UFC gets a Cryptocurrency sponsor

December 27, 2018

The UFC is getting an “Official Cryptocurrency Partner” for UFC 232 as Litecoin announced on its website that it has signed a sponsorship deal to appear in the Octagon at UFC 232: Jones Gustaffson 2 at the Forum in Inglewood, California. It is the first deal of its kind for the UFC.

According to its web site announcement, “We view this sponsorship as the first step to what will hopefully be a long and fruitful relationship with UFC.  We look forward to the possibility of doing some amazing things with this incredible organization.”

The Litecoin Foundation is a non-profit organization registered in Singapore.

Cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units and verify the transfer of assets.

In a bit of irony, the New York Times ran an article on Thursday discussing the depletion of cryptocurrency.  Notably, the article states that Litecoin was worth $366 a coin last year.  It’s now $30.

Payout Perspective:

The deal seems like a “one off” where the company hopes to get some publicity for sponsoring this event.  But, with the decline of cryptocurrency in general, I’m not sure how long it can sustain this type of media buy.  While it may capture the young demo, I don’t know how many people it can convert to its product.  It would be interesting to hear the plan for activation with the UFC.

MMA Payout Year in Review: No. 8 – Golden Boy promotes first MMA event

December 27, 2018

Golden Boy Boxing made its debut promoting mixed martial arts this past November with a card in Inglewood, California.  The event was headlined by Tito Ortiz taking on Chuck Liddell.

The event was centered around the main event which was a farce to begin with as it was clear that Liddell was in no shape to fight.  The California State Athletic Commission, the one that issued a license to Jon Jones, provided Liddell with the license to fight Ortiz.  Based on the looks of Liddell, the 48-year-old was in no shape to fight, yet, CSAC granted him the opportunity.  To no surprise, Ortiz put Liddell out of his misery in the first round.

Maybe the only good thing that came out of the event was the UFC signing Deron Winn. The 5’7 205-pound Winn earned a victory over former UFC light heavyweight Tom Lawlor.

The pre-fight press conference was one of the worst showings to promote an event as Oscar De La Hoya appeared to be preoccupied with something else.

De La Hoya hopes to be a disrupter in the world of MMA and become an alternative to the UFC as he took aim straight at White.  The head of the UFC went right after the Golden Boy and even included salary and PPV specifics in a piece authored by Yahoo! Sports Kevin Iole.

For his troubles, Liddell made $250,000 while Ortiz earned $200,000.  The rest of the payouts, attendance and gate from the event are below.

11-24-18 GB MMA Payouts by on Scribd

11-24-18 GB MMA Box Office by on Scribd

The PPV was originally priced at $49.99 but was reduced by $10.00 to $39.99.  According to multiple reports, it was estimated at 40,000 PPV buys and as low as 30,000 PPV buys.

Payout Perspective:

Despite the low PPV numbers, Golden Boy professes to continue promoting MMA events.  While the competition may be beneficial for fighters, I’m not sure its debut was something to redo.  If it can be a place for entertaining fighters that no longer want to be in the UFC or Bellator, there could be a place in for it in the MMA stratosphere.  The question will be if Oscar De La Hoya will be engaged enough with this venture to ensure that he develops a quality product rather than attempting to “hot shot” events with something like Ortiz-Liddell.

MMA Payout Year in Review: No. 9 – NLRB denies Leslie Smith claims against Zuffa

December 26, 2018

The 9th MMA Payout Story of the year is Leslie Smith’s Charging Letter to the National Labor Relations Board in which she claimed that she was discharged by the UFC for her attempt to organize fighters via Project Spearhead.

Smith, a women’s bantamweight, was known for her work with the Professional Fighters Association and then launched Project Spearhead.  She actively recruited current UFC athletes to sign cards which would allow the NLRB to conduct a vote to determine if the fighters could be considered employers of the UFC.

In April 2018, she was scheduled to face Aspen Ladd at UFC Fight Night: Atlantic City.  However, Ladd missed weight and Smith declined to fight at a catchweight.  It was Smith’s last fight on her contract and she sought to see if she could obtain a contract renewal with a monetary raise as well as fighting on the card.  The UFC did not negotiate, paid Smith her show and win purse and terminated her contract.

In May 2018, Smith filed a Charging Letter with the NLRB claiming that she was terminated due to her work with Project Spearhead.  It appeared that there was potential for success as the Regional Office determined that Smith’s claims had merit.  Her case was then moved to the D.C. Office as Smith’s lawyer claimed that this was done as a political favor by the Trump Administration on behalf of Dana White.

In September 2018, the D.C. office dismissed Smith’s claim arguing that there was no evidence which showed she was dismissed due to the protected activity of organizing fighters.  Rather, the NLRB believed it to be more of a contractual dispute that reached an impasse.  Smith appealed the decision arguing that there were several factual misstatements and omissions in the opinion which should overturn the decision.  But the NLRB upheld the decision affirming Smith’s decision lacked merit.

The only recourse at this point would for Smith to file an appeal with the U.S. Court of Appeals.

Payout Perspective:

Smith has gained some publicity this year with her fight as she was featured this fall on an episode of Full Frontal with Amanda Bee.  As many speculate, the NLRB administration decisions are political dependent on the administration in charge.  Smith had viable claims against Zuffa but there was not enough proof according to the NLRB in D.C.  This is disappointing since the regional office had concluded that Smith’s claims had merit.  It would be interesting to see if another appeal is made on her behalf.  At this point, Project Spearhead and the attempt to organize fighters lives with fans, but not with fighters.  We shall see if there is any more movement from Smith or other fighters in 2019.

MMA Payout Year in Review: No. 10 – The UFC Antitrust Lawsuit rolls on

December 26, 2018

MMA Payout is doing its annual review of top business stories for the year.  The first story we take a look at is the ongoing Antitrust lawsuit which had several key developments this year.

First, Judge Boulware denied Zuffa’s Motion for Summary Judgment on Friday, December 14th.  It did not decide on class certification on the day as the Court made it clear it wanted to hear from the experts in the case for him to determine if there was a viable case on the part of the Plaintiffs.

Earlier this year, experts for Plaintiffs and Zuffa issued the experts reports in this case.  The reports assessed things such as the liability of Zuffa and potential damages.  Zuffa, of course, shot down these arguments asserted by Plaintiffs’ experts.  They, then filed a motion to exclude Plaintiffs’ expert citing (in general) that the opinions did not follow traditional scientific opinions.  A bulk of the reports were sealed as the experts reviewed confidential information.

Plaintiffs also filed for Class Certification, a requisite of Class Action status.  Zuffa opposed the motion.  At this time, this motion is on hold pending Judge Boulware hearing more on the subject from the experts.

As discussed about on Show Money in December, it appears that the lawsuit will come down to Plaintiffs’ expert’s assertion that the way to determine antitrust injury is based on “wage share” versus “wage level.” Wage share, adopted by Plaintiffs’ is looking at the wages of athletes in comparison with the revenues of the company.  Wage level, adopted by Zuffa, is looking at the wages over a period of time and not in comparison with company revenues.  Clearly, a wage share outlook would favor Plaintiffs if they are asserting that their salaries have been artificially depressed due to anticompetitive measures by Zuffa.  Wage level would favor Zuffa since its clear that salaries have increased over time.

Payout Perspective:

Do not look for the resolution of this case in 2019.  Even if Judge Boulware were to dismiss this case, Plaintiffs would seek to appeal the decision.  Zuffa would do the same if there would be an unfavorable ruling for its case.  The only way this case would end in 2019 is if the parties decided to settle the issue short of trial.  While this would be out of the question, if the Judge were to impose his will on the parties to settle, I would foresee this happening.

Jon Jones enrolls in VADA testing

December 25, 2018

On Monday, ESPN reported that Jon Jones has enrolled into VADA as a result of UFC 232 being moved to California from Nevada.  Previously, Jones had turned down the suggestion by the California commissioners to enroll in VADA.

According to the ESPN story, a condition of Jones receiving his license was enrolling in the VADA program.  Jones is also committed to the UFC Anti-Doping Program conducted by USADA.

UFC 232, which occurs this Saturday was abruptly changed from Las Vegas, Nevada to Inglewood, California due to an out-of-competition test which was flagged by USADA for metabolites of the same banned substance Jones tested positive for in July 2017.  The UFC and USADA indicated that the test were remnants from July 2017 despite the fact that he had cleared several drug tests between then and now.

Payout Perspective:

Putting aside the PR gaffes going on here with Jones and his lawyer deciding not to let Jones go into VADA testing last week (with the knowledge of the failed out-of-competition test) and now deciding to sign up for it when essentially forced into the program, the question of this event is an issue.  Displaced fighters and fans have really made this event hard to support.  With additional testing, it puts a little more stress on Jones and also brings up the concern that he may not pass a drug test which would make this whole situation another catastrophe with Jon Jones at the center.

UFC 232 moves to LA due to Jon Jones drug test

December 23, 2018

Due to a drug test which revealed metabolites related to Turinabol in an out-of-competition test of Jon Jones, UFC 232 is moving from the T-Mobile Arena in Las Vegas, Nevada to The Forum in Inglewood, California.  The reason being is due to a licensing issue with the state of Nevada.

An out of competition drug test earlier this month from Jones turned up Turinabol, the same substance that caused his 15-month suspension.  Again, USADA indicated it had no idea where the Turnabol came from and there was some scientific things that were explained by UFC executive Jeff Novitsky.  But, to be honest, not of that really matters.

Why?  Well, what I explained above and from reading multiple reports indicates that Jon Jones had a test flagged for a banned substance.  This also means he failed a drug test.  Brett Okamoto succinctly breaks it down

How a residual amount of the substance can stay in one’s system for over a year is baffling.

USADA does provide an explanation:

Last week the California State Athletic Commission gave approval to Jones for a temporary license despite its concerns with how USADA handled Jones’ case.  Rather than take Jones off the card, it has moved the entire show to another state where Jones has a license.

This did not take into consideration the money expended by fans and athletes for attending the event this Saturday.  The UFC indicated fans will get refunds on the Nevada tickets but it does not account for the hotel and airfare fans had expended.

Payout Perspective:

This is a complete public relations disaster by the UFC.  The only saving grace for the UFC is for Dana White to throw his tantrum similar to the one he gave about Greg Hardy being in the UFC.  Then, he’ll just enlist some folks to shout down those questioning him.  Why one fighter has this much importance and is getting the benefit of the doubt once again reflects that the UFC is built on just a handful of stars.  And those stars take advantage of the UFC just as much as the UFC takes advantage of them.  The good news, is the UFC probably knows that they are going to score on PPV no matter the inconvenience of the fans.

As for the UFC Anti-Doping Policy, USADA is showing its flexibility in dealing with Jon Jones.  Not only has it once again emphasized that this test result was not his fault, it is not sanctioning him.  Yet, it cannot invest on determining why Jones had this in his body in the first place.  Moreover, in discussing this issue, it skirts the issue about Jones failing the drug test which would likely take him off this card.

Notably, California suggested Jones enroll in VADA to clarify any issues with his image.  Jones denied it.  And his opponent this Saturday, Alexander Gustafsson noticed.

He does mean VADA testing above but its clear that he doesn’t believe in Jon Jones’ drug test capabilities.

PBC on Fox drew 1.69M viewers Saturday night

December 23, 2018

PBC on Fox Saturday night drew 1.69 million viewers according to Television By Numbers.  The first event for PBC as the anchor to Fox drew 0.5 in the Adult 18-49 demo and a 2 share in fast overnights.

The event was set to air from 8-10:30pm and the ratings reflect just the first two hours.  The event featured the Charlo brothers in the main events of the evening.  Jermell Charlo was upset by Tony Harrison and Jermall Charlo was not impressive in a win against Matt Korobov, a last-minute replacement.

The last PBC on Fox in August drew 933,000 viewers.  In April another PBC on Fox drew 880,000.  In February, PBC on Fox drew 1.06 million viewers.

PBC on Fox was last in overall viewership for its time slot but second behind a Dateline NBC rerun in A18-49 viewership.

Payout Perspective:

The ratings are still below the pace of UFC on Fox cards which may be seen as a disappointed considering the additional shoulder programming Fox gave PBC including mentions during the NFL on Fox as well as a ton of shoulder programming on FS1.

Did Dana White inadvertently help Michael Chiesa’s lawsuit against Conor McGregor?

December 23, 2018

The attorney for UFC welterweight Michael Chiesa filed an Amended Complaint earlier this week in his lawsuit against Conor McGregor. In this amended version, Chiesa cites New York’s “Son of Sam” Law which states that McGregor should not be able to benefit from his crime.

Chiesa is suing McGregor (technically his company) and the Barclay’s Center for the April 5, 2018 incident in which he threw a dolly at the bus carrying several UFC fighters including Chiesa and Khabib Nurmogomedov. As a result of McGregor’s action, Chiesa was bloodied from shattered glass and had to be taken off the card. According to the amended complaint filed on December 20th, Chiesa was to be offered the opening spot against Khabib Nurmogomedov but for his injury. Chiesa claims that when Max Holloway was unable to fight, a UFC executive texted him about the possibility. Its presumed that the text was sent prior to knowledge of Chiesa’s health status and that he would have taken the fight.

The “Son of Sam” law in New York was made to prevent criminals from profiting from the publicity of their crimes. The law was named after serial killer David Berkowitz, known as “Son of Sam,” gained fame in the mid-1970s for his crimes. There was widespread speculation that Berkowitz would profit from his murders by selling his story to be made for a book or film. As a result, New York passed a law preventing someone from profiting from their crimes.

McGregor was charged with multiple crimes and while he was acquitted of his wrongdoings, Chiesa claims that the law would apply since the law relates to those charged of crimes.

Here, Chiesa is claiming that McGregor has made money off of this incident. The complaint notes McGregor selling his whiskey, “Proper 21,” during his UFC 229 press conference. Also, included in the lawsuit, was McGregor’s quote from the press conference that he knew that he was going to go after Khabib that day. There is also the use of the footage to build UFC 229 and Dana White’s proclamation that his use of it was part of the story and build for the fight.

518314 2018 Michael Chiesa … by on Scribd

UFC 229 was the highest-grossing PPV in the company’s history with a reported 2.4 million buys.

Chiesa’s amendment to his lawsuit, if agreed by the trier of fact, would mean that he could feasibly claim McGregor’s part of his reported earning from UFC 229 and/or sales from Proper 21.  While its not clear how the law would apply and if there would be a disgorgement (giving up the money) of profits by McGregor, it puts the welterweight with an interesting legal argument.

Payout Perspective:

It’s an ingenious strategy to utilize the “Son of Sam” law here especially when Dana White was adamant that they utilize the bus footage in its build for what became the biggest PPV in the history of the UFC.  McGregor sold “Proper 12” at the pre-fight press conference and a lot of conversation surrounded the April incident at Barclay’s.  While McGregor may claim that the press built this up themselves, we have White explicitly stating his reasons to promote the attack.  Thus, it was generated by McGregor’s actions and facilitated by the UFC.  It will be interesting to see if McGregor blames the UFC for its use of the footage or not.

McGregor’s attorneys had filed a motion to dismiss certain claims including Chiesa’s claims for negligence, negligent infliction of emotional distress and intentional infliction of emotional distress.  With the amendment of his lawsuit, this may make McGregor’s attorneys have to retool its motion to dismiss as one might assume that the new claim regarding the Son of Sam law would likely be addressed in a motion to dismiss by McGregor.

MMA Payout will keep you posted.

Report has UFC 231 between 240-300K PPV buys

December 22, 2018

UFC 231 drew in the neighborhood of 240-300K PPV buys according to a report by Dave Meltzer of The Wrestling Observer.  The event featured Max Holloway as he defended his Featherweight title against Brian Ortega.

UFC 231 took place in Toronto, Ontario Canada and was a sellout according to UFC officials.

The Prelims drew 786,000 viewers on FS1.  Notably, the event took place on the same night that Vasiliy Lomachenko took on Jose Pedraza on ESPN. The fight drew over 2 million viewers and was the second-most viewed fight on ESPN this year.

Payout Perspective:

The unofficial PPV buy rates are above average if you consider that many run-of-the-mill PPV buys hover around 200K.  The return of Holloway against a very good challenger in Ortega plus the 125 pound women’s title fight between Valentina Shevchenko and Joanna Jedrzejczyk was a very enticing card although none of the fighters are proven draws.  If Holloway can stay healthy, a possible showdown with Conor McGregor could be a big fight down the road.

NLRB denies Leslie Smith appeal affirming the claims lacked merit

December 21, 2018

MMA Payout has obtained the NLRB denial letter provided to Leslie Smith’s attorney after their attempted appeal of Smith’s charge that her contract was terminated due to the protected activity of trying to organize athletes.

The letter, dated September 19, 2018, states that Smith’s charge “lacks merit.”  The letter affirms its original decision as it states, “[t]here is significant evidence suggesting that the breakdown in contract negotiations in April 2018 occurred for nondiscriminatory reasons related to her demands.”  The NLRB weighed Smith’s offer to the UFC in which she requested an extension and raise in April 2018 after she learned her opponent for the last fight on her contract did not make weight as evidence that this was more of a contract impasse than a pretext to terminate her contract.  Smith was public with her attempts to sign up fighters for Project Spearhead, an organization which is making the attempt to bring fighters together for better work conditions.  Instead of attempting to negotiate with Smith, the UFC decided to end their contract with her.

Leslie Smith UFC NLRB Dismi… by on Scribd

Smith and her attorney made the salient argument that under the terms of the Bout Agreement, she should still have a fight left on her contract.  Yet, the NLRB did not address this point.  Rather, the fact that they concluded that Smith’s contract ended and was not related to her efforts to organize fighters.

Smith’s Charging Letter seemed promising when she filed it last spring.  An initial determination from the Regional Office determined that Smith’s claims had merit.  However, soon after the ruling, her case was sent to Washington D.C. for review.  In September, her claim was dismissed.  The subsequent appeal was made and the letter essentially closes her case.

At this point, Smith’s recourse would likely be filing an appeal with the U.S. Court of Appeals.

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