Unredacted passages and footnotes reveal more about Zuffa’s business in plaintiffs’ expert report

July 31, 2019

MMA Payout had the opportunity to review the proposed amended redactions from Zuffa to Plaintiffs’ expert, Hal Singer in the UFC Antitrust lawsuit. The newly revealed sections that were previously blocked from public view, gain some insight into the factual underpinnings of the promotion.  This is the first of a couple posts related to Dr. Singer’s expert report.

Late last month Zuffa, filed a revised version of redactions it sought for Dr. Singer’s expert report. The newly unveiled versions of the report provide some innocuous passages as well as some interesting tidbits which the promotion originally wanted redacted from public view.

The Last Hope – Strikeforce

One of the more interesting unredacted sections include deposition testimony from Bellator head Scott Coker.  While with Strikeforce, Coker indicated that the promotion was the last possible chance of competition with the UFC.  The line might remind you of this.

The acquisition of Strikeforce occurred after Affliction’s demise.  Singer’s expert report reflects the notion that Zuffa tried to exert its market force over the competition.  Coker stated at his deposition:  “If you can’t battle these guys [UFC] it’s over for the MMA industry.  UFC will be the only one left.  We’re the last chance.  Otherwise, fighters’ purses will go down if UFC is the only one – is the only one period.  We’re Luke Skywalker and UFC is Darth Vader and the Death Star.”

Interesting enough, as many know, after Strikeforce was engulfed by the UFC, Coker was  a part of the company until he was able to go to Bellator.  Coker sent this tweet after Cris Cyborg, who is heading into free agency, won her fight this past Saturday at UFC 240.

Why purchase Pride?

The newly unredacted information in the report includes emails from Zuffa’s outside counsel addressing the company’s acquisition of Pride.  In a rather ominous email that may be one to cover the attorney, it states, “the strategic/preemptive nature of this acquisition (i.e., to stop others from buying it) and you having seriously contemplated acquiring them only to shut down their business and utilize their Fighters in the UFC.”  Another unredacted footnote from a corporate representative from Deutsche Bank stated that ‘based on conversations with Zuffa and materials provided by Zuffa, Deutsche Bank’s interpretation was that “Each acquisition [Pride, WEC and WFA] had unique offensive and defensive purposes at the time.  However both the WFA and Pride transactions resulted in Zuffa’s roster of elite fighters expanding significantly.”

It’s worth noting that while the Deutsche Bank comment may buttress the argument of a predatory Zuffa looking to buy up the rest of the MMA promotions in the space, it is speculation and essentially hearsay – a statement made without foundation to assert the truth of the matter.  Deutsche made the conclusions based on conversations and documents not known in the passage so its hard to say whether the documents would be reliable.  Yet, you may infer that the position that Deutsche Bank was in as a lender to Zuffa would command truth and honesty on the part of the organization.

UFC pays DeathClutch

Brock Lesnar’s pay was revealed in a footnote that was unredacted.  When he fought as champion, Lesnar’s company, Deathclutch, was paid $812,500 within 30 days of a fight.  He was then paid another $812,500 within 60 days following the completion of the bout for a total of $1.625 million minus deductions and withholdings. Lesnar was paid a sum of $750,000 for fights where he was not UFC Champion. Similarly, he was paid $375,000 within the first 30 days and another $375,000 within 60 days.

On the issue of fighter pay within the UFC, Singer’s report is a Letter of Agreement from Lyoto Machida that gave him a $100,000 bonus for a fight stoppage.  Presumably this would be in addition to any Performance or Fight of the Night bonus.

The Letter of Agreements according to the report were given to a “small number of top-tier Fighters.”  As explained by Dr. Singer, they were “generally lump-sum payments to Fighters following a Live MMA Event, with the amount often contingent on the outcome of the fight.   Thus, they would not appear in commission reports on purses.  Some were based on a specific outcome and may “also incorporate sponsorship or endorsement agreements or both.”  Dr. Singer explained that the use of these agreements would keep the salaries of Fighters unknown to the public.

Evidence of Counterprogramming to hurt rivals

Another swath of footnotes revealed UFC plans to counterprogram rivals.  The UFC began to air its programming opposite other promotion’s big events starting in 2006.  The UFC first aired a taped compilation of fights opposite a WFA PPV.  In 2008, it countered Affliction’s PPV with a ‘re-run of a prior pay-per-view event on free television.  White openly admitted to throwing together a fighter card  in five weeks in an attempt to choke out another promotion.

 

More boxing coming to UFC Fight Pass in revamp of digital platform?

July 31, 2019

Is a Fight Pass revamp coming?  If so, it will happen this fall.

According to Sports Business Journal’s John Ourand his sources tell him that the digital streaming service is set to relaunch by October.  Without saying, Ourand notes that there will be “addition of boxing programming” on FightPass.

UFC Fight Pass has Roy Jones, Jr.’s boxing promotion on its platform but one might assume that there is more boxing coming.  If we are to piece this together with the recent news that someone has been hired to Zuffa Boxing, it sounds as though that Fight Pass is diversifying to include more boxing.

Fight Pass commercials have hyped more combat sports in addition to MMA.  Ourand inquires as to how this will play with ESPN which has used UFC programming to bolster ratings.  Also, what does it due with DAZN’s streaming business.  Another query would be how Top Rank feels about one of ESPN’s properties becoming a competitor in the field of boxing.

The news is interesting considering that Zuffa Boxing is imminent and appears to have a home on Fight Pass.

Showtime Boxing draws 553,00 viewers for Davis-Nunez fight

July 30, 2019

Showtime Boxing on Saturday night drew 553,000 viewers for the Gervonta Davis-Ricardo Nunez feature on the network.

The event drew 188,000 viewers in the A18-49 demo and a 0.33 share per Nielsen via ShowBuzz Daily.

Davis KO’d Nunez in the second round in front of a hometown crowd in Baltimore, Maryland.  Davis retained the WBA Super Featherweight World Championship over the promotion’s mandatory challenger.

The event improved greatly over the June 29th Showtime event which drew just 379,000 viewers for the feature bout of Jermall Charlo and Brandon Adams.  May’s Deontay Wilder-Dominic Breazeale fight drew 791,000 viewers.  April’s Robert Easter, Jr. Rances Barthelemy fight garnered 312,000 viewers.

Payout Perspective:

The event on Saturday was a bounce back from June’s Showtime televised event.  The viewership tuned in to watch a Floyd Mayweather, Jr. protégé return to action before a hometown crowd.

UFC 240 Prelims on ESPN post 722K viewers

July 30, 2019

The UFC 240 PPV Prelims drew 722,000 viewers on ESPN Saturday night.  The event drew 357,000 in the A18-49 demo and 0.46 overall share.

The prelims aired on ESPN prior to the PPV card Saturday night from Edmonton.  The feature bout of the prelims saw Viviane Araujo defeat Alexis Davis in a minor upset.  The undercard also saw three bonus winners as the Fight of the Night between Deiveson Figueiredo and Alexandre Pantoja and Hakeem Dawood’s

It was the lowest-rated viewership for a PPV Prelim on ESPN.  The previous low was UFC 237’s 813,000 viewers.  The main card featured Max Holloway as he defeated Frankie Edgar to successfully retain his Featherweight title.

Payout Perspective:

One might suspect that based on the low viewership for the prelims that the buy rate did not fair well.  Certainly two PPVs in the same month is hard and considering the lack of support after the two main fights on this card, it was a pretty easy PPV to skip.  The 722,000 is a low for the prelims on ESPN but since there were many factors to attribute to the numbers, one might suspect next month’s event in Anaheim will bounce back.

UFC 240 attendance, gate and bonuses

July 28, 2019

UFC 240 took place Saturday night in Edmonton, Alberta Canada.  The promotion awarded its $50,000 bonuses which included two Performance Bonuses and a Fight of the Night.

Deiveson Figueiredo’s victory over Alexandre Pantoja drew Saturday’s Fight of the Night as the two flyweights put on a show on the Prelims which aired on ESPN.  In addition, Geoff Neal won a Performance Bonus for his second-round stoppage over Niko Price.  Also, Hakeen Dawodu stopped Yoshinori Horie in the last minute of the final round of their fight on the Prelims.

The event drew $1.4 million (U.S) and 12,144 from Rogers Place.   The numbers were announced post-fight by the UFC.

The main event saw Max Holloway successfully defend his Featherweight title against Frankie Edgar.

Payout Perspective:

The Prelims produced a lot of the action Saturday with Figueiredo-Pantoja and Dawodu’s KO.  The attendance and gate were very good although we don’t know the amount of comps for the event.  Still, a pretty nice showing from the Canadian crowd.

PFL 5 main card on ESPN2 draws 165K viewers

July 27, 2019

The Professional Fighters League on Thursday night drew 165,000 viewers on ESPN2 according to Nielsen via ShowBuzz Daily.  PFL5’s main card aired on the network.

The main card which aired at 9 pm ET featured Lance Palmer as he defeated Luis Rafael Laurentino via TKO in Featherweight action.  Also, Chris Wade secured a spot in the playoffs with a unanimous decision over Akhmet Aliev.

PFL 1: 137,000 (prelims)

PFL2:  120,000 (prelims)

PFL 3:  113,000 (prelims)

PFL 4: 227,000 (prelims)

PFL 5: 165,000

Payout Perspective:

A couple weeks after posting a season high for its prelims, PFL 5 dips with a main card featuring Featherweights and Lightweights.  This has to be disappointment since it was in a better time slot and it was presumably better fights.

UFC 240 tickets affordable as ticket demand non-existent

July 26, 2019

UFC 240 this Saturday in Edmonton, Alberta, Canada looks to be one of the most affordable in recent memory.  According to SeatGeek, the ‘get-in’ price on the secondary market is $110 USD.

As of Friday afternoon, the market appears to be very soft for this event featuring the Featherweight title defense of Max Holloway and Frankie Edgar.  The event is taking place at Rogers Place.

Ticketmaster has a lot of seats available as of Friday afternoon.  The lowest price listed is $181.85 Canadian.

The average resale price for a ticket is $153.  According to SeatGeek, comparing UFC 240 to the last ten UFC PPV events, it’s the least expensive ticket based on average resale.

The October 2017 PPV in Vegas featuring Tony Ferguson and Kevin Lee was the last event which was more affordable ($101).

Notably, SeatGeek saw on Friday a few tickets in the first or second row going for $454.

Payout Perspective:

With just one real big fight on the card followed by the Cyborg-Spencer fight, this event is more of a Fight Night than anything else.  The secondary market for this event is predictably soft but affordable for fans in Edmonton that want to see MMA live.  As for the prospects of PPV buys, this one won’t be doing much business for ESPN

Pac-Thurman attendance, gate, comps and payouts (Pac pays a lot for tickets)

July 25, 2019

The Nevada Athletic Commission disclosed the payouts, attendance and gate for the Manny Pacquiao-Keith Thurman fight.

The event this past Saturday sold 11,436 tickets with another 1,675 comped.  The gate drew $6,260,275.

The commission also disclosed the payouts from the event.  Manny Pacquiao received $10M (although likely more) for his fight with Keith Thurman who received $2.5M (although likely more).  Pacquiao received an approved advance of $2 million but also paid $4.22M in federal taxes.  He paid $150,000 in sanction fees.  Also under incidentals, he paid $340,952.02 in flights and $200,000 in hotels.  His share was $1,789,047.33.

The pay is as follows:

Omar Figueroa, Jr.:  $300,000

Yordenis Ugas:   $300,000

 

Sergey Lipinets:  $250,000

Jay-Ar Inson:  $10,000(late fill-in was said to be receiving more)

 

Luis Nery:  $150,000

Juan Payano:  $25,000

 

Caleb Plant:  $750,000

Michael Lee:  $250,000

 

Efe Ajagba:  $15,000

Ali Eren Demirezen:  $10,000

 

Austin Dulay:  $10,000

Justin Pauldo:  $10,000

 

Abel Ramos:  $10,000

James Williams:  $10,000

 

Genesis Libranza;  $3,000

Carlos Maldonado:  $9,000

 

John Dato:  $6,000

Juan Antonio Lopez, Jr.:  $5,000

 

Emanuel Medina:  $8,000

Peter Dobson:  $8,000

Payout Perspective:

Notable that on a card where 1,675 were comped, Pacquiao still paid $1.3M for tickets.  Of the reported $10M, he netted $1.7M.  He is receiving more than the reported amount but it is still an astronomical amount to pay.  The lowest paid fighter on the card, Libranza made just $3K in a KO win over someone who made three times as much as him, Carlos Maldonado.  The 25-year-old Filipino is 19-1.

Aurora Cannabis and UFC launch joint research project on CBD

July 25, 2019

Aurora Cannabis and the UFC have launched an endeavor for researching the use of CBD products for MMA athletes.

The company’s CBD sponsor, Aurora Cannabis, is launching the research program which will produce multiple studies under the terms of the partnership with the UFC.

According to the release, the research will examine the use of hemp-derived CBD as an effective treatment for pain, inflammation, wound-healing and recovery on MMA athletes. The research data will be used to drive the development of ‘science-backed, hemp-derived CBD topicals that will be safe and reliable.’

Any resulting product will come to life in the U.S. under the new high-performance sports brand ROAR Sports, a portfolio of high-quality, hemp-derived CBD topical treatments scientifically formulated with elite athletes in mind.

The clinical study will take place at the UFC Performance Institute.

Payout Perspective:

This is a pretty big announcement that could change the way UFC athletes train and recover.  It also could mean a financial boon for the UFC.  The joint study between Aurora Cannabis and the UFC may result in a product that one would suspect the fight promotion would have a stake in.  The CBD industry is gaining momentum in the United States as many sports are looking into the benefits of cannabis as states have legalized it for medicinal and recreational use. The UFC is attempting to get ahead of the curve in how CBD is used and its ability for helping athletes.  This will be an interesting issue to keep in mind as the PI becomes more involved with UFC contracted athletes.

Zuffa Boxing makes a hire

July 24, 2019

Zuffa Boxing may be taking another step to becoming a reality and likely a major player in the industry.

Mike Coppinger of The Athletic reports that Zuffa has hired an individual to run Zuffa Boxing.

White has intimated the promotion’s foray into boxing and one might expect Zuffa Boxing to become a disrupter in an industry that is ‘antiquated’ as described by Coppinger.

White was in the middle of the Conor McGregor-Floyd Mayweather fight in August 2017 which landed the largest PPV buy rate in the history of combat sports.  During that promotion, White collaborated with Al Haymon and Showtime for that fight but will be competing with the likes of PBC, Top Rank, Matchroom, Showtime and DAZN.

Payout Perspective:

Certainly, White is a polarizing figure in the sport of MMA and has received a fair amount of criticism balanced with praise for making the UFC the power it is today.  With boxing on an ascension due in part to content-hungry digital platforms such as ESPN+ and DAZN, the prospects of another promotion entering are good.  Yet, one has to wonder if there is enough talent for White to sign enough boxers to his brand.

The good news for Zuffa Boxing is that it has a built-in infrastructure in place.  The construction of the Vegas-based UFC Apex gym and Performance Institute are enticements for boxers.  One would think that the gym and training facility would benefit boxers and the gym could be a place to broadcast shows either through a television/digital partner or through Fight Pass.  No word on a launch date, but with the announcement of a hire, one would suggest that the move to boxing is happening sooner than later.

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