The fallout from Brock Lesnar’s potential drug violation

July 18, 2016

On Friday, Brock Lesnar was flagged by the United States Anti-Doping Association (USADA) of a potential violation of the UFC anti-doping policy due to an out of competition test from June 28, 2016.  Although testing results of Lesnar’s “B” sample are yet to be revealed, the fallout from Lesnar’s appearance hurts the UFC and possibly the WWE.

On June 5, 2016, it was announced that Lesnar would fight at UFC 200 on July 9, 2016.  The signing was unprecedented because he was under contract with the WWE.  Yet, the WWE granted Lesnar the chance to fight in the Octagon once again.  Despite the fact that the WWE has its own drug testing policy (known as the Wellness Policy – Lesnar has never been flagged for a violation), Lesnar was tested by USADA eight times in just the month lead-up to his fight against Mark Hunt.  He took 5 tests in the first two weeks after it was announced he was returning.  Multiple tests came up clean.

Despite the tests, the UFC policy handled by USADA dictated that a returning athlete to the UFC most give the company four months written notice so that USADA can put the athlete in the pool of those it may selectively test.  But, the UFC anti-doping policy allows an exemption for a returning athlete that may be subject to drug testing.  Per 5.7.1 of the UFC anti-doping policy:

An Athlete who gives notice of retirement to UFC, or has otherwise ceased to have a contractual relationship with UFC, may not resume competing in UFC Bouts until he/she has given UFC written notice of his/her intent to resume competing and has made him/herself available for Testing for a period of four months before returning to competition. UFC may grant an exemption to the four-month written notice rule in exceptional circumstances or where the strict application of that rule would be manifestly unfair to an Athlete.

The key sentence here is the last sentence:  “UFC may grant an exemption to the four-month written notice rule in exceptional circumstances or where the strict application of that rule would be manifestly unfair to an Athlete.”

Since the UFC Anti-Doping Policy did not begin until July 1, 2015 and Lesnar’s last fight in the UFC prior to UFC 200 was December 2011, he was considered a new athlete.  There has not been an official statement as to whether the UFC granted the 4-month exemption due to an “exceptional circumstance” or if it was “manifestly unfair to an Athlete.”  Of course, either waiver could be easily explained.

But, one has to think that Lesnar and the UFC had contemplated his return as he had been training prior to the June announcement of his return to the Octagon.  One might suggest that Lesnar could have notified the UFC of his return in the requisite 4 months to allow for the proper testing to occur.

However, it would seem that the parties wanted the Lesnar announcement to be a surprise.  Recall, that Ariel Helwani and others from MMA Fighting were thrown out of a UFC event and Helwani was banned for life due to his report of Lesnar’s return prior to the UFC’s opportunity to make it themselves.  Helwani along with his colleagues were reinstated a couple days later.

Notwithstanding the notice issue, let’s take a look at what Lesnar could face as a result of testing positive for a banned substance.  First, Lesnar’s “B” sample, a second sample taken to determine the validity of the finding in the first sample, must confirm the initial finding of a banned substance.  If this happens, Lesnar will face discipline from Nevada and the UFC per the anti-doping policy.

Since the infraction took place in Nevada, Lesnar will have to appear before the Nevada State Athletic Commission to address the drug test failure.  At that time, we should know what drug(s) Lesnar tested positive for in his out-of-competition sample.  In 2015, Nevada adopted guidelines for combat sports which included a 36-month suspension and 50-75% of the purse for a first-time offender for someone taking anabolic steroids.

In addition, the UFC anti-doping policy would discipline Lesnar.

Under Section 10 for Sanctions on Individuals, Section 10.1 specifically states:

An Anti-Doping Policy Violation occurring during, or in connection with, a Bout may, upon the decision of UFC, lead to Disqualification of all of the Athlete’s results obtained in that Bout with all Consequences, including, without limitation, forfeiture of title, ranking, purse or other compensation, except as provided in Article 10.1.1.

Read broadly, under the UFC-USADA Anti-Doping Guidelines, Lesnar could have his purse for the bout and “other compensation” taken from him.  It would hurt enough that Lesnar would lose out on his $2.5 million reported purse but “other compensation” could mean money he makes from his PPV “upside.”

Not only could that happen, but the section further states that UFC could fine Lesnar up to $500,000 per Section 10.10 of the UFC-USADA Anti-Doping Guidelines.  In addition, he could have his win against Mark Hunt overturned to a no decision per discretion of the Nevada State Athletic Commission according to section 467.850.  This would not sting as much since Lesnar did not have a win bonus to forfeit.  Regardless, he still could have a substantial amount of money taken away.

The monetary fine would be the hardest penalty for Lesnar.  The $2.5 million is the largest reported payout for a UFC fighter in its history.  But, Lesnar was going to make more from his PPV guarantee.  It is being reported that the UFC 200 PPV drew 1.1 to 1.2 million PPV buys.  In most markets, the PPV for UFC 200 was $59.99 HD and $49.99 SD.  Lesnar was projected to make $3-5 million in addition to his $2.5 million.

Mark Hunt, Lesnar’s opponent has demanded that he receive half of Lesnar’s $2.5 million or else he is requesting his release from his UFC contract.  Hunt, who made $700,000 for taking on Lesnar, will be disappointed to learn that under the UFC-USADA guidelines, any money forfeited by an athlete would be under the UFC’s discretion “to be applied to offset the costs of the Program or given to anti-doping research.”

The UFC could also fine Lesnar pursuant to its Code of Conduct which imposes discipline based on misconduct.  Under its Code, “misconduct” may include, “Conduct that undermines or puts at risk the integrity and reputation of the UFC.”  A violation of its drug program could fall under this.

There is precedent for a fine as Jon Jones was docked $25,000 for failing a drug test in December 2014.  Of course, Jones’ drug test failure was for cocaine use.  We note that the detection of this drug was done out of competition and should have not been tested for according to the rules.

Lesnar’s only statement related to Friday’s news of his potential violation was a vague “we’ll get to the bottom of this.”

The WWE does not seem to be concerned with the potential violation and has indicated his next appearance will be at its big event Summerslam, August 21st.  They have not addressed the potential violation.  From its perspective, its an MMA matter, that a WWE matter.

However, the question looms as to whether a Nevada State Athletic Commission suspension would affect his wrestling career.  Some state athletic commissions oversee professional wrestling.  Most commissions honor suspensions of an athlete in other states.  Would a suspension in combat sports carry over to professional wrestling?  We will see.

UFC 200 estimated over 1M PPV buys; 199 does 320K

July 16, 2016

Dave Meltzer of The Wrestling Observer reports that the buy rate for UFC 200 is estimated to be between 1.1 to 1.2 million PPV buys.  In addition, there are reports that UFC 199 drew 320,000 PPV buys.

UFC 200 featured Amanda Nunes and Miesha Tate.  However, Brock Lesnar was the real feature of the card.  Of course, news hit Friday night that Lesnar was flagged by USADA for a potential violation of the UFC anti-doping policy.  As we know, Jon Jones was pulled from his fight against Daniel Cormier during fight week.  Despite the issues, the UFC Prelims drew the third-highest ratings for a prelims show on the network despite starting 30 minutes late due to baseball.

Last month’s UFC 199 featured Luke Rockhold and Michael Bisping (who replaced Chris Weidman) and Dominick Cruz facing Urijah Faber.  For UFC 199, the Prelims drew 798,000 viewers and 500,000 google searches for “UFC 199” on the day of the fight which may have indicated the estimated buy rate.

2016 PPV buy rates

UFC 195 – 300,000

UFC 196 – 1.5 million

UFC 197 – 450,000

UFC 198 – not known at this time

UFC 199 – 320,000

UFC 200 – ~1.1-1.2 million

Payout Perspective:

The 1.1-1.2 million should be seen as a very good buy rate considering the Jon Jones issue and the lack of a Rousey or McGregor on the card.  The buy rate reflects the fact that Brock Lesnar was a big draw (once again) for the UFC.  Thus, the news of his potential drug test failure brings into question a lot of things related to the use of Lesnar on the card and the decision to waive him from waiting four months per the UFA anti-doping rules.

Can Lesnar push UFC to record PPV buy rate?

July 6, 2016

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Payout Perspective:

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

UFC-Joe Hand renew PPV distribution partnership

June 29, 2016

The UFC announced a multi-year’s partnership with commercial PPV distributor Joe Hand Promotions.  Financial terms were not disclosed.

Joe Hand Promotions will continue as the exclusive domestic distributor for UFC PPVs.  The company serves as the agent for the UFC in selling UFC PPVs to bars, restaurants and casinos.  It essentially sells licenses for businesses to air PPVs.  The fee varies per size of commercial establishment.

Via announcement:

“Our relationship with UFC is one of the longest and most valued in the history of Joe Hand Promotions. The UFC is the largest Pay-Per-View provider in the world with unparalleled leadership and we are proud to be their partners,” Joe Hand Jr. said. “We look forward to growing our customer base together and bringing the excitement of the UFC to even more commercial locations.” ` `

In light of UFC 200, Joe Hand is offering a free conference call to help commercial owners effectively market next Saturday’s PPV.

Payout Perspective:

While its rarely discussed as we mainly focus on PPV buys, it’s Joe Hand’s job to sell UFC PPVs to commercial establishments.  As we indicate, the fees vary based on the establishment.  As we head into the biggest week of the year for the UFC, Joe Hand is expected to maximize the number of establishments that purchase a license to show 200.

UFC 197 PPV buy estimated between 375K-450K

May 19, 2016

MMA Fighting reports that uFC 197 drew between 375,000 to 450,000 PPV buys.  The event featured Jon Jones taking on Ovince Saint Preux.

The PPV buy rate estimates are very good but reveals what we know about Jon Jones.  While he may be the best pound for pound fighter in the UFC, he is not a top draw.  Clearly, you can say the same about Demetrious Johnson who was also on the card.

UFC PPVs for 2016

UFC 195: 1.032 million

UFC 196: 1.5 million

UFC 197: 375,000 to 450,000

Notwithstanding his showdown with Cormier last January, Jones has put up marginal PPV buys.  UFC 172 against Glover Teixeira drew 350K PPV buys and his UFC 165 against Alexander Gustafsson drew 310K.

Payout Perspective:

It’s a respectable number considering that there were only 50,000 google searches for UFC 197 after the weigh-ins.  Recall that this event was to be Jones-Cormier.  But, with Cormier needing to pull out, the top of the card took an extreme hit.  With Johnson not being a draw, Jones stayed on the card and OSP was the fighter the UFC picked to face him.  Jones has not had a huge PPV buy rate since 182 when he faced Cormier.

Canelo-Khan PPV buys reported between 460-600K

May 13, 2016

There are conflicting reports on the PPV buys for the Canelo Alvarez-Amir Khan fight this past Saturday. ESPN’s Dan Rafael reports the fight drew around 600,000 PPV buys according to Golden Boy’s Oscar de la Hoya.  Kevin Iole of Yahoo! Sports indicates that it drew 460,000 PPV buys based on information from cable and satellite companies.

Alvarez knocked out Khan in the 6th round in the feature bout from Vegas.

The Rafael accounting comes from Golden Boy and HBO from satellite services and basing them on historical figures.  The 600,000 figure is not a final number but appears to be a good initial estimate on how the event fared.

Iole notes that 145,000 PPV purchased from DirecTV, “about 230,000 on cable and about 60,000 on Dish Network.  The other buys were from other companies such as Verizon Fios per Iole.

Alvarez, the true featured fighter from Saturday night, drew 900,000 PPV buys for his fight last November against Miguel Cotto.

Payout Perspective:

It’s not fair to compare the PPV buys to last May’s “superfight” between Mayweather and Pacquiao.  As we know, the “retirement” fights for both fighters drew between 400-500K PPV buys.  Depending on who you believe, the 600K PPV buys is a very good draw considering that Khan is a “name” for an opponent but there was truly no real threat.  If you believe the 460,000 number, it might be a little low for a fighter that Golden Boy/HBO hopes to propel them in a post-Pac/May PPV boxing market.

Disappointing PPV buy rate for Pacquiao-Bradley III

April 20, 2016

The Manny Pacquiao-Tim Bradley trilogy did poorly on PPV according to Bob Arum in a report from ESPN’s Dan Rafael.  The Top Rank promoter admits that the PPV did between 400K-500K buys and that the event lost money.

Arum admitted that the April 9th event will be closer to 400K PPV buys than 500K and that the PPV numbers are terrible.

The event will lose money considering Pacquiao was guaranteed $20 million and Bradley $4 million even before considering pay for the rest of the card.  Although the reported purse for Pacquiao was $7 million, he was guaranteed $20 million.

The replay on HBO did a respectable 750,000 network subscribers without an accompanying live fight.

Payout Perspective:

Clearly there was no appeal to this third matchup and Pacquiao’s comments about same sex relationships hurt this event even more.  Similarly, Floyd Mayweather’s September fight against Andre Berto likely was a money loser as well considering the payouts to fighters and a comparable buy rate (400K-500K).  Maybe its best that Pacquiao fade away as his PPV draw has faded.  Of course, this is boxing so we will likely see him this November.

Replay of Pacquiao-Bradley trilogy draws 750K on HBO

April 19, 2016

The HBO replay of the Manny Pacquiao-Timothy Bradley fight from April 8th drew 750,000 network subscribers per Sports TV Ratings.

The event drew 347,000 viewers in the Adult 18-49 demo.

The event was marred by Pacquiao’s controversial comments about same sex relationships which cost him his Nike sponsorship.  Notably, Pacquiao still wore Nikes in his fight with Bradley.  It is also worth noting that Bradley, who was a former Nike-sponsored athlete, was not wearing the swoosh for this fight.  In fact, he had Asics shoes in the ring.

The PPV buy rate seems to reflect that most were not interested in this trilogy as Dan Rafael reported that the initial buy rates were between 400K to 500K buys which is similar to the Mayweather-Berto buy rate.

Payout Perspective:

The last Pacquiao replay was in May 2015 which was ran with a live event featuring Canelo Alvarez taking on James Kirkland.  That event drew the best rating on HBO since 2006 as 2.146 million subscribers tuned in to watch the Alvarez-Kirkland fight and over 1 million watched the Pacquiao-Mayweather replay.  Again, there was a lot of sports on Saturday night and the luster was off of this event despite it may being Pacquiao’s “last fight.”

UFC 196 trending to be biggest PPV ever

March 11, 2016

The UFC has indicated that UFC 196 is trending to be the biggest PPV in the company’s history according to a press release sent out by the promotion.

UFC 196 had the highest digital PPV sales of all-time in addition to a record 4.9 million viewers for the UFC’s Embedded series.

Dana White has claimed that the event sold 1.5 million PPVs.  The UFC record is UFC 100 with 1.6 million reported PPV buys.  Of course, UFC PPVs are $60 now as opposed to back in 2009.  Dave Meltzer of The Wrestling Observer stated early estimates are over 1.2M PPV buys.

Notably, there were 5M google searches for UFC 196 on Saturday which seems to infer that a lot of people were seeking the event out.  Tracking google searches have become a source of predicting PPV sales.

The Prelims drew the second-highest rating on FS1 ever.  The peak for the UFC 196 prelims hit 2,082,000 viewers.   It was the most-watched PPV Prelim card in the history in the adult 18-49 demo with 1.074M viewers per Fox Sports.

Payout Perspective:

The digital sales were likely aided by a special offer on UFC Fight Pass for subscribers receiving 20% off of the PPV.  The job by the UFC to sell the McGregor-Diaz fight after RDA dropped out was excellent.  One has to wonder if RDA stayed in the event whether the PPV sales would have been the same, less or more.  The UFC has now had three of its past 4 PPVs draw 1 million buys or more.

UFC Fight Pass offers 20% off for UFC 196

March 3, 2016

UFC Fight Pass is offering 20% off the UFC 196 PPV price on its digital platform.  As if you didn’t know, the event is this Saturday, March 5th.

This is the latest move in the company’s attempts to highlight this business and attract more subscribers.  Last Saturday on Fight Pass, UFC Fight Night from London featured Michael Bisping taking on Anderson Silva.  It was the largest audience for a live event on Fight Pass according to Senior Vice President and General Manager of UFC Fight Pass, Eric Winter.

In addition to the main card, UFC 196 will have its own Prelims starting at 6:30pm ET.

Fight Pass offer

Payout Perspective:

Maybe this is not news and I’m the only guy that got this offer.  But I doubt it.

One would think that the Bisping-Silva fight was the most watched on UFC Fight Pass.  The offer to watch UFC 196 this Saturday marks a test as to how many subscribers would venture to watch via Fight Pass.  There has always been the option but this is a dedicated effort to attract more UFC fans to order through this means.  Although it is said that Fight Pass augments the television side for the UFC, this is a very interesting move as its expected that this event should do very good PPV numbers.  One would surmise that this benefits the UFC as it would not have to split revenue with any distributors (i.e., satellite or cable providers).  The only apprehension are issues with streaming. Winter indicated that there was a brief issue on the “PC-side” of Fight Pass during UFC Fight Night London but that was rectified quickly.  With so many different ways to watch UFC Fight Pass, there is the possibility of issues but so far so good.  I have certainly experienced streaming issues with Fight Pass but one would think that UFC Fight Night London was a test for this Saturday’s event.

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