Court to determine Wanderlei Silva fate in Nevada by May 11th

April 22, 2015

After extensive oral argument on Wednesday, a Clark County District Court will issue a ruling on or before May 11th as to whether it will uphold a lifetime ban issued by the Nevada State Athletic Commission on Wanderlei Silva.

Judge Kerry Earley heard oral arguments from Silva’s attorney Ross Goodman and Nevada Deputy Attorney General Chris Eccles arguing on behalf of the NSAC.  The petition for review was filed by Goodman on behalf of Silva who was not in attendance at Wednesday’s hearing.  It essentially appeals the NSAC ban and fine of Silva stemming from his evading a drug test in lead-up to UFC 175.

MMA Junkie’s John Morgan, who attended and tweeted the proceedings, reported that the primary question was whether the NSAC was correct to order Silva to submit to a drug test “out of competition” although he was not licensed by the state at the time.

As maintained by Goodman in his pleadings and oral argument, the NSAC does not have jurisdiction over a fighter not licensed in the state.  Therefore, it had no power to suspend or punish.

Eccles argued that Silva took part in a news conference promoting the event and was thus “an unarmed combatant and contestant who was contracted to appear in the state as such.”

While the question of the severity of the suspension was discussed, it appears that the primary issue is that of jurisdiction.

Judge Earley indicated that she wanted more time to review the relevant statutes and regulations prior to issuance of a ruling.

Payout Perspective:

As always, the issue of jurisdiction must be determined first prior to discussing the substantive merits.  This could be a case where the Court knows a wrong has occurred and wants to make sure that the right result is made.  But, how do you do it when the law is not in your favor.  The relevant statutes appear to favor Silva’s argument but the NSAC makes an artful (and maybe persuasive) argument that the law should be interpreted broadly to include Silva within the jurisdiction of Nevada.  We shall see what the Court does on May 11th.

More on Appellate Court decision to allow Rampage to fight Saturday

April 22, 2015

A New Jersey Appellate Court has overturned the portion of the Preliminary Injunction preventing Rampage Jackson from fighting this Saturday at UFC 186.  According to the Court opinion issued Tuesday, the Preliminary Injunction, aside from his fight remains.

The rest of the issues will be determined by the trial court where Bellator sued Jackson for allegedly breaching his contract.  Jackson claims it was Bellator that breached the agreement.

The trial court granted Bellator MMA’s preliminary injunction which precluded Jackson from fighting April 25th.  However, Jackson filed an emergency appeal to reverse the trial court’s decision.  The appeal went under the radar until the announcement of the opinion on Tuesday.

The Appellate Court determined that any irreparable harm that may be suffered by Bellator due to Jackson fighting on Saturday was just “vague speculation” which overturns the trial court’s determination that Jackson’s involvement at UFC 186 would have caused reputational harm as well as the opinion of the trial court that Bellator’s investment in Jackson was more than just monetary.

Brett Okamoto tweeted a pic of the 3 page order and MMA Junkie has obtained it as well.

Payout Perspective:

The Appellate Court’s opinion makes the ongoing lawsuit between Jackson and Bellator clear as mud.  It also presents the issue that Bellator may either amend its legal Complaint to include the UFC or sue them separately.  A footnote to the opinion indicates that there may be a time where the preliminary injunction would need to be further amended or eliminated altogether and that the parties return to the Appellate Court.  The message does not put a lot of faith in the trial court.  Sure, each party knew that they could seek relief from the appeals court but to have the court actually announce this in a footnote seems like an overseer of the trial court.

With that said, the Appellate Court opinion negates the trial court opinion on the issue of irreparable harm when it came to the issuance of the preliminary injunction.  In essence, it believed that the trial court may have over-analyzed the issue with respect to Bellator’s investment in Rampage, the contractual landscape of MMA fighters and the unique value of Rampage.  It also seemingly dismissed any argument or value in Bellator’s argument regarding reputation harm.

MMA Payout will continue to monitor.

UFC manager comments on Reebok deal, fight management

April 22, 2015

In light of Zuffa’s announcement that it has changed the policy through which it will compensate fighters under the Reebok sponsorship deal, a manager of UFC fighters has spoken out about the deal and the sponsorship landscape.  Oren Hodak of KO Reps who represents Johny Hendricks, Ovince St. Pierre and Joe Lauzon among others has expressed his opinion on the problems with the current state of MMA sponsorship.

“The current problem in the MMA landscape is the managers/agents that are in the business.  They aren’t working hard enough or smart enough going after non endemic brands.  They are simply seeing a logo on another fighter and then contacting that company. Or even more pathetic is agents calling another agent to help them out with a deal,”  Hodak told MMA Payout.  Hodak holds a Master’s degree in Sports Marketing and worked in the sports industry for several years before opening up his MMA management company.

“KOreps has had great success giving companies such as Reebok, Bass Pro, Smart Stop Self Storage, Instaloans and most recently Parts-express.com their first real taste of Octagon exposure in addition to partnering with fighters outside of the cage,” stated Hodak.  “Sure, the sponsor tax takes money out of budgets from your core MMA clothing and supplement companies but there are plenty more companies out there with a sports marketing budget.  Over the years the UFC has slowly raised the sponsor tax and added numerous categories to the non-approved list, giving fighters less and less opportunity. In turn, managers have an excuse as to why they aren’t producing and UFC has fighters openly complaining about sponsorship money.”

On Monday, the Sports Business Journal reported that the UFC had changed the way it would pay its fighters through the Reebok sponsorship deal which goes into effect in July.  Instead of relying on media rankings, it would base the sponsorship pay on the number of fights an individual has had under Zuffa.  This would include fights in Strikeforce and WEC after both were acquired by Zuffa.  The change in the policy was said to be based on speaking with a number of fighters and managers.

“Some fighters may come out ahead with this new deal but I believe the fighters with professionally qualified sports management behind them will not,” Hodak added, “We have already heard from numerous fighters losing deals because they can’t utilize the valuable fight night impressions surrounding tv viewership.”

Payout Perspective:

It’s clear that despite the change in payment structure, the UFC-Reebok deal will still affect the bottom line of many fighters.  Hodak points out an issue he sees as a manager of fighters.  It’s an interesting viewpoint and a constructive critique on the nature of the business.  It also calls into question the management practice of some in the industry.  Not only will the sponsorship landscape change in the UFC, but the management of fighters may change too.  We shall see how this plays out in the UFC after the Reebok deal is put into place this summer.

Injunction overturned, Rampage back on UFC 186 card

April 21, 2015

In a surprising turn of events, the New Jersey court that issued the preliminary injunction preventing Rampage Jackson from fighting on Saturday’s UFC 186 card has reversed its decision. At this point, no court records have surfaced but Bellator has issued a statement indicating that it is “disappointed (the court) reversed the injunction as to the April 25 fight.

Jackson released his own announcement via social media:

Payout Perspective:

One can only guess the reasons for the Court to reverse its decision at this point. In its opinion issued on April 7th, it appeared that the Court seemed dead set that Rampage had breached his contract. Unless there was a procedural defect, the Court must have been persuaded by another issue it overlooked to reverse its opinion.  MMA Payout will have more as the information becomes available.

UPDATED: Not surprising, the UFC is pleased with Tuesday’s ruling overturning the preliminary injunction.  “We are happy with the decision from the New Jersey Court allowing Rampage to fight in Montreal this Saturday night,” UFC President Dana White said, “I am looking forward to seeing Rampage back in the Octagon.”

Show Money Episode 3 talks Rampage, Antitrust and Phil Davis

April 21, 2015

The third episode of Show Money talks Rampage injunction, an update on the UFC Antitrust lawsuit, Phil Davis to Bellator and the dismissal of Zuffa’s lawsuit in New York. I join Bloody Elbow’s Paul Gift and John Nash to talk, debate and discuss these issues.

Pacquiao will command over $2 million for shorts ad space

April 21, 2015

Manny Pacquiao will recieve an extra $2.25 million in sponsorship money for ad space on his boxing trunks for his May 2nd bout against Floyd Mayweather according to Pacquiao’s business manager Eric Pineda.

Pineda told World Boxing News that at this point there are six companies that will have its logos on his trunks.  In the past, Pacquiao has had various Filipino companies on his trunks as well as other notable sponsors including Nike and Head & Shoulders.

Perhaps, the most inauspicious sponsor on Pacquiao’s shorts was Wonderful Pistachios as he wore the sponsor patch in his December 2012 fight against Juan Manuel Marquez.  When Marquez knocked out Pacquiao, the “Get Crackin” sponsor patch on the back of his shorts was visible for all the wrong reasons.

Payout Perspective:

It’s clear that this fight will be one of the most watched in the history of the sport.  While Pacquiao will receive less than half of the gross revenues from the fight, he will make a nice sum from sponsors on his shorts.  For Filipino companies, placing an ad on his shorts makes sense as virtually the entire country will be watching the fight.  What will be interesting is to see whether some of the companies that have sponsored him in the past will pay the dramatically increased fee.  Also, will there be new sponsors for Pacquiao on May 2nd.  Although not confirmed to be on his shorts, Butterfinger has a marketing campaign with Pacquiao in lead-up to the fight.

SBJ looks into the finances of PBC on NBC deal

April 20, 2015

The Sports Business Journal (the article is free to non-subscribers) has an exclusive report on how Al Haymon developed his deal to launch PBC on NBC.  Based on public documents obtained by Bill King of the SBJ, it appears that Haymon’s investors have paid NBC over $425 million.

The story begins with the initial pitch to NBC starting in late 2013 where fighters advised under Al Haymon would be showcased on NBC on weekend afternoons and Saturday nights.  To entice the network execs, he offered a time-buy which would front the money for the venture.  But, he also asked for more than the standard pay to play model.  He wanted NBC in on the production of the programs as well as offering “Olympic-level” features to introduce his fighters to the audience.

The financials for the undertaking include a $371.3 million investment by Ivy Asset Strategy Fund, in what King determined to be Haymon Boxing.  A second fund, WRA Asset Strategy. listed an investment of $42.2 million in Haymon Boxing and a third fund, Ivy Funds VIP Asset Strategy showed an investment of $18.5 million.  Waddell & Reed fund manager Ryan Caldwell and Haymon attorney Mike Ring helped facilitate the deal.  Caldwell co-managed a fund that put $1.5 billion into Formula One racing.

The $432 million and the unique structure of the two year deal convinced NBC to invest production costs as well as delivering well-known names as on-air talent (i.e., Al Michaels, Bob Costs, Sugar Ray Leonard) to its broadcasts.

The article differentiates the UFC dive into television as the sport was introducing MMA whereas PBC sees itself as “reviving” the sport.

So far so good for PBC on network television.  In two network telecasts, it scored wins in the valuable 18-49 demo.  And while the second network showing on April 11th drew less than its March debut on NBC, the vibes from fans have been positive.

The obvious question is whether more people will start to tune in.  While boxing fans are bullish on Haymon and the programming, an accompanying SBJ Turnkey Sports Poll to the article indicates that only 10% of those responding to the poll knew of PBC’s debut on NBC and watched.  However, 38% stated they heard of the debut but did not watch and another 51% were not aware of PBC on NBC.  In addition, another Turnkey Sports Poll question indicated that 62% of those polled would not watch the upcoming May 2nd fight between Floyd Mayweather and Manny Pacquiao.

Payout Perspective:

It’s an interesting read (which you can do without the need of a subscription at this point) about the financial backing of PBC.  It also shows the business acumen of Haymon and his financial backers.  While there is risk by Haymon, et al., he was able to convince NBC (as well his other network partners) to take part in the endeavor.  By requesting NBC production help including top-shelf on-air talent, it offered legitimacy to the program.

Will it catch on?  The Turnkey poll appears that there is still room to grow and perhaps boxing has been shelved for a while and out of the minds of the mainstream viewer but with promotion, it could grow.   One thing is for certain, it appears that Haymon and his investors are willing to take an initial financial hit for a long-term return on its investment.

UFC to change Reebok pay structure to tiered system

April 20, 2015

Sports Business Journal reports (subscription recommended) that the UFC is making a change to the way it will compensate its fighters through the Reebok deal.  Instead of paying fighters based on media rankings, it will pay fighters based on a “tiered system” based on tenure or number of UFC bouts fought.

There will be 5 tiers based on the number of fights an individual has had with the UFC.  The article indicates that the UFC will count fights with the WEC and Strikeforce into the number of fights an individual has fought with the organization. There will be tiers of 1-5 fights, 6-10 fights, 11-15 fights, 16-20 fights and more than 21 fights according to the article.

Title fights will be an exception to this rule as the fighters will receive greater compensation.  The UFC declined comment on sharing the amount of money each tier would receive.

The change is based on speaking with fighters and managers about the new Reebok deal according to UFC senior vice president of global consumer products, Tracey Bleczinksi.

The article includes quotes from Glenn Robinson of Authentic Sports Management and Ronda Rousey’s manager Brad Slater.  Robinson indicated that the sponsorship money has dried up over the years and that the Reebok deal is “more sustainable.”  Slater acknowledged that despite the number of sponsors a fighter may have, the total money earned was not “a really significant number.”

Payout Perspective:

The new “tiered” system appears to be a much more fair system than the media rankings which were widely criticized.  The system which rewards a fighter based on time served in the UFC (or WEC or Strikeforce) is a much more stable way of determining how a fighter will be compensated through the Reebok deal.  It also gives a fighter incentive to do their best to stay in the UFC.  Still, the unknown is how much a fighter will be paid through the deal.  The UFC does leave itself an out as the policy allows it to pay fighters more in championship bouts (e.g. McGregor at UFC 189).

The article points out that the change was based on discussions with fighters and their managers about the deal.  It’s interesting that these discussions happened now and not during the time prior to the Reebok announcement.  The new change should give a fighter more certainty as to what tier they are in and an expectancy as to how much they should receive from Reebok.

UFC on Fox 15 draws 2.43 million viewers in overnight ratings

April 19, 2015

Televison By Numbers reports that the UFC on Fox 15 event on Fox Saturday night drew an average of 2.43 million viewers which narrowly edged out the New York Rangers-Pittsburgh Penguins NHL game on NBC.

UFC on Fox 15 scored 2.43 million viewers, a 0.9 rating among the 18-49 demo and a 4 share.  The event ran from 8:00pm-10:00pm.  There was little, if any overrun as Luke Rockhold stopped Lyoto Machida in the main event.  The NHL on NBC (8:00pm-11:00pm) drew similar ratings with 2.41 million viewers, a similar 0.9 rating in the 18-49 category and a 3 share.

The UFC event was also up against the NBA Playoffs which aired on cable.

UFC on Fox 11 event which aired about the same time last year drew an initial overnight rating of 1.99 million viewers and was adjusted up to 2.5 million viewers.

In terms of overall viewership for the night, TV By Numbers is reporting that 48 Hours on CBS drew 6.25 million viewers in the 10pm slot Saturday

UFC on Fox 15 ratings

Payout Perspective:

This is a very good rating for the UFC considering it went up against the NHL Playoffs.  While it’s only the first round, one would think that the New York-Pittsburgh matchup would draw considerable interest from the two of the biggest television markets.  MMA Payout will have more on the ratings as they come in.

 UFC on Fox Ratings
UFC on Fox 1 5,700,000
UFC on Fox 2 4,570,000
UFC on Fox 3 2,250,000
UFC on Fox 4 2,360,000
UFC on Fox 5 3,410,000
UFC on Fox 6 4,220,000
UFC on Fox 7 3,300,000
UFC on Fox 8 2,380,000
UFC on Fox 9 2,800,000
UFC on Fox 10 3,220,000
UFC on Fox 11 1,980,000
UFC on Fox 12 2,500,000
UFC on Fox 13 2,800,000
UFC on Fox 14 2,820,000
UFC on Fox 15 2,430,000

UFC on Fox 15 attendance, gate and bonuses

April 19, 2015

MMA Junkie reports the attendance, gate and bonuses from UFC on Fox 15.

The event drew 13,306 fans for a gate of $1.2 million at the Prudential Center in Newark, New Jersey.  The last time the UFC visited Newark for UFC 159 (Jones-Sonnen) it drew 15, 227 fans for a gate of $2.7 million.  In comparison, last April’s UFC on Fox 11 from Orlando, Florida drew 17,000 fans for a gate of $1.55 million.  Numbers via MMA Payout Blue Book.

In addition, the bonuses announced last night went to Luke Rockhold, Max Holloway, Gian Villante and Corey Anderson.  Each scored an extra $50,000 for their performances.  Villante-Anderson won Fight of the Night in which Villante won via TKO stoppage.

Payout Perspective:

It was an entertaining night of fights with the main card offering some good performances.  Although she did not win a bonus, Paige Van Zant impressed with two judges scoring 10-8 rounds in her favor.  Max Holloway and Luke Rockhold also earned impressive victories with their dominating wins.

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