November 3, 2016
The New York Times reports that Gawker Media Group and Hulk Hogan have settled Hogan’s invasion of privacy lawsuit for a reported $31 million. Hogan prevailed at trial and a jury verdict awarded him a $140 million judgment but Gawker appealed the court decision. Instead of pursuing the appeal, the parties decided to settle the dispute.
The jury verdict sent Gawker, the owners (at the time) of websites such as Jezebel and Deadspin, into bankruptcy. The company and its web sites were sold out of bankruptcy to Univision Communications for $135 million this past August. In addition, Gawker’s founder, Nick Denton, filed for personal bankruptcy.
The settlement includes $31 million plus a portion of the proceeds from any future sale of the Gawker.com domain per a filing in the U.S. Bankruptcy Court.
Hogan will likely receive 1/3 of the reported $31 million as he will likely need to pay his attorney fees, costs and Peter Thiel who was reportedly funding the lawsuit. Despite the fact that Hogan will not receive $140 million, the settlement prevents more legal costs and waiting.
October 12, 2016
Combate Americas has hired former WWE star Alberto Del Rio, now known as Alberto “El Presidente” Rodriguez, as the new president of the Hispanic Mixed Martial Arts sports franchise.
Rodriguez was recently released from the WWE. In his new role, he will be “actively involved in all aspects of athlete relations and development, from recruitment to enhancing their showmanship skills,” per the Comate Americas press release.
Rodriguez has a background in MMA prior to his pro wrestling career. He also was a part of the Mexican National Greco-Roman wrestling team in the late ‘90s according to the press release.
Rodriguez will make his debut on Friday, October 14th.
The move is a way to elevate the promotion and maybe his notoriety can grab a few viewers as well as influence some young up and coming fighters to join the promotion.
September 11, 2016
Welcome to another edition of Payout Perspective. This time we take a look at UFC 203 from Cleveland, Ohio where CM Punk’s debut and Stipe Miocic’s title defense were the headlining events.
Gall mauls CM Punk
We all knew that this was going to happen. 3 pro fights in and Mickey Gall looks like a top prospect. Of course, his opponent was former pro wrestler CM Punk. Despite being a huge favorite, Gall had a game plan which was to take down and grapple Punk. Gall is a brown belt, Punk is a white belt as astutely pointed out by Joe Rogan. Gall had his way with Punk on the ground and eventually choked him out in round 1.
Mickey Gall wants fellow pretty boy Sage Northcutt next. Please UFC, book this. As for Punk, he gave a very nice speech about dreams and believing in yourself. Certainly this was a huge risk for a person in his late 30s but if he does continue his MMA dream it appears that it would be on a smaller, regional card. Or Bellator.
Stipe stops Reem
Stipe Miocic successfully defended his UFC 203 heavyweight title against Alistair Overeem in one of the best and craziest rounds of this year. Miocic was in trouble early in the first and almost was submitted (Reem thought there was a tap) by Overeem.
It looks like that Stipe gets Cain Velasquez next. So long as the fight is at sea level, this will be a tough fight for Miocic.
Cleveland came out for the UFC as the company reported a sell out for the event where the Cavaliers play. The event drew 18,875 for $2.6M.
Bonuses went to Miocic-Overeem for Fight of the Night and Yancy Medeiros and Jessica
Promotion of the Fight
ESPN aided the UFC with the promotion as it had Stipe Miocic on Sportscenter talking up the fight.
Of course, there was the 3-part series on FS1 for CM Punk.
Miocic and Jessica Eye did local promotions since they are from the area.
The Cleveland Cavaliers through their support behind Miocic and Eye.
— Cleveland Cavaliers (@cavs) September 10, 2016
They also let Dana White handle the Larry O’Brien trophy.
— Dana White (@danawhite) September 11, 2016
Eye had a chance to throw out the first pitch at the Cleveland Indians home game as seen on Embedded.
There were tons of tweets from athletes, celebrities and pro wrestlers throwing their support for CM Punk.
The newest sponsor in the Octagon for this PPV was IrishFireVodka.com. The company is based out of Dallas, Texas per its web site. Aside from that, there were the usual sponsors including MetroPCS, Harley Davidson, Toyo Tires, Bud Light and Monster Energy Drink in the center. They also promoted the UFC 204 PPV in the octagon.
MetroPCS had the fighter prep point. Throughout the PPV, they had voiceover ads for Topps Fighter Trading Cards App.
Odds and Ends
UFC offered a 10% discount on purchasing this PPV if you had previously filled out a survey regarding UFC Fight Pass. I’m sure they offer this periodically. It’s just another subtle way to get consumers to gravitate to the UFC web site as opposed to PPV cable and satellite distributors.
CB Dolloway was involved in an elevator accident after the weigh-ins which caused his fight to be cancelled. Expect a lawsuit.
Jessica Andrade looks like a legitimate title contender for the 115 pound women’s division.
What went on in that Browne-Werdum fight? If a fighter asks for a halt to the fight without the referee first calling it, shouldn’t that be a verbal submission? Then there’s the fracas with Edmund Tarverdyan post-fight.
Embedded showed Ronda Rousey’s dog with Travis Browne, but no Rousey. She was in Cleveland as she was present for a pro wrestling show the night before to support her friend and former MMA fighter Shayna Baszler.
The Ohio Athletic Commission allowing the CM Punk license was one thing. Its explanation for doing it was another. Punk has publicly admitted to several concussions while wrestling, is 37 years old and the OAC waived its license requirements citing he was a top end pro wrestler. But, to show its force, it stated it would investigate the Jessica Eye-Bethe Corriea shoving incident at the ceremonial weigh-ins. It also fined Alistair Overeem $500 for being late to the weigh-ins. Speaking of the Browne-Werdum fight, why did the referee allow for Browne to call an injury timeout on his own and not know that if Browne called for a stop to the fight, the fight was over. Will the OAC look into that debacle?
After Joe Rogan interviewed Stipe Miocic who thought he was knocked down by a kick (instead of a punch) and then Overeem believed Miocic tapped to a guillotine, Rogan made the comment that maybe he shouldn’t interview guys after a fight. Especially those that have been knocked out. Makes sense to me although this is unlikely to happen.
I asked the UFC brass if we could please refrain from interviewing fighters after they’ve been KO’ed. I don’t think it’s wise nor fair.
— Joe Rogan (@joerogan) September 11, 2016
Saturday night’s event drew over 1M searches for UFC 203 and another 200,000 for “UFC 203 Fight Card.” Certainly, the attendance at the event was great as it was pushing for Miocic and Eye as hometown favorites. But was the allure of CM Punk reason for casual viewers to purchase the PPV? It may have received a bump from pro wrestling fans but unlikely to move much with the rest. Although the PPV had a heavyweight title fight, Miocic-Overeem are not PPV draws. Since there was a little more marketing behind this event, I think we could see about 325-375K PPV buys.
September 10, 2016
CM Punk penned an article in The Player’s Tribune on the bliss in finding his passion for MMA. Punk has been the headliner this week for UFC despite it being his first fight in the UFC.
While Punk should be better prepared than James Toney when he fought Randy Couture at UFC 118, we all may conclude that this is a gimmick fight despite what the UFC may say. If Punk was Phil Brooks, aspiring MMA fighter, he wouldn’t be given the privilege of a PPV fight right off the bat. He’d have to prove himself in smokers, amateur fights and on the regional scene before he would get a shot with the UFC. He is a heavy underdog against Mickey Gall. The 24-year-old has just one UFC fight (2 pro fights altogether) after being “discovered” on Dana White’s UFC Fight Pass reality show. Aside from giving up 13 years in age and millions of dollars in career earnings, Gall should have every advantage in the Octagon to Punk.
Yet, Punk explains in his post on his love of MMA and the reasons why it’s far better than his life as WWE superstar CM Punk.
Certainly, finding your passion equals happiness. But, like most everyone else in the world, Punk’s dream job was paved through a turbulent road with a crappy former job. Although Punk did not explicitly discuss his time in the WWE, there were enough inferences that even a non-WWE fan could tell he is in a much better place than when he made much more money with the WWE.
FS1 aired a 3-part series on Punk and his training for Saturday’s fight so there’s a certain belief that his celebrity as a pro wrestler would garner interest in this event. Despite the main event being Stipe Miocic making his first heavyweight title defense in his hometown, Punk has been the main story line. We shall see if attaching his name to the card equates to a bump in PPV buys.
The Player’s Tribune is an outlet for an athlete to handle its own PR without the filter of a journalist to tell their story. It’s a great source for first person accounts from an athlete’s perspective but one has to read it knowing that it does not tell the full story. In Punk’s case, it’s a good read that tells you why he is doing it. Of course, what’s left out is the fact that in general fighter pay is low in the UFC compared to revenues and they are treated as independent contractors like in the WWE. Thus far, it does not appear a “hack journalist” has asked about the seemingly parallel between his current contractor (UFC) and his former contractor (WWE). Would be interesting questions to ask of him. Of course, the story is too good thus far to ask these questions.
August 15, 2016
The Wall Street Journal reports that online sports content provider FloSports has raised $21.2 million in Series B financing with World Wrestling Entertainment and Discovery Communications participating in this new round of financing.
FloSports, based out of Austin, Texas, provides online streaming of niche sports which includes amateur wrestling, grappling and regional MMA events. The $21.2 million adds on to the Series A round which netted the company $8 million.
FloSports is a subscription-based service although there is also free content. If you follow MMA writing, you know that MMA journalists have gravitated to the site including Jeremy Botter who broke the story that Zuffa was looking to sell the UFC.
The deal shows the influence and value of online viewership, content and niche audiences. This round of funding shows that companies like the WWE see value in the over the top platform and subscription-based business models. The new funding will likely help expand the company’s reach in sports, rights fees and technology.
August 14, 2016
This past week, ESPN established a portion of its online coverage to include WWE. The decision to include sports entertainment in its sports coverage comes as part of the strategy to amend for losing subscribers.
ESPN has lost over 4 million subscribers in the past year per Sports TV Ratings. The news suggests that ESPN must think of way to generate more web subscribers. Thus, more WWE coverage.
This news is not that surprising considering ESPN and WWE entered into a partnership to feature WWE in weekly segments on its broadcasts.
ESPN established a vertical dedicated to WWE and contributors will write and report on the company. Darren Rovell posted a look at the WWE financials on the first day of ESPN’s dedicated coverage.
ESPN has worked with WWE in the past and the move to provide dedicated coverage comes as a business decision to generate more attractive content for the company. But, opponents of WWE will argue that ESPN’s coverage is more entertainment than sports since we know that pro wrestling is choreographed. With John Cena hosting the ESPY’s, it’s clear that the two Connecticut-based companies are looking to help each other out for the long term. The new relationship probably means exclusive news coming to ESPN on behalf of WWE.
August 8, 2016
It was anticipated that A.J. Daulerio was to file for personal bankruptcy as well.
In March, a Florida jury awarded Hogan $140.1 million including $25.1 million in punitive damages. Despite the fact that the judge presiding over the jury trial advised the jury to not award punitive damages that would bankrupt the defendants. Nevertheless, the jury awarded the damages to the former pro-wrestler. The court determined that Gawker had $48.7 million in gross revenues las year and a net worth of $83 million.
Although Gawker is appealing the trial court decision, that would not stop Gawker’s Chapter 11 bankruptcy proceeding. The company filed for protection when the trial court judge upheld the jury verdict this past May.
Denton listed his stake in Gawker and his apartment in Manhattan as his only two assets. The combined value he estimates is less than $50 million.
While the settlement discussions have been ongoing, they have led to nowhere. One would think that Hogan might take less than the jury award to cut off the constant waterfall of legal fees that he will surely have to pay at some point. For Gawker, settlement would not stop a bankruptcy auction of the company. But, it could mean that they would have money left over after the sale.
July 28, 2016
Brock Lesnar will not receive a punishment from WWE for his two flagged drug tests from USADA.
TMZ Sports reported that “only full-time WWE performers are subject to the organization’s wellness policy, which prohibits PEDs.” Since Lesnar is not categorized as full-time, he is not subject to testing. Lesnar is scheduled to make his return to WWE on August 21st as part of Summerslam, the second-biggest event of the WWE’s year.
Dave Meltzer also confirmed on his podcast today that Lesnar was not subject to testing in the WWE.
On a day in which the WWE announced its second quarter earnings, no one asked about Lesnar. Certainly, the news about the WWE’s drug testing policy is interesting and peels back an unknown. The UFC may have known about this loophole in the Wellness Policy since it stringently tested Lesnar leading up to UFC 200. Of course, the flagged tests show that it did not work. Will there be any backlash for the WWE? Lesnar will still need to deal with USADA and the Nevada State Athletic Commission in the coming weeks and months.
July 28, 2016
On Thursday, the WWE announced its second quarter earnings for the year. Despite record revenues, the company’s Q2 profits missed expectations.
According to the WWE earnings call held Thursday morning, revenues grew 32% to a record $199M. Profits are off due in part to spending which included Wrestlemania.
The WWE Network hit 1.52M average paid subscribers which is up 25% over Q2 last year. The Network revenues generated $51.8M in revenues. Per the WWE earnings release, the average monthly churn declined 20% to 9.9% for the first six months of 2016 from 12.3% for the comparable period in 2015.
The release of its earnings comes on the heels of a lawsuit filed earlier this month by over 50 former WWE performers related to head injuries. S&P Global Ratings warned on Thursday that sports-related brain injuries are among the biggest new area for insurance claims.
Of the other numbers indicated in the earnings release was that live events were up from this time in 2015. In 2016, live event net revenues were $51.9M versus $26.4M in 2015. This is due in part to increased ticket prices.
Notably, there were no questions about Brock Lesnar and his failed USADA tests in the UFC. Of course, this may not have a direct impact with the financials. Then again, the fact that the information has surfaced that he was not subject to the WWE Wellness Policy which tests its performers for banned substances might raise questions. In addition, a question about the UFC came about during the call. Essentially, the WWE noted that the UFC is a private company and the sale reflected “the value people are putting on branded live content.”
June 11, 2016
Gawker announced that it was filing for Chapter 11 Bankruptcy on Friday as a result of the $140 million jury verdict assessed by a Florida jury in the Hulk Hogan invasion of privacy lawsuit. A Florida judge upheld the verdict by denying a motion for new trial or reducing the monetary judgment by Gawker attorneys late last month.
According to the Wall Street Journal, the company will sell its assets in bankruptcy court and has received an opening bid of $90 million from Ziff Davis. The offer is though to set a “floor” for the bidding.
The bankruptcy filing halts any attempt for Hogan’s attorneys to realize the $140 million judgment by conceivably taking control of the company. Under bankruptcy protection, Gawker can continue to operate while raising money for appeals.
Bankruptcy seemed like the only option for Gawker, the owners of Deadspin, Gizmodo and other popular sites. It appeared that during the trial, the judge indicated that any verdict should not bankrupt the company. Apparently, this was not the case. Chapter 11 is a form of bankruptcy taken on mostly by companies in extreme debt that may (or may not) reorganize in order to operate once again. For a recent example, sporting goods retailer The Sports Authority filed for Chapter 11 in March and is liquidating assets and closing stores in order to pay off debt. In the Gawker case, it does not look like Gawker in its current form will reemerge from Chapter 11. Rather, another media company will acquire the assets including Deadspin, et al. Thus, we haven’t seen the end of the actual web site companies. Of course, if Gawker prevails on appeal, we may see Nick Denton and A.J. Daulerio once again.