September 16, 2015
ESPN’s Dan Rafael reports that the Floyd Mayweather-Andre Berto PPV drew between 500-600K PPV buys according to industry sources contacted by Rafael. It is the lowest PPV output by Mayweather under his contract with Showtime.
UPDATED: Kevin Iole of Yahoo! Sports is reporting that his source says it did “roughly” 400K PPV buys. 145,000 buys come from DirecTV which is always one of the first to report its buys.
PPV industry source on #MayweatherBerto numbers tells me they’re very poor relatively speaking. ‘Being generous is might hit 550,000 buys.’
— Dan Rafael (@danrafaelespn) September 16, 2015
The first disclaimer is that these are estimates from industry sources. Showtime’s Steven Espinoza proclaimed that it would never reveal actual PPV numbers after Maidana I. Of course, Espinoza added the proviso that it would reveal the PPV numbers if it set a record. For instance, Mayweather-Pacquiao.
550,000 PPV buys is not bad….for a UFC PPV but when it comes to Floyd Mayweather, it is a disappointment. It’s the last fight on his Showtime contract and we’ll see if he will actual retire.
With the start of college football season and five boxing events on various networks starting the Sunday prior to the PPV fight, one might see why the PPV buy rate was so low. Moreover, many casual fans were not impressed with Mayweather’s last fight against Manny Pacquiao – a fight that cost many $100 to watch. The casual viewer probably did not want to spend another $75 to watch it again. With no real ethnic audience to draw upon and Mayweather’s fighting style, the buy rate (if accurate) seems about right.
September 14, 2015
The Nevada State Athletic Commission handed out a 5 year suspension to Nick Diaz after his drug test failure for use of marijuana following UFC 183.
In addition to his 5 year suspension, he was fined $165,000 which is 33% of his $500,000 fight purse from UFC 183. Diaz’s attorney, Lucas Middlebrook, indicated that they would appeal the commission’s decision. Middlebrook believes that the suspension was a “personal vendetta” against Diaz by the NSAC (h/t Brett Okamoto).
Diaz, who was present at the hearing, did not provide substantive testimony when asked questions by the commission asserting his Fifth Amendment right not to incriminate himself. Still, the commission asked him questions where Diaz continued to repeat “Fifth Amendment.” The commission believed that the Fifth Amendment relates to criminal issues whereas this was a civil proceeding. Diaz’s lawyers argued that the U.S. Constitution and the Nevada State Constitution trumps the commission rules.
It was a contentious hearing in which a lifetime ban for Diaz was discussed by the commission members. The 5 year ban may still end Diaz’s career.
Diaz passed the first and last of the three tests he took for UFC 183. Two different labs analyzed the tests. He failed the second test. The attorneys for Diaz, who were far more prepared for this hearing than Anderson Silva’s lawyers, provided a medical expert that it was “medically implausible” that Diaz could register the levels of marijuana measured by the three different labs. The AG for Nevada argued that the conflicting results did not negate each other and pointed to Diaz’s pre-fight questionnaire (which seems to be the silver bullet in these proceedings) where Diaz did not indicate he took marijuana leading up to his fight.
We will see how this plays out but it looks like that Diaz’s attorneys will be filing a lawsuit in Nevada seeking judicial review of the commission’s ruling. The hefty suspension cannot be easily justified when you consider that Diaz was not taking a performance enhancing drug (i.e. anabolic steroids). Perhaps it is due to the fact that Diaz did not correctly report his drug use on the questionnaire or his past history of marijuana use which caused the severe suspension. Regardless it’s a stiff sentence which almost invites further legal action.
September 13, 2015
Frank Mir’s request for a Therapeutic Use Exemption (TUE) for Adderall at UFC 191 brings up the inherent problem with the UFC-USADA anti-doping program and the potential conflicts with athletic commissions.
MMA Fighting reports that Frank Mir had requested a therapeutic use exemption in Nevada for his fight against Andre Arlovski. According to the UFC’s vice president of athlete health and performance, Jeff Novitzky, Mir was granted a TUE for Adderall by USADA. However, according to the LA Times’ Lance Pugmire, the Nevada State Athletic Commission ruled Mir’s TUE was inadmissible.
The story gets muddled as Novitzky indicates misreporting in Mir’s request for a TUE for Adderall. Novitzky claims that Mir never submitted a TUE through Nevada as at the time Mir was informed he needed to obtain a TUE with the NSAC, it was too late to obtain such an exemption before his fight. Instead, Novitzky stated that he told Mir to stop using Adderall. So, the question is whether or not, Mir’s drug test from UFC 191 will come up positive for Adderall. As of this writing, those drug test results have yet to come back.
Pugmire was told by NSAC executive director Bob Bennett that USADA is “confusing the fighters.” In addition, Bennett told MMA Fighting, “The Nevada State Athletic Commission is the only body that can authorize a therapeutic use exemption in the state of Nevada.” So, what about obtaining one from USADA?
Under the new UFC-USADA anti-doping program fighters can apply for TUEs although that information will remain confidential. Under the USADA policy for TUE application a fighter may apply for a TUE 21 days in advance of use of the prohibited drug if not scheduled to fight, 90 days in advance of use if scheduled to fight more than 90 days in the future or: “[a]s soon as practicable when the Athlete is scheduled to participate in a Bout with less than ninety (90) days advance notice.”
Notably, the first two application scenarios note that the athlete should notify USADA prior to the use of the prohibited medication. The last scenario provides a case where the fighter is likely already using the prohibited medication and the fight is in less than 90 days. One might assume the last scenario are for fighters that may be last minute replacements. The question is what if in the last scenario, USADA denies the TUE. If you believe that USADA is out-of-competition testing prior to fights, isn’t possible that Mir could be found for use of a prohibited drug.
In the Mir case, the UFC officially announced the fight on August 1st. Therefore, if you are in the Mir camp knowing he was using (or wanted to use) Adderall, you had the opportunity to apply with the NSAC at that point and with USADA under it’s “as soon as practicable” standard.
According to this document from the NSAC, the TUE request must be done within twenty days “before he or she needs the approval (i.e., a bout).” Thus, the timeline for Mir’s exemption would mean that he did not think of applying for a TUE with the NSAC inside of 20 days prior to UFC 191.
One might assume Mir made the TUE application with USADA within 20 days of UFC 191. Novitsky confirms that he was granted an exemption by USADA in the MMA Fighting article. But, he advised Mir to stop using the prohibited substance once it was discovered he could not obtain a TUE exemption from Nevada.
We have our first controversy with the UFC-USADA anti-doping program and it underscores the tension between athletic commissions and a third party organization like USADA. Should Mir be culpable for not ensuring he was cleared of an exemption since he did not know the protocol for allowing such an exemption? The protocol can be confusing considering that if you are in need of a TUE, you must notify USADA and the commission where you are fighting. But, what happens if you are denied by the commission but allowed by USADA? Or, the commission grants the TUE but USADA does not? Both work independent of one another so this is a definite possibility. In this instance, Novitsky advised Mir to stop taking Adderall immediately. But, what happens if the fighter does not apply with USADA but with the NSAC?
It’s the commission that will administer any penalty for a drug violation. But, could a showing that USADA granted a TUE be seen as circumstantial evidence or information which may be considered in determining a penalty, if any. Based on the TUE protocol for USADA and NSAC, there are conflicting requirements which we see could confuse fighters. Realistically, just lobbying commissions to follow USADA protocol is not sufficient. Time will tell if this gets clarified.
UPDATED: We should add that while USADA has its own penalties for violation of the UFC’s anti-doping policies, the state regulatory body (i.e., commission) would hold a hearing if a fighter were to violate the state drug policy.
September 8, 2015
Welcome to another addition of Payout Perspective. This time we take a look at UFC 191 held at the MGM Grand Garden Arena where John Dodson had his second crack at Flyweight Champion Demetrious Johnson.
Mighty Mouse dominates Dodson
Demetrious Johnson showed his skills in taking a 5 round unanimous decision from John Dodson. Dodson squeaked out (maybe) one round according to judges but tired while Johnson showed his great cardio. It was another dominant showing but once again was not enough to satisfy the crowd. According to some in attendance, people were leaving before the fight. Perhaps that’s the reason Johnson lashed out at the fans that booed in a post-fight interview with Ariel Helwani.
— Dana White (@danawhite) September 6, 2015
The biggest fight in Johnson’s division may be Henry Cejudo assuming he gets past Jussier Formiga. If not that, I would suggest Johnson moving up to 135 to try and get some competition as its clear he’s lapping the 125 pound division. Arlovski edges Mir Maybe this was the reason why people were leaving early. Andre Arlovski defeated Frank Mir in the co-main event of the evening. Mir came in heavy, I mean real heavy, for this fight and it showed as he was almost standing still during the fight. At one point, Mir got position on the ground on Arlovski and just laid on him until it was broken up. Not the heavyweight fight that the matchmakers had hoped to see. Certainly, the forecast was for a quick KO like both had in their prior fights. Even winning, Arlovski looked down about his performance. On a six-fight winning streak, Arlovski puts himself in line for the Heavyweight title although he may have to wait until next summer for that considering Fabricio Werdum wants to wait until March to fight. So, Arlovski will likely get another fight. Maybe a returning Fedor Emelianenko? Attendance and gate It was not surprising that 191 did not do as well as other PPV events this year in Vegas. It drew 10,783 fans for a gate of $1.367M. It was the lowest gate for a UFC PPV since August 2004 at UFC 49.
UFC 191’s reported gate of $1.3 million is the lowest for a Las Vegas-based UFC pay-per-view card since UFC 49 in August 2004. — Mike Bohn (@MikeBohnMMA) September 6, 2015
The last time the MGM Grand drew a comparable attendance and gate was last September for UFC 178 which featured Johnson defending against Chris Cariaso. Bonuses The $50,000 bonuses went to Raquel Pennington, Anthony Johnson, John Lineker and Francisco Rivera. Pennington, Lineker and Rivera were on the UFC 191 Prelims. Johnson won a bonus for his KO of Jimi Manuwa. Lineker and Rivera won FOTN for their slugfest which Fox Sports tweeted out for people to see.
Promotion of the Fight
Notably, the UFC Countdown show on FS1 Sunday drew just 83,000 viewers per Sports TV Ratings. Of course this rating must be taken into consideration with the fact that many people are now watching UFC Countdown online at their leisure.
The Embedded Episodes once again followed the main fighters on the card including following John Dodson to the hospital to go see his wife deliver their daughter. It also followed Paige Van Zant during fight week and one can tell that the UFC has plans for her future.
The LA Times also ran a feature on Van Zant. Perhaps the most salient quotes for the article was that Dana White stated that “[s]he has great personality. People and sponsors love her.” Also, Van Zant seemed to infer that some of the other fighters in her weight class may be taking PEDs as she noted that some “have very masculine physiques, and I [PVZ] don’t know if you can get those naturally.”
The “Go Big” press conference was a news event of itself with Conor McGregor once again taking center stage.
Perhaps the most noticeable thing about sponsors for UFC 191 was the absence of Xbox as a sponsor for Demetrious Johnson. The Microsoft-owned video game platform had been a long-time sponsor for Johnson. In fact, it was the only fighter it sponsored. With the Reebok-deal, Johnson had to give up the sponsorship although he could still do promotional work for the company outside of the Octagon. However, an MMA Fighting article stated that his deal with Xbox was in limbo.
Notably, Xbox promoted its upcoming version of Halo on the PPV as it sponsored the Fighter prep point, octagon signage and Tale of the Tape.
Aside from Xbox, the Octagon had the usual sponsors including Toyo Tires, MusclePharm, MetroPCS, Bud Light, Harley Davidson, Draft Kings and Monster Energy Drink had the center of the Octagon
Odds and Ends
Google trends had 200,000 searches for “UFC 191” which is pretty good. But does that equate to PPV buys? Notably, worldwide the search term “Demetrious Johnson” fared better this time around than it did for his last fight in April. Same for the search term “Mighty Mouse and UFC.”
An anti-domestic violence group called MMA Watchdog staged a rally on Saturday afternoon outside the MGM Grand Garden Arena in opposition to UFC fighter Anthony Johnson. According to the group, there was a small turnout of 30 people.
The UFC expressed disappointment with Johnson’s actions after a gym confrontation with a woman. Yet, he was not taken off of UFC 191. Johnson agreed to counseling and a donation to a women’s charity to make good on the incident.
Joe Rogan’s dual interview of Ross Pearson and Paul Felder was really weird.
Dana White introduced a promo for FX’s “The Bastard Executioner.” Usually these types of promos are introduced by a fighter. Unless FX wanted White to do the introduction, one would think putting your fighters out there to do this type of work helps prepare them for future sponsorship work.
All of the indicators suggest that UFC 191 will be the lowest output for PPVs this year. Even with 3 more PPVs left in 2015, we can predict that those cards will outdo this one based on the level of fights on each. Are we to blame the UFC for putting Johnson in the main event based on his prior PPV history? Or, is it Johnson, through no fault of his own that lacks the appeal of other fighters? Johnson is trying his best, but fans are not buying his shows. Without another fight on the card that would be of interest, UFC 191 is destined to garner around 150,000 buys if lucky.
August 29, 2015
Plaintiffs on behalf of the fighters in the UFC Antitrust lawsuit have filed a Motion for Protective Order as a result of what it claims to be an exclusion from discovery of one of its main attorneys.
As is the case in litigation where there are sensitive materials that will be shared by opposing sides via discovery, the court required the parties to work together to come up with a protective order which would serve as the guidelines for the exchange of information. A concern by plaintiffs is that Zuffa lawyers seek to exclude Rob Maysey, an attorney for Plaintiffs, from “highly confidential” information.
Via Plaintiffs’ Protective Order:
Zuffa has proposed an unusual special “HIGHLY CONFIDENTIAL – ATTORNEYS’ EYES ONLY” designation in the Protective Order that would apply to “extremely sensitive, highly confidential, non-public information, consisting either of trade secrets or other highly confidential information directly concerning business plans, strategies, revenues or costs, disclosure of which to another Party or Non Party would create a substantial risk of significant competitive or business injury to the Designating Party that could not be avoided by less restrictive means.” Zuffa [Proposed] Order ¶ 2.7.
The attached exhibits to the Motion for Protective Order include a back and forth exchange on discovery between the parties which cover such issues as retention of data and other pertinent eDiscovery information as to when Zuffa would provide its data and in what form. Most, if not all of this information will be provided electronically and uploaded in reviewable databases for attorneys to review.
As for the interesting stuff, Zuffa is proposing two tiers of confidential information. Essentially, Zuffa wants Maysey “firewalled” from the discovery deemed HIGHLY CONFIDENTIAL. Plaintiffs argue that the definition proposed by Zuffa would preclude him from a broad swath of material. Plaintiffs claim that Maysey is central to the litigation and would impair his ability to assist his clients and prepare for trial. On the other end, Zuffa argues that Maysey is a “competitor” of the UFC according to its attorneys as he founded the Mixed Martial Arts Fighters Association. The claim is that Maysey should not be allowed to view contracts and sensitive business materials which Zuffa claims he might use for future prospective gain.
The argument is that Maysey and a partner at one of the other plaintiffs’ firms, Neal Tabachnik (who has represented MMA fighters in the past) should be precluded from HIGHLY CONFIDENTIAL Information. Plaintiffs seek an order from the court which would preclude Zuffa’s argument that Maysey is precluded from seeing the HIGHLY CONFIDENTIAL information.
Exhibit 1 (attached to Plaintiffs’ Motion) is a letter from Plaintiffs’ lawyers to Zuffa lawyers. Specifically, the argument points out the reasons why the confidential designations are overbroad and why Maysey should be allowed to view documents.
The full letter is below:
Exhibit 2 is a response from Zuffa lawyers to the above letter:
I could not highlight the pertinent sections in the letter from Zuffa’s attorneys but it essentially spells out its position by pointing to case law that dual tiers of confidentiality is not unusual and that Maysey’s involvement in MMAFA warrants that he is blocked from viewing HIGHLY CONFIDENTIAL documents. It cites to the MMAFA web site and his own law firm bio as to reasons why he should be firewalled for viewing documents. Notably, Zuffa points to a 2009 MMA Payout article in which Maysey was interviewed by Robert Joyner.
Notably, Maysey filed a declaration with the Motion for Protective Order which mentions that he is the “principal client liaison” with the fighters in this litigation. However, what it does not say is that he is trial counsel for the lawsuit (i.e., he will be in court trying the case if it gets to that point). This could be a major distinction when arguing whether or not an attorney assisting in preparing the case is essential in the discovery process. Moreover, Maysey states in the declaration that he founded MMAFA but does not own or “head” the MMAFA. Also, he does not profit from it. But, the issue that Zuffa will press is that he founded the organization and the web site maintains he is still a part of the organization.
This is a case of the internet coming back to bite back. Zuffa’s attorneys have done its due diligence in scouring the web for information on Maysey and MMAFA. One might see this as picking on someone that had attempted to help fighters seek out benefits. Its clear Maysey was emotional during the initial press conference announcing the lawsuit. We now see a strategy employed by Zuffa to block him out of the litigation. Coincidence or not, this is litigation and this is what happens.
Two tiers of confidentiality is not unusual in litigation especially when highly sensitive material such as trade secrets are involved. Zuffa’s arguments are valid but it will be how broad the definition of HIGHLY CONFIDENTIAL is that the court will look at when deciding whether or not it would be valid to preclude Maysey from looking at documents. Certainly, one would think the court would have to balance its decision on the right for the plaintiffs’ attorney to communicate with his clients and prepare for trial. MMA Payout will keep you posted.
August 28, 2015
Dana White went on ESPN Friday night to announce that the Ronda Rousey-Holly Holm fight is being moved up and to another location. Rousey will now face Holm in Australia as part of UFC 193.
White appeared by phone on ESPN to make the announcement. It was later discovered that the original main event for that card Robbie Lawler-Carlos Condit is now off due to an injury to Lawler.
The UFC plans to break an all-time attendance record for an MMA event in Melbourne. The event is taking place at Etihad Stadium. UFC 193 was awarded to Melbourne after a law restricting cage fighting was lifted earlier this year.
UFC 129 which drew over 55,000 fans and registered a gate of over $12 million is the current record for attendance and gate. This past January, the UFC drew 30,000 fans and a $3 million gate in Sweden for UFC on Fox 14.
Etihad Stadium has a capacity of over 55,000 although one might expect the UFC to boost the seating configuration so attendance would surpass UFC 129.
UFC 190 drew 900,000 on PPV based on Rousey and one might expect her to draw similar numbers.
White’s appearance Friday night seemed impromptu as he did not do a live remote but over the phone. Also, the timing of the event seems out of the ordinary as it was done 8:30pm PT/11:30 ET on Friday night. Usually, this type of announcement would occur during the week. Moreover, the original thought was that this news would trump the news earlier in the day that the organization had lifted the suspension of Travis Browne. However, it now looks like it was done to jump the news that Robbie Lawler was off the card. It will be the second straight title defense outside of the US for Rousey and she will look to produce another PPV hit.
August 27, 2015
Dave Meltzer writing for MMA Fighting reports that UFC 190 featuring Ronda Rousey and Beth Correia drew an estimated 900,000 PPV buys. The number would make it the third PPV event this year to draw 800,000 buys.
UFC 189 featuring Conor McGregor vs. Chad Mendes drew 1 million buys according to UFC.com. Other estimates have the July 11 PPV less than 1 million. Regardless, it’s the second straight PPV that has done well based on just 1 fighter. UFC 189 it was all Conor McGregor and UFC 190 was all Ronda Rousey.
Perhaps supporting the contention that Ronda Rousey’s star is brighter than ever is that there were no noteworthy fights on the UFC 190 main card. Despite the fact the show went over 3 hours, there was nothing great on the card besides Rousey. There were two TUF Brazil final fights and Shogun Rua-Little Nog. In comparison, UFC 189 did have another title fight between Rory MacDonald and Robbie Lawler to entice fans to buy the PPV.
UFC 190 joins 189 and 182 as top events that have drawn 800,000 PPV buys or more. No PPV event went over 600,000 in 2014. In 2013, only 2 events (UFC 158 and UFC 168) went over 800,000 PPV buys.
Ronda Rousey PPVs (via MMA Payout Bluebook)
UFC 157 – vs. Liz Carmouche: 450,000
UFC 168 – vs. Miesha Tate (co-main): 1,025,000
UFC 170 – vs. Sara McMann: 350,000
UFC 175 – vs. Alexis Davis (co-main): 545,000
UFC 184 – vs. Cat Zingano: 600,000
UFC 190 – vs. Beth Correia: 900,000
Early indicators from most outlets reflected the fact that UFC 190 did well on PPV. The prelims drew 1.3M viewers and google searches topped 6 million. All of these indicators would point to the fact that Ronda Rousey is, arguably, the top draw in the UFC. The card had little to support her and she was able to garner 900,000 fans. The PPV buy rate also reflects the fact that her star is gaining steam. One might expect her to draw similar numbers when she faces Holly Holm at UFC 195.
August 24, 2015
Earlier this month the UFC filed its appeal brief to the Second Circuit Court of Appeals with respect to its dismissed lawsuit against New York. The appeal focuses on Zuffa’s claims that MMA is protected by the First Amendment and that Plaintiffs have standing to press their challenge that the law prohibiting MMA in the state is unconstitutionally vague.
For those that are subscribers to the Sports Business Journal, I provide a lengthier in-depth analysis of the implications of Zuffa’s First Amendment appeal as a guest columnist in this week’s edition.
This past spring Judge Kimba Wood of the Southern District of New York dismissed Zuffa’s lawsuit which attempted to overturn the law banning professional mixed martial arts in the state. The UFC retained former U.S. Solicitor General Paul Clement to handle the appeal which was filed this spring in the Second Circuit.
The two primary issues that Zuffa focuses on in its appeal is its First Amendment claim that MMA deserves free speech protection and that the statute is unconstitutionally vague.
We will focus on the First Amendment appeal in this post and address the vagueness claim in another post later this week.
In its appellate brief filed on August, it argues that live entertainment, including MMA is presumptively entitled to First Amendment protection when performed in front of a live audience. This is based on the belief that implicit in the statute prohibiting MMA in New York according to Clement, is that the New York law restricts live MMA but does not prohibit the practice of MMA in gyms and training facilities across the state. Thus, the district court, as Clement writes “missed the forest for the trees.” Essentially, Judge Wood evaluated the law banning pro MMA in the state from the aspect as to whether MMA is inherently expressive when not part of a live performance. Clement asserts that it is “backwards” rationale. “As the Supreme Court has confirmed time and again, performing before an audience is what brings conduct that might not otherwise be expressive within the scope of the First Amendment,” writes Clement. The brief goes on to further argue that “a law that singles out for prohibition public exhibitions of perfectly lawful conduct is plainly problematic…”
It’s clear that MMA falls within the ambit of free speech and so Clement argues that the state of New York cannot contend that the message MMA live events convey is not entitled to First Amendment protection. He goes on to argue on behalf of the UFC that the district court dismissed the First Amendment claim, in part, due to the fact that even though live MMA conveyed a “particularized message,” it must be “understood by those viewing it.” Clement negates the belief citing the fact that whether the conduct involves lives performance before an audience, the case law suggest that there is no other need for further inquiry. As stated above, the law specifically addresses live MMA and since the law specifically seeks to regulate live MMA, there should be no further evaluation as to whether the audience will understand the particular message.
The response brief from New York will be filed the first week of November. At that point, the UFC will have a chance to reply to the response brief.
The appeal before the 2nd Circuit will not be decided until sometime in 2016 (if that) as the appellate court does not have a hard timeline to make a decision. If the court determines that MMA deserves First Amendment protection, it could have bigger implications than just MMA as one might conclude that sports in general could receive First Amendment protection. Moreover, it may impact technology like live streaming phone apps such as Periscope and Meerkat. If MMA, and sport by extension, is determined to have First Amendment protection, then what would prohibit an individual from live streaming an event for others to watch online? Another broader issue also addresses the intersection of a league’s intellectual property versus First Amendment protection. We have seen leagues and its sponsors attempt to use Periscope with the eventual hope of monetizing it and take advantage of its content. If the general public is allowed to stream sporting events using their phones, leagues and sponsors face an issue.
Although this was not brought up as a big issue, MMA Fighting’s Marc Raimondi was prohibited from using Periscope during fight week leading up to UFC 189. It was later clarified to him (according to Raimondi in a subsequent tweet) that he just could not Periscope during the actual night of the fight. For those wondering, I had reached out to the UFC to see if it had an official policy on live streaming its events. I did not receive a response.
MMA Payout will keep you posted on the appeal.
August 20, 2015
The International Business Times wrote a feature on the state of sports sponsorships in smaller leagues including the UFC. Overall, it provides a good overview of the current state of sports sponsorship using the UFC’s recent deal with Reebok as anecdotal information.
The article leads with Stitch Duran’s dismissal from the UFC and includes an explanation from the UFC’s Lawrence Epstein later in the story.
The article addresses the issue of sponsorship clashes between athletes’ personal sponsors and the official sponsors of the leagues and organizations in which they participate. The most recent example involves track and field athlete Nick Symmonds who was left off the US roster for this month’s 2015 World Championships in Beijing. Symmonds, a middle-distance specialist won a silver medal in the 800 meters at the 2013 World Championships and is a two-time Olympian. Yet, the U.S. Olympic team is a Nike sponsor (a reported $500M deal with USTAF) and Symmonds has an individual sponsorship with Brooks Running among others. As a result, he was left off the team to the consternation of Symmonds. He estimates that his income is 3 percent from the U.S. Track Team with 10 percent coming from prize money, 10 percent from personal appearances and the rest coming from corporate sponsorships. The New York Times detailed the sponsorship spat between the runner and the U.S. team as the chasm between the athlete and organization highlights the current push/pull of the business of sports. It indicated that an athlete like Symmonds could draw $250K-$350K a year which is still below the wages earned by NFL or NBA players. But, Symmonds’ earnings are probably more than a lot of UFC fighters.
Similar to the UFC-Reebok outfitter policy, the U.S. Olympic Track Team allows for its athletes to wear non-Nike gear but requires them to wear it during designated times (i.e., competitions, ceremonies and other official functions.) As we know, UFC contracted fighters are allowed to wear other sponsors but cannot wear them during fight week and/or other times where it is promoting a UFC event.
IBT notes that Nike and Adidas (and Reebok since it is owned by the 3 stripes) are spending more money than ever on sponsorships. Per research firm IEG, in North America, corporate sponsorship spending across all sports jumped 21 percent from $12.38 billion in 2011 to a projected $14.98 billion in 2015.
As IBT outlines in its article, “small leagues” like the UFC and U.S. Track and Field, there is a disparity not readily made up through earnings. The article notes that the NFL, NBA, MLB and NHL negotiate sponsorships and athletes obtain 50% of the revenue via the league’s collective bargaining agreements per sports management professor Dan Rascher. Of course, the four leagues have unions which represent the players of the league so that there is some facet of representation when leagues enter into these types of agreements. Any problems with the sponsor deals, the athlete can contact a union rep.
Lawrence Epstein was quoted in the IBT article. He stated that despite lower payouts versus past individual sponsor deals, “companywide deals provide fighters with stable sponsorship money” as well as facilitate long-term growth for the UFC. He indicated that 15 UFC fighters will have individual contracts with Reebok by year’s end which indicates that four more UFC fighters will have individual deals. Currently, 11 fighters have individual deals.
He also stated that Duran wasn’t fired because of his comments about the Reebok deal.
“Unequivocally, his [Duran] comments had nothing to do with him getting let go. I can’t be more firm on that. There are a variety of reasons that he was let go but nothing to do with his comments on Reebok,” Epstein said. “He’s trying to paint this thing as, he said some stuff about Reebok and as a result, he was let go. It’s just not true. That’s not the reason why he was let go. I can’t be more clear on that.”
The IBT article is an interesting look at the disparity of earnings between established team sports and smaller counterparts. What should be noted is that sponsorship spending is on the rise in sports which one might conclude that there are good opportunities for athletes to make extra revenue through sponsors. The UFC, like U.S. Track and Field, have brokered sponsorship deals which include substantial exclusivity that forecloses out opportunities for its athletes. The response by the UFC, as stated by Epstein, is that these deals provide stability for its fighters and will help the product in the long run. This is great if most of the contracted fighters are still with the UFC in the long run.
As for the continued repercussions of the Stitch Duran fallout, it is becoming a he said/he said sort of battle. Epstein contends Durant’s dismissal had nothing to do with his comments about Reebok yet he the timing of Durant’s departure is clearly not coincidence. Furthermore, White’s “shifting the conversation” about the Stitch departure lends one to think it had to be about Reebok.
August 19, 2015
Brock Lesnar is making the rounds on behalf of the WWE as it promotes the company’s second-biggest event of the year, Summerslam, at the Barclay’s Center in Brooklyn, New York. The biggest news to come out of Lesnar’s appearance was his comments that Vince McMahon is a better promoter than Dana White.
The statement itself is not that controversial. The 38-year-old Lesnar signed a lucrative deal with the WWE and as he said he upon announcing the re-signing with the WWE he gets paid full-time for working part-time. So, for him to take the side of the WWE is not that extraordinary.
But the reason for the question by ESPN was based on a twitter back and forth between Dana White and a fan in which White stated that wrestling is “fake.” Well, of course it is. And there’s no dispute there. Yet, we should probably go all the way back to the source for the response: some guy on twitter. The question asked by the guy to White is to whether UFC PPVs should be priced at $9.99 like WWE PPVs.
@RKORollins I hear u bro but fake shit should be 9.99
— Dana White (@danawhite) August 1, 2015
Obviously the second half of the tweet may be tongue in cheek as both White and twitter guy know its fake.
One might assume the question was based on whether the UFC should go to the WWE model of placing its PPVs on Fight Pass like the WWE has done or whether the UFC should charge its fans a discounted rate for PPVs that do not have big stars appearing on them.
White told the twitter follower that wrestling is “fake” and one might read into that response that based on its scripted finish the price point should reflect accordingly. Still, the back and forth seems rather innocuous.
As with most of White’s tweets, it did not go unnoticed. WWE Champion Seth Rollins chimed in with a response to White’s “fake” comments.
Guys, cut @danawhite some slack. I mean he’s had a million matches, so his opinion is super valid and should be taken as gospel.
— Seth Rollins (@WWERollins) August 2, 2015
Fast forward to yesterday in which ESPN hosted Lesnar. The question which got MMA web sites to sit up at their keyboards and take notice was the now infamous White tweet that wrestling is fake. Lesnar responded with perhaps an honest response in stating that McMahon is a better promoter than Dana White and explained the differences between UFC and WWE.
I would argue that the UFC and WWE business models are similar but not the same. It’s clear that the WWE has taken a big step with its WWE Network as opposed to what the UFC is doing with Fight Pass. The WWE received steep criticism from the outset with its plan as it essentially invested heavily into the over the top network while planning on moving its PPVs to the platform. Not only did this deteriorate its PPV business, it put off its previous distributing partners that received a revenue split from the PPVs. The distributors still receive a PPV cut, but it is less than before.
The question about whether UFC PPVs should be $9.99 needs to be addressed because it’s such an illogical question from the start. The UFC business model is predicated on the success of its PPVs. While the company receives revenue from event gates, merchandise and Fight Pass subscriptions among other revenue streams, PPVs remains one of the biggest pieces of the UFC financial pie. Starting this year, it increased its PPV price point $5 to $59.99 which likely meant an increase in PPV revenue. To suggest it cut UFC PPVs by $50 so more people can afford it seems way off the business model. Yet, it’s not wrong for someone on twitter to ask. And perhaps White’s response was appropriate as he was making the point that its business of real fighting is different from the WWE’s.
But, as with anything on twitter, it exploded into more. While most web sites, including this one, are picking up Lesnar’s comments, the underlying cause for the news is predicated on non-news. A question from someone on twitter that escalated. It’s an obvious commentary on the state of what is news nowadays.
ESPN picked up the twitter back and forth from White and asked Lesnar. Thus, what was an innocuous question about lowering PPV prices turned into Lesnar calling out White on ESPN. Of course, just a few months ago, Lesnar showed up in LA at UFC 184 with White and entertained thoughts of going back to the UFC. So, it’s unknown how personal White will take the slight. In the past, McMahon has taken swipes at the UFC with no response by White. One might expect nothing more to come of this since the WWE would like to have Ronda Rousey make another appearance at next year’s Wrestlemania in Dallas. Thus, a working relationship between the two companies is warranted for that to happen.
But then again, someone might ask another question of White on twitter which may once again be blown out of proportion.