16 for 16: No. 6 The year of Conor McGregor

December 27, 2016

Conor McGregor showed the world why he continues to dominate and elevate the sport of MMA.

McGregor lost in March at UFC 196, scoffed at having to do media for UFC 200 and retired, unretired and returned to avenge his loss at UFC 203 and then headline UFC 205 in New York.

At every stop, McGregor has set records and pulled huge buy rates.  He’s also elevated the career of Nate Diaz.  It was Diaz that upset McGregor at UFC 196.  Diaz’s victory meant at least a rematch with McGregor.  The two met again in a 5-round war in August at UFC 202.  McGregor pulled out the victory in the rematch.  Most believe there will be a trilogy at some point.

In the meantime, McGregor headlined UFC 205 as the company debuted in New York.  McGregor defeated Eddie Alvarez to win the UFC lightweight title.  He became the first fighter to hold two titles at the same time.  He would later agree to relinquish the featherweight title.

McGregor’s star appeal was apparent this year as he pulled out huge numbers for each of his PPV fights.

PPV Buys

UFC 196 – 1.3 million PPV buys

UFC 202 – 1.65 million PPV buys

UFC 205 – ~1.3 million PPV buys

Attendance and Gate

In addition, UFC had the third-highest-ever gate in Nevada for UFC 196.  It drew 13,412 for a gate of $8,197,628.00 at the MGM Grand Garden Arena in Las Vegas.  Their rematch in August at UFC 202 drew the fourth-highest-ever gate with 12,657 for a gate of $7,700,810.60.  Notably, Conor stars in 4 out of the 5 top gates in Nevada.

UFC 205 set a gate and attendance record with $17.7 million before a crowd of 20,427.  It was the largest gate since the stadium show at UFC 129.

McGregor has been a crossover success.  Notwithstanding the constant rumors about a mythical fight with Floyd Mayweather, he is on the mind of the mainstream.  He was regularly featured on ESPN, lampooned on Saturday Night Live and a Chris Jones Esquire feature on him made 2016’s Best American Sports Writing.

While not everything worked out for McGregor this year, including his loss to Diaz in March, a fine assessed by the NAC (which he is appealing) and a power play which failed and cost him UFC 200, he has had a remarkable 2016.  McGregor was the first UFC fighter to have made a reported $3 million for his August fight with Diaz.

With McGregor likely taking some time off, his return should only mean bigger numbers for 2017.

Barnett flagged for potential USADA violation

December 27, 2016

Josh Barnett has been flagged for a potential USADA violation for an out of competition test from December 9, 2016.

The UFC issued its standard statement with respect to potential anti-doping violations.

Barnett’s last fight was on September 3, 2016, a win against Andrei Arlovski.  He was not scheduled for an upcoming fight.

Payout Perspective:

Barnett has had a sordid past with drug test failures and this is the latest for the 39-year-old.  We will see if Barnett has an excuse for the failure but with his history, it’s hard to think that this will end well.

16 for 16: No. 7 Bellator signings includes Fedor, Sonnen, amateur wrestlers

December 26, 2016

Benson Henderson, Rory MacDonald and Chael Sonnen signed with Bellator MMA this year reflecting a new age of free agency for MMA.  Fedor Emelianenko was also signed by the Viacom-owned company in 2016.

Wanderlei Silva also joined Bellator in March 2016 but would not be able to fight until 2017 as he is still serving out his suspension from the Nevada Athletic Commission.

Bellator continued with its strategy of signing fighters with some fan notoriety to headline as well as sign accomplished amateur wrestlers to groom for the future.  Three-time NCAA Division 2 wrestling champ Romero Cotton signed an exclusive MMA contract with Bellator in November.

In addition to Cotton, Bellator added Joey Davis, Jarod Trice and Tyrell Fotune.  Ed Ruth, a Penn St. amateur wrestler signed in 2015 and made his debut in November 2016.  Aaron Pico also signed with Bellator but has yet to make his debut.

Henderson signed with Bellator after his contract ended with the UFC.  Thus far, Henderson has not fared well in Bellator.  He was thoroughly dominated by Andrey Koreshkov in his Bellator debut at welterweight.  He moved back down to lightweight to challenge for Michael Chandler’s title.  In a fight to see who would face Chandler, he defeated Patricio Pitbull Freire due to an injury by Pitbull. Henderson went on to lose to Chandler this past November for the lightweight title.

Rory MacDonald signed this August after his contract expired in June.  He has yet to fight in Bellator but it appears he will compete at middleweight and welterweight for the company.

Sonnen may have been the surprise since he has been out of action since 2013.  He signed with Bellator in September and now is scheduled for a tentpole event in January 2017 against Tito Ortiz.

The Fedor signing should be a big deal for many international and Strikeforce fans that want to relive the glory days of The Last Emperor.  Coming out of retirement, it’s likely that we won’t see him in any title fights but just features with handpicked opponents.

The strategy of signing ex-UFC talent seems to work.  Certainly, Sonnen-Ortiz will draw big ratings especially since the UFC moved its event off of the same day.  While using the former UFC fighters to draw in fans for name recognition, it allows the company to allow the young former amateur wrestlers get fights under their belt without the pressure of being a featured fighter.

We’ll likely see more UFC fighters take a look at free agency as more fighters weigh their options post-UFC sale.  This may allow Bellator to be more particular in looking at fighters to sign.

16 for 16

8.  UFC pulls credentials for Helwani after breaking news

9.  Legal troubles for Jon Jones continues

10.  WSOF legal woes continues

11.  Ronda Rousey returns

12.  Alliance MMA goes public

13.  GSP declares himself a free agent

14.  Bellator 149

15.  CM Punk debuts

16.  Former Bellator employee sues company, organization sues back

UFC 206 replay on Fox scores big Christmas Eve

December 26, 2016

The replay of selected fights from UFC 206 earlier this month drew 4.7 million viewers on Christmas Eve according to Television By Numbers.  It also drew a 1.6 rating and a 6 share in the Adult 18-49 rating making it the second highest viewed UFC show on Fox since UFC on Fox 1.

The replay was the most-viewed show Saturday night and drew the biggest share among adults 18-49 across the board on the network.

The fights on the 2-hour replay Saturday included Lando Vannata versus John Makdessi, Cub Swanson versus Doo Ho Choi, Donald Cerrone versus Matt Brown and Max Holloway versus Anthony Pettis.

Nielsen reports that the peak viewership occurred during the Swanson-Choi fight which many consider a Fight of the Year frontrunner for 2016.

Only the November 2011 fight featuring Cain Velasquez-Junior dos Santos scored more viewers when the company’s debut on Fox drew 5.7 million viewers.

Payout Perspective:

The obvious takeaway here is that the UFC has found a niche and its likely Fox will be open for this slot for next Christmas Eve.  Even on a night when many people were doing holiday activities and spending time with family, many people tuned in.  This is great for the UFC as the actual card only did 150,000 PPV buys.

16 for 16: No. 8 UFC pulls credentials for Helwani after breaking news

December 25, 2016

While it may not be a pure business or legal story, the UFC expelling Ariel Helwani and two others at UFC 199 is a reflection of the unique business of the company under Dana White and the Fertittas.

This past June, Helwani was escorted out of UFC 199 prior to the end of the event along with Esther Lin and Casey Leydon.  He was given a lifetime ban by the UFC as they revoked the credentials of the individuals representing MMA Fighting and SB Nation.  The web site and its parent company supported the three after the incident.

The reason for the revocation was due to Helwani’s discovery that Brock Lesnar was going to return to the Octagon at July’s UFC 200.  The UFC had planned to unveil this news on its own but Helwani received the confirmation.  Notably, the information was confirmed from someone with the knowledge of Lesnar’s return so the question becomes why the UFC was angered with Helwani’s report and not the fact that someone had leaked this information.

Ironically, people with knowledge of the Saturday night incident did not reveal the details or break this news until Helwani could give his first-hand account on The MMA Hour on Monday.  Thus, while media supported Helwani for getting the scoop on the Lesnar news, they were reluctant to break what they knew of the Helwani story because it was Helwani’s story.

Fortunately, cooler heads prevailed and the UFC reinstated Helwani, Lin and Leydon.

The incident highlights the current state of the media and the stories they cover.  Jeremy Botter and Darren Rovell were threatened by the UFC (Botter with a letter from the company’s attorney) when they reported news of a UFC sale in June.  While the UFC denied these allegations, we all know now that the sale was true.  Currently, the news that Ronda Rousey will not be obligated to speak to the media during fight week has infuriated many.  She has only given limited access to ESPN’s Ramona Shelburne and appeared on The Ellen Show to appease her women demo.  We now have The Player’s Tribune so that athletes can convey their side of the story without a media filter.  But the push-pull of media and its subjects and control of a story were highlighted with Helwani doing what journalists do and the UFC being angered that it could not control the story.  These things happen in non-sports as well as we know.  With the new UFC owners, we shall see how much access it will grant MMA media as opposed to its control of information and releasing it to certain outlets.

16 for 16: No. 9 Legal troubles for Jon Jones continues

December 24, 2016

It was a big year for Jon Jones. But it could have been worse.

Just weeks prior to his return to the Octagon at UFC 197, Jones was arrested for violating his probation (you may recall he accepted a plea deal for his part in a car accident with a pregnant woman).  In March, he was stopped by Albuquerque Police for allegedly drag racing.  The traffic stop was caught on camera.  He turned himself in for the violation. Fortunately, for Jones, only modifications were made to his probation and he did not have to serve any jail time.  Also, he was able to continue to train for UFC 197.

Jones returned to the Octagon in April at UFC 197 to face Ovince St. Preux after his rematch with Daniel Cormier was postponed due to a Cormier injury.

Jones and Cormier were rescheduled for UFC 200 in July as the main event.  Bur, Jones was taken off the card days before the event as an out of competition drug test was flagged.  As we now know, the banned substance he took was a bootleg sexual enhancement pill he received from a training partner.  Jones became the first UFC athlete to take USADA to arbitration related to a flagged drug test.  However, he lost at arbitration with the opinion stating that despite the fact that he may not have knowingly attempted to take a PED, he did show disregard for ingesting something for which he did not know the contents.  As a result, he was given a one year ban retroactive to July 2016.  Jones had hoped that he would be in the Octagon much sooner.

Jones settled the drug test infraction with the Nevada Athletic Commission by agreeing to a one year suspension as well which allows him to be on track to be back in the Octagon in July 2017.

This year’s legal issues lost him a lot of trust from the UFC.  He has been given chance time and again with him saying all the right things after the problems have ended, but he always finds himself in another problem.  The UFC was likely angered by having to rearrange marketing and finding a replacement so near UFC 200.  Still, he is probably one of the best pound for pound fighters in the world and the organization will welcome him back this July.

16 for 16: No. 10 WSOF legal woes continues

December 23, 2016

The World Series of Fighting will cap off its year with a show on New Year’s Eve in New York.  However, there might be cause for concern for the organization as legal problems persist.

3 new lawsuits were filed in Nevada this year which call into question the financial stability of the company.  The lawsuits reveal the fact that the company has internal issues with the people that run it and the people that fund it.  Based on the information gathered from the lawsuits, the people investing and claiming ownership (even a small %) are not the most professional people you may know.  You may recall a lawsuit in 2015 saw issues with loans and an assignment of rights for use internationally.  The new lawsuits see similar problems with loans to keep the organization afloat.

In addition to the legal troubles, WSOF cancelled two events in order to bolster its New Year’s Eve show in New York.  WSOF opened an office in New York last year and supported the push to legalize professional MMA in the state so it makes sense that they want a show in the state by year’s end.  But a New Year’s Eve show conflicts with the College Bowl Playoffs on television.

Notwithstanding what may happen on its New Year’s show, the ratings for WSOF on NBC Sports Network are slightly behind 2015’s average of 189,000 viewers.

Will WSOF survive its legal and financial woes in 2017 and continue through the year into 2018?

Fox to air UFC 206 Christmas Eve

December 23, 2016

The UFC announced that it will air a special presentation of UFC 206 on Fox on Christmas Eve Saturday night at 8pm PT/ET.

The two-hour special on the network will feature Lando Vannata’s KO on John Makdessi, a fight of the year candidate of Cub Swanson vs. Doo Ho Choi, Donald Cerrone-Matt Brown and the main event of Max Holloway and Anthony Pettis.

Payout Perspective:

Dave Meltzer pointed out that strings were pulled to air the PPV within 30 days of its original airing date as distributors have rights to this window.  But, it’s unlikely that anyone would purchase this PPV as initial estimates had it at just 150,000 buys.  The move is very good strategy despite the fact it’s a Saturday night on Christmas Eve.  There is still some leftover from NFL viewers earlier in the evening as most games have been moved to Saturday.  It also gets one of the better quality PPVs on network television with UFC 207 coming up on Friday.  Also, it can introduce the casual viewers to the likes of Cerrone and Hollway.  We will see if it can continue the momentum of last week’s UFC on Fox 22 ratings.

16 for 16: No. 11 Ronda Rousey returns

December 23, 2016

Ronda Rousey returns to the Octagon on December 30th.  Although this has yet to happen at the time of this post, it still makes the list as one of the top business stories for 2016.

The Rousey rise and fall is well-documented as she went from fan favorite to a polarizing figure among MMA fans and media.  Her recent decision to not do any media in lead-up to her return at UFC 207 has stirred some resentment from MMA folks.  This is likely due to the fact that she has allowed limited access for stories that shed positive light onto her comeback (i.e., Ellen and Ramona Shelburne at ESPN).  It’s controlling the message and not becoming entangled in internet rumors.  In the Shelburne piece, she explains that she had made too many people happy while leaving herself to deal with depression.

Clearly, Rousey hates to lose and her KO loss to Holm has set her into a self-imposed exile and she will resurface on December 30th. Like many ultra-competitive, pro athletes, Rousey hates to lose.  Her methods to return and win are turning the fans against her, but like Conor McGregor when he did not want to do media for UFC 200 for a rematch against Nate Diaz, they do not want any distractions.

With that being said, the Rousey brand is still activating around her return to the Octagon.  She is the star of a new ad campaign for the Procter & Gamble brand.  This summer she was the star of Reebok’s #PerfectNever campaign which nodded at her loss to Holly Holm.  Rousey also did was part of an ad campaign for Carl’s Jr.  So, while Rousey is turning down the usual MMA media requests, her business interests are still working for her.

The UFC has advertised UFC 207 around Rousey’s return and has seemingly left out the champion Amanda Nunes in its marketing.  But, to be realistic, it’s Rousey that is the star here and her proven record of bringing in PPV dollars is the reason why Rousey receives top billing and not the champion.

With UFC 207 being on a Friday night, you might expect a downturn in PPV buys considering the last time a UFC PPV aired on a Friday night it was UFC 141 in 2011.  Brock Lesnar versus Alistair Overeem headlined that card but the event drew 535,000 PPV buys – a low considering Lesnar was featured.  Notably, Nate Diaz-Donald Cerrone were the co-main event.

Rousey drew 900,000 PPV buys in her title defense against Bethe Correia at UFC 190 in August 2015 and her loss to Holly Holm at UFC 193 drew 1.1M PPV buys.

Rousey’s mainstream fans which include women should help bolster next Friday’s UFC 207.  Also, the curious, casual fan will likely tune in to see Rousey fight.  You might expect another buy rate around 1 million buys making 2016 the best year on PPV for the company with 5 UFC PPVs (196, 200, 202, 205 and possibly 207) over 1 million buys.

16 for 16: No. 12 Alliance MMA goes public

December 22, 2016

Alliance MMA went public on the NASDAQ stock exchange in October.  The company describes itself as a “premier development league for aspiring mixed martial arts fighters.”

In an interview with CNN Money, its Alliance MMA (no relation to the SoCal Fight Gym) CEO Paul Danner outlined a plan in which it would sponsor fights across the country through regional promotions.  Its revenues will be drawn from the attendance, live fight access and attraction of national sponsorships.

More information on the stock can be found on Nasdaq.com.  Its stock symbol is (AMMA).

According to its company financials, its net income is -$223,941 and its total assets is $56,766.  Its total liabilities are $661,874.

Its initial share price is $4.50 per share.  As of Thursday, December 22nd, it is trading at $3.61.

In an interview with Alliance MMA’s Robert Haydak, the company wants to have a similar footprint to that of the WWE when Vince McMahon, Jr. acquired smaller regional promotions and became a national presence. They consider themselves the “NCAA to the NFL.”  Essentially, a feeder league for the UFC, Bellator, OneFC and others.  At this point, Alliance MMA has acquired 6 regional promotions with the intentions of more.

The company has retained former UFC fighter relations pro Burt Watson to be on its Board of Directors and serve as its head of fighter relations.

It’s an interesting strategy to raise capital and we will keep an eye on Alliance MMA in 2017 to see if it can execute its strategy.  Placing itself as a feeder league for the bigger organizations is an interesting niche and we shall see if there is a sufficient amount of interest from the public in purchasing its stock.

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