Haymon-Golden Boy await judge ruling on MSJ

January 12, 2017

The Al Haymon-Golden Boy antitrust lawsuit filed in federal court in Los Angeles is set for trial on March 14, 2017 if the court does not grant the defendant’s Motion for Summary Judgment.

For a good refresher on what this case is about and the gist of the motion, you can read Paul Gift’s synopsis last month. We take a deeper dive in the legal issues of the motion below.

An oral argument for the motion was taken off calendar (i.e., cancelled) by the court this past November 28th.  As of this date, there has been no ruling issued by the trial court.  Realistically, there is no timeline for the court to render a ruling on the motion except for the fact that there would likely be an opinion prior to trial documents needing to be filed with the court.

Haymon’s Motion for Summary Judgment

Haymon’s attorneys, and the attorneys for his entities that were also sued in this litigation argue that Golden Boy failed to establish a triable issue of fact of its attempted monopolization.  It essentially argues that there is no evidence of specific intent for a monopoly, Golden Boy failed to identify any anticompetitive or predatory conduct and Golden Boy misconstrues the concept of antitrust injury.

One of the claims set forth by GBP is that Al Haymon should be held individually liable for violation of the antitrust laws.  Haymon attorneys assert that Haymon could not be liable of antitrust injury because individual liability requires “inherently wrongful” conduct, a per se violation.  Haymon argues that attempted monopolization is not properly evaluated as a per se antitrust violation.

In an antitrust case, there are two ways a court looks at whether there is a violation of the antitrust laws.  The first is a “per se” violation and the second is the “rule of reason.”  Per se relates to conduct that is manifestly anticompetitive with limited potential for procompetitive benefit.  The rule of reason is the presumptive or default standard and the general standard it examines whether the procompetitive benefits outweigh the anticompetitive effect.

“Inherent conduct” is equated to a “per se” violation by Haymon.  In its moving papers, they state that courts have regularly dismissed claims against corporate officers in cases dealing with conduct that is permitted or even encouraged by the antitrust laws.  Here, the argument is that Haymon and his entities did not do anything wrong.

It also argues an “even if” scenario providing the hypothetical that if a court were to analyze the tying claim as a “per se” claim it would fail on the merits.  It first argues that there is no tie in the first place.  Haymon points out the similar Top Rank lawsuit in citing that Top Rank failed to prove as a matter of law that the two distinct services of promotion and managing were tied together.  The clause in the contract that is questioned is the provision that requires consent to enter into contracts.  However, Haymon’s attorneys point to the Canelo Alvarez-Amir Khan fight in May 2016 as an example of interpromotional fight making.  Also, the Floyd Mayweather-Manny Pacquiao case is another example which reflected the opportunity for a contracted Haymon fighter to work with another promoter.  Thus, the examples show that the contracts do not foreclose other promoters.

Haymon argues that the market described by GBP are artificial and are “illogical, divorced from the reality of the boxing industry, and fail to satisfy GBP’s burden to establish coherent markets in which the Defendants could possibly have market power.”  It states that “Championship-Caliber Boxers,” the market described by GBP in its lawsuit is not a recognized industry term.  Haymon attorneys identify the fact that the term was interpreted differently by multiple people within the boxing industry.  They also argue that GBP has not shown that there are barriers to entry in the markets for which they define.

Golden Boy Theory of Antitrust Injury

As you might recall Golden Boy brought a lawsuit against Al Haymon and his entities illegal tying of its managerial and promotional services.

As we wrote:

The lawsuit claims that Haymon, et. al have created a “tying” relationship in violation of antitrust laws.  This is done through agreements affecting to separate relevant markets.  The first market is for management of Championship-Caliber Boxers and the market for promoters.  As described in the Complaint, the management market is the “tying” market whereas the promotion market is the “tied” market.  Essentially, the fact that Haymon manages so many fighters it affects the promotions market since he has exercised control over the direction of each fighters’ career.

Tying under Section 1 of the Sherman Act must show:

  • There is evidence of a tie;
  • There is evidence “of coercion” of purchasers to buy products or services;
  • There is evidence of market power in a properly defined market.

Golden Boy opposes the motion on the grounds that Al Haymon is personally liable for antitrust injury.  It suggests that the standard for individual antitrust liability is met when an officer knowingly approves to each element of a claim whether or not the claim involves “inherently wrong” conduct.  It also states that it has ample evidence to support their tying claim as Haymon tied their management services to the rejection of competitors’ promotion services in favor of their own.  Also, it rebuts the assertion by Haymon that it has fabricated the relevant market definition.  It also contends that there are “significant barriers to entry” in the relevant markets.  Finally, it states that the Haymon acted as promotes as well as managers.

GBP claims that issues of fact exist as it relates to the evidence of exclusionary contracts which “tie out” others.  It also claims that its expert’s testimony provides ample evidence of the markets in the industry and that they are controlled by Haymon.

In its opposition to the motion for summary judgment, GBP argues that Haymon’s model of paying supracompetitive sums is not a “rational business model, unless there is to be a payoff.”  The “payoff” as concluded by GBP is the monopoly of the boxing promotion business, controlling the television market for boxing and “invoking supracompetitive pricing once dominance is obtained.”

The opposition points to “draconian exclusionary terms” in contracts which give Haymon Sports control over all aspects of the boxer’s career and a veto right over all boxing related contracts.  In its pleadings, Haymon does admit that a “standard management agreement gives it the right to approve the boxer’s selection of promoter, it has never exercised this right to require or coerce its boxers to use or not use a particular promoter.”  This seems to negate, but confirm terms within the Haymon boxing management contract that reflects control over the boxer’s selection of promoter.

GBP also argues that Haymon has a tying arrangement in which one must refrain from accepting another product.  Here, GBP contend that Haymon tied his management services to the rejection of competitors’ promotion services.  They suggest that fighters under contract with Haymon know that they cannot work with other promoters outside of Haymon.  GBP indicates that this is a triable issue of fact that would

Payout Perspective:

The standard on a motion for summary judgment is to weigh all of the pleadings and facts within and weigh them in the “light most favorable to the non-moving party (in this case GBP).”  If the court determines that there are no genuine issues of material fact, it will grant a dismissal as a matter of law.  However, a court will deny a motion for summary judgment if there are pending issues of fact.

Whether or not Haymon could be individually liable will be an issue the court will need to determine based on the facts provided and the legal arguments made by the parties.  While Haymon’s attorneys argue that personal liability cannot be assessed in these matters, Golden Boy argues that case law supports the contention that Haymon is personally liable.  As for the business model, the fighter contracts will be an issue for the court to consider as well as GBP’s expert testimony which addresses the relevant markets.

Once a decision is rendered, MMA Payout will let you know

Mark Hunt files lawsuit against UFC, White and Lesnar

January 10, 2017

UFC Heavyweight Mark Hunt has filed a lawsuit against the UFC, Dana White and Brock Lesnar in the District Court of Nevada on Tuesday.  The lawsuit stems from Hunt’s fight against Lesnar at UFC 200.

Hunt is claiming violations of the Racketeer Influenced Corrupt Organizations Act, Conspiracy to Commit Racketeering, Fraud, False Pretenses, Breach of Contract, Breach of Covenant of Good Faith and Fair Duty, Negligence and Unjust Enrichment.

The premise of the complaint is that the UFC allowed Lesnar to fight at UFC 200 while providing the WWE wrestler with an exemption from the UFC’s anti-doping policy.

Lesnar tested positive for a banned substance in both an out-of-competition and in-competition drug test.

Lesnar defeated Hunt via unanimous decision at UFC 200 this past July.

The Complaint makes reference to UFC 152 when Vitor Belfort was allowed to fight with a testosterone use exemption but without disclosing the information to the public or his opponent Jon Jones.

In the lawsuit is embedded a photo of Lesnar pummeling Hunt.

Of the notable items in the Complaint, Hunt claims RICO violations against the UFC which carry treble (3 times) damages.

He also claims personal injuries which include damage to reputation, loss of opportunity of career advancement and further earning potential.

Payout Perspective:

Hunt has intimated that he may take legal action and he did.  The timing comes after Lesnar was recently handed 1 year suspensions from USADA and the Nevada State Athletic Commission which meant that he could come back in July 2017.

RICO is a very specific statute that requires that a person must commit at least two acts of racketeering activity from a set of crimes within a specific time frame and are related to an enterprise.  This will be interesting for Hunt to prove and would make discovery as interesting as the current antitrust lawsuit filed by former fighters.

Hunt is scheduled to fight in March 2017 which makes this lawsuit all the more interesting.

MMA Payout will keep you posted.

2016: The year in boxing

January 7, 2017

2016 seemed to be a low-key year in the world of boxing.  While 2015 saw some major moves from Al Haymon and his Premier Boxing Champions, the endeavor has fizzled.  The same could be said for the year of boxing on PPV as there were no major events that drew PPV buy rates the likes of Mayweather or Pacquiao in their primes.

We saw less of Haymon’s Premier Boxing Champions on the multiple channels it was on the year prior.  PBC has blown through a lot of capital since it launched in March 2015.  A lawsuit filed by Golden Boy, one of two filed by rival organizations, is set to go to trial in March 2017.

Currently, Haymon and the entities sued by Golden Boy have filed a motion for summary judgment to dismiss the case prior to the trial date.  No decision has been made as of this date.

The other antitrust lawsuit against Haymon, filed by Top Rank Boxing was settled by the parties this past spring.

Both of the lawsuits claimed that Haymon’s PBC business model sought to create an illegal tie-in through Haymon’s signing of fighters as their management and then promoting them.  They also argued that PBC foreclosed the fighter market and possibly promoting the fighter since fighters under Haymon would allegedly not deal with other promoters.  It also tied-out promotions that sought to be on television since Haymon struck exclusive deals with multiple networks.

Chris Algieri fought this past April but expressed concern with how much he would be paid as his promoter did not reveal how much of a percentage he would receive from his fight against Errol Spence, Jr.  The situation brought up an issue with the Ali Act.

Speaking of Spence, after defeating Algieri his next fight in August drew an impressive 4.8 million viewers on NBC with a peak of 6.34 million.  The PBC on NBC fight aired after the U.S. Olympic gold medal basketball game between the U.S. and Serbia.  The one-hour show was sandwiched between Olympic network coverage which may have attributed to the huge viewership which seems to be an anomaly when compared to past PBC on NBC telecasts.

Deontay Wilder and his promoter Lou DiBella are embroiled in a lawsuit with Alexander Povetkin and his promoter World of Boxing, LLC over a failed fight that was set to happen in Russia in May.  Povetkin tested positive for Meldonium.  However, he claimed that only small traces were found in his sample and his use occurred prior to January 1, 2016 when WADA banned the substance.  The WBC reinstated Povetkin because the substance in his system was below the threshold accepted by WADA although it claimed to require Povetkin to submit to drug tests.  The parties are embroiled in a discovery fight but the case is set to go to trial this spring.

Notably, Povetkin tested positive after he was reinstated and scheduled to face Bermane Stiverne for the WBC heavyweight title.  He stated that he wanted his “B” sample tested on Thursday at the UCLA Laboratory in Los Angeles.

DiBella is one of the boxing promoters that protested the new law legalizing MMA in New York, but requiring promoters to provide $1 million worth of coverage per athlete in the event of a life-threatening brain injury.  He pulled the rest of his shows scheduled for New York in late October as a form of protest and as a matter of practicality. Jo DeGuardia of Star Boxing along with DiBella submitted a public comment regarding the regulations.

A survey of all of the fights on HBO, including PPV replays, drew an average of 780,000 subscribers of the premium channel.  The highest-rated fight this year was GGG versus Dominic Wade on April 23rd which drew over 1.3 million viewers.  Only two other fights reached past 1 million viewers: Sergey Kovalev versus Jean Pascal which drew 1.179 million viewers in January and Andre Ward versus Sullivan Barrera which drew 1.064 million viewers.

Showtime had less fights this year and drew an average of 363,000 viewers.

In May, a year after the “Fight of the Century” between Manny Pacquiao and Floyd Mayweather, Jr. resulted in a lawsuit as Showtime sued Top Rank citing indemnification and breach of contract related to lawsuits filed by third parties against Showtime and Top Rank related to Pacquiao’s claim that he fought with an injury against Mayweather.  Showtime sought to invoke the indemnification language in the contract.  However, Top Rank, as you might expect, disagreed with the reading of the contract.  In fact, they intended to bring a motion to dismiss Showtime’s lawsuit.

But, in September, Showtime voluntarily dismissed its case.

Finally, it was a rather disappointing 2016 for boxing PPVs.

Boxing PPVs 2016

April 9, 2016 – Pacquiao-Bradley III: ~400K PPV buys

May 7, 2016 – Alvarez-Khan: ~450K-600K PPV buys

July 23, 2016 – Crawford-Postol: 50K-60K PPV buys

September 17, 2016 – Alvarez-Smith: >~300K PPV buys

November 5, 2016 – Pacquiao-Vargas: ~300K PPV buys

November 19, 2016 – Ward-Kovalev – 160,000 PPV buys

An unfair comparison, except for this web site I suppose, but if you consider the UFC had its most successful year on PPV with 5 events going over 1 million, boxing had a dismal year.  Canelo Alvarez, the predicted heir to boxing PPV, did not draw as expected and Manny Pacquiao is losing his appeal in the U.S.  Note that HBO passed on distributing his November fight in order to promote a fight that drew just 160,000 on PPV.  Unless GGG-Canelo happens in the fall of 2017, there are not any marquee PPV fights coming up in boxing this year.

UFC 207 early PPV estimates: 1.1M buys

January 6, 2017

UFC 207 looks to have done well on PPV as initial estimates by The Wrestling Observer’s Dave Meltzer have the PPV at 1.1 million buys.

UFC 207 featured the return of Ronda Rousey as she faced Amanda Nunes for the UFC bantamweight title.  Nunes stopped Rousey in the first round.

The 1.1 million PPV buys ties UFC 193 as the largest buy rate for a Ronda Rousey headlined event.

UFC 193 – 1.1M

UFC 190 – 900,000

UFC 184 – 600,000

UFC 170 – 350,000

UFC 157 – 450,000

Payout Perspective:

The buy rates do not include the events where Rousey was the co-headliner with Chris Weidman (UFC 162 and UFC 168).  UFC 168 drew 1.025M buys but was the return of Weidman-Silva.  It was also Tate-Rousey.  UFC 207 reflects the Rousey demo.  The PPV was not hurt due to the PPV being on Friday night or the fact she did not do the regular media rounds to promote the fight.  You probably cannot turn your back on the media all the time but the fact that Rousey was returning provided some extra interest for her fans.  It also shows the niche that she has carved out and if she were to retire, would there be another woman fighter that could garner this much attention.

UFC 207: Payout Perspective

January 3, 2017

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 207 from the T-Mobile Arena in Las Vegas, Nevada.

Rousey finished in 48 seconds

It was the long-awaited return of Ronda Rousey.  She looked in top shape but the question was whether she could return to her form pre-UFC 193.  The former bantamweight champion that brought women’s MMA to prominence could not.  Amanda Nunes broke Rousey’s spirit within seconds of the fight starting.

Rousey’s lone takedown attempt was stuffed and she actually started turning away from punches as if she’s never fought before.  It was pretty sad to watch a former champ go down this easy. She was out on her feet and didn’t even realize the fight was over.

For Nunes, it was easy work.  As she did at UFC 200, she broke a fighter’s spirit and likely retired another top opponent.  Nunes also showed some great promo skills post-fight as she told the media to forget about Rousey.

It will be interesting to see who will be next for Nunes.

I don’t think we can say poor Ronda Rousey.  Even though her MMA career should be over, her payday ($3 million) ties her for the highest-ever with Conor McGregor.  Rousey is more psychologically damaged than physical and if she doesn’t have her heart in fighting, she shouldn’t do it.


Garbrandt showboats to championship

While one championship fight had little promotion, the Dominick Cruz-Cody Garbrandt title match-up had great lead-up.  The two verbally sparred throughout the promotion of the fight and Garbrandt attempted to go after Cruz during media rounds.  There was even a pull-apart at the ceremonial weigh-ins.

Garbrandt showed no fear and solved Cruz’s awkward, but successful style.  It could be that Garbrandt was just quicker or Cruz lost a step but it made it a unanimous decision for the challenger.

This exchange will likely be gif’d to death.  In all honesty, I’ve watched it about 50 times.

In a touching moment, Garbrandt put the belt around a kid he befriended that battled back from leukemia. The kid, who walked hand in hand with Garbrandt to the ring, chanbed his life according to the new champ.  In the same post-fight interview, he called T.J. Dillashaw a m****f*****.  So, he’s still rough around the edges.

Garbrandt could grant Cruz a rematch or go after T.J. Dillashaw.

Attendance and Gate

Ticket demand was still high for Rousey as UFC 207 drew the largest attendance for an MMA event in the state of Nevada with 18,533.  T-Mobile Arena sold standing room only seats for the event which likely helped the attendance figure.  The gate was $4.75 million.

While the secondary market was not as robust as prior Rousey events, this was the first one in sometime in Vegas.

Bonuses

The fighters taking home the belts earned bonuses: Amanda Nunes and Cody Garbrandt.  Garbrandt and Cruz won the Fight of the Night.  Nunes and Alex Garcia earned a Performance bonus as well.  All received $50,000 checks.

Salaries

Ronda Rousey drew $3 million which ties her with Conor McGregor for the highest-reported salary in the UFC.  Amanda Nunes earned $200,000 ($100k win/$100 show) for her defeat of Rousey.

The full list is here.

Pre-Fight Promotion

Ronda Rousey did little pre-fight promotion except for appearances on Conan, Ellen and an ESPN piece with Ramona Shelburne. Dana White stated that this was due to a one-time agreement with Rousey.

There were radio ad buys for UFC 207 to bolster the end of the year event.  The ad included the Cain-Werdum fight which did not happen.

Although Rousey did not speak, the faceoff in her return during the UFC 205 event in New York was intense.  Also, the ceremonial weigh-in on Friday with Nunes wearing the lionhead was great as well.

Over 103,000 people watched the ceremonial weigh-ins on YouTube and over 59,500 watched it on Facebook Live during the Rousey-Nunes faceoff.

Rousey appeared in 3 of the 6 Embedded episodes although she did not talk that much.

Ratings

The UFC weigh-ins drew 222,000 viewers on FS1 and 94,000 in the A18-49 category per Sports TV Ratings.

The UFC 207 Prelims drew 1.511 million viewers on Friday night making it the fourth-highest rated PPV prelim of 2016.

The pre-fight show on FS1 drew 572,000 viewers and the post-event drew 404,000 viewers.

Overall, very strong numbers despite the fact it was a Friday night.

Sponsorships

MetroPCS, Toyo Tires, Harley Davidson, the WGN series ‘Outsiders’, Geico, Twinzz.com, IconicFaceOff.com, Geico, Budweiser, the movie XXX and Monster Energy had the center.  XXX is the latest in the Xander Cage (Vin Diesel) series.

Rousey was sponsored by Monster Energy drink as she had the logo on her shorts.  The same for Dominick Cruz.

Pantene also had the Rousey commercial during the PPV.  The company activated a new campaign around Rousey in lead-up to this event.

Toyo Tires sponsored the Embedded series.

Odds and ends

Yahoo Beauty found a way to mention Ronda Rousey by doing a story on why women MMA fighters braid their hair.

Johny Hendricks looked better against Neil Magny, but missed weight again.  The issue seems to be in his head as he challenged media to cut weight.

Cain Velasquez was taken off the UFC 207 card and his fight with Fabricio Werdum after discussing his injuries in an interview.  The NAC took Cain off the card without his knowledge according to the former heavyweight champion.  He responded via a lengthy Facebook post.

Embedded was a good time for Dominick Cruz to show-off his branded t-shirts.

A big faux pas occurred when cable and satellite distributors advertised that UFC 207 was happening Saturday.  As we know, it was Friday.  Based on the Friday night ratings, people knew the correct time.

Nunes had the “Island of Dr. Moreau” look with the lion head at the ceremonial weigh-ins.

If you noticed a man in a wheelchair at the weigh-in, he had cashed in his UFC Reward Points for the opportunity to be on stage at the weigh-ins.  A pretty nice payoff considering he saw an almost fight right in front of him and Rousey-Nunes.

The bad news about Rousey’s fame was that she was covered in most of the mainstream news outlets including the Wall Street Journal, New York Times, Sports Illustrated and ESPN.

“Ronda Rousey Fight” drew over 5 million google searches on Friday which should indicate a huge PPV gate.  But, a portion of those probably were searching for the fight after learning the news that Rousey was KO’d in less than a minute.  Interesting enough, there were no copyright warnings as there were for UFC 193.

Conclusion

All the indicators (google searches, ratings, etc.) reflect a huge PPV buy rate.  While we may want to discount some of those google searches, there were still a healthy amount of people that knew the fight was going to be Friday and that Ronda Rousey was returning to the Octagon.  For those that though there was “lack of buzz,” they underestimate the Rousey demo and are stuck in their old ways of thinking of what “MMA fans” want to see.  It would not be surprising to see this PPV hit 1 million buys.

UFC 207 Prelims on FS1 draws 1.511M viewers

January 3, 2017

The UFC 207 Prelims on Friday night drew 1.511 million viewers on FS1 per Sports TV Ratings.  It was the fourth highest PPV of 2016 and the sixth prelims telecast to go over 1 million viewers.

In addition, it drew 813,000 viewers in the adult 18-49 category.  The featured fight on the prelims was Johny Hendricks versus Neil Magny.  Magny earned a unanimous decision.

The average for 2016 was 1,097,000.  In comparison, 2015 drew an average of 1,069,000.

In addition, the pre-fight broadcast on FS1 which preceded (4:00-5:00pm PT) the UFC Prelims drew 572,000 viewers and 281,000 in the A18-49 demo.  The post-fight drew 404,000 viewers and 234,000 in the A18-49 demo.  The post-fight event went from 9:50pm-11:07pm PT.

Payout Perspective:

The ratings are very considering the prelims took place on Friday night.  The big viewership number likely reflects a big PPV buy rate.  All of the prelims except UFC 195 drew over 1 million PPV buys.  With Rousey on the PPV card, expect a buy rate over 1 million.

16 for 16: No. 1 WME-IMG purchase the UFC

December 31, 2016

The UFC was sold for approximately $4.2 billion this summer changing the face of the largest, mixed martial arts company.

Despite internal and external denials, it was clear that Zuffa was set to sell the company.  Perhaps we should have seen this coming the year prior.  Subtle changes made to the brand logo and broadcasts, making Reebok the official clothier of the company and adding a drug testing component likely solidified the company as prime for purchasing.  One of the things that appealed to the buyers was the strong brand and making investments in its brand pre-sale helped the eventual transaction.

WME-IMG made the purchase.  The deal was backed by private equity firms Silver Lake, Kohlberg Kravis Roberts and the investment firm of Michael S. Dell.  The price tag of $4 billion was surprising considering that the sport is still considered a niche.

Via our post this past July

The purchase price of $4 billion represents a 22 multiple of the UFC’s earnings before interest, taxes, depreciation and amortization.  On $600 million in gross revenue from 2015, UFC’s EBITDA is $180 million.  $180m x 22 =$3.96 billion.  The hope is that with a new media rights deal, the multiple will lower to 13-14 range which would make it a much better purchase.

The Fertitta brothers, Dana White and Flash Entertainment cashed out on their ownership interests.  White signed back on with the new owners for 5 years and 9% of the company’s net profits.  Ari Emmanuel and Patrick Whitesell are the new faces of the UFC.  They were No. 4 on a list of most influential in sports business for 2016.

The transaction was scrutinized by government regulators for its questionable buyout-loan strategy.  The Fed warned Goldman Sachs and Deutsche Bank AG, the entities that marketed the debt to investors, of abuse in inflating earnings before interest, taxes, depreciation and amortization. The EBITDA for the UFC was pegged at $170 million but then was estimated up to $300 million when presented to debt investors helping finance the sale.  The higher EBITDA allowed WME borrow $1.8 billion for the deal without running afoul of the guidelines which prevent borrowing for more than 6x a company’s EBITDA.  A WSJ article stated $48 million in expected “future step up payments to television contracts and other licensing agreements,” helped bring the EBITDA up to $300 million. Under the new owners, it is looking for $450 million per year for 10 years in next media rights deal.  This would have bolstered the anticipated EBITDA of the company.  Whether or not the UFC could garner $450 million is yet to be seen.  We’ll see if there are buyers on the market this time next year.

Regulators made a second reprimand to Goldman Sachs earlier this month.

The sale included incentives for WME-IMG which included a $175 million contingent payment upon achievement of $275 million in EBITDA (but not earlier than June 30, 2017 and $75 million payable upon achieving $350 million of LTM EBITDA (but not earlier than December 31, 2018).

A Sports Business Journal poll of its readers found 66% of the responses thought that WME-IMG overpaid for the UFC while only 3% of the responses found it underpaid.  Another 30% thought it paid the right amount.  26% of SBJ readers polled thought the UFC to be the hottest sports property of 2016.  The NBA, NFL and NCAA were ahead of the UFC (in that order).

As far as changes, the new regime is looking to institute corporate discipline in cutting costs.  The new owners trimmed staff which included consolidating overseas operations in what seems to be a focus on domestic events.  Matt Hughes and Chuck Liddell were let go by the UFC.  Perhaps indirectly, long-time PR exec Dave Sholler found a job with the Philadelphia 76ers and Joe Silva announced he was leaving the company at the end of 2016.  Also, Mike Goldberg called his final UFC fight at UFC 207. In its new media rights deal, it indicated that its partner would be in charge of production of events whereas the UFC had been in charge of it in the past.

The sale also sparked more fighters to express their discontent with the organization over pay.  With the news of the purchase price, fighters wondered their worth to the company.  The interest in organizing an association or union for the UFC came to the forefront this year as we saw a willingness by fighters to publicly state their views.  But, with an incentive to increase revenues to hit their EBITDA goals by the end of June 2017 and December 2018, the UFC will seek to cut more costs which does not bode well for fighter benefits.

2017 will be an interesting year to see how the new owners will manage the company and deal with the evolving issues that will come up.

16 for 16

2.  PFA and MMAAA seek to organize UFC fighters

3.  MMA finally legal in New York

4.  Legislation to expand Ali Act introduced

5.  UFC 200

6.  The year of Conor McGregor

7.  Bellator signings

8.  UFC pulls credentials for Helwani after breaking news

9.  Legal troubles for Jon Jones continues

10.  WSOF legal woes continues

11.  Ronda Rousey returns

12.  Alliance MMA goes public

13.  GSP declares himself a free agent

14.  Bellator 149

15.  CM Punk debuts

16.  Former Bellator employee sues company, organization sues back

UFC 207 draws largest MMA attendance in Nevada

December 31, 2016

UFC 207 drew 18,533 and a live gate of $4.75 according to UFC officials post-event.  The gate set an attendance record in Nevada but lands 14th on the list of biggest gates in Nevada.

The event was a sell-out according to the UFC.  As we reported on Friday morning, there were just scattered tickets available through the T-Mobile Arena.  It was announced that they were also selling standing room only tickets.

The numbers narrowly beat out UFC 200 (18,202) for attendance but UFC 200 had the bigger gate $10.7 million.

(h/t: MMA Junkie)

In comparison UFC 141, the last Friday night show in Vegas for the company did 13,793 and a $3.1 million for Lesnar-Overeem.

Payout Perspective:

Dana White indicated that he predicted the gate to be $4.5 million and the numbers did slightly better perhaps due to the standing room only seats.  The sell out on a Friday night before New Year’s Eve shows the star power of Ronda Rousey.

Ticket demand for Rousey still there for UFC 207

December 30, 2016

The average resale price for a ticket for today’s UFC 207 is $348.  According to Nate Rattner at SeatGeek, it is nearly 3x hotter than a ticket to UFC 206 in Toronto (the average resale price was $124).

Per SeatGeek, here are the average resale prices for the top 5 UFC fights since 2010:

  • UFC 205: $1233
  • UFC 200: $1137
  • UFC 202: $929
  • UFC 194: $843
  • UFC 189: $741

In comparison, here are the prices for Ronda Rousey fights on the secondary market per SeatGeek.  Note that the last two UFC Rousey fights are not included here since SeatGeek does not track international events.

  • UFC 184: $263 (vs. Zingano at Staples Center)
  • UFC 175: $411 (vs. Davis, Weidman-Machida co-main)
  • UFC 170: $205 (vs. McMann at Mandalay Bay)
  • UFC 168: $545 (vs. Tate, Weidman-Silva II)
  • UFC 157: $186 (debut vs. Carmouche at Honda Center)

According to Rattner, the median price on the secondary market dropped 5% from $417 to $389.

In comparison, per Julia Litz at Vivid Seats, the minimum ticket price on the secondary market is $152 and the median ticket price is $525.

A look on Ticketmaster as of 8:00am PT, had scattered seats available with the get-in price being $605.

Per Kevin Iole, T-Mobile Arena will sell standing room tickets which will be the first time the arena has done it in its short history. Iole also reported on that Dana White told him that the gate looks to be about $4.5 million and roughly 19,000 in attendance.  Of course, with standing room sales, this could go up.

Payout Perspective:

The ticket sales show you that the Ronda Rousey return is a big seller despite her media blackout.  While the median price may have dipped a little on the secondary market, the news that they will sell standing room only tickets reflects the demand.  The resale market does indicate that the tickets are “affordable” for a Rousey fight.  This might be due to it being a Friday event, New Year’s Eve and not a strong co-main (although Cody-Cruz should be fun).  Still, the demand for Rousey is there for her return.

16 for 16: No. 4 Legislation to Amend Ali Act Introduced

December 29, 2016

In May 2016, Oklahoma Republican Congressman Markwayne Mullin introduced an expansion of the Muhammad Ali Boxing Reform Act to include MMA.  A Congressional Subcommittee hearing was conducted in December to discuss the issues related to mixed martial arts and how the introduced law would help fighters.

In addition to Congressman Mullin, it is co-sponsored by Democrats including Joseph P. Kennedy of Massachusetts and Mark Takano of California.  Overall, 5 Republicans and 2 Democrats have put their name to the bill.

The UFC opposes the expansion and hired a lobbying firm to influence legislators into voting down the amendment to the existing law.  Several op-eds have come out to oppose the law citing government overreach among other reasons.  It attempted to strong-arm the December hearing by indicating it would not participate if Randy Couture testified.  It backed off and Jeff Novitsky represented the UFC at the hearing.

The amendment to the Ali Act mirrors the current law with few changes but for the inclusion of combat sports.  Earlier this year, I outlined the issues with the expansion of the Ali Act which included a variety of cases where boxers sued promoters and came up with a loss.  Notably, there could have been more done with the Ali Act to ensure functionality to allow fighters an alternative to needing to file a lawsuit under the Act.

Currently, the Ali Act is in the House Education and the Workforce Subcommittee.  There is no word on whether there will be additional hearings on the subject or what the next move will be on the bill.

With the new UFC ownership and its previous relationship with the incoming administration in January I do not know how successful passage will be.  At this point, there seems to be a lot more work to do before it comes to a vote in the House.

16 for 16

5.  UFC 200

6.  The year of Conor McGregor

7.  Bellator signings

8.  UFC pulls credentials for Helwani after breaking news

9.  Legal troubles for Jon Jones continues

10.  WSOF legal woes continues

11.  Ronda Rousey returns

12.  Alliance MMA goes public

13.  GSP declares himself a free agent

14.  Bellator 149

15.  CM Punk debuts

16.  Former Bellator employee sues company, organization sues back

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