Moody’s details UFC Holdings, LLC acquisition

July 26, 2016

In a press release sent out last week, Standard & Poor’s Global assigned a rating for the debt involved in the acquisition of the UFC by a group led by WME-IMG.  Moody’s Investor Service has sent out its own press release with more details related to the leveraged debt in the acquisition.

Per the July 22, 2016 release, Moody’s assigned VGD Merger Sub, LLC (aka UFC Holdings, LLC) a B2 corporate family rating and the proposed $150 million revolver and $1,300 million first lien term loan a B1 rating.  The rating is assigned to those investments with a high credit risk and are based on speculation.  The outlook, per Moody’s is seen as stable.

While Moody’s has a pretty optimistic outlook on the future of the company, it will not adjust the rating any time soon until the debt leverage is reduced.

UFC Holdings, LLC will be the rated entity after the transaction is complete.  The Moody’s release broke down the money covered in this transaction:

  • $1,420 million in new equity
  • $325 million in rollover equity from management and existing investors
  • $400 million of preferred equity
  • $1,300 million in new first lien term loans
  • $500 million second lien term loans or unsecured debt.

When the company determines if the $500 million will be in the form of a second lien term loan or an unsecured note, Moody’s will assign a rating to the debt offering.

Moody’s expects that the UFC will maintain a “good liquidity profile over the next twelve months with an expected cash balance of about $30 million following the close of the transaction and an undrawn $150 million revolving credit facility due 2021.”

Similar to the Standard & Poor’s projections, Moody’s cites the upcoming rights fee agreement as a positive for the company when considering its prospective business outlook.  Despite the high debt, analysts believe that this shall contribute to an ascending EBITDA.

Also to note from Moody’s:

WME Parent is subject to a $175 million contingent acquisition payment upon the 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 31st 2018).

The stable outlook reflects Moody’s expectation that UFC’s EBITDA will continue to improve following a strong year in 2015 driven by PPV revenues, increased digital revenues, and contractual domestic and international television rights fees. While leverage is very high, we expect it to decline below 7x by the end of 2018.

The report warns of a possible downgrade if leverage is not below 7x by the end of 2018.  It also states that there would be negative rating pressure if fee cash flow is used for returns to equity holders instead of debt repayment.

Payout Perspective:

The report notes that the legalization of MMA in New York and the success of UFC Fight Pass improved the outlook for the company.  The fact that the UFC is the largest MMA organization in the sport is a positive for analysts that see “high barriers to entry” to competition.  It also cites a strong brand and “its large contractually bound pool of fighters with superior opportunities for exposure and profit.”  The report also notes that the UFC has mitigated its concern over injured fighters which caused a downturn in PPV revenues in 2014.  Overall, despite the amount of debt used to purchase the UFC, it is seen as a good prospective purchase with the belief that the company will continue with its improving revenues.

UFC on Fox 20 draws 2.44M viewers in overnight ratings

July 24, 2016

UFC on Fox 20 drew 2.44 million viewers in overnight ratings per Television By Numbers.  Its strong showing helped Fox win the night in network ratings.

Per TV By Numbers it drew a 0.9 rating and 4 share in the adult 18-49 demo.  UFC on Fox 20 went up against The Bourne Identity on NBC, 20/20 on ABC and Angel from Hell on CBS.  Although The Bourne Identity drew more viewers (2.93M) and 20/20 drew more in the 9-10pm block (2.98M), its strong showing in the adult 18-49 demo won the night for the network.

The event improved on last year’s overnight rating as UFC on Fox 16 drew 2.29M viewers and improved to 2.8M in Live + SD ratings.  2014’s July show on Fox drew 2M viewers and ended up with 2.5M viewers.

UFC on Fox 20

The event was headlined by Holly Holm taking on Valentina Shevchenko in a women’s bantamweight matchup.

UFC on Fox Ratings
Overnights Live + SD
UFC on Fox 1 5,700,000
UFC on Fox 2 4,570,000
UFC on Fox 3 2,250,000 2,400,000
UFC on Fox 4 2,360,000 2,400,000
UFC on Fox 5 3,410,000 4,400,000
UFC on Fox 6 3,770,000 4,220,000
UFC on Fox 7 3,300,000 3,700,000
UFC on Fox 8 2,040,000 2,380,000
UFC on Fox 9 2,410,000 2,800,000
UFC on Fox 10 2,550,000 3,220,000
UFC on Fox 11 1,990,000 2,500,000
UFC on Fox 12 2,020,000 2,500,000
UFC on Fox 13 2,270,000 2,800,000
UFC on Fox 14 2,820,000 3,049,000
UFC on Fox 15 2,430,000 2,745,000
UFC on Fox 16 2,290,000 2,800,000
UFC on Fox 17 2,280,000 2,781,000
UFC on Fox 18 2,430,000 2,685,000
UFC on Fox 19 2,130,000 2,500,000
UFC on Fox 20 2,440,000

 

UFC Holdings, LLC issues credit facility, given ‘B’ rating, outlook ‘negative’ per S&P Global

July 23, 2016

Per a Standard & Poor’s Global press release Friday UFC Holdings, LLC will issue a $1.45 billion first lien credit facility.  The company was assigned a ‘B’ rating on the WME-IMG acquisition.  The outlook is projected as negative per the Standard & Poor’s Global Ratings report.

The financing for the deal to acquire the UFC will consist of the $1.45 billion credit facility which will consist of a $150 million revolver due 2021 and a $1.3 billion term loan B due 2023.

S&P Global Ratings assigned its ‘B’ corporate credit rating to UFC Holdings, LLC.  It issued a ‘B+’ issue-level rating to the company’s $1.45 billion credit facility.

The negative outlook reflects significant leverage with the UFC which is based on EBITDA growth to reduce leverage over the next few years (i.e., revenue is predicted to grow to offset the debt load currently taken on).

Recognizing that the revenue from its events fluctuate throughout the yar, the rating is given to ensure the “UFC can reduce total lease and preferred stock-adjusted debt to EBITDA to below 8x” before revising the outlook to stable.

Per S&P Global Ratings credit analyst Emile Courtney, “The ‘B’ corporate credit rating reflects very high anticipated adjusted leverage to complete the acquisition, partly offset by good EBITDA coverage of cash interest expense and an adequate liquidity profile.”

Analysts believe that the company’s EBITDA has a “plausible and robust growth path.”  Similar to the SBJ article, the belief is that future media rights revenue will increase with the next television deal.

Notably, the opinion of analysts is that “the risk of marquee fighter injuries, which caused a significant more than 40% decline in EBITDA in 2014, will likely be partially mitigated in future periods due to “a strategy of marketing multiple fights at events and planning back-up matches and fighters in the event of injuries…”  The report also states that “remedial training and safety actions” have taken place so that less injuries occur.

Payout Perspective:

The report essentially rates UFC Holdings, LLC the way it does because the acquisition by WME-IMG is predicated on loans and the speculation that the UFC revenue (which remains volatile, yet optimistic) will increase.  What is interesting is that the report is bullish on UFC events.  While the volatility of the events (i.e., injuries causing cards to change or fights cancelled) have been a concern with its credit rating in the past, this report implies that the UFC has changed its strategy by promoting multiple fights on a card as well as promoting more safety precautions in training.  The UFC has invested in helping fighters train smarter.  Despite the need to shift fights due to injuries (and now USADA flagging fighters), the report seems to believe that it has improved upon making changes last minute.  The underlying notion here is that the UFC brand is much stronger than the individual fighters.

Bellator files Cross-Complaint against Light

July 20, 2016

The Zachary Light-Bellator lawsuit in California is getting personal.  Bellator has filed a Cross-Complaint against Light stating that he stole money from the company and did not pay back a loan given to him due to the fact he was in financial trouble.

Light filed the lawsuit claiming wrongful termination back in May in Los Angeles Superior Court.  Bellator was granted an extension to respond to the Complaint and it’s also filed its own Complaint against Light filed July 12th.

The cross-claim digs right into Light stating that Light told Bellator, that, “despite his sizable income, he had difficulty managing his family budget and was experiencing financial distress.”  Bellator loaned Light $9,403.00 and entered into a written agreement to pay back the loan.  Bellator attached a copy of the alleged agreement as an Exhibit to its Cross-Complaint.  The company also claims that Light stole $4,600 in cash from VIP ticket sales from Bellator 136.  Bellator claims Light now owes $5,050.00 plus interest.

Conversion, the civil claim alleged by Bellator, is essentially stealing.  It also claims theft under California law and a breach of written contract which alludes to the purported failure of Light to repay the loan.

Bellator claims that as part of his job, Light “would collect the money he received from the sale of consignment and VIP tickets in connection with Bellator events, and remit the money to Bellator personnel shortly after he received it from purchasers.”  He would then give the money to Bellator’s Chief Financial Officer, Michael O’Roark or Jane Estioko, Manager of Talent Relations.  However, Bellator claims that Bellator remitted to Bellator “at least some of the money” he failed to give “thousands of dollars he collected.”  The Monday after the event, Bellator 136, Light did not report for work citing medical reasons.

With respect to his financial issues, Light and Bellator entered into an “Authorization for Deduction” on December 18, 2014 for $6,974.57 in which he would repay the loan in monthly installments of $240.50 from his paychecks.  It also appears that Bellator was charging him interest on this loan.  The exhibit to the Cross-Complaint is below.

Zach Light Payment

Payout Perspective:

Light will have an opportunity to respond to these allegations.  Obviously, these claims were filed as a result of Light’s lawsuit.  The lawsuit is turning personal as Bellator infers the fact Light has had financial difficulties throughout.  The loan was from December 2014 and the alleged theft occurred in April 2016.  Were there any other issues in between this time that Bellator is holding back for the lawsuit or are these two issues the only claims against Light?  Certainly Light will deny both claims.
The one question is why would Bellator give Light the responsibility of handling money on the company’s behalf if it believed he had an issue with finances.  MMA Payout will keep you posted.

The fallout from Brock Lesnar’s potential drug violation

July 18, 2016

On Friday, Brock Lesnar was flagged by the United States Anti-Doping Association (USADA) of a potential violation of the UFC anti-doping policy due to an out of competition test from June 28, 2016.  Although testing results of Lesnar’s “B” sample are yet to be revealed, the fallout from Lesnar’s appearance hurts the UFC and possibly the WWE.

On June 5, 2016, it was announced that Lesnar would fight at UFC 200 on July 9, 2016.  The signing was unprecedented because he was under contract with the WWE.  Yet, the WWE granted Lesnar the chance to fight in the Octagon once again.  Despite the fact that the WWE has its own drug testing policy (known as the Wellness Policy – Lesnar has never been flagged for a violation), Lesnar was tested by USADA eight times in just the month lead-up to his fight against Mark Hunt.  He took 5 tests in the first two weeks after it was announced he was returning.  Multiple tests came up clean.

Despite the tests, the UFC policy handled by USADA dictated that a returning athlete to the UFC most give the company four months written notice so that USADA can put the athlete in the pool of those it may selectively test.  But, the UFC anti-doping policy allows an exemption for a returning athlete that may be subject to drug testing.  Per 5.7.1 of the UFC anti-doping policy:

An Athlete who gives notice of retirement to UFC, or has otherwise ceased to have a contractual relationship with UFC, may not resume competing in UFC Bouts until he/she has given UFC written notice of his/her intent to resume competing and has made him/herself available for Testing for a period of four months before returning to competition. UFC may grant an exemption to the four-month written notice rule in exceptional circumstances or where the strict application of that rule would be manifestly unfair to an Athlete.

The key sentence here is the last sentence:  “UFC may grant an exemption to the four-month written notice rule in exceptional circumstances or where the strict application of that rule would be manifestly unfair to an Athlete.”

Since the UFC Anti-Doping Policy did not begin until July 1, 2015 and Lesnar’s last fight in the UFC prior to UFC 200 was December 2011, he was considered a new athlete.  There has not been an official statement as to whether the UFC granted the 4-month exemption due to an “exceptional circumstance” or if it was “manifestly unfair to an Athlete.”  Of course, either waiver could be easily explained.

But, one has to think that Lesnar and the UFC had contemplated his return as he had been training prior to the June announcement of his return to the Octagon.  One might suggest that Lesnar could have notified the UFC of his return in the requisite 4 months to allow for the proper testing to occur.

However, it would seem that the parties wanted the Lesnar announcement to be a surprise.  Recall, that Ariel Helwani and others from MMA Fighting were thrown out of a UFC event and Helwani was banned for life due to his report of Lesnar’s return prior to the UFC’s opportunity to make it themselves.  Helwani along with his colleagues were reinstated a couple days later.

Notwithstanding the notice issue, let’s take a look at what Lesnar could face as a result of testing positive for a banned substance.  First, Lesnar’s “B” sample, a second sample taken to determine the validity of the finding in the first sample, must confirm the initial finding of a banned substance.  If this happens, Lesnar will face discipline from Nevada and the UFC per the anti-doping policy.

Since the infraction took place in Nevada, Lesnar will have to appear before the Nevada State Athletic Commission to address the drug test failure.  At that time, we should know what drug(s) Lesnar tested positive for in his out-of-competition sample.  In 2015, Nevada adopted guidelines for combat sports which included a 36-month suspension and 50-75% of the purse for a first-time offender for someone taking anabolic steroids.

In addition, the UFC anti-doping policy would discipline Lesnar.

Under Section 10 for Sanctions on Individuals, Section 10.1 specifically states:

An Anti-Doping Policy Violation occurring during, or in connection with, a Bout may, upon the decision of UFC, lead to Disqualification of all of the Athlete’s results obtained in that Bout with all Consequences, including, without limitation, forfeiture of title, ranking, purse or other compensation, except as provided in Article 10.1.1.

Read broadly, under the UFC-USADA Anti-Doping Guidelines, Lesnar could have his purse for the bout and “other compensation” taken from him.  It would hurt enough that Lesnar would lose out on his $2.5 million reported purse but “other compensation” could mean money he makes from his PPV “upside.”

Not only could that happen, but the section further states that UFC could fine Lesnar up to $500,000 per Section 10.10 of the UFC-USADA Anti-Doping Guidelines.  In addition, he could have his win against Mark Hunt overturned to a no decision per discretion of the Nevada State Athletic Commission according to section 467.850.  This would not sting as much since Lesnar did not have a win bonus to forfeit.  Regardless, he still could have a substantial amount of money taken away.

The monetary fine would be the hardest penalty for Lesnar.  The $2.5 million is the largest reported payout for a UFC fighter in its history.  But, Lesnar was going to make more from his PPV guarantee.  It is being reported that the UFC 200 PPV drew 1.1 to 1.2 million PPV buys.  In most markets, the PPV for UFC 200 was $59.99 HD and $49.99 SD.  Lesnar was projected to make $3-5 million in addition to his $2.5 million.

Mark Hunt, Lesnar’s opponent has demanded that he receive half of Lesnar’s $2.5 million or else he is requesting his release from his UFC contract.  Hunt, who made $700,000 for taking on Lesnar, will be disappointed to learn that under the UFC-USADA guidelines, any money forfeited by an athlete would be under the UFC’s discretion “to be applied to offset the costs of the Program or given to anti-doping research.”

The UFC could also fine Lesnar pursuant to its Code of Conduct which imposes discipline based on misconduct.  Under its Code, “misconduct” may include, “Conduct that undermines or puts at risk the integrity and reputation of the UFC.”  A violation of its drug program could fall under this.

There is precedent for a fine as Jon Jones was docked $25,000 for failing a drug test in December 2014.  Of course, Jones’ drug test failure was for cocaine use.  We note that the detection of this drug was done out of competition and should have not been tested for according to the rules.

Lesnar’s only statement related to Friday’s news of his potential violation was a vague “we’ll get to the bottom of this.”

The WWE does not seem to be concerned with the potential violation and has indicated his next appearance will be at its big event Summerslam, August 21st.  They have not addressed the potential violation.  From its perspective, its an MMA matter, that a WWE matter.

However, the question looms as to whether a Nevada State Athletic Commission suspension would affect his wrestling career.  Some state athletic commissions oversee professional wrestling.  Most commissions honor suspensions of an athlete in other states.  Would a suspension in combat sports carry over to professional wrestling?  We will see.

Show Money Episode 11 talks about the UFC sale

July 17, 2016

I hopped on with Paul Gift and John Nash of Bloody Elbow to discuss the UFC sale and the future impact.  We also learned at the end of the episode that Brock Lesnar was flagged for a potential UFC anti-doping policy violation.

Lesnar flagged for potential UFC anti-doping violation

July 15, 2016

USADA has notified the UFC that Brock Lesnar has been flagged for a potential violation of the company’s anti-doping policy.

The UFC posted its statement on the notification on Friday night.

“The UFC organization was notified today that the U.S. Anti-Doping Agency (USADA) has informed Brock Lesnar of a potential Anti-Doping Policy violation stemming from an out-of-competition sample collection on June 28, 2016. USADA received the testing results from the June 28, 2016 sample collection from the WADA-accredited UCLA Olympic Analytical Laboratory on the evening of July 14, 2016.

“USADA, the independent administrator of the UFC Anti-Doping Policy, will handle the results management and appropriate adjudication of this case. It is important to note that, under the UFC Anti-Doping Policy, there is a full fair legal review process that is afforded to all athletes before any sanctions are imposed. The Nevada State Athletic Commission also retains jurisdiction over this matter as the sample collection was performed in close proximity to Lesnar’s bout at UFC 200 in Las Vegas.

“Consistent with all previous potential anti-doping violations, additional information will be provided at the appropriate time as the process moves forward.”

The flagged test calls into question the UFC waiving Lesnar’s notice to return to the UFC without the requisite 4-month written notice.  Under 5.7.1 of the UFC anti-doping policy, it’s within the UFC’s right to grant an exemption to a 4-month period in which USADA may test you.  The UFC clearly allowed an exemption  for Lesnar to make 200.

The WWE gave a short statement regarding Lesnar’s test.  As it has been throughout the Lesnar lead-up to UFC 200, it’s staying away from Lesnar’s participation in the UFC.  I’m sure they regret promoting his win last Monday.

Payout Perspective:

Just a little over one year into the UFC Anti-Doping Policy, we are discovering that the drug testing policy shows no favorites.  Not only did a flagged test take Jon Jones off of the biggest card of the year, Brock Lesnar was identified as possibly committing a violation as well.  The fact is that these drug tests could be expedited to ensure that all fighters are cleared of any out of competition violation prior to an event.  But, it has been decided that whatever testing process they go through was not rushed.

The failed test is a negative for the WWE as Lesnar is scheduled to be featured in next month’s WWE Summerslam.  Notably, two of the WWE’s big stars (Roman Reigns) have been flagged for a drug violation.

The violation likely forecloses Lesnar in the Octagon again unless he has an excuse for the flagged test.  For the UFC, it’s another blemish for the company.  However, Lesnar is not a mainstay for the company despite being the biggest draw on PPV.  Thus, the UFC and its new owners should withstand the bad PR in the coming days.

UFC 200: Payout Perspective – Part 2 of 2

July 13, 2016

Welcome to UFC 200’s Part 2 of Payout Perspective.  We are once again recapping the weekend that was in the UFC.

UFC Sold to WME | IMG

The news came out on Sunday that Zuffa, LLC had sold the UFC to an investment group spearheaded by William Morris Endeavor and International Management Group.  As we learned the sale price was approximately $4 billion.

While Jeremy Botter’s report was met with denials as well as a lawyer letter, the news was true.  The Fertitta Brothers, Dana White and Flash Entertainment sold its shares in the UFC.

Prior to Sunday’s news, Los Angeles Times and TMZ both ran articles refuting the stories of a sale which were backed by Zuffa executives.  The TMZ story did not cite names but quotes from Zuffa execs while the Times ran a piece which included sit downs with White and Lorenzo Fertitta

More Promotion

UFC 200 introduced its main event of Jones vs. Cormier (after McGregor-Diaz was scrapped) on ABC’s Good Morning America.  The event included Dana White, Jon Jones, Daniel Cormier, Miesha Tate, Chuck Liddell and Frankie Edgar.  It was the second time that a fight was announced on GMA.  This time around, the UFC was front and center on the show.  It was good exposure for the company.  Too bad the main event didn’t stick.

Forbes ran a piece on the marketing behind those crazy graffiti posters.  Apparently part of the idea was based on Conor McGregor’s tirade at the pre-fight press conference at UFC 197.  McGregor was promoting his fight against Rafael dos Anjos.  Imagine if RDA did not get injured.

Bud Light offered limited edition UFC bottles.  Guess who promoted them:

Payouts

The complete list of salaries from UFC 200 as disclosed by the Nevada State Athletic Commission is as follows (via MMA Junkie):

Amanda Nunes: $100,000 (no win bonus)
def. Miesha Tate: $500,000

Brock Lesnar: $2,500,000 (no win bonus)
def. Mark Hunt: $700,000

Daniel Cormier: $500,000 (no win bonus)
def. Anderson Silva: $600,000

Jose Aldo: $500,000 (includes $100,000 win bonus)
def. Frankie Edgar: $190,000

Cain Velasquez: $300,000 (no win bonus)
def. Travis Browne: $120,000

Julianna Pena: $64,000 (includes $32,000 win bonus)
def. Cat Zingano: $35,000

Kelvin Gastelum: $86,000 (includes $33,000 win bonus and $20,000 from Hendricks’ purse)
def. Johny Hendricks: $80,000(Hendricks forfeited 20 percent of his original $100,000 show money to Gastelum for missing weight)

T.J. Dillashaw: $50,000 (includes $25,000 win bonus)
def. Raphael Assuncao: $42,000

Sage Northcutt: $100,000 (includes $50,000 win bonus)
def. Enrique Marin: $13,000

Joe Lauzon: $108,000 (includes $54,000 win bonus)
def. Diego Sanchez: $80,000

Gegard Mousasi: $110,000 (includes $35,000 win bonus)
def. Thiago “Marreta” Santos: $28,000

Jim Miller: $118,000 (includes $59,000 win bonus)
def. Takanori Gomi: $55,000

The Reebok Clothing payouts are here via MMA Junkie.  Notably, Aldo and Edgar both made $30,000 each as “challengers” since they were vying for the interim(?) Featherweight title.

Odds and Ends

What has happened to Johny Hendricks?

Early weigh-ins did not help Johny Hendrick as he yet again had issues with weight cutting.  Notably, Kelvin Gastelum has had problems in the past and just made the limit.  Miesha Tate had to disrobe to make the championship weight.

UFC 200 Prelims scored the highest rated show ever on FS2 as the first 31 minutes was switched to the network due to MLB going extra innings on FS1.  Despite the delay due to baseball, FS1 was the highest-rated prelim ever in the adult 28-49 demo.  The prelims on FS1 peaked with over 2 million viewers in the last quarter hour.

The last hour of the prelims went head-to-head with the first hour of PBC on ESPN.  PBC scored 442,000 viewers for its 2-hour plus event on Saturday night.

UFC offered the event in 4K.  It was the first time that a PPV was offered in 4K by any sport organization.

I missed Jon Jones’ press conference but I cannot say I feel sorry for him.  Whether or not he took PEDs, he’s been given chance after chance to succeed, but continues to fail.

Think about how much Jon Jones cost the UFC for them to tear down his posters and take his likeness off of the T-Mobile Arena.  There’s also the unsold t-shirts and posters.  He also cost UFC employees a night’s sleep to re-do all of the promotion centered around the Jones-Cormier main event.  Now that’s selfish.

International Fight Week

If you’ve never been to International Fight Week, it’s sort of like the NFL Experience at the Super Bowl.  If you have never been to that, think big convention hall with tons of sponsor/vendor booths, interactive areas and talks from special guests.  It’s a great thing to go and see if you’re a big UFC fan.  I realize that over the years this event may have lost steam, but once again, it’s something for the true UFC fan.

While UFC 200 and International Fight Week may have been much bigger with Ronda Rousey and/or Conor McGregor on the card, the event and week is a good opportunity for the UFC and its partners to engage with its fan base.

UFC 200: Payout Perspective – Part 1 of 2

July 11, 2016

Welcome to a special edition of Payout Perspective.  This time we take a look at UFC 200 from the T-Mobile Arena in Las Vegas.

Nunes upsets Tate to win women’s title

If I were to tell you at the start of the year that the main event for July’s UFC 200 would be Amanda Nunes versus Miesha Tate, you probably would have thought that it was a joke.  However, due to Ronda Rousey’s movie career, Conor McGregor’s poorly played power move and a Jon Jones drug test, we received Nunes-Tate as the final fight on what was/is supposed to be the biggest card of the year for the UFC.

Amanda Nunes looked sharped and started off quick as she always does.  She peppered Tate and may have broken her nose.  Once it got to the ground, Nunes applied the rear-naked choke (or chin crank) for the victory.  You could see Tate being broken as the round went on.  She barely made weight for this fight despite seemingly calm throughout the rest of the camp.

Nunes was emotional and became the first openly gay UFC champion for the sport.  It was fitting as it was the same weekend that the UFC announced its line of apparel in support of the LGBTQ community.  Of course, the weekend was somewhat tarnished by comments made by Donald Cerrone on Sunday although The Cowboy did apologize immediately.

Nunes may have Holly Holm or a returning Ronda Rousey at year’s end.  If Rousey decides to return to the Octagon, I could envision a New York defense for Nunes against Rousey.

UFC 200

Lesnar dominates Hunt in return to Octagon

Brock Lesnar surprised most of the MMA fanbase as he defeated Mark Hunt in a 3-round heavyweight bout.  Although Lesnar’s last time in the Octagon looked very bad (a loss to Alistair Overeem at UFC 141), he looked quick and his wrestling helped squash Hunt.  In another surprise, Lesnar’s post-fight interview was far-less dynamic and much more humanitarian than beast-like in his UFC 100 tirade which even UFC Fight Pass censors due to his comments about sponsor Bud Light.

This was supposed to be a one-time thing for Lesnar as he was on “loan” (for $2.5M +) from the WWE.  We will see if he will fight again.  If he does, you have to think he’s close to being in line for a title shot.

Aldo wins interim belt as McGregor watches on

Jose Aldo looked like his old self in securing a unanimous decision win over Frankie Edgar.  Aldo’s ability to stuff takedowns and score on the outside helped him defeat a game Edgar.  Aldo should receive his much-anticipated rematch against Conor McGregor (after his one-off with Nate next month).

Not sure what Edgar will do next.  He had been on a great run up until Saturday.  However, he’ll have to hope for a Conor win to get another shot at the 145 title.

Attendance and Gate

The UFC set a gate record in Nevada with $10.7 million for the 18,202 in attendance at the T-Mobile Arena in Las Vegas.

Bonuses

The bonuses of $50,000 went to Amanda Nunes, Cain Vevlasquez, Joe Lauzon and Gegard Mousasi.  All were performance bonuses as there was no Fight of the Night.

Payouts

The biggest payout was Brock Lesnar and his $2.5 million.  Even with no win bonus, it’s the largest reported payout for a UFC fighter.  No complaints from anyone else as Lesnar likely brought in many PPV purchasers.  Lesnar likely will make more from his PPV cut.

Lesnar’s opponent, Mark Hunt, received $700,000 for stepping in with the WWE superstar.  According to Kevin Iole, the Nevada State Athletic Commission stated that Cormier was slated to make $1 million for his fight with Jon Jones.  But since that was cancelled, he made $500,000.

Promotion of the Fight

The UFC bought ad time on Adult Swim in an effort to expand its reach as well as touch upon the network’s African American demo.  At the time, the main event was Cormier-Jones.

In addition, the UFC had a “confrontation show” on FS1 with Jon Jones and Daniel Cormier talking about their fight.

Bud Light and Monster Energy held promotions months in advance holding trips to win a chance to go to UFC 200.

The UFC did their usual media stops although it did not seem as broad a reach as UFC 196.

Sponsors

The special gold mat included the usual sponsors as well as a couple new ones.  EA UFC2, Harley-Davidson, MetroPCS, Toyo Tires, Bud Light and Monster were all in the Octagon with the energy drink having the center of the Octagon.  Hudson Shipping Lines, a mainstay sponsor on many International UFC cards had signage in the Octagon.  DirecTV promoted its original show, Kingdom.  It showed clips of the show as well as showing stars in attendance.  Also, Speedway was also in the Octagon sharing a signage post with Monster.  The company is a gas and convenient store with most of its locations on the East Coast.  It ran a promotion in conjunction with Monster leading up to this event.

Bud Light had the prep point at the televised weigh-ins and at the event.

As we mention, Bud Light and Monster Energy had promotions far in advance of 200.

Odds and ends

Yes, we’ll address the sale in another post.

The mat probably was to be more a gold look but was yellow to commemorate UFC 200.

The UFC offered 200 in 4K.  It was the first time ever and event was offered in PPV.

This was the first reveal of the Reebok kits.  It had more colors.  Notably the yellow looked good for Anderson Silva as it was his usually color.  But, the yellow also was the same as the mat.

Interesting that DC was wearing his Nike Air Max shoes during fight week including during the Embedded where Dana White told Cormier that his fight with Jones was off.

The WWE did not actively promote UFC 200 although the PPV featured an ad for Summerslam.  It was not until Brock’s win did the WWE social media machine engage.

While there is so much love for Lesnar right now, an injury-free Cain Velasquez at sea-level is probably the best heavyweight out there.

It’s been slightly over 1 year with the UFC Anti-Doping Policy and the company’s biggest event is greatly affected by it.  At least we know that there are no favorites in the process.

The UFC and Snapchat announced a multi-year partnership for coverage of its live events which began at UFC 200.

The UFC Prelims on FS1 were sent to FS2 for the first half hour due to the MLB game that preceeded the event going to extra innings.  The FS1 audience missed out on the Sage Northcutt fight.  Despite an average (maybe below) average performance, Sage secured an individual Reebok sponsorship.

The Exclusive UFC Fight Pass Prelims had some of the more exciting fights of the night on it as it produced two bonus winners (Lauzon, Mousasi).

Speaking of Fight Pass, I was interviewed by The Verge about how the UFC became the ‘Netflix of Combat.”

Conclusion

We’ll have more on the event, the Expo, Jon Jones and more in part 2.  But, everyone probably wants to know what an estimated buy rate would be for this event.  While we pondered whether this event could draw 2 million PPV buys, that would be unlikely after the Jon Jones debacle.  Jones is not a big PPV draw but the promotion and marketing was centered around the feud with Cormier.  UFC 182 drew 800,000 PPV buys.  With Lesnar and two other title fights, one would think that it could draw near the 2 million mark.  Even without the feud, UFC 200 should do well with just the name Brock Lesnar attached.  UFC 200 should doing something between 1 million to 1.2 million PPV buys.  While it won’t eclipse UFC 100’s buy rate, it will be a good sendoff for Zuffa.

UFC sold, announcement Monday

July 10, 2016

Chris Maathuis of KLAS-TV News, a CBS Las Vegas affiliate is reporting that Zuffa has officially sold the UFC to WME-IMG Capital.  The official confirmation will come on Monday morning although Lorenzo Fertitta and Dana White sat down for interviews with the local station about the sale.

Despite internal and external denials about a rumored sale, it was clear that Zuffa was set to sell the company.  It will be sold to WME-IMG for approximately $4.2 billion.  The deal will be backed by private equity firms Silver Lake, Kohlberg Kravis Roberts and the investment firm of Michael S. Dell per the NY Times.

The sole response, as of this writing, coming from Dana White’s twitter account tonight:

White told ESPN’s Brett Okamoto that he is staying on with the company as President despite the sale.

Payout Perspective:

We now learn that the reports of the sale back in May were true and the UFC was just holding the story until after UFC 200.  Notably, the UFC’s lawyers sent Jeremy Botter of FloSports (according to Botter in an interview with Josh Nason of The Wrestling Observer) a letter warning him about his report that the UFC was being sold.

As for the sale, the price tag is amazing for a sport that you still must consider niche (fighting does not appeal to a broad base) but attractive to a young demo with disposable income.  We shall see what directions the new owners pursue and what level of input White will have with the ownership.

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