MMA Payout Year in Review: No. 1 – Conor McGregor returned and headlined biggest PPV in UFC history

December 31, 2018

The return of Conor McGregor to the Octagon to main event the biggest UFC PPV in its history is the number 1 MMA biz story of this year.

The event drew a reported 2.4 million PPV buys and was mired in controversy for its ugly ending with Khabib Nurmogomedov jumping the cage and going after Dillon Danis and Conor McGregor taking a swing at one of Khabib’s teammates. The event drew 1.9 million traditional PPV and an estimated 470K-480K streaming buys per Dave Meltzer’s report this past October.

McGregor’s return and storyline began in April 2018 when he got on a plane from Ireland to fly to New York to go after Khabib at the Barclay’s Center in Brooklyn. As we know, he threw a dolly at the bus Khabib was on which led to his arrest. He was later cleared of any wrongdoing which shows us that the justice system can be bought.

The criminal activity led to the disruption of a UFC PPV event and 3 fights being taken off the card at UFC 223.

Yet, this added to the story for the UFC as the bus attack was played up in promoting UFC 229.

The press conference between Khabib and Conor included McGregor promoting his new whiskey, Proper No. Twelve as well as personal attacks by both. McGregor also took a shot at Khabib’s manager, Ali Abdelaziz in calling him a terrorist.

The personal attacks did not sit well with Khabib as it was clear it was extra motivation for him. He dominated their fight and submitted McGregor, held on to it a little longer than normal and then spat on him. Then the aforementioned melee ensued.

While most MMA weirdos thought this was the norm, it was a bad look for the sport. But the oddity of combat sports is that despite the after-fight brawl, the rematch will do big money.

At this point, its not clear what will become of the two. McGregor signed a six fight deal to fight in the UFC. Khabib has been on a championship tour of sorts after his fight but his purse from the event is still held up by the NAC due to his actions.

Our review of the event is here and my thoughts about Chickens Coming Home to Roost.

The event was the biggest PPV in the company’s history and it highlights the drawing power of McGregor. The concern will be what happens if McGregor goes on a losing streak. He still has drawing power and the charisma to bring in the mainstream. But if he loses a Khabib rematch, a Tony Ferguson fight and/or a Max Holloway return bout (all fights seem possible in 2019), we could see some problems with the selling of McGregor.

Still, McGregor’s drawing power is strong and he has devout fans that follow him. He came back from the Mayweather loss with the same swagger as before. Can he continue the same after Khabib? Likely.

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

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

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

7. MMA Payout Year in Review: No. 7 – DAZN enters sports streaming market

6. MMA Payout Year in Review: No. 6 – Josh Barnett “wins” at USADA arbitration, but still leaves promotion

5. MMA Payout Year in Review: No. 5 – PFL debuts

4. MMA Payout Year in Review: No. 4 – ONE making moves, signs media deal with Turner

3. MMA Payout Year in Review: No. 3 – UFC signs media rights deal with ESPN

2.  MMA Payout Year in Review: No. 2 – Jon Jones returns to the UFC with controversy

MMA Payout Year in Review: No. 2 – Jon Jones returns to the UFC with controversy

December 31, 2018

Jon Jones returned to the UFC on Saturday night at UFC 232 at The T-Mobile Arena in Las Vegas, Nevada.  The Forum in Inglewood, California.  He had a masterful performance in decimating Alexander Gustafsson was marred as we know.

Jones tested positive for Turinabol, the drug that caused his previous suspension.  It showed up in an early December test and later revealed to be in tests in August of 2018.  Despite these finding USADA and the California State Athletic Commission were adamant that they not destroy Jon Jones’ career due to failing a drug test.  CSAC did not know of the August tests prior to giving Jones his license back which seems all the shadier since USADA and the UFC knew of these findings but did not provide them to Andy Foster.

The CSAC required that Jones register with VADA to fight in California.  It was intimated at the hearing that California would pay for his enrollment.  Foster had chartered a plane to drug test Jones prior to his CSAC hearing.  But, the drug test was at a non-WADA authenticated drug lab in San Dimas, California according to an MMA Fighting report.

The event was moved on Sunday of fight week to LA from Vegas.  The cost to do this was $6 million according to Dana White at the pre-fight press conference in LA on Thursday.  Flights were chartered, a building was secured (how long in advance would be interesting to know) and schedules were rearranged.  The underlying innocent victim of this was the fans that flew to Vegas or were flying to Vegas and had booked hotel rooms.  They were out money and lost out.

The good news is that the SoCal fans, who lost a UFC event in January when the company postponed its January 26 PPV event, came through with a sellout at The Forum.

As for the drug tests, picograms were used as a talking point to show the small amount of banned substance in his system stating that this could not have yielded any performance enhancement.  This, in itself, would seem like a faulty argument if your goal is for zero tolerance of banned substances.  Still, this was the talking point shoved down the media’s throat.  And yet, when a journalist asked a question of Jones and his tests, the former and now current UFC Light Heavyweight Champion called for “better journalism.”

Similarly, he left an interview with TSN because it was “killing his vibe.”  For both instances of blissful ignorance, he apologized.

Jeff Novitsky did the media rounds on Joe Rogan and then one on Friday before the event.  While both were fine, it revealed a lot of issues with the UFC Anti-Doping Program.  Notably, it was clear that the UFC and USADA were defending Jon Jones.

Also of importance, the conclusion was that the UFC needed to move the fight to save the PPV.

Notwithstanding the issues with Jones (and we probably won’t know about his in-competition tests for a while), its clear that a showdown with Daniel Cormier is inevitable.  Despite Cormier relinquishing the Light Heavyweight title the day before the fight and retiring soon, it’s clear that the two are on a collision course.  It will be a big PPV fight but the questions will remain about Jones.

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

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

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

7. MMA Payout Year in Review: No. 7 – DAZN enters sports streaming market

6. MMA Payout Year in Review: No. 6 – Josh Barnett “wins” at USADA arbitration, but still leaves promotion

5. MMA Payout Year in Review: No. 5 – PFL debuts

4. MMA Payout Year in Review: No. 4 – ONE making moves, signs media deal with Turner

3. MMA Payout Year in Review: No. 3 – UFC signs media rights deal with ESPN

MMA Payout Year in Review: No. 4 – ONE making moves, signs media deal with Turner

December 30, 2018

ONE Championship made its presence known in the latter half of 2018 after it signed Eddie Alvarez, “traded” Ben Askren for Demetrious Johnson, Sage Northcutt, hired Miesha Tate as an executive and signed a media rights deal with Turner.

The Alvarez was the first big signing for One in October.  The former UFC lightweight champion weighed his options after his UFC contract ended and decided to sign with One.  It was a surprising move with the potential for The Underground King to go back to Bellator and compete in a talented lightweight division.  He’d also be closer to home fighting presumably in North America.

The acquisition of Demetrious Johnson came in the form of a “trade” with Ben Askren going to the UFC.  There was also the hiring of Miesha Tate as an executive for the Singapore company and then Sage Northcutt was signed by One after the UFC decided not to re-sign him.

ONE has come into question for its valuation of its finances as it has received a considerable amount of capital for a young company.  ONE CEO Chatri Sityodtong responded with a post about how it raised $250 million from blue-chip investors.

ONE also came through with a media deal for 2019 which will allow North American viewers to watch ONE via a deal with Turner Sports.  The deal will include ONE on Turner’s B/R Live streaming service and TNT.

The first ONE show on Turner airs on January 19, 2019, the same day as the UFC’s debut on ESPN.

Also, a sidenote, it’s the same day as Manny Pacquiao’s next fight as he faces Adrien Broner on Showtime PPV.

This could be a new era for ONE as it extends its reach with the Turner deal.  Will this foster competition with the UFC?  Or are they going to compete on a secondary level with Bellator?  With its recent round of financing it looks like ONE is in spending mode and we will see how much MMA fans want to adopt.

MMA Payout Year in Review: No. 7 – DAZN enters sports streaming market

December 28, 2018

This past June, Bellator MMA announced a deal with sport streaming service DAZN.  The late September 2018 launch in the U.S. of the $9.99 per month service was another challenge on the traditional way we watch sports.

Perhaps bigger than the Bellator deal, and securing another deal with Combates America, it signed Canelo Alvarez to an exclusive deal which began in December.  Alvarez pummeled an overmatched Fielding.

Bellator MMA aired several events which were exclusive to DAZN but also some events were also airing on the Paramount Network.  But the streaming on the digital platform allowed subscribers to see the Bellator product where the promotion did not have media deals.

DAZN is spending a lot of money for media rights and we’ll see if it pays off in the end.  For Bellator, it’s hard to decipher whether the deal will help recruit new fans to its product, but it gets it more exposure in previously untapped markets.

The question for Bellator will be whether it decides to abandon the notion of PPV and air exclusive events on DAZN.

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.