Anderson Silva steps in to face DC at UFC 200

July 8, 2016

The UFC announced Thursday night that Anderson Silva will face Daniel Cormier in a 3 round fight at UFC 200.  Silva steps in for Jon Jones who was removed due to a potential UFC Anti-Doping Policy Violation.

Silva was scheduled to do an autograph signing in town this week but that was cancelled prior to the news of Jones’ drug test.  Silva takes the fight with just 2 days notice.

Cormier was distraught about losing the Jones fight but now gets one of the greatest in the sport.  However, Silva comes off a February loss to Michael Bisping and was removed from UFC 198 and a fight with Uriah Hall due to injury.

Payout Perspective:

Silva’s addition after Jones’ removal will help bolster the card that may have seen some fans asking for refunds after the title fight fell.  But, Silva is still an attraction that will keep the momentum of Saturday’s card.

Jones off UFC 200 for potential UFC Anti-Doping violation

July 6, 2016

Jon Jones is out of the main event for UFC 200 and off of the card entirely after he was flagged for a potential UFC anti-doping policy.  The UFC was informed of the potential violation on Wednesday night.

Jones is said to address the potential USADA violation on Thursday morning.

The positive test is a result of an out-of-competition sample on June 16, 2016.  According to the UFC anti-doping policy

Via UFC.com:

The UFC organization was notified tonight that the U.S. Anti-Doping Agency (USADA) has informed Jon Jones of a potential Anti-Doping Policy violation stemming from an out-of-competition sample collection on June 16, 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.

However, because Jones was scheduled to compete against Daniel Cormier this coming Saturday, July 9 in Las Vegas, there is insufficient time for a full review before the scheduled bout and therefore the fight has been removed from the fight card. As a result, the three-round heavyweight bout between Brock Lesnar and Mark Hunt will become the UFC 200 main event.

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

Ticket refunds available upon request at primary point of purchase.

Brock Lesnar and Mark Hunt will be the main event of the PPV.

Payout Perspective:

It’s a huge kick in the stomach to the UFC that Jones is the center of controversy once again.  It comes on the biggest stage and on the biggest card for the UFC.  While we cannot conclude Jones is culpable for this drug test as there may be factors which may show no wrongdoing and he is entitled to due process per the terms of the policy, it is another sign that Jones is not clear of his demons.  He appeared past his problems and the UFC Embedded series showed a guy that seemed happy and ready to focus on his career.  It appears that this is not the case.

Not only is Jones out of UFC 200, there is now a possibility that he may have violated the terms of his probation.  The terms in which the state can withdraw its plea agreement is below.  While I don’t think he violated the terms, it is another trouble for a fighter that could have been the best ever in the sport.

Screenshot (27)

As for the card, it’s clear that the UFC is fortunate that Brock Lesnar is on it.  PPV, which has been boosted to $70 for HD, may take a small hit but where we may see the problem is with the gate for the T-Mobile Arena.  It will be interesting to see how many people request a refund.  The card is still packed but a Jones-Cormier feud is going to be put on hold yet again.

Can Lesnar push UFC to record PPV buy rate?

July 6, 2016

At UFC 100, Brock Lesnar’s defeat of Frank Mir helped the company set a record with 1.6 million PPV buys.  Can Lesnar’s fight on the UFC 200 main card help the company set a record yet again?

Things have changed since July 2009 when Lesnar manhandled Frank Mir in two rounds.  However, the UFC is banking on the Lesnar PPV success to continue 7 years and 100 PPVs later.

Before we discuss UFC 200 surpassing UFC 100 in PPV buys, one has to recall UFC 100 also included Georges St. Pierre defending his welterweight title.  In addition, a young Jon Jones fought on the preliminary card.  Arguably, UFC 200 has a better lineup with 3 title fights as well as Cain Velasquez and Travis Browne in the main card opener.

Lesnar is a PPV magnet and despite the fact he’ll likely be fourth on the card behind the three title fights, many people are buying the card to watch him.

Back in 2010, MMA Payout deduced that Lesnar was the biggest UFC PPV draw.  We note that the post occurred in August 2010, prior to Lesnar’s defeat at UFC 121 to Cain Velasquez.

With Lesnar in the main event, it’s clear that he’s been an overwhelming boon for business.

UFC 91, November 15, 2008: Lesnar v. Couture: 1,010,000 PPV buys

UFC 100, July 11, 2009: Lesnar v. Mir: 1,600,000

UFC 116, July 3, 2010:  Lesnar v. Carwin: 1,060,000

UFC 121, October 23, 2010: Lesnar v. Velasquez: 900,000

UFC 141, December 30, 2011: Lesnar v. Overeem: 535,000

You might recall that UFC 141 was on a Friday night due to New Year’s Eve which likely detracted from the buy rate.  Despite that, the rest of Lesnar’s fights averaged 1,142,500 PPV buys.

In October 2014, the Sports Business Journal compiled a list of the biggest UFC PPV draws.  Lesnar topped that list as well.  GSP, Rampage Jackson, and Chuck Liddell followed in that order.

If we were to factor the Conor McGregor cards, he would crack the list of top PPV draws but Lesnar is still the top draw for the company.  Ronda Rousey events average around 680,000 PPV buys (excluding the co-main event cards with Chris Weidman).

With UFC 200 so stacked with fights for the casual to the hardcore fan, Saturday night’s event should flirt with the company PPV record of 1.6 million PPV buys.  The company’s decision to include Lesnar on this card could help it propel it to near 2 million PPV buys.

Payout Perspective:

It’s been 5 years since Lesnar last fought but Saturday’s event is stacked.  Jones-Cormier, Edgar-Aldo and Tate-Nunes would have given this card nearly 1 million PPV buys but the addition of Lesnar should put this event over the top.  We shall see if Lesnar would like to step back into the octagon after his fight with Mark Hunt Saturday.  Certainly, based on the anticipated huge buy rate, the UFC wouldn’t mind Lesnar coming back to the heavyweight division.

Boxers spar in court over failed bout agreement

June 26, 2016

Although Deontay Wilder is scheduled to fight Chris Arreola on Fox next month, he’s embroiled in a court battle against Alexander Povetkin and his promoter, Andrey Ryabinskiy due to a purported failed drug test which scratched the fight between the two.

On June 13, 2016, Wilder filed a lawsuit against Povetkin, Ryabinskiy and World of Boxing, LLC (“WOB”) for breach of contract and seeking the court for a declaratory judgment.  In addition to the money that has been put up in escrow for the fight

10 days later, World of Boxing, Povetkin and Ryabinkiy (“WOB”) filed sued against Wilder, Lou DiBella and DiBella Entertainment, Wilder’s promoters.  WOB is filing claiming causes of action for breach of contract as well as defamation.

Both lawsuits were filed in the U.S. District for the Southern District of New York.

Wilder and DiBella Entertainment, Inc. v. World of Boxing, LLC and Alexander Povetkin

The lawsuit claims breach of contract against WOB and Povetkin.

The facts, as told by Wilder’s attorney are below.  Also added, are additional facts from the WOB lawsuit which we identify as well.

  • The World Boxing Council (“WBC”) ordered Wilder and Povetkin (as the mandatory challenger) to begin negotiations for Wilder’s mandatory title defense of his WBC World Heavyweight Championship.
  • No agreement could be made and a purse bid was ordered. WOB won the purse bid at a price of $7.15M.  Notably, the WOB lawsuit claims DiBella’s bid was for $5.1M.
  • The agreed payout would include 10% of the amount bid ($715K) to the winner as a bonus and then a 70-30 split thereafter. But, the parties still had to negotiate other parts of the fight including drug testing.  The amount would also cover a 3% WBC sanction fee.
  • According to the WOB lawsuit, Wilder would receive $4,504,500, Povetkin $1,930,500 and the winner would receive $715,000.
  • Wilder’s side wanted to institute a drug program conducted by the Voluntary Anti-Doping Association (“VADA”).
  • Negotiations continued but suspicions by Wilder’s camp about Povetkin’s use of performance enhancing drugs increased.
  • With the parties at an impasse, the WBC stepped in and instituted an agreement on April 6, 2016. In the agreement, the drug testing program included VADA testing under the “WBC Clean Boxing Program.”
  • Since WOB won the purse bid, the fight was to take place in Moscow, Russia on May 21, 2016.
  • An agreement was signed on April 11, 2016. A copy is attached to the Wilder Complaint and is below.
  • On April 19, 2016 an Escrow Agreement was entered into in which $4,369,365 was put into an Escrow (identified as Chicago Title in the WOB lawsuit). The Escrow Agreement contained a (confidential per Wilder’s attorneys) liquidated damages provision.
  • Povetkin tested positive for Meldonium in an April 27, 2016 test.
  • The WBC issued a ruling that the fight would not take place as scheduled.
  • Wilder’s side advised the Escrow Agent not to disburse any of the money in escrow until it received a “joint instruction from the parties or a non-appealable order from a court of competent jurisdiction.”

Word of Boxing, LLC, et al. v. Deontay Wilder, et al.

The WOB lawsuit mitigates the finding that Povetkin tested positive for Meldonium.  This substance was the same one that tennis star Maria Sharapova tested positive for and has received a two-year ban from the International Tennis Federation.  In the UFC, Islam Makhachev tested positive for Meldonium and was pulled from the UFC on Fox 19 card.  The ban on Meldonium was instituted by the World Anti-Doping Agency (“WADA”) on January 1, 2016.  It was added to the list of banned substances and notice was given to athletes three months earlier in September 2015.

However, earlier this year, WADA acknowledged that there was a lack of clear scientific information on excretion times.  Thus, this new revelation may actually overturn certain notices of infraction.  In fact, this was noted by WOB’s attorneys in its lawsuit.

It argues that Meldonium found in Povetkin’s sample were traces and could not impact an athlete’s performance.  It should be noted that both “A” and “B” samples found Meldonium.  Povetkin admits to using Meldonim in 2015, prior to its ban.  But, the facts reflect that he had a negative sample in April 7 and 8, 2016 but then tested positive in an April 27, 2016 sample.

WOB’s breach of contract claim cites that Wilder did not allow the WBC, the governing body for this fight, make a determination on the Povetkin drug test.  Rather, Wilder and his promotion decided not to participate which WOB claims as the breach.

It also cites a breach of the escrow agreement with respect to the monies lodged in an Escrow Account which was to pay for the purses.  WOB claims that since the bout did not occur, it should receive its money back from the trust but Wilder has “taken actions to prevent Chicago Trust from releasing such funds…including through a letter directing Chicago Trust to refrain from disbursing the Escrow Property to World of Boxing.

The defamation claim is rather unique as it claims Wilder and his promotion arm instituted a “Smear Campaign” against Povetkin.  The WOB Complaint lists multiple news reports where it claims Lou DiBella and his promotion provided the outlets with false statements.  WOB claims Povetkin did not cheat or lie and the “trace amounts” in Povetkin’s April 27, 2016 sample do not support the fact that he attempted to do so per the WOB lawsuit.  WOB claims the statements were made to avoid their contractual obligation of Wilder having to fight in Moscow, Russia.

WOB is seeking $34.5M in its lawsuit.  It is looking for the $4,369,365.000 in the Escrow Account and its defamation claim seeks $10 million.

Bout Agreement

Payout Perspective:

Leave it to boxing to provide us with some of the more unique contractual legal issues in the sport.  There is an issue of who breached the contract between the parties.  Should Wilder have a claim due to the positive drug test from Povetkin?  Or, does Povetkin side have an argument against Wilder for not following the WBC procedures?  One has to think that Povetkin has a right to appeal the VADA ruling especially with the uncertainty of Meldonium.  But, we see that the contentious negotiations between the parties have now spilled over into the courts.  Wilder has found another fight in lieu of Povetkin.  But, does Povetkin have a claim against Wilder for blocking funds to be returned to them in Escrow?  It’s clear there is a liquidated damages provision in the Escrow Agreement of $2.5 million as both sides seek that it damages.

MMA Payout will keep you posted.

Company refutes UFC has been sold

June 21, 2016

MMA Junkie reports that Zuffa has sent an email to its employees refuting the story that the UFC has been sold.  Dave Sholler has made an official statement denying the report from FloCombat that the company has been purchased.

Sholler told MMA Junkie that, “FloCombat.com’s report indicating that the UFC has been sold is false.”

An internal email sent to Zuffa employees was obtained by Junkie addressing the rumors and report of the sale.  “A report today by FloComat.com indicating that the company has been sold is false,” read the email obtained by Junkie.  It went on to state that the company’s attorneys would “investigate and take all appropriate legal actions against the parties publishing and contributing to these false stories.”

The report stated that Zuffa had accepted a bid for $4.2 billion to sell the UFC.  No formal announcement has come forth despite the news that 4 entities had submitted bids to purchase the company late last week.

Payout Perspective:

This is semantics but it seems that the internal email refutes that the UFC has been sold.  The question is whether it will be sold.  The company has to cover itself at this point since the concern is that anything could unravel the deal (if the news is accurate).  The internal email and public denial is to ensure employees that their positions are secure.  As for whether lawyers for the UFC will come in to file a lawsuit against the alleged “false” report seems to be posturing on the part of the company.  Defamation would seemingly be the only claim the company might have although we do not have all of the facts at this point.

Report: Zuffa to sell for $4.2B

June 20, 2016

Zuffa, LLC has reportedly accepted a $4.2 billion bid to sell the UFC.  The report also states that Dana White will remain in his role with the UFC despite the sale.

Jeremy Botter of FloCombat first reported the sale.  A group consisting of WME-IMG, the Dailan Wanda Group, The Kraft Group and Tecent Holdings may have made the successful bid.

As of the time of this writing, the sale has not been formally announced.  As of a couple days ago, the groups that submitted bids were in the midst of obtaining financing for the purchase.

It is anticipated that Lorenzo and Frank Fertitta will bow out of the MMA business while Dana White will likely stay on with the new owners.

Payout Perspective:

The imminent sale is significant for what the Fertittas and Dana White have done to build something out of nothing but one would suspect that most things regarding business practices will not change.  The UFC has made significant upgrades to the look and feel of the company in the past year or so.  While most its revenues are derived from pay-per-view, UFC Fight Pass has become a valuable asset for the company that has provided a wide-ranging benefit to showcase the product.

UFC Fight Night 89 attendance, gate and bonuses

June 19, 2016

UFC Fight Night 89 from Ottawa, Canada drew 10,490 for a gate of $1,278,250.  The attendance, gate and bonuses were announced at the post-event press conference.

According to this, TD Place has a standing room capacity of over 10,500.  Thus, the numbers reflect a full house on Saturday night for the UFC’s debut in Ottawa.

The bonuses went to Donald Cerrone, Krzysztof Jotko, Steve Bosse and Sean O’Connell.  Each earned $50,000.  Cerrone and Jotko earned performance bonuses for their respective stoppages.  Bosse and O’Connell put on a slugfest to earn fight of the night honors.

Payout Perspective:

A good night of fights and based on the attendance announced it was a well-attended event.  The choice in venue (i.e., lower-capacity venue) probably makes this event look much more impressive.

Muhammad Ali Expansion Act revealed

June 17, 2016

The initial draft language for the Muhammad Ali Expansion Act was made public last week.  The language, while likely not the final version, amends the existing act which protects boxers.

The UFC opposes federal regulation of its sport.  Lawrence Epstein, the company’s Chief Operating Officer told ESPN, “We continue to believe the federal government would have no productive role in regulating MMA promotions or competitions.”  This is not the first time the company has lobbied against regulation.  According to Fox Sports.com, Zuffa hired lobbyists to help them oppose Senator John McCain’s proposed amendments to the Ali Act.

Officially the Professional Boxing Safety Act of 1996 amends the Muhammad Ali Act.  It was referred to the Committee on Education and the Workforce and the Committee on Energy and Commerce in late May.

Muhammad Ali Expansion Act by JASONCRUZ206

Payout Perspective:

The language essentially expands the current law to include combat sports.  The language and sections are changed but there is nothing wholly different from the existing law other than combat sports are now a part of the proposed law.  Certainly, the expansion of the Ali Act could cause the UFC, Bellator and other organizations to change its business practices to ensure that it is in compliance with the law.  However, the utility of the law has proven to be a difficult obstacle for fighters that have sued under the Ali Act.

The UFC has retained a lobbying firm to oppose the regulation.  A letter to the committees which will evaluate the proposed law, signed by mainly Republican-backed groups, has been circulating opposing the expansion.  On the other end, MMAFA has released a letter in support of the law.  The letter is signed by many fighters in support of the bill.

Zuffa close to sale of UFC

June 16, 2016

MMA Fighting reports that Zuffa, LLC is close to selling the UFC.  An ESPN report states that the UFC has received two bids in the range of $4.1 billion.

According to ESPN’s Darren Rovell, the two groups with the highest bids are WME-IMG in conjunction with Dalian Wanda Group and China Media Capital.  Per Rovell, the groups are finalizing the financing for the buyout.  The bids are for the whole company meaning that the Fertitta brothers, Dana White and Abu Dhabi’s Flash Entertainment would cede their ownership interests.

This news comes a month after Rovell reported that Zuffa was actively shopping the company.  There was speculation as to whether the sale would be for a portion of the company or not.  It appears that the transaction would encompass the entire company.

The Fertitta brothers purchased the UFC for $2 million in January 2001.

Last year, Lorenzo Fertitta told CNN Money that the company made “about $600 million.”  MMA Fighting’s sources indicated that the UFC drew $608,629,000 in total revenue and profited $157,806,000.

Payout Perspective:

The much rumored sale appears to be close to fruition.  It’s too early to tell whether or not the sale will mean anything in terms of changes of the brand or product.  There is speculation that White will be asked to stay with the company while the Fertittas may bow out of the sport.  Certainly, White has not been as much as a public figure in recent months.  The sale has yet to go through but you have to think that the business is so volatile that a $4.1 billion sale for a company that made $600 million last year is a great coup for Zuffa.

UFC 199: Payout Perspective

June 5, 2016

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 199 taking place at The Forum in Inglewood, California.  The show featured two title defenses.

Bisping shocks the world

Michael Bisping waited a long time for his shot at the middleweight title and he did not disappoint.  Perhaps exposing a suspect chin, Bisping KO’d the champion Luke Rockhold in the first round.  Rockhold appeared to be overconfident in the lead up to this fight and admitted as much post-fight.  Bisping is a polarizing figure but you have to respect his journey to the title.  We could see a rematch of the two or maybe Jacare Souza, who congratulated The Count on the way out of the Octagon would be a good choice.

UFC 199

Dominator overwhelms Faber

It was a very entertaining promotion for the fight, but in the end, Dominick Cruz showed that he was much better than Urijah Faber.  The oft-injured bantamweight champion secured a unanimous decision.  Joe Rogan seemed to focus on whether or not Faber would retire after this fight.

Would people be willing to pay $60 for a “superfight” with Demetrious Johnson?

Bonuses

Bonuses went out to Bisping and Dan Henderson (coincidentally opponents at UFC 100) for their performances.  Polo Reyes and Dong Hyun Kim earned Fight of the Night.  All received $50,000.

Attendance and Gate

The UFC announced post-fight that The Forum was a sellout with 15,587 for a live gate of $2,168,675.

Sponsorships

The sponsors in the Octagon included Harley Davidson, Toyo Tires, Bud Light, MetroPCS, and the TNT upcoming drama, Animal Kingdom.  Food 4 Less, a Compton, California-based “no frills” grocery was a sponsor in the Octagon as it shared a post with Monster.  As with most UFC events, Monster Energy had the center of the Octagon.

Dominick Cruz sported a Monster patch on his Reebok black kit.  He also did an old school thank you to them post-match including holding a Monster can.

UFC Embedded appears to be the place to have your non-official UFC sponsors to be visible.  Luke Rockhold wore Adidas and Monster Milk during the vlogs.

Odds and Ends

Three big pieces of news not related to 199.  First, Brock Lesnar is back.  Despite how he left the company, he returns and the move should draw eyebrows as the WWE is allowing Lesnar to fight a month before the company’s second-biggest show of the year – Summerslam.

Second, Fedor Emelienenko will be on Fight Pass on an EFN card on June 17th.   Thus, the UFC will finally get Brock Lesnar-Fedor…just not together.

Finally, the rematch no one except Conor McGregor wants as Nate Diaz will face McGregor at UFC 202 in Vegas August 20th.  Interesting that the UFC is traveling less domestically.

There were 4 fights on UFC Fight Pass Prelims.  3 of the 4 fights were very good.

UFC Fight Pass introduced a promotion where fans can send in 1 minute videos to tell Dana White why they are the biggest UFC fan.  The winner will get to come to International Fight Week, meet Dana White and attend UFC Fight Night: Alvarez-RDA.

UFC allowed flags in lieu of sponsor banners in the Octagon.

Octagon ladies sport the Monster patch on their uniforms, do they get paid for doing so?

Watching Embedded, apparently the champions (Cruz and Rockhold) were given rental properties to stay in during fight week while the others stayed in a hotel.

The weigh-ins were different since newly instituted weigh-in rules with the California State Athletic Commission allowed fighters to weigh-in between a 10am-2pm window the day before the fight.  Thus, the televised weigh-ins we usually see did not include the official weigh-ins.

Did the finish of Hendo/Lombard look similar to Hendo/Bisping at UFC 100 with Hendo unloading on an already unconscious opponent?

Ariel Helwani and three others were escorted from the building during UFC 199.  Helwani tweeted that he had been banned by the UFC for life.  It was Helwani that broke the Brock Lesnar news on MMA Fighting.

The show concluded with a tribute to Muhammad Ali who passed away on Friday.

Conclusion

This was a very good show but it will likely be overshadowed by the news that Brock Lesnar is returning next month.  Google trends had 500,000 searches for UFC 199 on Saturday.  Notably, Brock Lesnar drew 100,000 searches on Saturday.  How many PPV buys will this card receive?  Without a proven PPV draw at the top of the card, yet a solid lineup for the PPV, the buy rate should be 350,000 to 400,000 PPV buys.

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