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.

The Interview – Rafe Bartholomew

July 17, 2019

I had a great time catching up with Rafe Bartholmew of The Athletic. I first interviewed Rafe back in 2010 about his first published book about the love affair that the Philippines has with basketball.

We talk a little about Filipino basketball, the upcoming Pacquiao fight, Canelo, his latest piece about PBC fans/trolls and his pick to win the 2020 NBA Championship (which is a surprise to me).

4:00 – Filipino Hoops talk

14:15 – Preview of Pacquiao-Thurman

24:10 – Rafe’s Prediction on the fight

28:35 – I ask Rafe if we can appreciate this version of Pacquiao

35:04 – We talk about Pacquiao’s philanthropy

43:30 – Canelo announces he’s not fighting in September

54:45- We talk about Rafe’s latest piece on PBC fans

1:10 – Rafe gives us his 2020 NBA Champion Prediction

Rafe’s books can be found wherever you buy books and you can find him on twitter @rafeboogs.  You can also find his latest on boxing at The Athletic.

Canelo not fighting in September during Mexican Independence Day weekend leaving open date for boxing

July 17, 2019

Golden Boy Boxing sent out a press release on Wednesday informing boxing media and fans that Canelo Alvarez will not fight Mexican Independence weekend this September.

According to the press release, the “decision was made in an effort to secure the right opponent and to do justice to the level of promotion required for a boxing star of his magnitude.”

Alvarez defeated Daniel Jacobs Cinco de Mayo weekend.  One month later, GGG outclassed Steve Rolls to clear the way for the third fight in their trilogy.  But it appears that Alvarez is looking for another opponent.  There are rumors swirling that Sergey Kovalev may be a new challenge for Alvarez as that fight would likely take place at light heavyweight, meaning Canelo would go up in weight class.

As the dominoes go, if Canelo vacates the September date, one would think that GGG would vie for the opening to fight in Vegas.  GGG, a DAZN stablemate of sorts, signed a lucrative deal to be with the digital platform.  A fight possibility may be super welterweight Jaime Munguia.  The 22-year-old rising Mexican fighter would be a great opponent to fill the void of a Canelo fight.

Payout Perspective:

The loss of Canelo is a hit for DAZN as Alvarez’s Cinco de Mayo weekend fight against Daniel Jacobs aided the digital platform with subscriptions and one-off purchases.  The hope is that GGG replaces Canelo this weekend.  With that, it would only fuel the fire for a trilogy later down the road.  At this point, it appears that Canelo will fight in late November or possibly December (opposite UFC last weekend of the year?).  In the short term, the big September boxing event is on a holding pattern.

Plaintiffs in UFC Antitrust Lawsuit file brief opposing Top Rank, Bellator and Golden Boy’s objections to use of documents

July 3, 2019

Plaintiffs in the UFC Antitrust Lawsuit filed an Opposition this past Friday to the objections of Bellator, Golden Boy and Top Rank from producing the use of “potential” confidential information at August’s evidentiary hearing.

The Plaintiffs hope to utilize deposition testimony from Scott Coker related to Coker’s prior employment at Strikeforce, a copy of a standard Golden Boy promotional agreement template with boxers and a single paragraph from the Expert Rebuttal Report of Plaintiffs’’ expert Dr. Andrew Zimbalist which displays Top Rank’s wage share for the years 2013 to 2016.  There is also additional financial information from each of the three parties which Plaintiffs contend is “granular information.”

Plaintiffs’ Oppo to Non… by on Scribd

A set of evidentiary hearings will take place the last week of August and mid-September to determine the evidence provided by experts in the Antitrust lawsuit.  Pursuant to a scheduling order, the parties have produced exhibit lists they intend to use for the hearing.  Objections and responses have now been filed with reply briefs coming soon.

In addition, Bellator and Top Rank have filed objections to the use of information that includes information.  As third-parties to this lawsuit (they are not a plaintiff or defendant in the Antitrust lawsuit), they have filed objections to preserve the confidentiality of the documents.

Plaintiffs point out the standard that Bellator and Top Rank must convince the Court is that there must be “compelling reason” to exclude the documents from use.  Described as a high burden by Plaintiffs they cite to the overarching public policy that there is an “assumption that the press and public have a presumed right of access to court proceeding and documents.”  The only instance in which a party could overcome the policy is if “closure is essential to preserve higher values and is narrowly tailored to serve that interest.”

In arguing that Top Rank’s financial information which include the total annual revenues from 2010-2016 and average wage share are not commercially sensitive, they state that neither of the figures sought to use convey “granular, athlete-or event-specific information that could convey competitive advantage.”  Similarly, they suggest that the gross revenues from Bellator and Golden Boy would not provide a competitor advantage.

“Bellator and Golden Boy’s annualized gross revenues do not contain granular information that a competitor could potentially use to harm the Objectors because the figures convey no information that would enable a competitor to, for example, sign one of Objectors’ athletes, counterprogram Objectors’ events, or lure away Objectors’ sponsors.  If Objectors assert another type of harm, they have not articulated it and it is therefore waived.  Similarly, Objectors’ wage shares do not include information that could provide their competitors with an unfair advantage or put Objectors in a disadvantaged position in athlete negotiations or otherwise.”

Plaintiffs argue that Bellator’s annualized top-line revenues provide important context for assessing Zuffa’s dominant position in the market and wage share provides comparison regarding the class wide effects of Zuffa’s anticompetive Scheme.

With respect to the request to seal references to annual revenues and average wage share from 2010 to 2016, Plaintiffs argue that the information is “too old” to contain any competitive value.  Plaintiffs highlight the years in which each wants to seal their financial information from disclosure in arguing that the information is far removed from the litigation of today.

Bellator financial information:  2010-2016

Golden Boy financial information:  2015-2016

Top Rank financial information:  2013-2016

With Bellator and Golden Boy signing deals with streaming platform DAZN, Plaintiffs argue that the financial information is now obsolete.

Also, Bellator is asking to seal two passages from the deposition of Scott Coker.  Plaintiffs contend that there is not a compelling reason to do so.  Specifically, Coker reads from an email Zuffa produced that he wrote while he was Strikeforce president which is supposedly exemplifies Zuffa’s market share and its approach to competition.  The second passage asks the Court to seal identities of three principals in Strikforce’s parent company.

Finally, Plaintiffs claim that the Golden Boy standard contractual template is not a trade secret as it contains nothing specific or identifies an individual fighter.

Payout Perspective:

Top Rank, Bellator and Golden Boy will have a chance to respond to the Opposition Brief and argue the compelling reasons why the documents should remain confidential.  Alternatively, they might argue that the standard for exclusion is less than that proposed by Plaintiffs.  More likely, Bellator and Golden Boy will argue that the release and/or use of the financial information may provide a future template for competitors.  Regardless of how old the financial information is and despite any new partnerships, the information would be trade secrets that should not be disclosed to the public or utilized by Plaintiffs.  There is a lot riding on this ruling as Plaintiffs hope to use the information in late August for the expert hearings.  If not, it would present a big obstacle as they would have to find another way to present their evidence.  For Bellator and Golden Boy, the possible release of information might present more scrutiny on their company from its fighters and public as to the state of their finances as compared to prior statements of the company’s health.  MMA Payout will keep you posted.

Bellator MMA 223 draws 386,000 on The Paramount Network for tape-delayed card

June 25, 2019

Bellator MMA Live 223 drew 386,000 on The Paramount Network Saturday night.  The event was a tape-delayed telecast as the show took place earlier in London.

The event saw an upset as Rafael Lovato, Jr. defeated Gegard Mousasi to win the Bellator MMA middleweight world championship.

The telecast aired on digital streaming service DAZN as well as Paramount.

The last three Bellator events have been exclusively on DAZN.  The last event airing on Paramount was Bellator 219 which drew 307,000 viewers.

Payout Perspective:

It’s hard to gage how much Bellator viewership has dropped off since the event also airs on DAZN and we are not privy to the digital platform’s viewership.  With tape-delayed card, you can expect a lower viewership number since most of the hardcore fans will find ways to watch the event live.

The Athletic expands to combat sports, will fans subscribe?

June 10, 2019

The Athletic unveiled another vertical in its ever-expanding sports journalism business with coverage in combat sports.  The expansion gives the sport greater coverage but will the company’s foray into combat sports be rewarded with an uptick in subscribers.

Last week MMA coverage was introduced with MMA writing veterans brought on to write about the sport.  Today, Lance Pugmire, Mike Coppinger and Rafe Bartholemew announced that they are moving to The Athletic to write about boxing.  Pugmire wrote for The Los Angeles Times, Coppinger, for The Ring, and Barthomew a former writer for Grantland.  Notably, I interviewed Rafe back in 2010 about his first book at basketball in the Phillipines.

The expansion into covering MMA amd boxing was foreseeable.  Memorial Day weekend saw the unveiling of the company’s expansion into motorsports.  It also started to cover the WNBA when the season began in late May. With the company’s core business based on subscribers, robust content plus good writing, they are banking on an audience of hardcore sports fans that want a little more than the box score.

The Athletic has disrupted traditional sports journalism.  The standard business model for web sites with content is based on the selling of ads.  But The Athletic is solely based on subscribers as their main revenue source.

It hired away some of the biggest writers in the industry from other outlets and started a focus the localizing of journalism which hone in on certain cities and their teams as the writers gave a more detailed look at the teams including more features.

The startup was a creation of the Summer 2016 class coming of the Y Combinator – think summer camp for young entrepreneurs where they learn how to cultivate their ideas and most importantly, meet investors.

The company premised its business plan on the belief that there is still demand for “truly local content, written by sportswriters” with established credentials and contacts in the industry they cover according to a NY Times interview.  It started in Chicago where they hired the top sportswriters full-time and gave them a quota of writing quality, original content each day.

Perhaps the most notable early hires once it expanded past Chicago was the San Jose Mercury’s Tim Kawakami and veteran baseball writer Ken Rosenthal.  It also hired Seth Davis and Stewart Mandel.  Both known for their knowledge of college basketball and football respectively.

At a time when journalism was thought to be dead, The Athletic has shown it is not.  In a 2016 TechCrunch article, Alex Mather, co-founder of the company, said that 80% of readers view every article that is produced and subscribers spend an average of 90 minutes a week reading the content.  You can conclude that there is a base of fans that still want to read about the sports they follow and are willing to pay.

In addition to the written content, one of its main selling points is the quick load times for articles which, in a ‘right now’ society, is helpful.

Another aspect of The Athletic is that writers are incentivized to promote their work and build subscribers via social media as pay is tied toward the number of subscribers that they recruit.

Access is another linchpin for The Athletic.  With hiring established sportswriters, it gained instant credibility with teams and athletes.  NBA and MLB broadcasts refer to The Athletic articles all of the time.  Reporting on sporting events and interviewing players is just one component of The Athletic’s writing.  Long-form articles with intense detail and storytelling are a tell-tale characteristic of the web site.  This part of the web site has allowed them to be more creative and less-driven by press releases and/or PR pitches than with other sites demanding clicks.

Another facet of The Athletic that is pleasing to readers is no ads.  No sponsored content or banner ads that detract from the site.  Readers are asked at the end of the article if they find the content, “Awesome,” “Solid,” or “Meh,” which one might assume will factor into future content.

With the written content, it was only time before podcasts came along.  There are several podcasts on its platform and one might suspect MMA podcasts in the near future.

The Athletic has been a success since its launch.  As of late last year, it had over 100,000 paid subscribers with 60% under the age of 34 and a 90 percent retention rate for those retaining their subscription past the initial introductory offer.

Will this work for the MMA audience that have been accustomed to twitter for its news and looking on social media for the latest dust-ups between fighters?  Moreover, a fan base which is very supportive of fighters getting paid more and a union or association to combat the perceived injustices.  Yet, openly admitting to not wanting to spend money on PPVs and going through illegal streams to watch instead.  Paying $60 per year for stories up against web sites without a paywall seems to be a hard sell to MMA fans.  Alex Mather stated in a TechCrunch article that the $60 price is a “meaningful price, but not prohibitive.”

Of course, there is still backlash, by the MMA fan that doesn’t feel like they should spend money for writing.  It’s not a unique argument, but, as pointed out by Ben Fowlkes below, there is a price for writing:

In the TechCrunch interview, Mather differentiated The Athletic from others online as it being more original content as opposed to aggregated content.  With the advent of online content, there has been a demand for journalists to churn out blog posts in addition to stories for the daily paper.  The Athletic still demands daily original content, but there is also more feature material which could only live online without the parameters of a normal print paper or magazine.

The Athletic is the creation of co-founders Alex Mather and Adam Hansmann.   The two were co-workers at Strava – the subscription-based fitness company.  There has been a total of 6 rounds of venture funding.  Two seed rounds and three additional funding rounds.  According to Crunchbase, the initial seed round in 2017 drew 2.3 million.   A series A round saw it get $5.4 million.  A series B round raised another $20 million.  In October 2018, it drew another $61.8 million and the latest round in May 2019 saw it get another $21.7 million.  In total, it has raised approximately $89.5 million.

The company was valued at around $200 million after its October 2018 round and its likely more now after this latest round.

The Series C round this past fall was based on the possibility of diving into audio and video.  It also looks like there are rumblings that The Athletic will be expanding into the UK soon.

Eric Stromberg of Bedrock Capital, who met Mather and Hansmann at the Y-Combinator, and is an early investor in The Athletic stated that there were two things that they focus on when looking into investing a subscription business:  retention and a positive flywheel.

Retention seems self-explanatory in that there must be retention of customers after an introductory price is made.  The Athletic usually offers introductory offers to entice those interested.  It’s the retention to the usual price point is what matters to investors.

A positive flywheel is based on the premise that the more you build your subscriber base, the more you build your revenue base.  This provides the opportunity to reinvest the capital into hiring writers, expansion and technology.  Stromberg stated, “[w]hen this flywheel is working it’s actually quite hard to put a ceiling on the business.”

It would seem that The Athletic’s business model is working and the expansion into other sports will yield more fans to subscribe.  But the question of how much fans will be willing to spend becomes something dependent on the consumer.  Right now, things are looking great in the industry of combat sports as there are fights on multiple platforms and every weekend there’s an event to cover or write about.  The area of combat sports is not devoid of characters or notable stories.  This will keep the hardcore fans intrigued.  On a personal note, I think that boxing has a rich history that there would be a lot of stories to choose from.  Since MMA is relatively new, there’s only so much to pull from in comparison to boxing.  Yet, with the expansion of the subscription model where fans are paying for ESPN+ and DAZN and PPVs will there be a breaking point for paying out money for content that can be culled from the internet.  We shall see, but as of now the plan is working for The Athletic.

 

GGG tops Saturday’s DAZN event payouts

June 9, 2019

ESPN’s Dan Rafael reported the purses for Saturday night’s Madison Square Garden event featuring Gennady Golovkin.

According to Rafael, the official payout for GG was $2 million although its likely he’s getting closer to $15 million.  Steve Rolls, his opponent, drew $300,000.  Ali Akhmedov earned $25,000.  His opponent, Marcus McDaniel received $45,250.  Akhmedov defeated McDaniel.  Charles Conwell received $15,000 as he defeated Courtney Pennington who received $13,500.  Brian Ceballo defeated Bakhtiyar Eyubov.  Ceballo earned $25,000.  Eyubov earned $8,000.  Israill Madrimov earned $48,000 as he stopped Norberto Gonzalez who drew $15,000.  Nikita Ababiy earned $8,000 as he KO’d Juan Francisco Barajas who earned $3,500.

Despite loss, AJ sponsor Under Armour is sticking by the boxer

June 5, 2019

According to the Baltimore Business journal, Saturday’s loss to Ruiz received more news coverage due to the upset than if Joshua would have beat the heavy underdog.

Since the event was held on digital streaming service DAZN, still photos were used for coverage by ESPN and other reports.  The Under Armour “UA” logo was prominently displayed on the front of Joshua’s trunks.  Thus, there was more exposure than usual for the event if Joshua had knocked out Ruiz as many had anticipated.

While it is debatable that the publicity may have been bad since the UA-sponsored athlete lost.  But you could also argue that many did not know that Joshua was fighting since his US debut was meant to be against an opponent that he could easily defeat.  Ruiz was a fill-in opponent when Joshua’s original matchup failed his drug test.

Under Armour is sticking with Joshua after his loss.  Attica Jacques, the senior vice president of brand management told the Baltimore Business Journal that they would “stand with AJ and look forward to supporting him in the future.”  Under Armour once sponsored Canelo Alvarez but he is now a free agent per an interview last month.

Under Armour used Joshua’s fight week as an activation for its ‘Rush’ training apparel.  Joshua was one of three athletes featured in a marketing campaign for Rush.  Stephen Curry and U.S. women’s national team member Kelley O’Hara are the others.  Curry is currently in the NBA Finals and O’Hara and the U.S. National Team begin World Cup action this month.

Joshua was a part of a documentary on his training with the new ‘Rush’ training material showing behind-the-scenes training in lead-up to Saturday’s fight.  UA also created ring boots for Joshua to wear during his fight.  There was also social media promoting the UA brand.

While the loss may have hurt Joshua momentarily, UA is sticking by him for the long run.  UA says that activations were “extremely successful throughout fight week.”  It’s unlikely that the surprise loss will harm the marketing campaign for the new training apparel, but it may have hoped a win would propel the brand for future marketing campaigns.

Ruiz upset of Joshua helps heavyweight division

June 3, 2019

The biggest upset in boxing this year, and perhaps in several years, occurred at Madison Square Garden on Saturday night as Andy Ruiz, Jr. stopped Anthony Joshua in the seventh round.  The upset victory put a damper on the first appearance in the United States for one of the best in the world in the heavyweight division.

Ruiz knocked Joshua down 4 times in the fight.  Twice in the third round and another two in the seventh round with the last ending the night.

Ruiz was a fill-in for the original opponent for Joshua, Jarell Miller, after Miller tested positive for PEDs.

The loss may be seen as a setback for DAZN, which lists Joshua as one of its pillars in its boxing arm.  Last month, Canelo Alvarez and Daniel Jacobs fought on the digital platform.  Next week, Gennady Golovkin fights on the digital platform hoping not to fall to an opponent seen as a huge underdog.  Joshua, Canelo and GGG are three of the top boxers that have committed to DAZN as the company has offered each lucrative multi-fight, multi-year deals.

The upset derails a possible matchup with Deontay Wilder which was projected for 2020.  Wilder has inked a deal to fight Luis Ortiz again this fall.  Then, there is Tyson Fury.  The heavyweight that resurrected his career with his draw against Wilder last November is now looking for a rematch with Wilder.  But Fury must get past relatively unknown Tom Schwarz on June 15th for any talk of a rematch to occur.

Ruiz became the first Mexican American Heavyweight Champion and ascended to the short list of heavyweights that can demand big paydays from promoters.

The good news for Ruiz was that he professed to eating Snickers candy bars before fights.  On social media, Snickers gave him a shout out, and according to its twitter, sent him a care package:

In a free-rider sort of way, it also took advantage of Ruiz’s win:

In addition to Snickers, other sports celebrities’ game him props:

All is not lost for Joshua, although the luster of a matchup of undefeated fighters with Wilder or even Fury will no longer happen.  Big money fights are still on the horizon.  He still could sell out Wembley Stadium in a return against Ruiz or an eventual showdown with Wilder or Fury.  Despite the loss, we know that boxing forgets about these blemishes so long as the fighter returns to form.  Even a big fight showdown can still happen.  When Manny Pacquiao was knocked out by Juan Manuel Marquez, all thought that the superfight with Floyd Mayweather would not happen.  In fact, the fight did come to fruition and made big money at the gate and PPV.

While the boxing timeline may have been pushed back due to the upset, Ruiz’s win likely made the division that much more interesting and gave promoters more viable matchups to work with and push.

 

NAC discloses attendance and gate for Canelo-Jacobs

May 13, 2019

The Nevada Athletic Commission has released the attendance and gate for the May 4th fight between Canelo Alvarez and Daniel Jacobs at the T-Mobile Arena in Las Vegas.

The event was the sixth largest boxing event at the T-Mobile Arena with the top 5 involving Canelo.  The other event, Floyd Mayweather-Conor McGregor had the largest gate with $55,414,865.79, drawing 13,094.

The other events included:

Canelo-GGG I, 9/16/17 – 17,318 for a gate of $27,059,850

Canelo-GGG II, 9/15/18 – 13,732 for a gate of $24,473,500

Mayweather-Canelo, 9/14/13 – 16,146 for a gate of $20,003,150

Canelo-Julio Cesar Chavez, Jr, 5/16/17 – 17,143 for a gate of $10,631,850

Canelo-Daniel Jacobs, 5/04/19 – 15,730 for a gate of $8,685,750

Also, of note, there were 1,388 comps for the event.

Payout Perspective:

While it might be the lowest gate of the Canelo events listed above, Canelo-Jacobs did draw more than the second GGG fight. Admittedly, the other fights on this list had more heat and drawing power.  Not that Daniel Jacobs was not a worthy opponent for Canelo, but the others on this list already had a name many casual fans were aware of prior to the fight.  JCC, Jr. rode his family lineage for his popularity and therefore the big attendance and gate for that fight.

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