January 5, 2017
The Las Vegas Review-Journal reports that the UFC has sold an office building at its current headquarters in Las Vegas. According to the report, it sold the building for $1.45 million to a criminal defense law firm.
The criminal defense law firm has purchased the building but is leasing it back until the UFC moves to its campus it broke ground on in December 2015.
The UFC is also selling two other buildings included a 4,002 square-foot building listed for $1.7 million and a 22,897-foot square-foot property listed for $11 million.
The real estate transaction reflects the need for the company to divest in its current properties as it anticipates to move into its new campus. Back in December 2015, the plan was to begin construction in last January and last 15 months. So, if still on schedule, the new 184,000 square foot campus in Las Vegas should be done this spring.
January 4, 2017
World Series of Fighting drew
941,000 951,000 on NBC Saturday afternoon according to Nielsen. The rating makes it the highest-rated televised WSOF event ever.
The preliminaries on NBC Sports Network drew 71,000 viewers per Sports TV Ratings. The prelims aired from 11:30-1pm PT. The main card aired on NBC from 1-3pm PT.
Notably, the WSOF event took place during the first NCAA College Football semifinal at the Peach Bowl between Washington and Alabama. The game drew 18,397 million viewers on ESPN per Sports TV Ratings.
Also of note, the UFC 207 PPV post-fight replay on FS1 drew 76,000 viewers at 3-4am PT.
The Saturday event bests the WSOF’s last time on NBC when it drew 741,000 for WSOF 11 on July 5, 2014. This past Saturday’s event, which took place in New York, featured Jake Shields-Jon Fitch and Justin Gaethje-Luiz Firmino. Considering WSOF was up against one of the national semifinals for college football, reaching close to 1 million viewers is a success. Of course, the question of whether the WSOF can remain afloat in 2017 is another question.
January 4, 2017
Brock Lesnar was issued a one year suspension by USADA for failing an out of competition and in-competition drug test for UFC 200. Lesnar will be reinstated on July 15, 2017.
A portion of the USADA press release announcing the sanction reads:
Lesnar, 39, tested positive for clomiphene and its metabolite, 4-hydroxyclomiphene, following an out-of-competition urine test conducted on June 28, 2016, and an in-competition urine test conducted on July 9, 2016, at UFC 200 in Las Vegas, Nev. Clomiphene is a prohibited substance in the category of Hormone and Metabolic Modulators and is prohibited at all times under the UFC Anti-Doping Policy, which has adopted the WADA Prohibited List.
Last month, Lesnar entered into a settlement with the Nevada State Athletic Commission regarding the same drug test failure. He received a one-year sentence and $250,000 fine.
The drug has the ability to double testosterone levels. It is generally used as a fertility drug that causes the pituitary gland to release hormones. Notably, Lyoto Machida’s suspension of 18 months was for 7-keto-DHEA which helps burn fat.
The suspension was more or less expected after Lesnar settled with the NSAC. Of course, the disparity in suspensions we mention with Lyoto Machida have to be frustrating. The drug taken by Lesnar could aid him in fighting and I’m sure Mark Hunt its upset about this suspension. On the other hand, Machida’s banned substance helps burn fat so that you can make weight. The suspension reflect the issues with the UFC anti-doping policy overseen by USADA.
January 3, 2017
Former WWE broadcaster Todd Grisham will be taking an on-air position with the UFC. Grisham had been an ESPN anchor for the past 6 years.
Mike Goldberg ended his play-by-play duties with the company on Friday at UFC 207. There is still no official word as to the PPV announcer to replace Goldberg.
Grisham confirmed his job with the UFC with MMA Junkie. He will make his debut at the commentary desk at UFC Fight Night 103.
While he was at ESPN, Grisham worked on the now defunct “MMA Live” show and also provided in-ring interviews and commentating for Glory Kickboxing.
According to his LinkedIn profile, Grisham graduated from the University of West Georgia in 1998 and then was a local sports anchor for several years before moving to Fox and then to the WWE from January 2004-October 2011. He then went to ESPN until his move to the UFC this year.
Grisham is no stranger to combat sports and I would not think the quality should fall off. The former ESPN anchor is likely one of many changes coming to the company in the new year.
January 3, 2017
The UFC 207 Prelims on Friday night drew 1.511 million viewers on FS1 per Sports TV Ratings. It was the fourth highest PPV of 2016 and the sixth prelims telecast to go over 1 million viewers.
In addition, it drew 813,000 viewers in the adult 18-49 category. The featured fight on the prelims was Johny Hendricks versus Neil Magny. Magny earned a unanimous decision.
The average for 2016 was 1,097,000. In comparison, 2015 drew an average of 1,069,000.
In addition, the pre-fight broadcast on FS1 which preceded (4:00-5:00pm PT) the UFC Prelims drew 572,000 viewers and 281,000 in the A18-49 demo. The post-fight drew 404,000 viewers and 234,000 in the A18-49 demo. The post-fight event went from 9:50pm-11:07pm PT.
The ratings are very considering the prelims took place on Friday night. The big viewership number likely reflects a big PPV buy rate. All of the prelims except UFC 195 drew over 1 million PPV buys. With Rousey on the PPV card, expect a buy rate over 1 million.
January 1, 2017
The Nevada Athletic Commission has released the full roster of payouts from Friday night’s UFC 207. The total reported pay for the UFC 207 was $4,683,000.
Via MMA Junkie:
Champ Amanda Nunes: $200,000 (includes $100,000 win bonus)
def. Ronda Rousey: $3 million
Champ Cody Garbrandt: $200,000
def. Dominick Cruz: $350,000
T.J. Dillashaw: $200,000 (includes $100,000 win bonus)
def. John Lineker: $43,000
Dong Hyun Kim: $134,000 (includes $67,000 win bonus)
def. Tarec Saffiedine: $40,000
Ray Borg: $30,600+ (includes $18,000 win bonus)
def. Louis Smolka: $37,400+
Neil Magny: $114,000* (includes $47,000 win bonus)
def. Johny Hendricks: $80,000*
Antonio Carlos Junior: $42,000 (includes $21,000 win bonus)
def. Marvin Vettori: $12,000
Alex Garcia: $36,000 (includes $18,000 win bonus)
def. Mike Pyle: $55,000
Niko Price: $24,000 (includes $12,000 win bonus)
def. Brandon Thatch: $22,000
Tim Means: $35,000 (no win bonus since fight ended in a no-contest)
vs. Alex Oliveira: $28,000 (no win bonus since fight ended in a no-contest)
As noted, by Junkie, Hendricks forfeited 20% of his purse ($20,000) for not making weight and Ray Borg forfeited 30% ($5,400) of his purse for not making weight. The percentages were based on the amount that they were over.
Rousey earned a bulk of the disclosed payout with her $3 million salary. It should be noted that Oliveira may want to appeal the decision not to award a win bonus due to the failure to interpret the rules correctly. Hendricks’ failure to make weight is another sign that he may have to recalibrate his training. He did look better in his fight with Magny but his issues with cutting weight a a continued problem.
December 31, 2016
The UFC was sold for approximately $4.2 billion this summer changing the face of the largest, mixed martial arts company.
Despite internal and external denials, it was clear that Zuffa was set to sell the company. Perhaps we should have seen this coming the year prior. Subtle changes made to the brand logo and broadcasts, making Reebok the official clothier of the company and adding a drug testing component likely solidified the company as prime for purchasing. One of the things that appealed to the buyers was the strong brand and making investments in its brand pre-sale helped the eventual transaction.
WME-IMG made the purchase. The deal was backed by private equity firms Silver Lake, Kohlberg Kravis Roberts and the investment firm of Michael S. Dell. The price tag of $4 billion was surprising considering that the sport is still considered a niche.
Via our post this past July
The purchase price of $4 billion represents a 22 multiple of the UFC’s earnings before interest, taxes, depreciation and amortization. On $600 million in gross revenue from 2015, UFC’s EBITDA is $180 million. $180m x 22 =$3.96 billion. The hope is that with a new media rights deal, the multiple will lower to 13-14 range which would make it a much better purchase.
The Fertitta brothers, Dana White and Flash Entertainment cashed out on their ownership interests. White signed back on with the new owners for 5 years and 9% of the company’s net profits. Ari Emmanuel and Patrick Whitesell are the new faces of the UFC. They were No. 4 on a list of most influential in sports business for 2016.
The transaction was scrutinized by government regulators for its questionable buyout-loan strategy. The Fed warned Goldman Sachs and Deutsche Bank AG, the entities that marketed the debt to investors, of abuse in inflating earnings before interest, taxes, depreciation and amortization. The EBITDA for the UFC was pegged at $170 million but then was estimated up to $300 million when presented to debt investors helping finance the sale. The higher EBITDA allowed WME borrow $1.8 billion for the deal without running afoul of the guidelines which prevent borrowing for more than 6x a company’s EBITDA. A WSJ article stated $48 million in expected “future step up payments to television contracts and other licensing agreements,” helped bring the EBITDA up to $300 million. Under the new owners, it is looking for $450 million per year for 10 years in next media rights deal. This would have bolstered the anticipated EBITDA of the company. Whether or not the UFC could garner $450 million is yet to be seen. We’ll see if there are buyers on the market this time next year.
Regulators made a second reprimand to Goldman Sachs earlier this month.
The sale included incentives for WME-IMG which included a $175 million contingent payment upon achievement of $275 million in EBITDA (but not earlier than June 30, 2017 and $75 million payable upon achieving $350 million of LTM EBITDA (but not earlier than December 31, 2018).
A Sports Business Journal poll of its readers found 66% of the responses thought that WME-IMG overpaid for the UFC while only 3% of the responses found it underpaid. Another 30% thought it paid the right amount. 26% of SBJ readers polled thought the UFC to be the hottest sports property of 2016. The NBA, NFL and NCAA were ahead of the UFC (in that order).
As far as changes, the new regime is looking to institute corporate discipline in cutting costs. The new owners trimmed staff which included consolidating overseas operations in what seems to be a focus on domestic events. Matt Hughes and Chuck Liddell were let go by the UFC. Perhaps indirectly, long-time PR exec Dave Sholler found a job with the Philadelphia 76ers and Joe Silva announced he was leaving the company at the end of 2016. Also, Mike Goldberg called his final UFC fight at UFC 207. In its new media rights deal, it indicated that its partner would be in charge of production of events whereas the UFC had been in charge of it in the past.
The sale also sparked more fighters to express their discontent with the organization over pay. With the news of the purchase price, fighters wondered their worth to the company. The interest in organizing an association or union for the UFC came to the forefront this year as we saw a willingness by fighters to publicly state their views. But, with an incentive to increase revenues to hit their EBITDA goals by the end of June 2017 and December 2018, the UFC will seek to cut more costs which does not bode well for fighter benefits.
2017 will be an interesting year to see how the new owners will manage the company and deal with the evolving issues that will come up.
16 for 16
5. UFC 200
14. Bellator 149
15. CM Punk debuts
December 30, 2016
Amanda Nunes, Cody Garbrandt, Dominick Cruz and Alex Garcia were the post-fight bonus winners at UFC 207.
The bonuses were announced post-fight.
Garbrandt and Cruz earned Fight of the Night for their 5-round battle. Nunes and Garcia won Performance bonuses. Garcia starched Mike Pyle in a vicious KO and Nunes probably ended the MMA career of Ronda Rousey with a first round stoppage.
Hard to argue with these awards. Certainly, the Garbrandt/Cruz fight was the best of the night while Garcia’s KO of Pyle was devastating as Pyle’s head bounced off the canvas. And, for the second straight fight, Nunes took the soul of her opponent as she stopped Rousey.
December 30, 2016
Ronda Rousey will be making $3 million tonight as she returns to the Octagon at UFC 207. The purse was disclosed by the Nevada Athletic Commission.
Brett Okamoto at ESPN reported a portion of the purses including the women’s bantamweight champion, Amanda Nunes. She will be making $100,000 to show and $100,000-win bonus. Okamoto also reports that Nunes will be receiving a PPV upside.
Per NSAC, Ronda Rousey’s disclosed fight purse tonight is $3 million. No win bonus. Amanda Nunes is $100k/$100k.
— Brett Okamoto (@bokamotoESPN) December 31, 2016
Rousey is not receiving a bonus if she wins. She may also be receiving a PPV upside.
In addition, Dominick Cruz will be making $350,000 (no win bonus) in defending his bantamweight title. Cody Garbrandt will make $200,000 (no win bonus). T.J. Dillashaw will make $100,000 ($100,000 win bonus) and his opponent John Lineker will make $43,000 ($43,000 win bonus).
The $3 million is ties her with Conor McGregor for the highest-reported pay for a UFC fighter. Nunes made $100,000 at UFC 200, but no win bonus guarantee. Prior to that, she was made $28K/$28K at UFC 196. Thus, a huge step-up in pay for Nunes this year. The $350K is the same amount Cruz made at UFC 199 when he beat Urijah Faber. Garbrandt made $27K and $27K for his win against Takeya Mizugaki.
December 30, 2016
Thus, on September 1st the sport became legal and regulated by the state.
Assembly votes shown in this picture. Green is good.
— jim genia (@jim_genia) March 22, 2016
After much lobbying, time and effort, the UFC opened up with the first major card at Madison Square Garden on November 12th.
Notably, the UFC 205 Countdown show included a part dedicated to showing Sheldon Silver indicted on corruption charges. He is currently appealing his prison sentence. It was one final shot at the individual that Dana White blamed for not allowing a vote on the bill for years.
The UFC debut did not disappoint as it enjoyed the richest gates in company history.
Not long after the initial joy of legalizing the sport, boxing promoters began to complain about the hefty tax needed to insure fighters for events. A new insurance premium that would cover $1 million for each fighter on the card would be required for operation in New York.
In October, Promoter Lou DiBella canceled the remaining cards he was planning in the state due to the new requirement that has a $1 million minimum for each fighter in the event the fighter suffer a traumatic brain injury. The UFC paid approximately $1,675 per fighter and approximately $44,000 overall. It paid $40,200 for the Albany, New York show on December 9th. This does not include the standard $50K medical and $50K accidental death insurance policies.
Of course, one has to wonder whether or not boxing lobbied against the MMA bill due to the new insurance requirement. The new requirement does stem in part from a 2013 post-boxing incident in the state which left boxer Magomed Abdusalamov fighting for his life and a commission report found issues with the handling of the event.
New York set a tax of 8.5% on gross receipts in addition to other tax terms for MMA events. Thus, the state collected approximately $1.5 million in taxes from UFC 205 according to the reported gate of $17.7 million.
Despite the hefty tax paid by the UFC, it reported the best merchandise sales ever for an event.
Look for the UFC to hold big events in the New York to offset the insurance and taxes it needs to pay. Notwithstanding the cost, the final hurdle to legalize the sport in the state was a monumental hurdle the company overcame. One might consider it a factor in the sale of the company.
16 for 16
5. UFC 200
14. Bellator 149
15. CM Punk debuts