WWE Network posts 1 million subscribers

January 27, 2015

The WWE announced that its WWE Network has surpassed 1 million subscribers in just 11 months.  Despite early concerns about retaining subscribers, the company has hit a significant benchmark with its digital platform.

The announcement comes a week ahead of its 4th Quarter earnings for 2014.  The increase in its subscribers is a dramatic turn from its 3rd Quarter announcement of 731,000 viewers.  The WWE offered a free November for potential subscribers to have a chance to check it out.  It appears that this promotion, the appearance of “The Rock” and others at the Royal Rumble as well as launching the network in the U.K. and Ireland have helped boost the subscription number.

The results reflect a 37% increase globally and 24% domestically.  Despite the buzz that people were going to cancel the network en masse due to the Royal Rumble result, the show actually reflected positive gains.

WWE stock is up 20% on Tuesday at the time of this writing.

Payout Perspective:

Great news for the WWE Network as it is near the 1.4 million subscriber number which would put the WWE investment in the platform at break even.  It is behind its projected 1.25 million subscriber number per Dave Meltzer.  Yet, with the rumor that it will once again offer a free February and with “Wrestlemania Season” upon us, the subscription number should remain solid for now.  The 1 million subscribers could be attributed to the “Free November” which was interesting considering the content during that month was not astounding.  MMA Payout will keep you posted on the earnings report next week.

WSOF retains Hollywood marketing expert to grow sponsorship sales

January 26, 2015

The World Series of Fighting has announced that it has retained Rolfe Auerbach to assist with the growing organization’s sponsorship sales.  Auerbach is the President and CEO of Los Angeles-based Brand in Entertainment.  He will be in charge of all sponsorship sales and product integration strategies on behalf of World Series of Fighting.

WSOF

Via WSOF press release:

“I am thrilled to have the opportunity to work with World Series of Fighting which, in its relatively short lifespan of just over 2 years, has grown exponentially into a powerful sports entertainment vehicle,” said Auerbach.

“With its presence on the NBCUniversal platform, its tremendous reach on television platforms throughout the planet and some of the best and most exciting athletes in the sport of MMA, the World Series of Fighting product presents an incredible opportunity for consumer brands to engage the 18-34 year old male demographic.

“We are excited to bring a marketing mastermind and innovator like Rolfe Auerbach on board to our incredible team,” said World Series of Fighting President, six-time world champion and two-time Hall of Famer Ray Sefo.

“With Rolfe’s wealth of experience and blue-chip level relationships in the consumer products space,” continued Sefo, “he will no doubt be able to catapult our brand into the next stratosphere.”

Under Auerbach’s leadership, Brand in Entertainment, since its inception in 2000, has incorporated products and brands into a host of the world’s most popular studio films, television programs, music videos and video games.

In 2006, Auerbach’s company famously incorporated a key marketing initiative of upscale hotel chain Embassy Suites, into one of the most-watched episodes of Donald Trump’s smash-hit NBC-televised reality series The Apprentice.

Payout Perspective:

The hiring of Auerbach should help with obtaining sponsors for WSOF programming.  In the past, WSOF has sought outside help to grow its promotion.  Notably, it had retained IMG to facilitate selling its media rights.  There could be potential for the WSOF to pick up sponsors that may be shut out of the UFC due to the new UFC-Reebok relationship.  Of course, Auberbach may also help with retaining more mainstream, blue-chip brands.  We shall see.

UFC on Fox 14 draws 2.82M, wins time slot

January 25, 2015

Television By Numbers reports that UFC on Fox 14 on Saturday drew an overnight rating of 2.82 million viewers, 1.1 rating (18-49 year olds) and 4 share.  It won its time slot on Saturday night.

UFC on Fox 14 aired on Fox from 8:00-10:00pm ET and due to the first round stoppage in the main event, there was no overrun.  UFC won its network time slot on Saturday night.  It went up against an ABC kid’s movie, “Mirror/Mirror,” a rerun of CSI on CBS and Figure Skating on NBC.

UFC on Fox Ratings

UFC on Fox 1: 5.7 million

UFC on Fox 2: 4.57 million

UFC on Fox 3: 2.25 million

UFC on Fox 4: 2.36 million

UFC on Fox 5: 3.41 million

UFC on Fox 6: 4.22 million

UFC on Fox 7: 3.3 million

UFC on Fox 8: 2.38 million

UFC on Fox 9: 2.9 million

UFC on Fox 10: 3.22 million

UFC on Fox 11: 1.98 million

UFC on Fox 12: 2.5 million

UFC on Fox 13: 2.27 million

UFC on Fox 14: 2.82 million

UFC on Fox 14 ratings

Payout Perspective:

The good news is that the UFC won its time slot against less than stiff competition.  It is also up 22 percent from UFC on Fox 13 in the 18-49 demo.  The 2 hour show featured 3 stoppages so there was no overrun this time around.  Thus, the ratings will likely see a big increase.  The bad news is that the ratings are off from last year’s UFC on Fox 10 which aired last January.  That show which featured Benson Henderson vs. Josh Thopmson drew 3.2 million viewers. In 2013, January’s UFC on Fox 6 drew 4.2 million viewers which featured Demetrious Johnson vs. John Dodson.  The first January UFC drew 4.57 million viewers.  MMA Payout will have more on the ratings in the days to come.

NYS Assembly Speaker Silver arrested on corruption charges

January 22, 2015

New York State Assembly speaker Sheldon Silver was arrested on federal corruption charges on Thursday.  The charges include mail fraud, wire fraud and extortion.  In MMA circles, the state assemblyman had been the one that prevented a vote on the legalization of MMA in the state.

The Complaint obtained by the NY Times alleges that Silver has received “more than $6 million in outside income from two law firms since late 2002.”  This includes “undisclosed bribes and kickbacks” where Silver used his position and power to “induce real estate developers with business before the State to retain and continue to use a Real Estate Law Firm controlled by an attorney who previously had worked as Silver’s counsel in the Assembly and who caused Silver to be paid for such referrals by the Real Estate Law Firm,” reads the Complaint.

UFC head Dana White has accused Silver of blocking a vote which could potentially grant the legalization of professional MMA in the state.  New York is the only state which prohibits professional MMA.

Silver had served as speaker for more than two decades.  So far, there is no clear indication as to who Silver’s successor would be.

A lawsuit is pending in which Zuffa has sued the state for its legislative ban on professional MMA.

Payout Perspective:

The news of Sheldon’s arrest could breathe new life into the annual Zuffa lobbying activities in Albany this spring.  While Sheldon’s removal from his position may not mean that New York passes legislation legalizing professional MMA in the state, it gives lobbyists new hope that they can obtain a vote in the Assembly.  This story is just getting started and MMA Payout will keep you posted.

UFC Fight Night 59 draws over 2.7M, Prelims grab 908K

January 21, 2015

UFC Fight Night 59 held on Sunday night on Fox Sports 1 drew an average of 2,751,000 million viewers with a peak of 3,162,000 viewers during the final quarter hour (12:00-12:15 AM ET) of the show according to Nielsen.

The night started off well with the 3 hour prelim show drawing an average of 908,000 viewers making it the second most-watched non-PPV prelims in FS1 history.  The peak of the prelims occurred in the final quarter-hour (9:45-10:00 PM ET) with 1,486,000 viewers tuning in.  Notably, it went up against the AFC Championship Game between Indianapolis and New England.  Of course, that game was a blowout.

In addition, the post-fight Fox Sports Live averaged 1,167,000 viewers from (12:15 AM-1:00 AM ET) making it the most-watched Sunday edition of the program all time.

Overall, it was the third most-watched Sunday in FS1’s history despite it being NFL Championship Sunday.

UFC Fight Night 59 was the highest-rated MMA event on cable TV since TUF 10’s Finale on Spike TV which featured Roy Nelson defeating Brendan Schaub.  The card also had Jon Jones’ only loss, a DQ, to Matt Hamill.  It also featured a guy by the name of Kimbo Slice.

Payout Perspective:

The big viewership numbers were expected considering the news that it had an overnight rating of 1.7.  The great ratings for the day could be attributed to the marketing behind Conor McGregor for the event.  It also showed how Fox can help the UFC by promoting its product.  Note the cross-promotion of McGregor on FX as well as the many reminders during the NFL playoffs (including the NFC Championship) of the event.  The question is how often will Fox want to assist in the promotion of these UFC events.

Wanderlei Silva sues NSAC seeking reversal of lifetime ban, fine

January 20, 2015

MMA Fighting reports that Wanderlei Silva has filed a lawsuit against the Nevada State Athletic Commission.  Silva claims that the commission overstepped its boundaries in issuing him a lifetime ban last year.

In addition to the ban, the NSAC issued a $70,000 fine this past September.  The punishment arose out of his failure to take a drug test in lead-up to a fight with Chael Sonnen this past July.  As we know, the fight never happened.

“This case encapsulates agency aggrandizement at its worst where disciplinary ation was taken against a non-licensed person,” reads the introduction of Silva’s Complaint filed by Ross Goodman in Clark County, Nevada’ District Court.

Silva’s attorney argues that the NSAC did not have jurisdiction over Silva since he was not licensed in the state of Nevada at the time officials attempted to drug test Silva.  Silva’s attorney claims that the statutes which the NSAC must follow only pertain to a “licensee.”

Silva is looking for the NSAC ruling to be reversed and set aside which could the clear pathway for Silva to fight in Nevada again.

Goodman is familiar with combatting the NSAC.  In April 2012, he sued the NSAC on behalf of Nick Diaz.

W. Silva v. Bennett and NSAC

Court filing via MMA Fighting.

Payout Perspective:

As we indicated in December, the process for appeal of an administrative ruling is usually through filing a lawsuit seeking a “petition for review.” Still, we wonder why Silva is going through this legal process when he could work around the suspension in Nevada and still fight. Silva’s attorney makes an interesting legal argument based on the Nevada statutes which the commission must follow. We will see how the judicial system handles interpretation of these statutes and this case.

Report estimates UFC 182 PPV buys between 740K-820K

January 14, 2015

MMA Fighting reports the PPV buy rate for UFC 182 to be in the 740,000 to 820,000 range making it the biggest PPV since December 2013.

UFC 182 which featured Jon Jones defending his heavyweight title against Daniel Cormier was heavily promoted.  It received higher than average attention and resulted in the best UFC buy rate in over a year.  In addition, reports of packed sports bars and movie theaters to watch the event showed that the buzz featuring a contest between bitter rivals appealed to many.

For Jones, it was the best PPV buy rate since his UFC 145 main event drew 700,000 PPV buys.  That event was sold based on a bitter rivalry as well.  At that point, Jones was thought to be a PPV star.

UFC 182 was the best PPV buy rate since UFC 168 in December 2013 which drew 1,025,000.

Dana White had predicted the event to draw 750,000 PPV buys and then indicated it would exceed that amount immediately after the event.

As pointed out by Dave Meltzer in the MMA Fighting article, UFC 182 went up against the NFL Playoffs featuring the Pittsburgh Steelers-Baltimore Ravens which drew 28 million viewers.  It was one of the biggest TV audiences for an NFL Wildcard game in the NFL’s history.

Payout Perspective:

There was a time when Jon Jones was thought to be the next PPV star and draw this type of buy rate regardless of his match-up.  This has not come to full fruition and with the revelation that he used cocaine prior to UFC 182, it may taint his image.  The interest for this fight was greatly aided by the media day brawl back in August and the subsequent venom between the two fighters.  The UFC picked up on this and packaged it into slick promos and focused on the one fight rather than take time to focus on others.  The marketing for this fight worked and its reflected in the buy rate.

For those wondering, Google searches for UFC 182 were at 400K over fight weekend.  The event drew enormous traffic on MMA web sites; an average of over 1 million viewers watched the Prelims and a record-breaking rating for the post-fight show on FS1.  All of this amounted to a PPV buy rate somewhere between 740K and 820K.  Do you think it should have done better?  Should we just chalk this up to new expectations when it comes to PPV?  The good news was that all of the promotion provided a great deal of interest and 2015 is off to a very good start PPV-wise.

Jon Jones enters drug rehab

January 6, 2015

Kevin Iole of Yahoo! Sports reports that Jon Jones has entered a drug treatment facility for what may be an addiction to cocaine.  Jones failed a Nevada State Athletic Commission drug test on December 4th testing positive for benzoylecgonine which is the main metabolite in cocaine.

Clearly, Jones’ entrance into drug treatment confirms that the positive drug test was a result of cocaine use.  Per Iole’s report, the Nevada commission follows WADA and benzoylecgonine is not banned out of competition.  Thus, it appears that the commission could not stop Jones from fighting at UFC 182.

The UFC has issued a statement on Jon Jones:

“We support UFC light heavyweight champion Jon Jones’ decision to enter a drug treatment facility to address his recent issue. While we are disappointed in the failed test, we applaud him for making this decision to enter a drug treatment facility. Jon is a strong, courageous fighter inside the Octagon, and we expect him to fight this issue with the same poise and diligence. We commend him on his decision, and look forward to him emerging from this program a better man as a result.”

Dana White issued his own statement:

“I am proud of Jon Jones for making the decision to enter a drug treatment facility. I’m confident that he’ll emerge from this program like the champion he truly is.”

Payout Perspective:

This news puts a damper on UFC 182 and the momentum the company had in the new year.  Certainly, Reebok may be concerned with Jones after it signed him to an individual sponsorship deal.  There were likely other sponsors outside of the Octagon that might have been options for Jones which are likely out.

Jones was the face of the UFC and arguably the greatest fighter of all time.  Now, his image is tarnished…for now.  There are a lot of instances of fighters coming back from drug issues as outlined by Bad Left Hook’s Scott Christ.  But there has not been anyone as big a star in his sport as Jonesthat had to enter rehab at the pinnacle of his career.  At a time when there is concern about UFC business, Jones was the leading face of the company.  The UFC will not be able to lean on him now.

Also for the UFC will be questions as to whether Jones’ conduct violated the UFC Code of Conduct Policy.

Another issue is the Nevada State Athletic Commission.  How was his positive drug test kept confidential until now?  Has Jones finished his community service from the media day brawl punishment?  If not, will they revisit his community service hours now?  He’s talked to kids about choices and now the news of his cocaine use is out.  Highly unlikely he can continue to talk to kids and serve as a role model at this point.  If he does make it out of rehab and remains clean, he can serve as a positive story but not right now.

Obviously, Jones’ admittance into drug rehab also brings up the old question of a UFC drug policy.  This is something that the UFC seemed to dismiss during UFC 182 fight week.

UFC 182: Payout Perspective

January 5, 2015

Welcome to another edition of Payout Perspective.  This time we take a look at the much anticipated fight between Jon Jones and Daniel Cormier.

HQ_UFC_182

Jones dominates Cormier

In one of the most anticipated fights in some time, Jon Jones dominated Daniel Cormier.  It was clear that as the fight progressed, Cormier looked like he lost confidence and Jones had broke his will.  Say what you want about the crotch chop at the end, Jones is the best there is right now and he knows it.

This guy may be next for Jones:

Then again, there are rumblings that Jones may face Cormier’s training partner and friend Cain Velasquez. Although Cain is a heavyweight, Jones looked huge compared to Cormier.

Cerrone decisions Jury

One might have thought that this fight would have been a great lead-in to the main event.  Cerrone is a guaranteed “bonus” of the night, right?  Well, not so much tonight.  Except for a bunch of meaningless kicks by Cerrone to Jury, this was a forgettable fight.  Cerrone was disappointed despite winning.

Attendance and Gate

MMA junkie reports the attendance at the MGM Grand at 11,575 for a gate of $3.7 million.  There was no news on comps although the UFC were giving away tickets for the event. The gate failed to crack the top 5 of UFC events at the MGM Grand.  Notably, UFC 168, which occurred at about the same time last year, drew 15,650 for a gate of over $6.2 million.

Despite the low attendance, Dana White was bullish about the PPV buys as he indicated that the 750K PPV buys he predicted pre-event were trending to exceed his expectations at the post-fight press conference.  Although this cannot be confirmed, there were multiple reports that movie theaters and sports bars were full or near capacity.  This will not help contribute to the PPV buys but shows the amount of interest.

Bonuses

Bonuses for UFC 182 went to Paul Felder, Shawn Jordan, Jon Jones and Daniel Cormier.  Arguably, Felder was the most impressive fighter of the night (next to Jones of course) with his spinning back fist KO of Danny Castillo.

For you gamblers, Felder was the biggest underdog to win at +190 according to the MGM Grand.

Cody Garbrandt was shut out of receiving a bonus despite a strong UFC debut against Marcus Brimage.  Garbrandt was a +130 underdog.

Pre-Fight Promotion

While it was not as expected, the media day brawl back in August was the best thing to promote this fight.  Perhaps it would have picked up more steam if the fight actually happened in September than now.  Still, the promos for this fight were outstanding.  It centered on Jones and Cormier’s brawl and the subsequent ESPN dust-up caught on camera.

The UFC Embedded episodes included Jones attending a high school wrestling practice and Cerrone’s action sports (snowmobiling, car racing and flying).  It also included a backstage altercation between Jones and Cormier.

Tyson Griffin also captured the animosity on his Instagram as the two camps passed each other here and here.

The UFC special Bad Blood featured the Jones-Cormier feud.  Although this episode which aired on FS1 and replayed FX drew praise and hype from MMA folks, in my opinion, it amounted to a regular HBO 24/7 episode.  There was also a countdown show and an “All Angles” show featuring Cerrone.  Essentially, the episode was a “getting to know” Donald Cerrone show.

In addition to the television commercials, there were extensive radio buys which do not usually occur for a standard UFC PPV.

UFC 182 was shown in movie theatres across the country. From surveying social media, it appears that many people actually went to see the event at theatres. 

Also, bars across the country seemed to be packed for this event.

Sponsorships

The octagon had UFC sponsors, MusclePharm, Fram, MetroPCS, Harley Davidson, Cimemax’s Banshee, Toyo Tires and Bud Light in the center.  There was also signage for UFC 183 featuring an image of Anderson Silva sitting in a “spider” position.  Banshee also had the fighter prep point. There was also a commercial on the Cinemax show during the event.   

Cerrone was sponsored by Budweiser and attempted to giveaway beer on the Las Vegas Strip on New Year’s Eve until the UFC stopped the promotion.  Prior to the fight, it was announced that he had signed a sponsorship with Fram.  

Cormier had “Break Bones” t-shirts for the event which were made by his sponsor, CageFighter.

Jones sported his new Reebok sponsorship.  Jones’ trunks appear to be what his official uniform may be. He also has his own share of shirts from UFC.com.

Odds and Ends

  • To the dismay of some people, the UFC increased prices of its PPVs to $59.99 HD for the first three events of 2015.
  • The PPV was short on time which is odd since there have been at least two times in recent memory where a UFC PPV has exceeded 3 hours. UFC 181 had five hours squared away instead of the normal four hour block on PPV.  One would think if people were going to pay $5 more, the UFC would pay for an overrun to get some in-ring interviews of the co-main and main eventers.  Regardless, look for big ratings for the FS1 post-fight wrapup.
  • CM Punk was on the FS1 pre-fight show and did a Q&A before the weigh-ins. The company is getting the most out of Punk already and putting him out there for 182 made sense.  How much will they use him before he actually fights?
  • The commission threatened the fight purses of Jones and Cormier if there was any dustup at the weigh-ins. Thus, the awkward weigh-in staredown.
  • Steven Seagal was in attendance and “aided” Daniel Cormier prior to the fight as shown in an “Embedded” episode. Doesn’t look like it helped.
  • UFC Heavyweight newcomer Jared Cannonier utilized crowdfunding site GoFundMe to raise money for his training camp. He exceeded his goal of $5,000 by raising $6,100.  Unfortunately, he was KO’d by Shawn Jordan.
  • Speaking of training camps, Cerrone indicated he paid $20,000 to bring in fighters to spar with him. He is set to make slightly over $100,000 for the fight.
  • The UFC announced big additions to its Fight Library with the acquisition of libraries from several promotions.
  • We already know, but Conor McGregor is getting a huge promotional push by the company.
  • Is the UFC using the “boxing strategy” as many suggest that they highlight one fight to sell for its PPV? This can be done if there is a heated feud, but probably hard to sell as frequent as its PPVs are due to lack of build.

Conclusion

After the event, Dana White indicated that PPV buys were above the 750,000 he predicted pre-event.  There were 500,000 Google searches as of Friday which would indicate a big PPV buy rate.  However, the cautionary tale of relying on Google searches is that Pacquiao-Algieri fight in November drew 500,000 searches yet only drew a reported 300,000-400,000 PPV buys.  But, the promotion of the Jones-Cormier feud alone seemed to create the kind of buzz that got fans that pick and choose purchasing PPV events to buy this one.  Any buy rate number hitting 600,000 (or above) will be a great start for 2015 for the UFC.

UFC Increases PPV price for announced 2015 events

January 3, 2015

According to UFC.TV and multiple PPV providers such as DirecTV and Time Warner, the UFC will charge consumers an estimated $59.99 HD/$49.99 SD for all PPVs scheduled in 2015 so far, which include UFC 182: Jones vs Cormier, UFC 183: Silva vs Diaz and UFC 184: Weidman vs Belfort.

UFC_182_price_incr

 

Payout Perspective:

UFC President Dana White went on record (MMAFighting) years ago, stating that PPV prices would never be raised and would stay at their regular price of $54.95/$44.95 SD. That tune changed for UFC 168 in December of 2013, when the PPV price was raised to $59.95 HD/$49.95 SD. Dana White went on the record once again and stated that the PPV price hike was “just for UFC 168″, since it was justified by placing some of UFC’s biggest stars in highly anticipated match-ups (Weidman, Silva, Rousey, Tate).  White stated PPV prices would go back down to their regular price after UFC 168’s one-off price adjustment.

That brings us to 2015, which is just over a year after the UFC 168 PPV price hike experiment took place. To kick-off the new year, the UFC has scheduled it’s first three events of the year (UFC 182, UFC 183, and UFC 184) with an increased PPV price of  $59.99 HD/$49.99 SD ($64.95 HD/$54.95 SD for Verizon customers). Another one-off experiment cannot be the culprit this time around. So, what could have caused the PPV price hike this time around? Well, you don’t have to look any further than how mightily the UFC struggled in 2014 on the PPV front, which may seem a bit counter intuitive.

Last year’s down PPV business forced Standard & Poors to lower Zuffa’s outlook and threatened to lower their credit rating if things didn’t turn around by the end of Q1 2015.  Now having said that, it makes sense as to why Q1 2015 has been scheduled with some of UFC’s biggest stars and match-ups. As for the price hike, looking back at UFC 168, it did an estimated 1.025M PPV buys with the hiked PPV price, so it doesn’t appear to have been much of a deterrent. It’s pretty much a safe bet to say that the UFC’s takeaway from the UF 168 experiment was that their customers have no problem paying extra for a major event.  In 2015, it looks like they are taking that experiment a bit further by scheduling the first three events of the year with the price hike.

Essentially, the UFC is applying ad-hoc variable PPV pricing to their product, which is something the UFC has criticized and has tried to stay away from since their parent company, Zuffa, took over.  Fans have demanded variable PPV pricing for years as justification for not purchasing cards that were not as “stacked” as others yet cost the same amount. The UFC’s belief, however, has always been that consumers are buying the UFC experience via PPV, regardless of who is fighting on the card for the most part.  The UFC never wanted to admit in the past that some cards have less worth than others, which is a perception that has been shattered the past few years.  If the UFC wants to keep that perception that all PPV events have the same value, a uniform PPV price hike may be the next logical step in this experiment, but for a company who has struggled so much recently with their PPV business model, increasing the price on a product that many fans feel is over-saturated and watered-downed may prove to be quite the risky move.

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