.  The promotion is owned by Kathy Duva.  As MMA fans may recall, Duva filed a Declaration in Support of Bellator in the Eddie Alvarez lawsuit.

The defendants include Yvon Michel, his promotion, GYM; Golden Boy Promotions; Showtime Network, Inc. and boxer Adonis Stevenson.

To set the stage, Main Events’ Kathy Duva claims that it had an agreement for her fighter, Sergey Kovalev to face Yvon Michel’s promoted fighter Adonis Stevenson.  The deal was allegedly sealed with emails in late January 2014 between Duva and Michel.  The deal included a co-promoted fight on HBO which carried a $2.4 million rights fee.  The fee was offered by HBO executive Peter Nelson which Main Events contends was accepted by Michel on behalf of his fighter.

However, Main Events learned that Al Haymon became involved and Main Events’ attorney sent a letter to Haymon confirming the Stevenson-Kovalev.  Presumably, the letter was to prevent an anticipated breach on the part of Stevenson.

The Complaint paints Haymon as an individual with “a relationship with Showtime wherein certain promoters rely…for allocation of television dates and rights fees rather than negotiating those dates and fees directly with Showtime.”  It also alleges that Haymon has an alliance with Richard Schaefer (then CEO of Golden Boy) and they had planned to “wrest control” of Golden Boy.  As we know now, Schaefer and others have left Golden Boy and it’s not clear whether Schaefer and Haymon are entering into a venture together.  The Complaint alleges that Haymon violates the Muhammad Ali Act as he acts as a manager or advisor to boxers despite not following the rules related to the Ali Act.

Main Events claims that Showtime interfered with the negotiations between HBO and the Kovalev/Stevenson fight despite Haymon pushing for a Stevenson-Bernard Hopkins fight with Showtime.

The legal claims:

Breach of Contract

Main Events claims that Stevenson’s management group, GYM, breached its contract to co-promote a bout between Stevenson and Kovalev.

Breach of Fiduciary Duty

Main Events claims that GYM breached a fiduciary duty premised upon the co-promoted agreement as the two sides were to have split revenue on the proposed fight. It goes on to claim that since the co-promotion is considered a joint venture, GYM breached a fiduciary duty to Main Events for not going through with the co-promotion.

Fraud by Stevenson’s Promoter

Main Events has sued Stevenson’s Promoter, Yvon Michel, personally for fraud as it is alleged that he represented to Main Events that it “had nothing to worry about” regarding the agreed Stevenson-Kovalev fight and Haymon’s involvement was a mere way to “increase the rights fees for the unrelated interim bout.”  The interim bout that is being referred to was a fight in Montreal between Stevenson and Andrzej Fonfara.  Stevenson fought Fonfara in late May on Showtime.  In that fight, Stevenson hit the canvas once, but eventually won a decision over Fonfara.

Tortious Interference with Contract

Main Events claims that Haymon, Golden Boy, Stevenson and Showtime based upon the set of events, claims it had a deal for Stevenson-Kovalev, but the defendants interfered with that contract.

Interference with Prospective Economic Advantage

Premised upon the alleged agreement for a fight between Stevenson-Kovalev, Main Events contends that Haymon, Golden Boy, Stevenson and Showtime interfered with an existing contract for the fight and that there was “a reasonable expectation that plaintiff [Main Events] would have economically benefitted from the business relationship.”  Essentially, Main Events claims that it would have benefited (and it would have) from the fight between their fighter and Stevenson.  But there was interference which caused Stevenson to back out of the agreement.

Payout Perspective:

This is another example of the competitive nature between HBO-Showtime and Top Rank-Golden Boy.  Actually, here its Main Events.  Since the lawsuit was filed, Schaefer has left Golden Boy and the move may impact this lawsuit as it relates to the accusations between the companies.  The latest has a Summons issued to Schaefer in Laguna Beach, California.  A  pretrial conference that was to occur last week has been pushed to July 11th.

As for the legal maneuvering, it’s likely that Haymon, et al. will file a motion to dismiss the Complaint premised upon the argument that there was no binding contract between Main Events and GYM, and as such, there was no breach.  Premised upon the fact that there was no breach, there would be no fraud by Michael or interference with a contract.

The lawsuit underscores the power of Al Haymon in the boxing industry.  It’s clear that he has a powerful stable of fighters and has had working relationships with Showtime.  As many know, Haymon advises Floyd Mayweather.  Main Events alleges that Haymon acts as manager to his boxer which circumvents the Muhammad Ali Act which attempts to protect fighters.  The Complaint does not delve into this violation as it is not a plead cause of action at this point.  However, if discovery commences in this lawsuit, we may see allegations of specific violations.

It will be an interesting lawsuit to follow and MMA Payout will keep tabs on it.

UFC Fight Night 44 attendance, gate and bonuses

June 29, 2014

MMA Junkie reports the attendance, gate and bonuses for UFC Fight Night 44 which took place at the AT&T Center in San Antonio, Texas.  The main event featured Cub Swanson defeating Jeremy Stephens.

UFC Fight Night 44 drew 9,227 for a gate of $728,358.  No comps were announced.

In addition, the bonuses of $50,000 each were awarded and are as follows:

Fight of the Night:  Cub Swanson-Jeremy Stephens

Performance of the Night: Ray Borg, Carlos Diego Ferreira

Payout Perspective:

Saturday night’s UFC event outdrew Saturday morning’s UFC event by just over 1,000 fans.  It was one of the biggest Fight Nights this year with only UFC Fight Night 37 (14,604) drawing more.

UFC Fight Night 43 attendance, gate and bonuses

June 28, 2014

MMA Junkie reports the attendance, gate and bonuses from UFC Fight Night 43 taking place last night (or this morning) from Auckland, New Zealand.  It was the organization’s debut in New Zealand which took place at the Vector Arena.

According to the figures announced at the post-event news conference there were 8,098 in attendance with a live gate of $1.04 million New Zealand dollars which equates to approximately $913,000 U.S. dollars.

Bonuses for night were as follows:

Fight of the Night:  Gian Villante-Sean O’Connell

Performance of the Night:  Nate Marquardt and Charles Oliveira

Each received a $50,000 bonus for their work.

The event was shown on Fight Pass.  It was the first of two events as UFC Fight Night 44 takes place in San Antonio tonight.

Payout Perspective:

Good performances by Marquardt and Oliveira.  The Vector Arena is a 12,000 seat arena although we do not know the exact composition for the UFC event or the number of comps for the event.  This was one of those regional events where those of us in North America had to stay up late or wake up early to see live.

Digital-currency company sponsors Jon Fitch

June 28, 2014

Jon Fitch will be sponsored by a digital currency company when he fights next week for the WSOF as it makes in debut on  network television on NBC.  The sponsorship is the first of its kind for an MMA fighter.

The news was disseminated on CNBC’s web site via commentary produced by Brian Kelly, who owns Nautiluscoin.  According to its web site, it “is a next generation digital currency and free payment network designed to process transactions faster than Bitcoin with reduced volatility.”

Via Kelly’s CNBC article:

…I’m sponsoring Jon Fitch (www.jonfitch.net), the No.2 Mixed Martial Arts (MMA) World Ranked Welterweight, in his upcoming fight on July 5 on NBC. Like many of us, Jon has recently caught the digital currency bug and with this sponsorship, he will become the first professional athlete to be paid in a digital currency.

Fitch takes on Dennis Hallman in the main event of WSOF 11 which will air on NBC next Saturday.

Fitch is not the only MMA fighter thinking about digital currency, Rory MacDonald talked about wanting to be paid in Bitcoin on his Instagram account.  However, that may be just a joke.

Payout Perspective:

For Nautiluscoin, this is a great sponsor opportunity considering it wants publicity for its company and with WSOF being on network television, it will get eyes on its company logo.  As for Fitch’s side, it’s an interesting investment opportunity.  You may recall Fitch’s complaints about his pay while in the UFC.  He had talked about the financial impact when not fighting and that sponsors were tighter with money.  So, one might wonder why he would want to receive payment in digital currency if he had issues with fighter pay in the UFC.  At this point, the digital currency market is in its infancy and who really knows where that might go.  Perhaps due to the tightening of sponsor dollars, Fitch is taking the calculated chance.  Being on network television had to help Fitch with attempting to get sponsors, but maybe this opportunity will go beyond a mere patch on his shorts.

TUF 19 Episode 11: 366,000 viewers

June 27, 2014

MMA Payout has learned that the 11th episode of TUF 19: Team Penn vs. Team Edgar drew 366,000 viewers according to Nielsen sources.  The live plus same day number is the lowest this season but was the most-watched show on FS1 on Wednesday.

In addition, the same night replay of TUF in the 10pmPT/1amET time slot received 94,000 viewers which up 6% in that time slot.  In the fight of the episode, Corey Anderson defeated Patrick Walsh by unanimous decision.

TUF 19 Episode 11 Graph

Payout Perspective:

The 11th episode is the lowest rated show of the season and possibly the lowest rating ever for TUF.  Interesting that although it pulled the low rating, it was still the most-watched show on the network for Wednesday.  The ratings are disappointing after it had achieved its second highest rating of the season for episode 10.  We will see if it can bounce back for the season finale.  The average for the season is 466,000 (live +SD).

Golden Boy and Schaefer heading to arbitration

June 26, 2014

ESPN reports that Golden Boy Promotions has requested arbitration against former CEO Richard Schaefer.  According to the report, De la Hoya and Golden Boy are requesting $50 million in damages from Schaefer although no allegations have been reported as to the claim.

The case is being sent to private arbitration per the terms of Schaefer’s employment agreement with Golden Boy.  It likely had a clause that if there was a disagreement, in lieu of filing a lawsuit, the parties would agree to go to arbitration which is theoretically faster and less expensive.  Thus, no lawsuit and it is unlikely that the general public will not know much of the evidence and testimony unless it is leaked.

Payout Perspective:

While we may not know the claims against Schaefer, the speculation that Schaefer and Al Haymon may go into business together may be one of the claims Golden Boy is making.  Golden Boy might claim that Schaefer breached his fiduciary duty as CEO by not acting in the company’s best interests.  The recent Main Events lawsuit filed against Al Haymon paints the picture that Schaefer and Haymon have worked together (more on this lawsuit in the coming days).  The legal action is not surprising considering the public departure of Schaefer and other staff as well as Floyd Mayweather.

UFC launches VIP tour packages for events

June 26, 2014

The UFC has teamed up with event management company Quintevents to come up with VIP package services for its events starting with UFC 175.  It has launched an interactive website in support of this new endeavor according to a UFC press release.

Via UFC press release:

The UFC VIP Experience program and website are part of a partnership between UFC and QuintEvents, the industry-leading hospitality, travel and experience package provider, offering similar VIP package services to the NFL, NBA, College Football, MotoGP™ and more. The travel/experience program provides fans with a secure buying platform, guaranteed block seating, UFC celebrity meet and greets, full on-site hospitality and other official perks. All ticket and hospitality packages come direct from the UFC and are now offered to all UFC VIP Experience customers.

The new website provides details on UFC VIP Experience ticket packages, as well as on each of the upcoming fights offered through this program including seating charts, fighter line-ups, experiential photo and video galleries, schedules, reviews and FAQs. UFCVIPExperience.comwill also be updated in real time with breaking UFC news, announcements, fighter standings, fight previews, immediate recaps and more.

UFC QuinteventUFC Events

Payout Perspective:

The alliance is essentially a travel agent with perks for UFC events.  It’s a good idea for the UFC as corporate groups and/or fans will go directly through this web site instead of spending their money through other travel arrangements.  If you are a corporate group or a diehard UFC fan that wants to travel to events, this would be a one-stop place to get all your travel needs.

Cotto-Martinez: 300-315K PPV buys

June 26, 2014

SI.com is reporting that the Miguel Cotto-Sergio Martinez Top Rank PPV event that took place on June 7th only drew between 300-315K PPV buys which is well under the expected 500K anticipated.

After putting Martinez down three times in the first round, Cotto scored a 10th round KO of Martinez.  It was a much anticipated fight fans and well promoted on HBO.

SI’s Chris Mannix writes that multiple sources working with the promotion confirmed the number.  Mannix goes on to attribute the disappointing buy rate to a multiple of factors including the Belmont Stakes and the Stanley Cup which went into double overtime that night and well into the PPV.

In addition, UFC Fight Night 42 from New Mexico took place that night as well with Benson Henderson taking on Rustam Khabilov in the main event.  It was the third most-watched Fight Night on FS1 so far.

Bob Arum admitted to ESPN’s Dan Rafael that, “[t]he numbers were not great.”  He attributed this to “too many” PPVs.

Via ESPN:

“Pay-per-view was always designed, as was closed circuit back in the day, for true super fights, not just very good fights. There have been pay-per-views every month and people resent the fact that they’re asked to pay extra for anything halfway decent. Boxing pay-per-view numbers are down. Look at the (recent) numbers for the (Floyd) Mayweather and (Manny) Pacquiao fights. The UFC pay-per-view numbers are also down.”

Despite the rough numbers for PPV, Arum told ESPN that the gate drew $4.7 million.

Payout Perspective:

Arum essentially blames the low numbers on MMA fans’ favorite word when it comes to ratings: oversaturation.  In fact, Yahoo! Sports Kevin Iole wrote a controversial piece on whether saturation is good for the UFC.  With Canelo Alvarez facing Erislandy Lara in a couple weeks, boxing will have another PPV this year that caters to the steady boxing fan.  Alvarez is still not a top draw and Lara is not known to anyone that does not follow boxing. So, are there too many boxing PPVs at this point?  There will definitely be more this year than last and at a price point between $60-$75, its likely fans will be picking and choosing which to buy.  Perhaps, many combat sports fans will implement a “one week rule,” which is to wait a week for the PPV fight to air on HBO/Showtime.  Even if you were to pay for HBO-Showtime, your cable bill for those premium channels could rival that of you purchasing all the boxing PPVs.  Plus, you would get all of the boxing shows on the networks…and of course the rest of what those premium shows have to offer.

Looking at the fight specifically, it was an under the radar good fight on paper.  Certainly, the Puerto Rican fan base came out for Cotto.   The same for the Argentinian fans of Martinez.  But, was it something that the broader, casual fan would purchase, or wait to see on HBO a week later?

UFC Fighters up for ESPYs

June 25, 2014

MMA Junkie reports that three UFC fighters have been nominated for ESPY awards.  Ronda Rousey, Jon Jones and Chris Weidman are all up for awards for ESPN’s award show.  s

Rousey is up for “Best Female Athlete” and “Best Fighter.” `Jones is competing with Rousey in the “Best Fighter” category.   Weidman is up for the category of “Best Upset”  for his upset of Anderson Silva last July.

Rousey is up against WNBA player Maya Moore, Olympic skier Mikaela Shiffrin and UConn women’s basketball player Breanna Stewart.

Jones is up against Rousey, Floyd Mayweather, Manny Pacquiao and Andre Ward in the fighter category.

Weidman is up against UConn winning the men’s college title and Mercer (#15) defeating Duke (#2) during March Madness.

Fans can vote for the winners of these categories and more.

Payout Perspective:

The nominations reflect the fact that ESPN does not have a problem in promoting the UFC.  Rousey is the obvious mainstream star that may receive more attention at the ESPYs.  Aside from Rousey, it gives the UFC more exposure at the July award show.  There is not a lot more value in the ESPYs as they are a self-generated award by the network.

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