April 24, 2015
MMA Junkie is reporting that UFC middleweight Gegard Mousasi has sued clothing company Fear the Fighter and its president UFC fighter John Makdessi for unpaid sponsorship pay. A source in the article indicates that Mousasi is owed over $25,000.
The lawsuit is filed in Canada and while it has not been disclosed, one assumes that he is seeking damages for breach of contract of the sponsorship agreement. He claims Fear the Fighter has not paid him for his last 2 fights. Also, Mousasi claims that other fighters are also owed money from Makdessi’s company.
Makdessi is a UFC lightweight fighting from Canada. According to corporate records, he is the president of the clothing brand. Makdessi is scheduled to fight Saturday at UFC 186.
This is a first of its kind lawsuit where a fighter has sued a fighter. Obviously, the circumstances are unique as Makdessi owns a company that sponsors fighters. This situation actually lends itself to the argument that UFC-Reebok deal is warranted as the fighters would be guaranteed their pay. The issue of sponsors not paying a fighter is not a new thing and the UFC sponsorship deal should help address the situation. We shall see what is to become of this lawsuit and the reaction Makdessi may receive Saturday.
April 22, 2015
In light of Zuffa’s announcement that it has changed the policy through which it will compensate fighters under the Reebok sponsorship deal, a manager of UFC fighters has spoken out about the deal and the sponsorship landscape. Oren Hodak of KO Reps who represents Johny Hendricks, Ovince St. Pierre and Joe Lauzon among others has expressed his opinion on the problems with the current state of MMA sponsorship.
“The current problem in the MMA landscape is the managers/agents that are in the business. They aren’t working hard enough or smart enough going after non endemic brands. They are simply seeing a logo on another fighter and then contacting that company. Or even more pathetic is agents calling another agent to help them out with a deal,” Hodak told MMA Payout. Hodak holds a Master’s degree in Sports Marketing and worked in the sports industry for several years before opening up his MMA management company.
“KOreps has had great success giving companies such as Reebok, Bass Pro, Smart Stop Self Storage, Instaloans and most recently Parts-express.com their first real taste of Octagon exposure in addition to partnering with fighters outside of the cage,” stated Hodak. “Sure, the sponsor tax takes money out of budgets from your core MMA clothing and supplement companies but there are plenty more companies out there with a sports marketing budget. Over the years the UFC has slowly raised the sponsor tax and added numerous categories to the non-approved list, giving fighters less and less opportunity. In turn, managers have an excuse as to why they aren’t producing and UFC has fighters openly complaining about sponsorship money.”
On Monday, the Sports Business Journal reported that the UFC had changed the way it would pay its fighters through the Reebok sponsorship deal which goes into effect in July. Instead of relying on media rankings, it would base the sponsorship pay on the number of fights an individual has had under Zuffa. This would include fights in Strikeforce and WEC after both were acquired by Zuffa. The change in the policy was said to be based on speaking with a number of fighters and managers.
“Some fighters may come out ahead with this new deal but I believe the fighters with professionally qualified sports management behind them will not,” Hodak added, “We have already heard from numerous fighters losing deals because they can’t utilize the valuable fight night impressions surrounding tv viewership.”
It’s clear that despite the change in payment structure, the UFC-Reebok deal will still affect the bottom line of many fighters. Hodak points out an issue he sees as a manager of fighters. It’s an interesting viewpoint and a constructive critique on the nature of the business. It also calls into question the management practice of some in the industry. Not only will the sponsorship landscape change in the UFC, but the management of fighters may change too. We shall see how this plays out in the UFC after the Reebok deal is put into place this summer.
April 20, 2015
Sports Business Journal reports (subscription recommended) that the UFC is making a change to the way it will compensate its fighters through the Reebok deal. Instead of paying fighters based on media rankings, it will pay fighters based on a “tiered system” based on tenure or number of UFC bouts fought.
There will be 5 tiers based on the number of fights an individual has had with the UFC. The article indicates that the UFC will count fights with the WEC and Strikeforce into the number of fights an individual has fought with the organization. There will be tiers of 1-5 fights, 6-10 fights, 11-15 fights, 16-20 fights and more than 21 fights according to the article.
Title fights will be an exception to this rule as the fighters will receive greater compensation. The UFC declined comment on sharing the amount of money each tier would receive.
The change is based on speaking with fighters and managers about the new Reebok deal according to UFC senior vice president of global consumer products, Tracey Bleczinksi.
The article includes quotes from Glenn Robinson of Authentic Sports Management and Ronda Rousey’s manager Brad Slater. Robinson indicated that the sponsorship money has dried up over the years and that the Reebok deal is “more sustainable.” Slater acknowledged that despite the number of sponsors a fighter may have, the total money earned was not “a really significant number.”
The new “tiered” system appears to be a much more fair system than the media rankings which were widely criticized. The system which rewards a fighter based on time served in the UFC (or WEC or Strikeforce) is a much more stable way of determining how a fighter will be compensated through the Reebok deal. It also gives a fighter incentive to do their best to stay in the UFC. Still, the unknown is how much a fighter will be paid through the deal. The UFC does leave itself an out as the policy allows it to pay fighters more in championship bouts (e.g. McGregor at UFC 189).
The article points out that the change was based on discussions with fighters and their managers about the deal. It’s interesting that these discussions happened now and not during the time prior to the Reebok announcement. The new change should give a fighter more certainty as to what tier they are in and an expectancy as to how much they should receive from Reebok.
March 25, 2015
The WWE and Authentic Brands Group, LLC (ABG) announced a joint venture with Tapout as the brand formerly tied with MMA and the UFC will now be the official fitness and training partner of the WWE.
The partnership is reported as a 50/50 joint venture per the Sports Business Journal. According to the WWE release, it will integrate Tapout across WWE’s global platforms including TV programming, the WWE Network, pay-per-view broadcasts, live events, digital and social media.
As one might expect, the WWE will create advertising and marketing with its Superstars and Divas outfitted in Tapout gear. It will also be prevalent through the WWE Performance Center in Orlando, Florida and all “performers, trainers and staff” will don the Tapout workout gear.
The Tapout brand is described as “a newly repositioned fitness lifestyle brand” in the press release. More from the press release regarding Tapout:
The next generation of Tapout™ preserves the original brand essence and drives a hard-body, fitness-centric message positioned around motivation, discipline and determination. An all new line of men’s and women’s performance apparel and accessories will launch at retail in Spring 2016. New Tapout™ branding and packaging will roll out in key categories throughout 2015 starting with beverages, supplements and fitness centers.
There were many rumors about the partnership and the official announcement coincides with Wrestlemania week. Although not the same as the UFC-Reebok deal, it accomplishes the same premise of partnering with brands in an effort to increase audience and revenue. With the fitness industry apparently expanding, the WWE and Tapout will seek to make a dent into the market as well.
March 17, 2015
Welcome to another edition of Payout Perspective. This time we take a look at UFC 185 at the American Airlines Center in Dallas, Texas where two UFC titles were on the line.
RDA wins Lightweight Title
Rafael dos Anjos earned his unanimous decision against Anthony Pettis. It was total domination by the challenger as he topped Pettis with his striking and grappling. It was an impressive win considering the complete manhandling of Pettis and the post-fight news that he had a knee injury coming into the fight.
Up next for RDA is the winner of Khabib Nurmagomedov and Donald Cerrone this May. But with RDA’s knee injury, we may not see this fight until December.
Joanna J destroys Cookie Monster
It was a mismatch. And the Champion looked to be in trouble from the start. Joanna Jedrzejcyzk controlled Carla Esparza and the “Cookie Monster” did not look like a Champion defending her title. Jedrzejcyk’s Muay Thai background defeated Esparza’s wrestling and it was an easy win for the fighter from Poland.
In the end, the referee was looking for a way to stop the fight in the 2nd round. Jedrzejczyk has the personality to promote fights in her division. But, will there be anyone in her division that can match her?
Attendance and Gate
Attendance at the America Airlines Center drew a reported 17,160 fans for a gate of $2.155 million as announced at the post-fight press conference. Despite the good number, it was still the lowest of the three PPVs held at the venue.
Previous Attendance for UFC PPVs at American Airlines Center in Dallas, TX (via MMA Payout Blue Book)
UFC 103 – September 9, 2009 – Rich Franklin-Vitor Belfort Attendance 17,428, Gate: $2.4M
UFC 171 – March 15, 2014 – Johny Hendricks-Robbie Lawler Attendance 19,324, Gate: $2.6M
For the second PPV in a row, there was no Fight of the Nights. The four Performances of the Night went to RDA, Jedrzejcyk, Ross Pearson and Beneil Darush. Each received $50,000 bonuses. There were a lot of stoppages to choose from but one would have to concur that these four stood out.
For the second straight PPV in a row Monster Energy Drink had the center of the Octagon moving Bud Light to the Octagon bumpers. In addition, MetroPCS, Harley Davidson, Corn Nuts, DraftKings, Fram, MusclePharm and Toyo Tires.
Fram also had the fighter checkpoint.
Notably, Pettis was sponsored by Reebok, Corn Nuts, Monster Headphones and Monster Energy Drinks. Interesting enough, no Wheaties logo worn by Pettis or in the Octagon.
Reebok sold Showtime’s gear prior to the event at UFC 185. Wonder how sales are post-fight.
— Anthony Pettis (@Showtimepettis) March 13, 2015
Monster Headphones also had a campaign centered on Pettis.
-The UFC saw the crowning of two new champions. Who will have the longest title run? Moreover, who will the UFC be able to sell to fans?
-Does Hendricks get another shot at the title? With the win over Matt Brown, should Hendricks get the winner of Lawler-MacDonald?
-Henry Cejudo made weight and won a unanimous decision over Chris Cariaso. Could he be on the fast track to a 125 pound title shot?
Odds and ends
-Ben Askren and CM Punk were in the corner for Anthony Pettis.
-Interesting enough, Erik Koch made a cameo during the first UFC Embedded which one might think unusual if you read “Thrown.”
-Carla Esparza wore a wrestling singlet which was a nice touch. Both Esparza and Jedrzejcyzk were sponsored by Alienware.
-Alienware, a UFC sponsor, has been active of late with its activation with the UFC. There is a lot more visibility in sponsoring fighters as well as sponsoring the UFC Embedded online episodes.
-For the first time that I recall, the Embedded episodes had a sponsor, Alienware (“Powered by Alienware”). It was the umpteenth time we saw an Embedded episode where someone was at a barbershop getting their hair cut. This time it was Showtime at his barber shop.
-With Monster Energy as a new UFC sponsor, it appears we will see the return of awkwardly holding a soda can in the Octagon after a fight.
-UFC Prelims was on FX due to college basketball. We shall see whether the network change will affect ratings.
-There were over 100,000 Google searches for the UFC on Saturday which was far less than UFC 184 and Ronda Rousey during the same time frame.
-Texas did not do any “out of competition” drug testing for this event.
Prior to the PPV, we wrote whether Anthony Pettis could be the next big PPV draw for the UFC. If he does, it will be in pursuit of the belt he just lost. The card seemed like one more for the solid base of UFC fans that usually purchase PPVs. Yet, with the solid success of UFC PPVs this year, could we see another good PPV buy rate from the company. There was less buzz for this event than the previous three this year. This could reflect in PPV buys as I would assume that we get a PPV buy rate of around 325,000-350,000.
March 14, 2015
As we get ready for UFC 185, we take a look at whether Anthony Pettis can be a future PPV draw for the company. This will be the first event where Pettis will be the advertised main draw for a PPV.
For UFC 181 this past December, Pettis co-headlined with Johny Hendricks-Robbie Lawler II as the last fight on the card. Arguably, Pettis was the most impressive on the card scoring a submission against the former Strikeforce Champ Gilbert Melendez.
The good news for this PPV is that Johny Hendricks will be on the card fighting Matt Brown as well as the inaugural defense of the women’s strawweight title. Despite the lack of superstar power as we had with the previous 3 PPVs, this is a solid UFC card with 3 very good fights at the top. You might also add Alistair Overeem versus Roy Nelson and the interest of seeing former Olympic gold medalist Henry Cejudo and you have a PPV that you may be ok with spending $60 on.
The draw of this PPV has to be Pettis (although the women’s fight should be entertaining). He has the looks and talent to be one of the top draws for the UFC. Pettis already has the individual sponsorships from Reebok and Wheaties. He’s also donned the box of cereal maker as well. A big part of the UFC’s Embedded series for this event was Pettis preparing for the fight.
Previous UFC PPVs with Pettis in co-main or main event
UFC 164 vs. Benson Henderson – 270,000 PPV buys
UFC 181 vs. Gilbert Melendez – 400,000 PPV buys
The PPV buys are not too impressive right now but with the right promotion for Showtime, he can be a true superstar for the UFC. One need only reference the “Showtime Kick” to know that he has an appealing fighting style that can attract fans. And if you recall his backstory from “World of Jenks,” he’s overcome a lot in his personal life to be where he is now. Will this equate to a following that would be willing to automatically purchase UFC PPVs when he’s fighting?
Solid interest in UFC 185?
Looking at ticket sales for this event, there are still a number of seats available on Ticketmaster as of Friday afternoon. The “get in” price for the event was $66.72 although the highest price on the secondary market was $1,400. The seats on the primary market are scattered throughout the arena so we will see if there will be a good walk-up for the event that could push this event near a sellout.
Previous Attendance for UFC PPVs at American Airlines Center in Dallas, TX
UFC 103 – September 9, 2009 – Rich Franklin-Vitor Belfort Attendance 17,428, Gate: $2.4M
UFC 171 – March 15, 2014 – Johny Hendricks-Robbie Lawler Attendance 19,324, Gate: $2.6M
UFC 185 – March 14, 2015 – Pettis–Dos Anjos ?
Notably, the official capacity for the AAC in Dallas is 18,500. But, based on UFC 171, the configurations for the UFC probably allow for more seats. With Hendricks on the card, one might expect the strong attendance.
Anthony Pettis has all the look, swag, talent and ability to be a major superstar for the UFC. The only thing that has held him back has been injuries. If Pettis can keep healthy, he can become an anchor athlete to headline UFC PPVs in the future. We shall see if Pettis can keep the 2015 UFC PPV momentum going.
March 14, 2015
According to a recent Bloody Elbow report, it appears that many UFC contracted fighters may be still in the dark on the Reebok deal. During a press event to promote their upcoming fight in the Philippines Frankie Edgar and Urijah Faber indicated they knew little more about the new uniform policy set for July.
Although rules were circulated about the new uniforms, Edgar and Faber stated they knew little details regarding the payouts aside from knowing that the payments from the Reebok sponsorship are tied toward fighter rankings, little else was known by the fighters.
Edgar stated he doesn’t know the breakdown of payments from the Reebok deal. Faber stated the UFC has “given us zero additional info on the Reebok deal.”
If you are Frankie Edgar and Urijah Faber it’s unlikely you are too concerned with payouts from the Reebok deal since both are established fighters that should have money in the bank. But, if you are managing their careers, shouldn’t you be concerned? So, the question is who knows about the deal and its details? While Edgar and Faber are not champions in the UFC, they are mainstays in the company. One would think that financial information, even at least projections, about the deal would be provided to them. Unless they are being told not to speak about the details to the media, it’s clear that there is still uncertainty about a component of their earning power in the UFC.
March 12, 2015
Jonny “Bones” Jones is featured in the latest Reebok commercial which launched March 8th. The commercial feature Jones running in a variety of conditions to promote the company’s Reebok ZPump Fusion.
In addition to the commercial, it will be accompanied by print, digital and outdoor placements with the tag line, “get pumped” according to Footwear News. In a press release sent out on Tuesday, Reebok announced the launch of the shoe “that uniquely conforms to any foot.” The shoe appears to be a new take on Reebok’s “Pump” technology.
— #WelcomeToTheShow (@ufc) March 12, 2015
The new shoe is set to retail for $110.
I do not know for sure, but if Reebok purchases advertising during the NBA Playoffs, it will probably feature this commercial. As indicated in this write-up, Jones will appear in other media for the company’s launch of the shoe. The UFC participated in a press event for the shoe last week in New York. Jones is one of several UFC fighters to sign individual deals with the soon-to-be official clothier of the UFC. We’ll see if the campaign will involve other UFC fighters.
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.
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.
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.
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:
— Shanda (@UFC_Shanda) March 2, 2015
Big search numbers for Ronda Rousey:
Ronda Rousey finished w/ 1M Google searches Saturday. Another 200k for RR plus 200k more for UFC 184 on Friday. 50k for Cat Zingano Thursday
— Adam Swift (@AdamMSwift) March 2, 2015
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.
POLL RESULTS (700+ VOTES): Only 23% more interested in UFC than they say they were 3 years ago pic.twitter.com/DgyDjvtLYH
— Darren Rovell (@darrenrovell) March 1, 2015
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.
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.
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.
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.