Payout Analysis: The Strikeforce Death Knell?
October 12, 2011
Zuffa created a subsidiary called Forza LLC to control Strikeforce who was taken over from Silicon Valley Sports and Entertainment in March of this year. Since then, there’s been much debate as too whether Zuffa/Forza will continue to operate the promotion or just kill it off.
Strikeforces’ television contract with Showtime expires mid-February 2012 and both sides have been relatively quiet as to the future the promotions programming on the network. However, UFC President Dana White recently commented on the Strikeforce/Showtime situation at the UFC 135 pre-fight press conference:
“Who knows what’s going to happen? The way this thing works is, it depends on Showtime. The ball’s in their court. They need to decide whether they want to keep Strikeforce around or not”
Showtime has yet to comment on their plans moving forward. They do have an option to extend the deal through 2014, however, the ball that’s been left in their court doesn’t have much of a bounce left.
Over the past 5 months Strikeforce had their top draws cherry-picked by the UFC, an impressive list that includes former Strikeforce heavyweight champ Alistair Overeem, former welterweight champ Nick Diaz and Strikeforce light heavyweight champ Dan Henderson. It’s almost certain the Strikeforce lightweight champ Gilbert Melendez will join them. By hollowing out the promotions champions, Zuffa’s actions speak louder then words and Showtime should be getting the message now loud and clear.
So is there even a business case left for keeping Stikeforce around in 2012? Using the publicly available data we took a closer look at the performance of the two Strikeforce ownership groups, Silicon Valley, and Zuffa/Forza. We sampled data from the last 9 events under Silicon Valley ownership, between October 9 2010 to March 25 2011 that included 5 major tier 1 events and 4 smaller tier 2 Challengers events. We compared the average TV Ratings, Attendance, Gate and Payroll to the first 9 events under Zuffa ownership, between April 1 2011 and September 23 2011 that included 4 major tier 1 events and 5 tier 2 events.
Payout Perspective:
In the midst of losing their top talent, the rough estimation is that Strikeforce has seen TV ratings dip 5%, attendance drop 32%, live gate profits down 11% and an increase of 26% in fighters payroll since Zuffa took control in March 2011.
From Showtimes point of view, the ratings are stagnant and Zuffa is (or has) impeded the ability for Strikeforce to improve upon their ratings. Showtime is drawing approximately 2.5 times more viewers with boxing programming then with Strikeforce. M-1 Global, who also broadcasts MMA events on Showtime will air their next to last event on October 14th. With no word on a Showtime/M-1 contract renewal, perhaps Showtimes focus will shift solely back to boxing leaving the MMA programming by the wayside.
For Zuffa, they’re in a position where they have just signed a huge network television contract for the UFC with FOX, which includes distribution on the cable channels FX and Fuel TV. Plus, Spike TV appears set to continue broadcasting UFC content, counter-programming or not, throughout 2012. So for Zuffa’s primary brand there’s no shortages on the television front. There has been zero push for Strikeforce since the ownership change and none look to be in sight. The numbers aren’t terribly good and there is no momentum, I see little benefit for Zuffa to continue their support for Strikeforce. It’s plausible they would continue to broadcast Strikeforce on Showtime in an attempt to help limit potential competition but I think if Showtime is to continue with MMA programming, it won’t be under the Zuffa/Forza/Strikeforce banner.
Cain-JDS smart move for UFC
September 5, 2011
With last week’s announcement of Cain vs. JDS as the match November 12th for the UFC’s network debut, the UFC is putting its faith in the Heavyweight championship to catch casual viewers. Its a smart move.
While the decision may take away PPV buys from UFC 139 in San Jose, it makes a good first impression with network television. First impressions are everything and a solid matchup for viewers was essential. Not only does the UFC want to make a splash with its first fight on network television, it will be competing with Pacquiao-Marquez III despite the promise that the Cain-JDS matchup will be over before Pacquiao enters the ring.
The UFC is selling the fight as an asset to a Saturday night of fights. It will serve as the de facto lead-in to the boxing PPV Saturday night. UFC has made it clear that its Fox debut will not interrupt fight fans from seeing both MMA and boxing main events the same night. While it will compete with the undercard of the boxing PPV, its hard to say that most casual fight fans tune into for a Pacquiao undercard. This will make the creation of the Cain-JDS undercard much more intriguing. Does the UFC put up a solid undercard with known commodities? Henderson vs. Guida. Or, does it feature younger up and coming fighters (e.g., Rory McDonald, Edson Barboza) and push the likes of Henderson-Guida for UFC 139? Despite the Pacquiao main event, a strong Cain-JDS undercard could provide solid ratings and Zuffa could claim an overall win November 12th despite viewers tuning in to see Pacquiao.
Top Rank Boxing is targeting Pacquiao-Marquez III as the biggest PPV buy of Pacquiao’s career. Pacquiao-Mosley drew a reported 1.3-1.4 million buys depending on the source. In the past, he’s done 1.25 buys in fights with Oscar de la Hoya and Miguel Cotto. (H/t Bad Left Hook) Is this a subtle message that Bob Arum wants to steal the night? It would be no surprise based on his distate for all things MMA and Dana White’s comments directed toward him.
For the UFC, White is seeking ratings higher than Kimbo Slice’s last Elite XC win against James Thompson in May 2008. MMA Mania reports that Slice’s KO of Thompson (remember the exploding ear) garnerd 6.12 million viewers with a peak of 6.51 million viewers. The Kimbo-Roy Nelson fight on TUF 10 received 5 million viewers as TUF 10 received the best ratings in seasons. As an aside, for as athletic and gifted fighters are in the UFC, the fights of a backyard brawler garnered the highest ever ratings in MMA. Does this say anything about the sport of MMA? About the perceptions of the public of the sport?
The marketing of the November 12th fight on Fox has already started. Promos have been pushed during MLB games on Fox this past weekend, there will be a Primetime special after NFL Football on October 30th and Fox promises a “tailgate” party as a lead-up to the fight in Anaheim.
Via MMA Mania:
…FOX today promised levels of promotion the likes of which the world’s largest mixed martial arts organization has never seen before. That includes a red carpet and tailgate party complete with celebrities and the big time feel you’ve come to expect from major sporting events like the Super Bowl.
A “Super Bowl” like atmosphere? This is a good sign for the UFC as Fox is looking to put the full force of its marketing machine behind November 12. That’s a lot of pressure for just one fight. Hopefully Cain-JDS raise their level of skill to match the expectations. But, an injury to either one can prove to be disastrous for all parties involved. Is there a backup plan if either Cain-JDS gets hurt in training? Certainly this has to be an issue considering the number of injury replacements that were needed on cards this summer.
As for the logistics, there’s a lot of details that need to be hammered out.
Via MMA Junkie:
Admittedly for the UFC, there are a lot of things to work out with the promotion’s first effort on FOX: Where the show will air internationally, how it will look, what first-time fans can expect in the way of an introduction to MMA, and, don’t forget, the bulk of the fight card.
If nothing else, tuning into Fox to see how the UFC product is presented and how it differs from Zuffa’s presentation will be of interest to UFC followers. Another issue is to see how receptive the UFC is to Fox’s input on its broadcast. While everyone is friends right now, we shall see what happens the first time the UFC and Fox disagree.
White claims ESPN hates the UFC
August 20, 2011
In response to a tweet, Dana White wrote that ESPN has always hated the UFC. He clarified this tweet with another one stating that Jim Rome was the only good thing about ESPN.
It appears that the reaction is due to ESPN cancelling White’s interview promoting UFC 134.
Via MMA Mania:
Sounds like an awfully strong reaction over a cancelled interview and perceived lack of coverage. Perhaps there is more to the story that we don’t know? After all, ESPN airs “MMA Live” each week, which features stories revolving mostly around the UFC.
This is even more odd when one considers how much coverage ESPN dedicates to sports that routinely air on FOX networks, such as football, both college and pro, baseball and auto racing. And if White wanted more coverage for the UFC, wouldn’t it be a bad idea to make disparaging remarks about “Worldwide Leader in Sports?”
Payout Perspective:
Typical response by White? MMA Mania is correct in writing that the reaction is over the top considering how much ESPN has covered the UFC. Not to mention Stephan Bonnar and Rashad Evans are mainstays with MMA Live and the networks has provided coverage of many UFC PPVs. It is also included it in ESPY nominations too. Also, the MMA page on ESPN.com is predominantly UFC-Strikeforce news. And, of course, the appearances by White and UFC fighters on Rome is Burning.
Perhaps its the glee of the Fox deal, but White’s comments seem blown out of proportion. Could ESPN be blowing off White as a passive aggressive way to get back at the UFC for the Fox deal? Maybe. This seems a little like when Spike played the premiere of UFC 132’s Countdown midday. But here’s an example of the ills of the social media. Think before tweeting. Telling ESPN off doesn’t help keep a relationship with Rome is Burning. After all, Rome is on ESPN.
On a broader scale, the Fox deal will be interesting to see if the UFC will need to reign in some of its language. In addition, what will the UFC do if a homophobic or sexist slur is made during a broadcast? Will it be “business as usual” or will there be a need to address the situation?
FOX Deal May Be Just What New York Needs
August 20, 2011
I am certainly not alone in my view that the reported seven (7) year Fox/UFC deal is monumental for the sport of mixed martial arts on a number of levels. As Kevin Iole points out over at Yahoo!, Dana White is a winner because he has fulfilled a dream of taking the UFC to network television, Fox is a winner because it is tapping into a sport that appeals to the highly coveted 18-34 demographic, but “[n]o one, though, will benefit more than those who have turned the sport into what it is: its fighters.”
Perhaps this is implicit, but let’s not forget about the fans of the sport that will now be exposed to a better, more refined production that will be available, as I understand, almost every day of the week. Add to this the increased exposure the sport will receive with people who are otherwise not familiar with its intricacies, and I think the fan base should grow exponentially in the coming years.
For me (and many New Yorkers) I believe there is also significance to this deal that should not be overlooked – indeed, it should be capitalized on. As you may recall, on November 17, 2010, I wrote an article for MMA Payout, A History Lesson (or History’s Lesson) on Mixed Martial Arts in New York, where I traced the history of the sport and the circumstances that ultimately led to the ban on the sport in New York in 1997. In this article, I pointed out that the key to reversing the ban, in my view, was to increase exposure through, inter alia, the mainstream media to convince the public that this sport is not what it once was.
Regrettably, New York politics is a tricky beast, i.e., even though the votes are there to pass the bill that would legalize mixed martial arts, the political process (if we can call it that) has derailed the bill year-after-year. This is not dissimilar to the political situation in the late 90s where the votes were there to make the sport illegal but the then Senate leader was preventing a vote on that bill. Ultimately, the New York Times jumped on the legality of what it deemed barbaric and this and the resulting public reaction led to a complete 180—mixed martial arts went from legal to illegal virtually overnight.
Now (as then) I think the commitment by Fox, a major network based out of New York, to the UFC and mixed martial arts can help shine the light on, and expose, the superficial, strawman arguments of the opposition, e.g., Assemblyman Bob Reilly. Once the public understands the sport—and New Yorkers understand that the state is losing money to neighboring states because it fails to sanction a sport that is not only legal in 45 states but is on network television, the pressure to put the bill to a vote should overwhelm any purported countervailing forces at play.
While I realize Zuffa tentatively plans on doing the first Fox event in Anaheim in November, New Jersey would be a solid option to show both Governor Cuomo (and New Yorkers) that mixed martial arts is here to stay both in our backyard and on network television. This could be monumental for New York as the budget process gets underway.
Fight Lawyer
Justin Klein is an attorney at Satterlee Stephens Burke & Burke LLP in New York City where he concentrates his practice in commercial litigation and represents clients in the fight industry. He regularly addresses current legal issues that pertain to combat sports, including efforts to legalize MMA in New York, at his Fight Lawyer website. He is a licensed boxing manager with the New York State Athletic Commission as well as the founder and Chairman of the Board of the New York Mixed Martial Arts Initiative, a non-profit organization that gives inner city youth the opportunity to experience the emotional and physical benefits of martial arts training. Justin lives in New York City where he trains in jiu jitsu and boxing.
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Bellator turns down Marquardt
July 17, 2011
Earlier this week Bellator CEO Bjorn Rebney stated that middleweight free agent Nate Marquardt “just isn’t a good fit” for Bellator. Marquardt’s rejection is just the latest problem in the career of one of the best middleweights in the world.
Via MMA Junkie:
Rebney confirmed he and Marquardt, as well as the fighter’s representatives, discussed the possibility of a Bellator deal. However, he declined to comment on the specifics of the discussions and wouldn’t reveal the exact stumbling blocks. Admittedly, though, it was worth a shot.
Payout Perspective:
Its interesting that Rebney turned down the deal knowing that Bellator’s Ben Askren and Hector Lombard have called out Marquardt. Speculation is that money was the likely “stumbling block” for Marquardt to come to Bellator. While Rebney did not rule out a superfight with Askren/Lombard, he indicated that despite Marquardt’s pedigree, he’d have to enter the Bellator-style tournament to earn a shot at Lombard.
On another note, its interesting to see the MMA community beat up (via social media) a guy that’s been caught and punished. Even Dana White called him a “nice guy” despite giving Marquardt his walking papers (via social media no less). I don’t recall that many fighters calling out Chael Sonnen with his situations (TRT and legal issues). Could it be that fighters knew that if they called out Sonnen he would return verbal grenades and then some a la Keith Olbermann?
So what should Nate do next?
- Fight Back…Or “tweet” back. He’s already engaged in a twitter war with BJ Penn. Another fighter critical of Marquardt. While this strategy is entertaining to read as it unfolds, there’s little value to sending hate tweets to all your critics.
- Shift Focus. In a way, Ben Askren, Hector Lombard and BJ Penn have helped Nate Marquardt. While each has called out Marquardt, it has given him the opportunity to shift focus.
Also via MMA Junkie:
Some of the fighters that think they’re so cool and tough by kicking a guy when he’s down. As far as my career, this has been one of the worst times of my life, and these guys are calling me a cheater and talking crap. I’ve taken note as to who those guys are, and I’m going to come for them. Eventually, I’ll get them. I don’t care if it’s in a superfight or if they want to come down to my gym. I’ll beat them up for free.
Good fire from Marquardt. The TRT issue is over, he’s no longer suspended and he’s setting his sites on people that have tried to kick him while he’s down. While the quote has a hint of LeBron James, he can refocus the attention on fighting.
- Sign with a regional promotion and thereby take a paycut. Its easy to tell Marquardt to take a paycut, since we aren’t affected by it financially. But, if there is any chance to return to the UFC. he has to show that he is willing to start from the bottom once again. Even though Bellator turned down Marquardt, there are still some promotions out there that would be willing to give “the Great” a shot. With that being said, Marquardt and his reps would have to pick a promotion where the competition is decent.
- Lay low for a while and stay mum. The most passive strategy of them all. But, people will forget about the steroid stigma. The only problem with this is that people will forget about how great a fighter Marquardt was prior to the TRT issue.
Will Faber vs. Cruz carry UFC 132?
July 1, 2011
UFC 132 will be the first PPV headlining the Bantamweight division since the UFC-WEC merger. The big question will be whether or not Urijah Faber and Dominick Cruz will be able to attract the UFC audience.
The matchup has some heat considering it is for Cruz’s UFC-WEC Bantamweight title. In addition, there is bad blood between the two and Cruz is looking to avenge a lost to Faber. The Countdown show did a great job in detailing their history. Unfortunately, the debut ran on Spike TV during the day Wednesday. Regardless, the big question will be whether viewers buy the PPV?
You could call Faber “Mr. WEC” as he was the face of the organization prior to its merger with the UFC. Many of the big WEC events occurred in Sacramento, Faber’s hometown, and many of the main events involved “The California Kid.”
Taking a quick glance at Faber’s draw in the WEC:
WEC 52: Faber vs. Mizugaki: Versus rating – 570K
WEC 48: Aldo vs. Faber: WEC’s PPV – 175K buys
WEC 41: Brown vs. Faber: Versus rating – 1.3 million
WEC 36: Faber vs. Brown: Versus rating – 497K
WEC 34: Faber vs. Pulver: Versus rating – 1.5 million
Compared to Faber, the champion does not have the same appeal. Of course, he has had limited chances:
WEC 50: Cruz vs. Benavidez 2 – Versus rating – 316K
WEC 47: Bowles vs. Cruz – Versus rating – 373K
Prior to the WEC merger, few lightweight fighters found themselves at the top of a UFC PPV card. Aside from BJ Penn, the Lightweight division does not have the following as other heavier divisions. The last UFC PPV with lightweights as headliners was January 1st when Frankie Edgar defended his Lightweight title against Gray Maynard. While the contest was an exciting 5 round war, it did not equate into a high PPV buy rate. Notably, half of the people in attendance were comped tickets. Obviously, there were factors which could explain the less-than stellar buy rate (college football bowl games, recovering from New Year’s Eve) and comped tickets (hotels buying tickets for its high limit players that came for NYE).
UFC 132 will take place during a holiday weekend but shouldn’t experience the same distractions as UFC 125. The only competition for viewers would be the heavyweight boxing match between David Haye and Wladimir Klitschko but since the fight occurs during the day (the fight is in Germany), UFC 132 has the fight community’s attention.
132’s undercard should support the main event as it provides some compelling matchups. The Leben-Silva matchup should be a slugfest and its almost guaranteed that one man will be knocked out. Also, fans may see the very last fight in the UFC for Tito Ortiz.
Payout Perspective:
It will be interesting to see the buy rate for the PPV. Despite Cruz being the champ, most fans are cheering for Faber. Faber is a marketable figure as exemplified by many of his endorsement deals which include a mainstream ad campaign for K-Swiss and regular appearances on the Jim Rome radio show. Cruz is a relative unknown and if he defeats Faber, the UFC will need to ratchet up the marketing efforts to sell Cruz against other bantamweights. Certainly there are other quality fighters in his division, but aside from Faber, could the casual viewer name one?
With the infusion of the WEC lighter divisions and the introduction of the 125 pound division, one can only wonder whether these divisions will ever headline a PPV. Or, will they just be support for a PPV card. It could be that the divisions will be used for Fight Nights and other televised events with the UFC’s next TV partner (or its own network).
Zuffa’s Former WEC Staff Takes Over Strikeforce
May 17, 2011
All it took was two events after the Strikeforce purchase was announced for Zuffa to take over the Strikeforce promotion and replace the staff, quickly disproving the “business as usual” motto tied to the acquisition two months ago.
According to MMAPayout sources, May 9th, 2011 was the last day Strikeforce was an MMA promotion under Silicon Valley Sports & Entertainment, their previous owners who sold the budding promotion to Zuffa, LLC. A few days after 5/9, Scott Coker and Peter Dropick met with the old Strikeforce staff individually to inform them that their services would no longer be required to avoid operational overlap and inefficiencies. A couple of staff members were offered positions to join Zuffa, but accepting the job would required a move to Las Vegas, which was not seen as a desirable move for those that were already established in Northern California. Those few opted to stay in the Bay Area instead. Those that were willing to relocate and accept an offer from Zuffa were not offered a position.
As MMAPayout reported last month, Strikeforce employees were aware that after the April 9 event, staff changes were going to be made by early May and Zuffa would complete the process around early July, when most Strikeforce staff is expected to have worked their last days under the promotion. Rich Chou was let go a few weeks ago and was replaced by former WEC matchmaker Sean Shelby. Former WEC VP Peter Dropick will now do most of the heavy lifting for Strikeforce, as he was assigned to help run the promotion shortly after it was purchased.
It is still unclear what Scott Coker’s role will be going forward, but he will still be the figurehead of the promotion as long as they are up and running. It’s said that part of Scott Coker’s contract, besides a guaranteed job with Zuffa, included a clause that states he does not need to relocate to Las Vegas and could continue to work from his San Jose office, though that could not be confirmed upon publishing this article. Former WEC PR director Dave Sholler has been traveling with the Strikeforce staff helping promote their events since the purchase was announced, and will continue to spearhead the PR efforts for upcoming events. He flies to Dallas this week to meet up with Scott Coker, Herschel Walker, and Josh Barnett for a press tour in order to promote the second leg of the Heavyweight Grand Prix event in June.
Payout Perspective:
In post mergers and acquisitions, these type of layoffs are expected and it’s no difference in this case. In fact, considering the situation regarding the Strikeforce TV deal with Showtime – which will be up around February/March of 2012 – it makes perfect sense. During that time, Showtime will have the option of extending the TV deal, which would keep Strikeforce alive for the span of that deal. Without an extension, many in the MMA industry believe the promotion could be folded as early as second quarter of 2012. Negotiations between Zuffa and Showtime should heat up in the upcoming months leading up to the expiration date of the current TV contract.
Behind the scenes, Strikeforce is continuing to sign young prospects (Yuri Villefort, Maximo Blanco) and popular veterans (Keith Jardine, Jeff Monson) to fill up their cards, since they have a heavy schedule planned with Showtime for the remainder of the year. During recent contract negotiations, fighters have stated that they only spoke to Zuffa personnel (no one from Strikeforce) and that everything ran a bit smoother behind the scenes since the takeover. Fighter manager Monte Cox told Sherdog.com that Zuffa wasted no time in making changes:
“We didn’t get per diem [money]. We didn’t get mileage [money]. They just didn’t pay those things for the undercard…. Now there’s per diem. Now there’s travel. Now there’s three nights for a hotel. Instantly that all changed. For those guys, it’s a homerun.”
Along with increasing incentives for undercard fighters, Zuffa has done away with amateur fighters in the prelim slots, which will in fact help many in the Strikeforce roster who complained that they weren’t getting enough fights. The extra room will allow to book more fighters already under contract, though Showtime will continue their policy not to air the prelims. As a result, the UFC was looking to package those fights into another outlet for the fans, and although Facebook is a likely destination, nothing has been officially announced or confirmed yet.
No matter what type of outcome the Showtime TV negotiations produce, it appears that Zuffa has their personnel ready to either keep the promotion running or start the merge process, a move similar to what the WEC experienced just a year ago. Luckily for the former WEC staff, they are on the other side of the merger talks this time around.
The Sports TV Landscape, Pac-12 Landmark Deal, & Where MMA Fits
May 9, 2011
The soon to be Pacific 12 conference officially announced last week a blockbuster media rights deal with Fox and ESPN worth $3-billion over the span of 12 years, topping all other current collegiate conference TV deals and quadrupling the worth of their previous TV deal, setting the new standard for sport properties looking forward to upcoming re-negotiation periods.
Although some may wonder what the correlation is between this deal and MMA, you don’t have to search too long to realize that there is a scramble and bidding war going on at the moment to secure more sport content for networks, many who are either trying to get into the game or just acquire as much content as possible to stay in it. We are currently seeing a new trend for the sports and TV industry right now, where networks are paying a premium for this type of content, where now the Pac-10 has set the standard going forward.
CNBC’s Darren Rovell wrote, “[sports are the] best bet on entire television landscape. People get sick of sitcoms, reality shows and soap operas, but fans don’t lose interest in a sport. That’s why networks don’t have any problem signing deals that last as long as they do despite the fact that they have no idea what the economic or technological landscape is going to look like”.
Looking at the deal, the Pac-12 will use an equal revenue-sharing plan, which means each team in the conference will be raking in $21 million annually in guaranteed money just from this deal. The Pac-10 will be bringing in $250 million per year ($60 million in rights with the previous deal), which tops all TV deals by other conferences, including the Big-10 ($220 million per year) and the SEC ($205 million). As if that wasn’t enough, the soon to be Pac-12 will also start their own Network which will be fully owned by the conference, unlike the Big Ten Network which is 49% owned by Fox, which should bring even more revenue to the conference, which some have estimated could be worth an additional $10 million. The deal would put each team grossing around $30 million a year. The conference also created the “Pac-12 Media Enterprises” to manage and sell sponsorship and licensing rights controlled by the conference, along with the conference championship games. To illustrate how big of a deal this is for the schools, Utah – who left the Mountain West Conference to join the Pac-10 – was making about $1.2 million in TV money in the MWC, where in a few years in the Pac-12 could be 20-30 times more with the new deal signed.
According to Sports Business Journal, the front-runners in landing the Pac-10 deal were Fox and ESPN (who got the split deal) and Comcast/NBC, who was trying to pickup the rights for Versus, which will soon be renamed to NBC Sports after the Comcast/NBC merger. If you recall, just a few weeks ago, NBC/Versus was able to retain the NHL (TBS/TNT, ESPN, and Fox were also bidders) by signing a 10-year 2 billion dollar deal, which pays out at about $200 million a year. Versus – who currently has a TV deal with the UFC until 2012 – is in the midst of being renamed to NBC Sports as they will do their best to become a competitor in the sports TV market (ESPN). Keeping the NHL was a must and losing the Pac-10 deal was a blow, but it could be the silver lining for the UFC who has positioned themselves in the last couple of years as vital programming who can draw the 18-34 demo and brings in some of the better ratings for Versus. UFC events and playoff NHL games do about the same ratings on Versus (NHL averaged 624k viewers for the first round this year, UFC on Versus 3 on March 5th averaged 681k viewers), but UFC (MMA) outperforms the NHL during the regular season on average.
While the UFC’s deal with Versus is up next year, they are also in a renegotiation period with their other TV partner, Spike TV, who’s deal will also run out next year. Experts within the industry believe that both parties have been involved in intense negotiations (Spike advertising Bellator events during TNA showings and UFC putting prelims and other specials like Primetime – which were previously exclusive to Spike- on other networks like Ion and ESPN on time-buys. The UFC has also been experimenting airing their own content by utilizing Facebook to provide free preliminary fights.
In the past year, the UFC’s Dana White told MMA Fighting that he expected a network deal to be done by 2011, followed up by possibly starting up their own network in the next couple of years, though he has shied away from those comments recently. “Sports Business Journal came out with a survey asking big names in the industry with sport could start its own network and 4 out of 5 said us. They are right. I agree” said White.
Other networks that have long been interested in acquiring MMA content or a sport franchise are TNT/TBS/TruTV and Fox channels (FX & Fuel TV). In the last couple of months, MMA start-up promotion Shark Fights signed a deal with Fuel TV to air their events on the newly created “Friday Fight Night” segment. Long time Fuel TV VP/GM CJ Olivares stepped down from his role with the network just last month, and was replaced by Fox Sports Network’s George Greenberg who shared some insight if MMA programming will still be in the plans for Fuel TV.
You do not see a lot of MMA on Fuel right now. Will we have a little bit? Yes. Will we have more? Yes, a bit more. Television programming is a diet that needs a bit of everything in it. It’s okay to have some MMA, and it’s okay to have your action sports stars appear in shoulder programming, there’s absolutely nothing wrong with that. At the end of the day, TV is a horse race and we need to get ratings.
On the other hand, FX will be a part of the Pac-10 TV deal with Fox, which it has agreed to televise college football games on the network. Back in December of last year, it was rumored that Bellator was going to sign a TV deal with Fox which would put the MMA promotion on FX, FSN, and Fuel TV, a deal that fell through and ultimately landed Bellator on MTV2. FX was also said to have some interest in Strikeforce and the UFC in the past, but nothing had gone beyond exploratory talks. It is said that after NBC/Versus and Fox lost rights to sport franchises they were bidding for, both entities could not afford to lose their current programming staples.
NBC/Versus signed a lucrative deal with the NHL and looks to use them as the premier league for their newly created NBC Sports channel, while Fox (losing out the LA Lakers contract in Southern California) needed to keep the Pac-10 programming to keep their stations going in that region. As a note, HBO, Fox, NBC, and ESPN/ABC have been said to be interested in MMA content from the UFC in the past, though nothing ever came to fruition.
Back in January, MMAPayout discussed the “The Sports TV Landscape” and brought up the domino effect of these lucrative TV deals and why a network deal would have to make sense to the UFC due to the PPV vs. Rights to fee trade-off. A move by the UFC to leave Spike TV could generate a chain reaction by Spike to replace them with another promotion if they wanted to keep airing MMA content, which would be no easy task but not impossible either, since many think that Bellator is being groomed just for that reason. Larry Scott of the Pac-10 said it best when he proclaimed the three main goals for the conference that should apply to any sports entity looking to grow in the current market conditions are to increase revenue, generate exposure, and create your own network. Three key points the UFC has been stressing over the past couple of years and is aiming to accomplish in the near future.
Current Sport TV Deals – Collegiate Sports, NHL, MLS, WWE, and UFC:
Pac-10: $250 million/Year (Fox/ESPN/ABC) … previously $60 million (Fox/ESPN/ABC)
Big Ten: $220 million/Year (ESPN/ABC)
SEC: $205 million/Year (ESPN/CBS)
NHL: $200 million/Year (NBC/Versus) … previously $77.5 million (Versus)
ACC: $155 million /Year (ESPN)
Big 12: $130 million/Year (Fox)
WWE: $30-35 million/Year [Meltzer] (USA Network) … With Syfy included, estimated at around $70+ million/Year.
UFC: $35 million/Year [Meltzer] (Spike TV) … TV deals will be up after 2011 with Spike TV and Versus (4 events).
MLS: $14.75 million / Year (ESPN2, $8.5 million/Fox Sports Channel, $6.25 million) … Asked for $20 million/Year (FSC)…. previously $3 million (FSC)
Analyzing Dana White’s Recent Video Blog, Interview, & Executive Iceman Promo
April 28, 2011
The promotion for UFC 129 has been in full force over the past couple of weeks, which means tons of interviews and PR work for Zuffa’s staff. Dana White released his latest Vlog and gave an insightful interview for MMAHeat.com with Karyn Bryant.
Payout Perspective:
White’s Vlog was interesting to see in terms of how much his vlogs have changed from the days that he would attack promotions, MMA media, and pretty much let anything go off the top of the head. Since then, Zuffa pays close attention tot he details now with any sort of media that reaches it’s fanbase and detractors. In this video, we are presented with a very calm and relaxed Dana who is just strolling around the Zuffa offices playing practical jokes and giving us some insight into how the company works.
Along with interviews and Vlogs, the UFC has also just released a video ” Mr. Liddell: Executive Iceman” that goes along with these vibe they are painting to their audience. You can expect more of these videos from the UFC brass as they try to portray the UFC as a fun and laid-back brand to appeal to the casuals instead of the bloody cage-fighter image painted on to the sport from it’s early days.
We also get to see what White’s reaction was watching the Strikeforce event in San Diego back in April, where he keeps pushing the message that it was a great event and that he is a Strikeforce fan and enjoyed the show. It was apparent that Dana had a worried look when Daley knocked down Nick Diaz, but was emotional and enthusiastic when Diaz was able to finish off Daley, who had been kicked out of the UFC for sucker-punching Josh Koscheck after their bout.
When Karyn Bryant asks about a UFC Channel, White quickly shy’s away and says that it’s not easy to get your own channel, though brings ups the fact that in a Business Journal article, UFC was the most popular property chosen to have enough content and demand to start one.
Should there be a fighter’s union?
April 27, 2011
In a recent interview with ESPN, Randy Couture voiced his concern for fighters to receive health benefits. These comments raised the issue of whether there is a need for a fighter’s union. While Couture is against a union, he endorsed the need for fighters to receive some type of medical coverage.
Via ESPN:
Couture isn’t interested in spearheading a war for fighters’ rights, but he said there are issues that absolutely need to be addressed. His hope is that Zuffa and the fighters will come together with open minds before a war is the only option left.
Couture points out health insurance when not competing and the need for a pension as two issues he would like to see addressed to take care of fighters. However, Couture does not think unions are always beneficial. He points to the recent NFL labor issues as an example.
The Score disagrees with Couture’s comments:
The disagreement I have with Couture is that he believes that, without any leverage, Dana White and Lorenzo Fertitta will bow to the fighters command and do this. Why would Zuffa invest millions of dollars into fighter safety away from the cage when there is no pressing need to do so? The last line of Couture’s interview says it perfectly “There’s got to be a way to come together and meet on ground that everyone can live with.” This is why Unions exist, so that two parties can come together, on equal footing, and negotiate a common ground.
Whether it’s Couture’s political ideology or the fact that his retirement is imminent and needs to be in the good graces of hte UFC so he can receive a Chuck Liddell-like position in the UFC, Couture believes that Zuffa and fighters would come together to address concerns. While I do not believe there will be a Norma Rae moment in the UFC or Strikeforce, it begs the question of the need for insurance coverage for fighters. Its not clear whether Couture actually thinks that Zuffa and fighters would actually sit down and talk about these issues…let alone think that the discussion would be amicable. Bear in mind, Couture and Zuffa have been involved in litigation. Perhaps Couture is painting a rosy picture on this issue as he fades into retirement.
While there is speculation that some fighters are covered by Zuffa in their contracts, others are not. For an up and coming fighter at the bottom rung of the card, it would be hard to request in their contract a clause for insurance. The fighter market is so competitive that if a fighter is injured, its easy to find someone to replace the injured fighter. There have been instances of fighters going into fights with known injuries but doing it because they need the money to feed their family.
There are distressing stories out there about fighters not being covered by insurance. Former TUF welterweight winner Joe Stevenson had to go to Mexico for x-rays due to the fact that he could not afford it in the U.S. This was after Stevenson had won the six-figure contract as the TUF winner. Then there is the gruesome injury (don’t click on the link if you have a weak stomach) suffered by Corey Hill in 2008. Dana White indicated that the UFC paid for Hill’s medical treatment and rehabilitation. Even though Hill’s medical bills were paid, Hill still had financial problems. Obviously breaking a leg when your profession is being a fighter hurts you financially. One may argue that the individual should be held accountable for their financial fate. But, most fighters give up other careers to focus on their dream of fighting in the Octagon.
For the UFC’s part, it has conducted seminars for its athletes to educate them on the need for coverage. If nothing else, this can provide the necessary information on what is and what is not covered in terms of health insurance coverage. Then, it would be up to the individual fighter to determine whether to purchase insurance.
With no health or disability insurance offered by Zuffa, fighters are left to make the decision on whether to purchase it themselves or roll the dice and hope that they are not seriously injured. Certainly, insurance premiums would be high considering the nature of the work.
Although it would be prudent for an agent or manager to persuade their fighter to purchase insurance, it would be up to the fighter. With all the other expenses in training for a fight, paying for insurance might seem excessive at the time.
Zuffa could provide some sort of fund that would pay for health and/or long-term disability coverage for fighters suffering injuries while under contract with the UFC. But, a foreseeable result of something like this would be lowering fight purses and fight bonuses. Essentially, if money is taken from Zuffa, it would likely find another area to recoup the money.
Moreover, this could lead to the potential for lawsuits if a fighter is denied coverage.Then there is the logistic question of which fighters are covered and if there should be a threshhold of fights an individual must compete in to be covered.
During a web chat in leading up to UFC Fight Night in Seattle Dana White was asked about whether fighters should unionize, Dana White responded that it was up to the fighters. Despite being a neutral answer during the web chat, it’s probable that he would oppose fighter’s unionizing. In fact, he would probably hold a personal vendetta against those attempting to unionize. If you thought denying a media credential was bad, think of what Zuffa would do to fighters attempting to create a union.
