UFC 184: Payout Perspective

March 4, 2015

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 184 from the Staples Center in Los Angeles, California. In the main event, Ronda Rousey fought Cat Zingano.

Gone in 14 seconds

Zero strikes but a scramble that had Cat Zingano’s arm caught by Ronda Rousey and a straight armbar ended the night very early for the challenger.

It’s too bad considering the Zingano backstory.  Even though she was a huge underdog, you would have like to see more of a fight.

For Rousey, she has received mainstream approval and sports people asking if she’s good for the sport.  Obviously, the fact that people are talking about Rousey is good for the UFC.  The question of who should see fight next is a good question.  With Rousey taking time off to do a movie, it will be interesting to see who will be set up as her next opponent.  Beth Corriea? Jessica Eye?  One fighter not mentioned was Cris Cyborg who fought on the Invicta card the night before.

ufc 184 poster

Holm defeats Rocky

It was not the strongest of debuts for “The Preacher’s Daughter” but she sustained a very good Raquel Pennington for the decision.  Holm was one of the most talked about women’s fighters not in the UFC prior to her debut.  Now, she seems destined to challenge for Rousey’s belt.  Based on Saturday, she’s not ready yet.

Attendance and Gate

According to the post-fight press conference UFC 184 at the Staples Center drew a reported 17,654 fans for a gate of $2.675 million.  Of the UFC events held at the Staples Center, only UFC 60 which featured Matt Hughes taking on Royce Gracie did better (14,802 for $2.9 million).  The Staples Center capacity ranges from 18,000-21,000 depending on the event.

Payouts

Cat Zingano ($100K) actually had a higher base salary than Ronda Rousey ($65K) although it was reported by Larry Pugmire of the LA Times that Rousey would probably clear $1 million with her cut of PPV revenues.  Also, Rousey was sponsored by Reebok, Monster and Monster Headphones.  All are UFC sponsors (presumably Monster Energy Drink has signed with the UFC).

Rousey did make $65K and $65K plus a Performance of the Night bonus to earn a total of $180,000.

In addition, Jake Ellenberger made $68K and $68K plus a Performance of the Night bonus to earn a total of $186,000.

Tony Ferguson and Tim Means earned the other $50K Performances of the Night.  There was no Fight of the Night.

The rest of the payouts are here.

Promotion of the Fight

The episodes of UFC Embedded were once again entertaining although I would argue that this time around the portion of the UFC Countdown show focusing on Cat Zingano had to be the best

The pre-weigh-in staredowns included the main eventers wearing evening gowns.

Rousey made the usual media rounds including an appearance on Jim Rome.  Something that people picked up on was a dispute between Rousey and Arianny Celeste.

Sponsors

Probably the biggest sponsor for Saturday was the “M” in the middle of the Octagon which replaced the usual Bud Light sponsor.  It appears that Monster Energy Drink has signed on as a sponsor for the UFC.  The former Bellator sponsor was shown prominently in the center of the Octagon as well as ring posts.

In addition, DraftKings announced a new sponsorship deal this week and was also on the Octagon mat.

Rounding out the sponsors on the Octagon mat included, Bud Light, MetroPCS, MusclePharm, Toyo Tires, Harley Davidson, Air Force Reserve and the movie Run All Night.  Harley Davidson had the prep point.

Holly Holm had no sponsors except UFC on her ring gear.  Raquel Pennington had a pretty nice “Colorado Rocky” shirt.

Ronda Rousey had Monster, Reebok and the UFC on her ring gear.  She also donned Monster headphones upon heading to the Octagon.  Rousey also had her jeans sponsor Buffalo on her fighter poster.  Maybe Nissan of Omaha was the best sponsor for Cat Zingano as it was clearly seen as she was being submitted.  Other notable Zingano sponsors included Sepec and Kalapaki Joe’s.

Odds and Ends

The UFC indicated that the social media campaign around Ronda Rousey did well:

Big search numbers for Ronda Rousey:

Darren Rovell took an ad hoc poll on the popularity of the UFC. The fact that Rovell is gaging his followers on its popularity shows that Rousey sparked his interest in the UFC.

Other ends…

Sponsor Mike’s Seafood on Derrick Lewis’ backside was either a good idea or a bad one.

The top three cities on Google Trends that searched for “Ronda Rousey” were Quezon City, Philippines, Los Angeles and New York in that order.

UFC 184 was in theaters once again. There were anecdotal reports of packed sports bars watching the fight.

Mark Munoz did not look good on Saturday. He failed to make weight on his first try at the weigh-ins although he subsequently made it. I would have hoped that he would make it to the Philippines card and then retire. It might be best for him to retire now.

InvictaFC had a card the night before in LA with Cyborg in the main event. Yet no real mention of her after the Rousey fight.

Essentially, the PPV ended at 9:00pm PT due to the quick main event and prelim matches were shown to fill-in time.

Conclusion

Ronda Rousey is one of the big draws of the UFC and based on searches and media coverage she is someone that casual viewers would tune into watch. The fact that ESPN talking head shows and other sports media were talking about her 14 second win on Monday reflects her popularity. But does that mean it equates to people paying $60 to watch her fight? We shall see. The last time Rousey headlined (without another co-main) was UFC 170 which drew 350,000 PPV buys. My guestimate would be somewhere around that mark and perhaps a little more 350,000-375,000 PPV buys.

Due to Reebok deal, James Krause states he’ll lose $20K in sponsor money

February 24, 2015

James Krause spoke out about the Reebok deal and stated that due to the new uniform policy he will be losing $20,000 in sponsor money.  In speaking with MMA Fighting, he indicated he did not know how much he will be making, but know how much he will be losing.

Krause is not the only fighter to state that he will be losing money due to the new policy.  Brendan Schaub indicated on his podcast that he would be losing 6 sponsors and that he gets paid twice as much from sponsors than he does from his UFC fight purse.

In his last bout, a loss to Jorge Masvidal at UFC 178.  Krause reportedly earned just $15,000.  He did earn a double bonus at UFC 161.

Although Krause is hopeful about the Reebok deal will bring, the fact that he is not ranked as a lightweight likely means he will not be seeing payouts close to what he received from his sponsors.  The Reebok deal is based on rankings with ranked fighters getting more than unranked fighters.

Payout Perspective:

The article is an interesting and thoughtful perspective on the impact of the new Reebok deal.  For his part, Krause is thinking ahead and planning for the future which is a good thing.  The article indicates he owns two gyms and a Metro PCS franchise (notably, an official UFC sponsor).  He also owns an MMA promotion too.  But, most fighters are likely not as financially forward-thinking as Krause.  With the fact that most fighters do not know what the Reebok deal will make them, there is great concern ahead as they lose their current sponsors.

Show Money Episode 1 discussing issues in MMA business

February 11, 2015

In collaboration with Bloody Elbow, I hopped on with Paul Gift and John Nash to discuss current issues in MMA business including the UFC Antitrust lawsuit, the Reebok deal, independent contractor status and the new Bellator.

Silva bristles at donning Reebok

January 30, 2015

In a recent interview, Anderson Silva stated he will not wear Reebok in the UFC despite the impending uniform deal.  More damaging, he is quoted as saying he doesn’t identify with Reebok at all.

The quotes came in a recent interview with Brazilian outlet Terra and were reported by MMA Junkie.

Until Nike decided to opt out of the MMA sponsor business, Silva was a swoosh mainstay.  Silva stated that he identifies with the Nike brand even though he no longer is sponsored by the Beaverton, Oregon company.

Silva stated that his whole family wears Nike and Adidas.  As an aside, Adidas owns Reebok.

Payout Perspective:

The words from SIlva are not encouraging for Reebok when one of the biggest stars in the UFC does not endorse the brand.  Furthermore, although he’s being frank, he is burying the brand and endorsing its competitor, Nike.  Obviously, Silva’s long-time ties with Nike may persuade his views but I’m sure his opinion on the Reebok brand might be shared by other fighters that will be required to don the Reebok gear this July.

McGregor signs deal with Reebok

January 15, 2015

On Wednesday Conor McGregor signed a sponsorship deal with Reebok making him the 5th fighter to sign an individual deal with the UFC’s official clothier. The fighter announced the deal via twitter.

Financial terms of the deal were not announced. McGregor joins Jon Jones, Ronda Rousey, Johny Hendricks and Anthony Pettis as UFC fighters that have signed individual deals with Reebok.

Via MMA Fighting:

“Conor’s hard work, determination and confidence have gotten him to where he is today,” Reebok Brand President Matt O’Toole said in a press release. “His passion and his commitment to continual self-improvement are a true reflection of the Reebok brand.”

Payout Perspective:

With all of the additional lead-up for McGregor for a UFC Fight Night, the Reebok news seems appropriate.  McGregor has marketing value as is exemplified through the fact that there have been two produced episodes of “UFC Embedded” for Sunday’s event despite the fact that the “Embedded” series have been limited to promoting PPVs until now. McGregor also participated in the ESPN “car wash” this week.  The deal should help with the UFC-Reebok brands internationally as well.

UFC 182: Payout Perspective

January 5, 2015

Welcome to another edition of Payout Perspective.  This time we take a look at the much anticipated fight between Jon Jones and Daniel Cormier.

HQ_UFC_182

Jones dominates Cormier

In one of the most anticipated fights in some time, Jon Jones dominated Daniel Cormier.  It was clear that as the fight progressed, Cormier looked like he lost confidence and Jones had broke his will.  Say what you want about the crotch chop at the end, Jones is the best there is right now and he knows it.

This guy may be next for Jones:

Then again, there are rumblings that Jones may face Cormier’s training partner and friend Cain Velasquez. Although Cain is a heavyweight, Jones looked huge compared to Cormier.

Cerrone decisions Jury

One might have thought that this fight would have been a great lead-in to the main event.  Cerrone is a guaranteed “bonus” of the night, right?  Well, not so much tonight.  Except for a bunch of meaningless kicks by Cerrone to Jury, this was a forgettable fight.  Cerrone was disappointed despite winning.

Attendance and Gate

MMA junkie reports the attendance at the MGM Grand at 11,575 for a gate of $3.7 million.  There was no news on comps although the UFC were giving away tickets for the event. The gate failed to crack the top 5 of UFC events at the MGM Grand.  Notably, UFC 168, which occurred at about the same time last year, drew 15,650 for a gate of over $6.2 million.

Despite the low attendance, Dana White was bullish about the PPV buys as he indicated that the 750K PPV buys he predicted pre-event were trending to exceed his expectations at the post-fight press conference.  Although this cannot be confirmed, there were multiple reports that movie theaters and sports bars were full or near capacity.  This will not help contribute to the PPV buys but shows the amount of interest.

Bonuses

Bonuses for UFC 182 went to Paul Felder, Shawn Jordan, Jon Jones and Daniel Cormier.  Arguably, Felder was the most impressive fighter of the night (next to Jones of course) with his spinning back fist KO of Danny Castillo.

For you gamblers, Felder was the biggest underdog to win at +190 according to the MGM Grand.

Cody Garbrandt was shut out of receiving a bonus despite a strong UFC debut against Marcus Brimage.  Garbrandt was a +130 underdog.

Pre-Fight Promotion

While it was not as expected, the media day brawl back in August was the best thing to promote this fight.  Perhaps it would have picked up more steam if the fight actually happened in September than now.  Still, the promos for this fight were outstanding.  It centered on Jones and Cormier’s brawl and the subsequent ESPN dust-up caught on camera.

The UFC Embedded episodes included Jones attending a high school wrestling practice and Cerrone’s action sports (snowmobiling, car racing and flying).  It also included a backstage altercation between Jones and Cormier.

Tyson Griffin also captured the animosity on his Instagram as the two camps passed each other here and here.

The UFC special Bad Blood featured the Jones-Cormier feud.  Although this episode which aired on FS1 and replayed FX drew praise and hype from MMA folks, in my opinion, it amounted to a regular HBO 24/7 episode.  There was also a countdown show and an “All Angles” show featuring Cerrone.  Essentially, the episode was a “getting to know” Donald Cerrone show.

In addition to the television commercials, there were extensive radio buys which do not usually occur for a standard UFC PPV.

UFC 182 was shown in movie theatres across the country. From surveying social media, it appears that many people actually went to see the event at theatres. 

Also, bars across the country seemed to be packed for this event.

Sponsorships

The octagon had UFC sponsors, MusclePharm, Fram, MetroPCS, Harley Davidson, Cimemax’s Banshee, Toyo Tires and Bud Light in the center.  There was also signage for UFC 183 featuring an image of Anderson Silva sitting in a “spider” position.  Banshee also had the fighter prep point. There was also a commercial on the Cinemax show during the event.   

Cerrone was sponsored by Budweiser and attempted to giveaway beer on the Las Vegas Strip on New Year’s Eve until the UFC stopped the promotion.  Prior to the fight, it was announced that he had signed a sponsorship with Fram.  

Cormier had “Break Bones” t-shirts for the event which were made by his sponsor, CageFighter.

Jones sported his new Reebok sponsorship.  Jones’ trunks appear to be what his official uniform may be. He also has his own share of shirts from UFC.com.

Odds and Ends

  • To the dismay of some people, the UFC increased prices of its PPVs to $59.99 HD for the first three events of 2015.
  • The PPV was short on time which is odd since there have been at least two times in recent memory where a UFC PPV has exceeded 3 hours. UFC 181 had five hours squared away instead of the normal four hour block on PPV.  One would think if people were going to pay $5 more, the UFC would pay for an overrun to get some in-ring interviews of the co-main and main eventers.  Regardless, look for big ratings for the FS1 post-fight wrapup.
  • CM Punk was on the FS1 pre-fight show and did a Q&A before the weigh-ins. The company is getting the most out of Punk already and putting him out there for 182 made sense.  How much will they use him before he actually fights?
  • The commission threatened the fight purses of Jones and Cormier if there was any dustup at the weigh-ins. Thus, the awkward weigh-in staredown.
  • Steven Seagal was in attendance and “aided” Daniel Cormier prior to the fight as shown in an “Embedded” episode. Doesn’t look like it helped.
  • UFC Heavyweight newcomer Jared Cannonier utilized crowdfunding site GoFundMe to raise money for his training camp. He exceeded his goal of $5,000 by raising $6,100.  Unfortunately, he was KO’d by Shawn Jordan.
  • Speaking of training camps, Cerrone indicated he paid $20,000 to bring in fighters to spar with him. He is set to make slightly over $100,000 for the fight.
  • The UFC announced big additions to its Fight Library with the acquisition of libraries from several promotions.
  • We already know, but Conor McGregor is getting a huge promotional push by the company.
  • Is the UFC using the “boxing strategy” as many suggest that they highlight one fight to sell for its PPV? This can be done if there is a heated feud, but probably hard to sell as frequent as its PPVs are due to lack of build.

Conclusion

After the event, Dana White indicated that PPV buys were above the 750,000 he predicted pre-event.  There were 500,000 Google searches as of Friday which would indicate a big PPV buy rate.  However, the cautionary tale of relying on Google searches is that Pacquiao-Algieri fight in November drew 500,000 searches yet only drew a reported 300,000-400,000 PPV buys.  But, the promotion of the Jones-Cormier feud alone seemed to create the kind of buzz that got fans that pick and choose purchasing PPV events to buy this one.  Any buy rate number hitting 600,000 (or above) will be a great start for 2015 for the UFC.

14 for 14: No. 2 UFC-Reebok announce uniform deal

December 31, 2014

There was much speculation as to when the UFC would broker a uniform deal.  The long-awaited deal will begin during International Fight Week in July 2015 according to the joint announcement on December 2nd.

Details of the deal are outlined here.

ufc and reebokThe deal is estimated at 6 years for $70 million and offers a unique distribution deal which the UFC touts will give back to its fighters based on UFC rankings.  However, with the announcement of the UFC-Reebok deal, it also means that all other fight sponsors would be eliminated from the Octagon.  There will no longer be fight banners or any other sponsor patches on shorts or t-shirts.  Fighters may not wear other sponsors during UFC related promotions leading up to an event.  This information led to many concerned fighters.  Brendan Schaub indicated that he lost 6 sponsors in light of the Reebok deal.  The Heavyweight stated that he made twice as much from sponsors as his fight purse from the UFC.  It also means the end of many sponsors we are familiar seeing such as Dynamic Fastener.

On the other end of the spectrum, Jon Jones and Ronda Rousey signed individual sponsorship deals with the brand.  The two join Johny Hendricks and Anthony Pettis as those fighters with sponsor deals with the company.

The UFC indicated it reached out to fighters about the deal prior to its announcement although a list of those fighters has not been disclosed to the public.

Payout Perspective:

It will be interesting to see how the deal will play out.  While many knew of the impending uniform deal, they did not know that fighters would be paid based on their UFC ranking.  The rankings are based on media vote which adds a layer of uncertainty to the whole situation.  One might surmise that any controversy about fighters getting paid from this deal will be immediately deflected to those media members that choose the rankings.  Then again, the entity that chooses the media members that votes on the rankings…the UFC.  Moreover, at this point, it does not seem like any of the fighters know how they will be compensated or what to expect based upon fighter rank.  Also, if you are an unranked fighter, will you be making more or less with the Reebok deal?  It will be interesting to see how this deal will play in the current antitrust lawsuit filed by fighters against Zuffa.

14 for 14:

3.  Bellator 131/Bellator on PPV

4.  Zuffa downgraded by Standard & Poor’s

5.  CM Punk signs with the UFC

6.  Rebney replaced by Coker

7.  UFC Fight Pass a success in first year?

8.  TRT banned by NAC, UFC

9.  UFC PPVs down

10.  WSOF airs on NBC

11.  UFC continues global expansion

12.  Rousey wins CSAC arbitration against Fight Tribe

13.  Cung Le drug suspension overturned

14.  Gil re-signs with the UFC

Schaub loses 6 sponsors in light of Reebok deal

December 10, 2014

According to a recent podcast by UFC Heavyweight Brendan Schaub, he has lost 6 sponsors due to the recent UFC-Reebok uniform deal.  On The Fighter and The Kid podcast this week, Schaub claims that he had made twice what the UFC pays him from sponsors.

Schaub lost to Travis Browne at UFC 181 this past Saturday.  Schaub made $32,000 as disclosed by the Nevada State Athletic Commission.

If we are to believe this to be correct, Schaub would have made six figures with a win plus his sponsorship money.  Even without the win, Schaub would be making close to six figures.

(h/t:  MMA Mania)

Payout Perspective:

We might see more stories like Schaub’s in the coming months as the Reebok deal goes into effect in July.  Certainly, current sponsors may seek to leave the UFC as they might revisit their respective marketing budgets and either find fighters in other organizations to sponsors or leave the MMA landscape altogether.  MMA Fighting has an interesting perspective on the Reebok deal from managers with UFC clients.

The obvious concern about the Reebok deal is that fighters will lose money from sponsors without knowing what they will be earning through this new arrangement with the UFC.  Furthermore, managers are not able to say whether the Reebok deal will be better or worse than their current earning potential.

UFC-Reebok uniform deal worth $70M per report

December 4, 2014

Gareth Davies reports that the UFC-Reebok uniform deal announced on Tuesday is worth $70 million dollars.  The 6 year pact makes Reebok the official clothier for the mixed martial arts promotion.

While the deal has been described as a positive “game changer” for the UFC, it has been criticized for the elimination of all other sponsors and the new function of UFC rankings which will dictate how fighters are paid via the new system. The UFC has posted details of the deal on its web site.

Here are comparisons to uniform deals in other sports:

MLS:  Adidas estimated $25M per year through 2018.  An initial 10 year $150M deal was extended in 2010 reflecting a 66% increase and the new deal is valued at $200M

NFL:  Nike estimated $220M per year.  The deal is estimated at $1.1B dollars for 5 years which began in 2012.  Previously, Reebok had a 10 year $250M deal.

NBA:  Adidas estimated at over $400M per year.  The 2006 deal was for 11 years.

NHL:  Reebok estimated at $200M per year.  The deal is up in 2016 and hockey brand Bauer may make a play for the spot.

Payout Perspective:

So,is this a good deal?  Its clear that the UFC would not garner the amount of money one of the major leagues would command but assuming the report is correct, Reebok is paying the UFC approximately $11.67 million per year for the right to outfit UFC fighters.  One wonders if the deal will (or eventually will) include exclusivity for UFC gyms.  Reebok is big in the fitness/crossfit industry and the additional exposure would make sense.  For the UFC, it creates more opportunities for visibility and arguably legitimizes it as a sport.

UFC-Reebok announce 6 year sponsor deal

December 2, 2014

The UFC and Reebok announced the long-awaited fight uniform deal which will commence during International Fight Week July 2015.  The announcement came with many interesting details.

The UFC touted the announcement as its biggest non-broadcast contract ever.  Financial terms were not disclosed for the 6 year partnership which makes Reebok the exclusive uniform supplier and commercial outfitter.

One of the most compelling details of the deal is that fighter compensation will be tied directly with the UFC fighter rankings.  The rankings are often criticized, and there is no exact science to determine how fighters are ranked.  Moreover, unsaid but inferred from the structure, unranked fighters will benefit, little, if any from the deal.

Via ESPN:

The pay structure will allocate funds per fight, based on a tiered ranking system. Champions will receive the largest payment, followed by fighters ranked Nos. 1-5, 6-10, 11-15 and unranked. UFC’s official rankings are voted on by media outlets and are overseen by the company.

Starting with UFC 189, which coincides with International Fight Week, there will no longer be fight banners or any other types of sponsors aside from Reebok.  Fighters will be able to ascertain sponsorships outside of the Octagon but cannot be sponsored by any other company leading up to a fight or during it.

The UFC indicated that aside from “costs associated” with the sponsorship, the money goes directly to the fighters.

Here’s what we should expect at UFC 189 via MMA Junkie:

At each UFC event after the July rollout, a newly established team of UFC equipment managers will distribute to each fighter and cornerman a Reebok gear bag with fight shorts, walk-out jerseys, hoodies, T-shirts, fleece tops and bottoms, headwear, socks and shoes, among other items, which will be used throughout fight week and are intended for the athlete to keep after the event.

In addition, there is a charity component of the deal as a portion of the revenue from the UFC-Reebok line of products goes to Fight for Peace, a nonprofit aligned with the sportswear manufacturer.

The UFC indicated it had reached out to UFC fighters about this deal before it was announced.

The deal does not dismiss other sponsors, but one might assume that agents and managers will have a harder time finding sponsors for fighters outside of a UFC event.  Moreover, one of the prime attractions for most sponsors, the logo on the shirt/shorts, will go away.

Payout Perspective:

This is an interesting deal that will certainly garner scrutiny in the days to come.  For top-level fighters and current champions, the deal is favorable for them.  Of course, these are not the fighters to be concerned with as they have always be taken care of from various sponsors.  But, for those fighters that appear on prelims and Fight Nights, this new change could be a concern.  There are many unknowns at this point on what the pay structure will look like and only time will tell to see how fighters will benefit.  How much money will be allotted to fighters?

MMA Payout will have more on this deal.

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