RYU bows out of UFC sponsorship

April 8, 2013

RYU formally announced that it is no longer a sponsor of the UFC.  In its recent Form 10K  (page 5) filed this April, it stated that it no longer will cater to the MMA Marketplace.

Despite an initial positive outlook for the company, it failed to find an adequate financial return on its investment in the sport of MMA.  

RYUentered the MMA landscape at the beginning of 2012 as an official sponsor and was a part of UFC broadcasts and PPV.  It also opened a store and training facility in Las Vegas.  It boasted several former Nike executives which brought an instant credibility to the brand.  The brand received good PR including glowing articles about the prospects of the brand.  

RYU sponsored fighters with former UFC vet Jon Fitch as its main fighter.  RYU aspired to be a lifestyle clothing brand for MMA fans however it did not pan out.  As noted in a July 2012 Sports Business Journal article (via MMA Payout), the success depended on the consumers:

While RYU is getting some good buzz, SBJ notes that its success will depend on how well the products sell.  A selling point for the brand is that the clothing uses natural materials as it prides itself on being “95% sustainable” and stresses the newest performance technology.  Compared with the likes of Nike and TapouT, RYU clothing is much more expensive than it competitors.   The question is whether consumers would be willing to spend more on this new brand.

It turns out, consumers did not.  

A director resigned although the release did not state that it was related to the financial results of the company.  It has moved its headquarters from Las Vegas back to Portland, Oregon where it originally had offices.  

On page 9 of its Form 10K, RYU noted a gross loss of $1,115,157 which it attributed to its product development and a write off.  It also showed a bigger net loss related to selling and marketing expenses, production creations costs and administrative costs which amounted to $9,868,603.

The company notes that the company will “need to raise substantial additional equity” in 2013 in order to continue RYU as planned.

It goes on to state that 2012 sales fell short of expectations and management cites its UFC partnership in which it tried to position the brand as a “premium performance apparel brand.”  The company suffered losses as a result of lower than expected sales from its sponsorship of the UFC.

RYU is undergoing a rebranding strategy which will appeal to a broader base of consumers according to its filing.

RESPECT YOUR UNIVERSE, INC. JON FITCH

Payout Perspective:

RYU’s demise in MMA might be attributed to an assortment of factors.  It did go into the endeavor with both feet as it became an official sponsor, opened up a training facility in Las Vegas and sponsored fighters.  However, it failed to sell its product as it had envisioned.  This could be attributed to the higher price point on its apparel.  As we indicated early on, the question was going to be whether consumers would buy a hoodie that was priced $10-$20 higher than a competing brand.  Further, the Jon Fitch sponsorship did not work out as Fitch lost his first bout as a RYU sponsored fighter in seconds to Johny Hendricks.

We will see if the RYU brand will continue on without MMA.  But, RYU’s story in MMA reflects the fact that despite the best plans, it all depends on the consumers.

After layoff, Fitch talks about financial impact

October 11, 2012

Jon Fitch was a number 1 contender to Georges St. Pierre not too long ago.  But, his lack of fights have slowed him down and he talked about the financial impact it has had on him.

In speaking with MMA Junkie, Fitch discussed the economic condition of MMA.  When not assigned a fight, Fitch noted that it’s harder to produce revenue for yourself.  Fitch indicated sponsors are tighter with their money and appearance fees are not what it used to be.   As a result, he’s “very careful” with his money.

To supplement his income, he also advocated for more fights.

Via MMA Junkie:

“I would love for us to be able to fight three times a year,” he said. “I think that’s more than realistic. … But we’re pretty lucky to get three in a year. If you get three, that’s ideal. But when you get one or two, it can be difficult. If I still lived in Indiana, it wouldn’t be such as much an issue, but I live in California, and it’s expensive. Even the cost of food at the store is more expensive.”

Fitch had been dealing with injuries and lost his last fight in 12 seconds to Johnny Hendricks.

Payout Perspective:

Its worthy to note that Fitch is still sponsored by athletic sportswear maker RYU.  The brand is also an official UFC sponsor.   So, we may assume that he’s supplied with at least workout gear for training and potential appearance opportunities for the sponsor.

However, for up and coming fighters on the prelim cards, earning money in between fights is a reality.  With sponsors having to pay the UFC fee, sponsors may be more selective with fighters.  Without big sponsors to foot the bill, these fighters would have to find other means to earn an income in between fights.

Does anyone find Fitch’s comments surprising considering the amount of injuries that have occurred on UFC cards this year, let alone the number of cards?  He states that he’d like to fight three times a year but finds it difficult to do so.  Prior to a draw with BJ Penn and a knockout to Hendricks, Fitch’s only UFC loss was a title fight to GSP.  Otherwise he was on an 8 fight UFC win streak before GSP and then ran off another 5 after GSP before Penn.  If healthy, Fitch should be someone the UFC could utilize.

 

UFC 152: Payout Perspective

September 23, 2012

Welcome back to another edition of Payout Perspective.  This time we take a look at UFC 152 coming from the Air Canada Centre in Toronto, Canada.

Jones survives scare, subs Phenom

A first round armbar out of nowhere and Jon Jones almost saw his unblemished (let’s not count Hamill DQ) record go away and one of the biggest upsets this side of Matt Serra.  But, Jones survived and does what he does: dominate opponents.  This time, it was a Keylock that made Belfort submit.

Belfort gave a lot more than expected but it was a definite mismatch after the armbar attempt.  This match showed the beauty of jiu jitsu in the UFC. First, Belfort’s armbar was perfectly executed and he would have subbed, or broken the arm, of almost every other fighter in the UFC.  Secondly, Jon Jones’ elbows sliced Belfort’s forehead and as Jones positioned himself for what everyone believed to be a mounted crucifix to reign more elbows on Belfort, Jones saw Belfort’s arm was bent and immediately went for the keylock.  Excellent strategy by Jones.

Mighty Mouse wins Flyweight title

Demetrious Johnson won a split decision over Joseph Benavidez to win the inaugural Flyweight title.  It was a great technical match up.  I had thought Johnson won the fight outright but the judges had it at a split decision.

It’s a great win for a guy with a good backstory as we learned from the Countdown show.

The fans were booing during the end of the match which made no sense to me.  Sure, the fight had slowed but its due to the pace in the early rounds.  The crowd reaction drew some criticism from Joe Rogan on the broadcast.

The Count includes Stann as win

Michael Bisping used his superior cardio skills and outclassed Brian Stann to stake a claim for the next title shot against Anderson Silva.   For as outspoken as Bisping is, he backs it up and did a good job of muting Stann’s offense.

Attendance and gate

MMA Junkie reports that the attendance at the Air Canda Centre in Toronto drew 16,800 for a gate of $1.9 million.  In comparison, the UFC 140 which featured Jon Jones taking on Lyoto Machida last December drew 18,303 fans for a gate of $3.9 million.

It’s interesting with the card shuffling that even with the addition of Jon Jones it did not move the ticket sales as compared to last December.

Bonuses

MMA Junkie reports the bonuses which were announced at the post-UFC 152 press conference.  Each fighter received a $65K bonus.

KO of the Night:  Cub Swanson

Submission of the Night: Jon Jones

Fight of the Night: Evan Dunham vs. T.J. Grant

Sponsorships

The octagon sponsors included Edge, Marines.com, Dodge, the upcoming film, “Here Comes the Boom”, video game Assassin’s Creed , UltimatePoker.com, TapouT and Bud Light with the center.  MetroPCS, RYU and Corn Nuts also sponsored portions of the PPV.

New UFC sponsor Allfuse had the prep point.  This is the second straight PPV where a new sponsor has had the spot where fighters get greased  before heading into the octagon.  I’m not sure if its being used as a one off for sponsors looking to dip its toe in the sponsorship game.

The biggest new sponsor was Nike as Jon Jones sported the swoosh in the Octagon for the first time. The Bones Knows t-shirts were worn by Jones on each media obligation he had prior to the fight.

In addition, Jones was sponsored by Muscletech.  In order to get some notoriety with the sponsorship, it aired a short swim workout Jones did in conjunction with the sponsor.  It was tweeted out to Jones’ followers.

Xyience is also a sponsor of Jones.  After the fight, one of Jones’ corner men reminded Jones he needed to hold the can when he had his hand raised.  But Jones shrugged him off and handed the can back to him.  Xyience was probably not happy about that considering a part of the deal is that he have the can.  After further review, Jones’ right arm was the one that was armbarred so maybe he couldn’t or didn’t want to hold it.

SKY was a prominent sponsor for Vitor Belfort.  Also, Gillette, BMG, Jaco and RVCA were on Vitor’s person.  Despite losing the fight, Vitor did well for himself.

Mighty Mouse was sponsored by Xbox once again.  Probably, one of the best brands and the strongest outside of the Swoosh to endorse.

UltimatePoker.com had a sponsor tie in with a “Belt the champ” contest in which the winner was able to put the belt on Jon Jones.

SE Solutions sponsored Brian Stann.  SE Solutions is an IT company servicing federal agencies focused on protecting America’s security.  The sponsorship fits with what Stann has done and who he is and that’s a good thing.

The cutmen were back to TapouT vests as opposed to RYU ones which they had last PPVs.

Here Comes the Boom, the upcoming movie about a mild-mannered teacher becoming a UFC  fighter to raise money for his school.  The UFC gave James, a huge UFC fan before it became mainstream, license and access for the movie. But, was Kevin James supposed to look that big in the promo for the movie, “Here Comes the Boom.”  James is living the dream.  Not only was he in the King of Queens opposite Leah Remini (at her best), now he’s opposite Selma Hayek in a role where he allegedly becomes a MMA fighter.  I know, we are supposed to suspend reality…

Roger Hallet was sponsored by MMA Bodyguards.  The company offers security assistance leveraging their MMA training.  Former UFC fighter Josh Neer is on the web site.

Sponsor Assassin’s Creed had a UFC tie-in with Royce Gracie winning a contest voted on by the fans.  Sure, we’ll buy it.  The contest and the video game.  Edge had a similar activation with Joseph Benavidez winning the Edge new “fresh face”

Although the two companies can be considered  competitors , RYU sent a welcome to Nike.

Post-UFC 152 Headlines

What’s next for Jones?

Is a Chael Sonnen showdown really what the UFC needs?  Sure, it will sell a PPV but what about the long-range direction of the division.  We can argue that the division has been cleaned out and now the UFC should just find the biggest fight.  Sonnen can hype a fight.  But does he stand a chance on winning.

How much will we see the Flyweight division?

With the crowning of a champion, it will be interesting to see how much we will see this division featured on PPV.  I think that the division should start out on Fuel and FX Prelims and eventually gravitate to PPV.  But, from the crowd reaction, it may take some time for fans to adjust.

Does Bisping deserve a title shot?

We may hate him as much as Jon Jones but Michael Bisping is a top contender in the middleweight division.  He controlled Brian Stann and should be thought of as the next in line for a title shot against the Spider.

Odds and ends

-The initial headliners: Johnson-Benavedez and Stann-Bisping did some promos where they hung off of the CN Tower.  All that and they didn’t even receive top billing

-We outlined the PR issues Jon Jones has and the main point from that is Jones needs to mature and be himself with the understanding that he couldn’t please everyone.  But his entrance song last night:  Bob Marley’s “Could you be Loved” as if it were a plea to his fans to like him.

-I believe it is now mandatory that Ronda Rousey appear at anything UFC related.  She was seen in the crowd at the event.  Also, Strikeforce fighters Luke Rockhold (wearing black) and Daniel Cormier (wearing white) to which Cormier mouthed to the camera “Ebony and Ivory”.   It’s the details that make me laugh.

-Any twitter jokes that the Marines Keys to Victory figures of Benavidez v. Johnson were their actual sizes?

-Can someone tell me the other man that Matt Hume told he should quit his full time job to train as a fighter?  Mighty  Mouse was one, who was the other?

-We will address Dana White’s post-UFC152 fury at a Toronto columnist in a separate post.

Conclusion

It will be an interesting buy rate for UFC 152.  Arguably, the cancellation of 151 could have helped with buys since fans would be Jonesing for UFC fights.  Still, the card shuffling and main event of Jones-Belfort didn’t seem like it was a real attraction.  A buy rate of 450K-500K would be a success.  But think what the buy rate would be if Jones was not on this card.

RYU featured in Sports Business Journal

July 30, 2012

The Sports Business Journal (subscription required) has a feature on UFC official sponsor RYU.  The article is a positive company profile on the company.

While RYU is getting some good buzz, SBJ notes that its success will depend on how well the products sell.  A selling point for the brand is that the clothing uses natural materials as it prides itself on being “95% sustainable” and stresses the newest performance technology.  Compared with the likes of Nike and TapouT, RYU clothing is much more expensive than it competitors.   The question is whether consumers would be willing to spend more on this new brand.

RYU Flagship at The Shoppes at The Palazzo


Payout Perspective:

Another positive article for one of the UFC’s newest sponsors.  Not only is it featured in this week’s SBJ, its clothing was featured on ABC’s Good Morning America and, of course, here.  The good publicity comes at a pivotal time for the company as it has made a major investment in a retail storefront in Vegas, an athletic training facility and the launch of a women’s athletic line.  We’ll keep an eye on RYU and its stock and evaluate its performance over time.

RYU opens training facility, Flagship store in Vegas

July 17, 2012

UFC official clothing sponsor RYU announced that it has opened an athletic training facility, the House of RYU, in Las Vegas, Nevada.  It will offer fitness and training programs for athletes and MMA practitioners of all levels.

The House of RYU

Via RYU press release:

The House of RYU will offer fitness and training programs for athletes and MMA practitioners of all levels.  In addition to this, the House of RYU will also be a headquarter location for RYU athlete appearances, fighter signings and is poised to become one of the top Martial Arts training facilities in the world for pro fighter training camps and fight preparation.  The House of RYU will also be actively involved with the local (501(c)(3) pending) non-profit organization The Fight Foundation that educates and empowers at-risk youth thru Mixed Martial Arts and mentoring programs and activities, hosting   events to combat bullying and its ensuing social issues.

As part of the re-branding of the facility, RYU will also replace the previous retail display with new items from their just released Men’s Fall 2012 Collection and new Women’s Fall 2012 Line so that Martial Arts enthusiasts who train at the House of RYU will also be able to wear RYU’s premium performance apparel and gear specifically designed to enhance their overall performance.

The company is on a roll having been featured on ABC’s “Good Morning America’s” Deals and Steals segment to Beat the Heat.  It also announced that it signed a lease for its first Flagship store at The Shoppes at the Palazzo in Las Vegas.  It is set to open this September.

Payout Perspective:

This is a big step for RYU as it still in the infancy of its sponsorship with the UFC.  However, as you can see from UFC events, RYU is starting to become a familiar logo within the Octagon.  The brick and mortar training facility and Flaghship store are risks for the company.  It’s interesting to see this expansion so soon. It does have the full support of the UFC.  As an example, the UFC tweeted out the new RYU’s women’s line in support of its sponsor.  A nice boost for the company that the UFC is promoting its business.  We shall see how the company does over the course of time.

RYU Flagship at The Shoppes at The Palazzo