MMA Payout Year in Review: No. 3 – UFC signs media rights deal with ESPN

December 30, 2018

The UFC will move to ESPN starting in 2019 as it signed a deal with the network this past May.  This also brought the end of the 7-year deal with Fox as its first network media rights deal.

ESPN paid $1.5 billion for the next five years starting in 2019 for its television and digital rights.  The UFC had been touting it was looking for $450M per year for 10 years.  The deal includes airing on ESPN and its new digital media platform, ESPN+.  The new deal with ESPN will carry 10-15 UFC events exclusively on ESPN+.

The first fight on ESPN will take place on January 19th at Brooklyn’s Barclay Center.

Via our original post on the story in May:

Per the press release supporting this announcement Dana White stated, “I couldn’t be more excited to partner with The Walt Disney Company and ESPN on an agreement that will continue to grow our sport. UFC has always done deals with the right partners at the right time and this one is no exception. We will now have the ability to deliver fights to our young fan base wherever they are and whenever they want it. This deal is a home run for ESPN and UFC.”

The press release also states:

“With more than 280 million fans around the world, UFC boasts the youngest fan base among major professional sports organizations in the US with a median age of 40 and an audience comprising 40% millennials.”

The lineup of UFC content available to ESPN+ subscribers will include:

  • Exclusive, all new-seasons of “Dana White’s Contender Series” beginning in June 2019
  • A new original, all-access series produced by IMG Original Content
  • Exclusive pre- and post-event shows for all 15 “UFC on ESPN+ Fight Nights”
  • Non-exclusive access to UFC’s full archive of programming, including historic events, classic bouts, and original programming
  • Additional UFC-branded content, including “UFC Countdown” shows, press conferences, weigh-ins, and pre-and post-shows

It was just announced that Dana White’s Contender Series will have a second season starting this June.  The announcement today confirms a third season starting next June.

Payout Perspective:

UFC Fight Pass will remain a standalone digital platform despite event airing on ESPN+.  On Saturday, it announced more content including additional fight promotions across the world as well as Roy Jones, Jr. promoted boxing.  Prior to the deal, assessing whether the UFC could attain a media rights deal to their liking despite a dip in its ratings and industry observers concerned that the product had been “watered-down,” the UFC ended up with a great deal.  While its not the amount of money it had wanted, it is now a part of the biggest sports network in North America.  This should help with other areas of its business including licensing and sponsorships (which appears to be picking up).

MMA Payout Year in Review: No. 5 – PFL debuts

December 30, 2018

The Professional Fighters League began its first season this year and will end it on New Year’s Eve in New York.  Although the PFL has re-emerged from WSOF with a novel “season” with winners having a chance at $1 million, it still is suffering from lack of viewership according to its ratings.

The good news is the PFL found a television partner in NBC Sports Network.  It also had a concept which was intriguing as the fighters fought tournament style earning points with fighters entering the playoffs and a final in each of the weight divisions.

In August, it was reported that comedian Kevin Hart and several other famous Hollywood stars had invested $28 million in the PFL.  Hart even did a video promo for its playoffs this past October.

The new investors that took over include investment banker Russ Ramsey, venture capitalists Donn Davis and Mark Leschly and D.C. sports franchise owner Ted Leonis.

The PFL season started this past summer with playoffs occurring in October.  It will culminate on Monday, December 31st.  Despite the financial security it may have with its investors, the viewership of the events has been dismal as not one event has surpassed 200,000 viewers.  The ratings are smaller than WSOF events on NBC Sports Network.

With such notable investors, we will see what strategies they take to attempt to turn the tide for the organization.

MMA Payout Year in Review: No. 6 – Josh Barnett “wins” at USADA arbitration, but still leaves promotion

December 28, 2018

Josh Barnett became the first UFC athlete under the UFC Anti-Doping Program to not receive a suspension of time from fighting after taking his case of a failed drug test to arbitration.  Still, not trusting the drug testing process, Barnett requested his release from the company.

Barnett tested positive for a banned substance as a result of an out-of-competition sample on December 9, 2016.  The sample tested positive for Ostarine.

Barnett noted that he was routinely taking dietary supplements “to maintain his conditioning as an elite athlete.”  The opinion notes he took 17 supplements prior to providing the sample that came up positive for Ostarine.  Tributestin 750 was one of the supplements that was supposed to contain only Tribulus Terrestris.  Tribulus is not a Prohibited Substance.  “It is claimed to naturally support the production of testosterone among other positive health attributes.”

Through working with USADA, it was discovered through the process of supplement examination that Barnett’s Tributestin was contaminated with Ostarine.  After testimony at the hearing, USADA conceded that the source of the Ostarine found in Barnett’s out-of-competition samples were from Tributestin as the product was contaminated.  With this concession which USADA seemed to admit from the outset and confirmed with Barnett’s testimony, the case “became one of the Applicant being the victim of a Contaminated Product with a Prohibited Substance.”

Barnett’s prior history of failed drug tests was discussed and the matter of whether this was a second infraction of the UFC ADP.  However, the arbitrator determined that a drug sample taken by the California State Athletic Commission

Notably, Barnett, gave the UFC notice that he was taking a “leave of absence” on December 14, 2016.  Two weeks later, his A sample came up positive for Ostarine.

If not for Barnett’s detail in keeping the supplements he took while training, he would have likely been suspended.  The Arbitrator noted:  “I find this Applicant to be a very meticulous and careful person.  In my experience as an arbitrator of hundreds of doping cases I have never heard testimony from an individual who has taken so much care to record his supplement regime in order to avoid the very problem he is now experiencing.

After the arbitration determined that the supplement Barnett took was tainted, Barnett sued the maker in Los Angeles Superior Court.

Despite being exonerated, Barnett decided to leave the UFC.  The process showed how long it took for Barnett’s case to be adjudicated.  He had lost time and was the victim of a tainted supplement.  Barnett noted in a Facebook post of his distrust for USADA and its “insistence” to punish him despite Barnett’s belief that they new it was a tainted supplement issue.

Via Barnett’s Facebook Post:

I cannot in good conscience trust them to act in good faith or perhaps may even wish to look to enact some sort of vengeance in an attempt to cancel out my victory against them in arbitration. It’s not the kind of environment that I want to spend the final years of my career in.

This week USADA and the UFC Anti-Doping Program has come into question after it publicly defended Jon Jones after Turinabol had mysteriously returned to his system.  And then, Jeff Novitsky revealed that it was not just one test in December that showed the metabolite, but tests in August revealed the same.  He also stated at Friday’s press conference that the California State Athletic Commission was not privy to the August results.

At least from an outsider perspective, it’s clear that there are fissures in USADA’s system.  Novitsky has indicated that USADA will continue to be the vendor for the UFC Anti-Doping Policy with more tests.  But it is the quality, not quantity of test, investigation and swiftness adjudication that will help see results and satisfaction.

Josh Barnett wins USADA Arb… by on Scribd

MMA Payout Year in Review: No. 7 – DAZN enters sports streaming market

December 28, 2018

This past June, Bellator MMA announced a deal with sport streaming service DAZN.  The late September 2018 launch in the U.S. of the $9.99 per month service was another challenge on the traditional way we watch sports.

Perhaps bigger than the Bellator deal, and securing another deal with Combates America, it signed Canelo Alvarez to an exclusive deal which began in December.  Alvarez pummeled an overmatched Fielding.

Bellator MMA aired several events which were exclusive to DAZN but also some events were also airing on the Paramount Network.  But the streaming on the digital platform allowed subscribers to see the Bellator product where the promotion did not have media deals.

DAZN is spending a lot of money for media rights and we’ll see if it pays off in the end.  For Bellator, it’s hard to decipher whether the deal will help recruit new fans to its product, but it gets it more exposure in previously untapped markets.

The question for Bellator will be whether it decides to abandon the notion of PPV and air exclusive events on DAZN.

MMA Payout Year in Review: No. 8 – Golden Boy promotes first MMA event

December 27, 2018

Golden Boy Boxing made its debut promoting mixed martial arts this past November with a card in Inglewood, California.  The event was headlined by Tito Ortiz taking on Chuck Liddell.

The event was centered around the main event which was a farce to begin with as it was clear that Liddell was in no shape to fight.  The California State Athletic Commission, the one that issued a license to Jon Jones, provided Liddell with the license to fight Ortiz.  Based on the looks of Liddell, the 48-year-old was in no shape to fight, yet, CSAC granted him the opportunity.  To no surprise, Ortiz put Liddell out of his misery in the first round.

Maybe the only good thing that came out of the event was the UFC signing Deron Winn. The 5’7 205-pound Winn earned a victory over former UFC light heavyweight Tom Lawlor.

The pre-fight press conference was one of the worst showings to promote an event as Oscar De La Hoya appeared to be preoccupied with something else.

De La Hoya hopes to be a disrupter in the world of MMA and become an alternative to the UFC as he took aim straight at White.  The head of the UFC went right after the Golden Boy and even included salary and PPV specifics in a piece authored by Yahoo! Sports Kevin Iole.

For his troubles, Liddell made $250,000 while Ortiz earned $200,000.  The rest of the payouts, attendance and gate from the event are below.

11-24-18 GB MMA Payouts by on Scribd

11-24-18 GB MMA Box Office by on Scribd

The PPV was originally priced at $49.99 but was reduced by $10.00 to $39.99.  According to multiple reports, it was estimated at 40,000 PPV buys and as low as 30,000 PPV buys.

Payout Perspective:

Despite the low PPV numbers, Golden Boy professes to continue promoting MMA events.  While the competition may be beneficial for fighters, I’m not sure its debut was something to redo.  If it can be a place for entertaining fighters that no longer want to be in the UFC or Bellator, there could be a place in for it in the MMA stratosphere.  The question will be if Oscar De La Hoya will be engaged enough with this venture to ensure that he develops a quality product rather than attempting to “hot shot” events with something like Ortiz-Liddell.

MMA Payout Year in Review: No. 9 – NLRB denies Leslie Smith claims against Zuffa

December 26, 2018

The 9th MMA Payout Story of the year is Leslie Smith’s Charging Letter to the National Labor Relations Board in which she claimed that she was discharged by the UFC for her attempt to organize fighters via Project Spearhead.

Smith, a women’s bantamweight, was known for her work with the Professional Fighters Association and then launched Project Spearhead.  She actively recruited current UFC athletes to sign cards which would allow the NLRB to conduct a vote to determine if the fighters could be considered employers of the UFC.

In April 2018, she was scheduled to face Aspen Ladd at UFC Fight Night: Atlantic City.  However, Ladd missed weight and Smith declined to fight at a catchweight.  It was Smith’s last fight on her contract and she sought to see if she could obtain a contract renewal with a monetary raise as well as fighting on the card.  The UFC did not negotiate, paid Smith her show and win purse and terminated her contract.

In May 2018, Smith filed a Charging Letter with the NLRB claiming that she was terminated due to her work with Project Spearhead.  It appeared that there was potential for success as the Regional Office determined that Smith’s claims had merit.  Her case was then moved to the D.C. Office as Smith’s lawyer claimed that this was done as a political favor by the Trump Administration on behalf of Dana White.

In September 2018, the D.C. office dismissed Smith’s claim arguing that there was no evidence which showed she was dismissed due to the protected activity of organizing fighters.  Rather, the NLRB believed it to be more of a contractual dispute that reached an impasse.  Smith appealed the decision arguing that there were several factual misstatements and omissions in the opinion which should overturn the decision.  But the NLRB upheld the decision affirming Smith’s decision lacked merit.

The only recourse at this point would for Smith to file an appeal with the U.S. Court of Appeals.

Payout Perspective:

Smith has gained some publicity this year with her fight as she was featured this fall on an episode of Full Frontal with Amanda Bee.  As many speculate, the NLRB administration decisions are political dependent on the administration in charge.  Smith had viable claims against Zuffa but there was not enough proof according to the NLRB in D.C.  This is disappointing since the regional office had concluded that Smith’s claims had merit.  It would be interesting to see if another appeal is made on her behalf.  At this point, Project Spearhead and the attempt to organize fighters lives with fans, but not with fighters.  We shall see if there is any more movement from Smith or other fighters in 2019.

MMA Payout Year in Review: No. 10 – The UFC Antitrust Lawsuit rolls on

December 26, 2018

MMA Payout is doing its annual review of top business stories for the year.  The first story we take a look at is the ongoing Antitrust lawsuit which had several key developments this year.

First, Judge Boulware denied Zuffa’s Motion for Summary Judgment on Friday, December 14th.  It did not decide on class certification on the day as the Court made it clear it wanted to hear from the experts in the case for him to determine if there was a viable case on the part of the Plaintiffs.

Earlier this year, experts for Plaintiffs and Zuffa issued the experts reports in this case.  The reports assessed things such as the liability of Zuffa and potential damages.  Zuffa, of course, shot down these arguments asserted by Plaintiffs’ experts.  They, then filed a motion to exclude Plaintiffs’ expert citing (in general) that the opinions did not follow traditional scientific opinions.  A bulk of the reports were sealed as the experts reviewed confidential information.

Plaintiffs also filed for Class Certification, a requisite of Class Action status.  Zuffa opposed the motion.  At this time, this motion is on hold pending Judge Boulware hearing more on the subject from the experts.

As discussed about on Show Money in December, it appears that the lawsuit will come down to Plaintiffs’ expert’s assertion that the way to determine antitrust injury is based on “wage share” versus “wage level.” Wage share, adopted by Plaintiffs’ is looking at the wages of athletes in comparison with the revenues of the company.  Wage level, adopted by Zuffa, is looking at the wages over a period of time and not in comparison with company revenues.  Clearly, a wage share outlook would favor Plaintiffs if they are asserting that their salaries have been artificially depressed due to anticompetitive measures by Zuffa.  Wage level would favor Zuffa since its clear that salaries have increased over time.

Payout Perspective:

Do not look for the resolution of this case in 2019.  Even if Judge Boulware were to dismiss this case, Plaintiffs would seek to appeal the decision.  Zuffa would do the same if there would be an unfavorable ruling for its case.  The only way this case would end in 2019 is if the parties decided to settle the issue short of trial.  While this would be out of the question, if the Judge were to impose his will on the parties to settle, I would foresee this happening.

Did Dana White inadvertently help Michael Chiesa’s lawsuit against Conor McGregor?

December 23, 2018

The attorney for UFC welterweight Michael Chiesa filed an Amended Complaint earlier this week in his lawsuit against Conor McGregor. In this amended version, Chiesa cites New York’s “Son of Sam” Law which states that McGregor should not be able to benefit from his crime.

Chiesa is suing McGregor (technically his company) and the Barclay’s Center for the April 5, 2018 incident in which he threw a dolly at the bus carrying several UFC fighters including Chiesa and Khabib Nurmogomedov. As a result of McGregor’s action, Chiesa was bloodied from shattered glass and had to be taken off the card. According to the amended complaint filed on December 20th, Chiesa was to be offered the opening spot against Khabib Nurmogomedov but for his injury. Chiesa claims that when Max Holloway was unable to fight, a UFC executive texted him about the possibility. Its presumed that the text was sent prior to knowledge of Chiesa’s health status and that he would have taken the fight.

The “Son of Sam” law in New York was made to prevent criminals from profiting from the publicity of their crimes. The law was named after serial killer David Berkowitz, known as “Son of Sam,” gained fame in the mid-1970s for his crimes. There was widespread speculation that Berkowitz would profit from his murders by selling his story to be made for a book or film. As a result, New York passed a law preventing someone from profiting from their crimes.

McGregor was charged with multiple crimes and while he was acquitted of his wrongdoings, Chiesa claims that the law would apply since the law relates to those charged of crimes.

Here, Chiesa is claiming that McGregor has made money off of this incident. The complaint notes McGregor selling his whiskey, “Proper 21,” during his UFC 229 press conference. Also, included in the lawsuit, was McGregor’s quote from the press conference that he knew that he was going to go after Khabib that day. There is also the use of the footage to build UFC 229 and Dana White’s proclamation that his use of it was part of the story and build for the fight.

518314 2018 Michael Chiesa … by on Scribd

UFC 229 was the highest-grossing PPV in the company’s history with a reported 2.4 million buys.

Chiesa’s amendment to his lawsuit, if agreed by the trier of fact, would mean that he could feasibly claim McGregor’s part of his reported earning from UFC 229 and/or sales from Proper 21.  While its not clear how the law would apply and if there would be a disgorgement (giving up the money) of profits by McGregor, it puts the welterweight with an interesting legal argument.

Payout Perspective:

It’s an ingenious strategy to utilize the “Son of Sam” law here especially when Dana White was adamant that they utilize the bus footage in its build for what became the biggest PPV in the history of the UFC.  McGregor sold “Proper 12” at the pre-fight press conference and a lot of conversation surrounded the April incident at Barclay’s.  While McGregor may claim that the press built this up themselves, we have White explicitly stating his reasons to promote the attack.  Thus, it was generated by McGregor’s actions and facilitated by the UFC.  It will be interesting to see if McGregor blames the UFC for its use of the footage or not.

McGregor’s attorneys had filed a motion to dismiss certain claims including Chiesa’s claims for negligence, negligent infliction of emotional distress and intentional infliction of emotional distress.  With the amendment of his lawsuit, this may make McGregor’s attorneys have to retool its motion to dismiss as one might assume that the new claim regarding the Son of Sam law would likely be addressed in a motion to dismiss by McGregor.

MMA Payout will keep you posted.

Show Money Episode 25: The Vegas Field Trip and Uncle Dana reveals some numbers

December 21, 2018

I joined John Nash and Paul Gift to talk about their coverage of the UFC Antitrust Hearing on December 14th and discuss the Kevin Iole piece in which Dana White revealed salaries and PPV buys.  Enjoy.

You can find the audio here.

 

UFC on Fox 31 draws 2.15M viewers on Fox

December 16, 2018

UFC on Fox 31 drew 2.15 million viewers on Fox Saturday night according to Television By Numbers.  It was the promotion’s swan song with the network.

The event featured Kevin Lee-Al Iaquinta in the featured bout of the telecast.  The show drew 0.7 in the A18-49 demo and a 3 share.

Although the show beat out the others network shows in its time slot, it came in third to two reruns on NBC (Dateline) and CBS (NCIS: Los Angeles) in overall viewers.

 

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 2,975,000
UFC on Fox 21 2,200,000 1,983,000
UFC on Fox 22 2,690,000 3,178,000
UFC on Fox 23 2,020,000 2,189,000
UFC on Fox 24 1,740,000 1,996,000
UFC on Fox 25 1,640,000 2,046,000
UFC on Fox 26 1,780,000 2,107,000
UFC on Fox 27 1,590,000 1,770,000
UFC on Fox 28 1,820,000 2,037,000
UFC on Fox 29 1,780,000 2,020,000
UFC on Fox 30 1,460,000 1,678,000
UFC on Fox 31 2,150,000

 

Payout Perspective:

Maybe there were some nostalgic fans for the last event on Fox as it was the highest-rated showing for a UFC on Fox since December 2016.  The event did well on the network and broke a string of UFC on Fox shows that could not crack 2 million viewers.  Next up for UFC is new partner ESPN as Fox welcomes PBC full-time as its anchor combat sports tenant on the network.

 

« Previous PageNext Page »