Wrestlemania XXX Perspective

April 10, 2014

Welcome to a special look at Wrestlemania XXX which took place at the Superdome in New Orleans, Louisiana.

Ultimate Warrior passes away

Perhaps the news of the death of Jim Hellwig (aka The Ultimate Warrior) has overshadowed the post-Wrestlemania news.  Hellwig was inducted into the WWE Hall of Fame, made an appearance at Wrestlemania, signed a deal to be an “ambassador” for the WWE and appeared on television on the company’s signature show, Monday Night Raw.  News broke late Tuesday night that he passed away in Arizona.

The Ultimate Warrior’s passing was picked up by mainstream news outlets as well as the UFC which sent out its condolences.  UFC fighters also chimed in to offer their sympathies.

Similar to the passing of Randy Savage, the outpouring of condolences for the death of The Ultimate Warrior likely brought back fond memories of a person’s childhood for many that grew up watching him.

Attendance and gate

According to a WWE press release, it was a sellout with a gate of $10.9 million with 75,167 in attendance.  Sunday’s event landed 5th in all-time Wrestlemania attendance.

For those in attendance, it may have been easier for fans to obtain unauthorized WWE merchandise as a Louisiana District Court denied the WWE’s motion to stop and confiscate bootleg merchandise from being sold in the area.  An order like this is usually allowed as a way to protect the intellectual property of the company.  However, the court decided it could not legally give the WWE this broad authority without identifying these potential infringers more specifically.

Don’t bet on pro wrestling

While we won’t necessarily get into the storylines from the night, it should be noted that The Undertaker’s win streak of 21 consecutive wins at Wrestlemania was broken by former UFC Heavyweight champion Brock Lesnar.  While this was scripted, a gambling web site lost money on the fight as it expected that the WWE would not let the Undertaker lose.  Fox Sports reported that the odds ranged from 14 to 1 and 8 to 1 for Lesnar to prevail.  The maximum bet was $100 although some people were allowed to bet “as much as $500 on Lesnar.”

UFC hypes Lesnar

Not only was Brock Lesnar a part of Wrestlemania, but the UFC took advantage of the hype of the event by having the Rock (below), Jim Ross and Steve Austin talk about the former UFC Heavyweight champion.   All of the videos were “Fight Pass Exclusives.”

Post by UFC.

WWE stock takes a hit

The day after Wrestlemania, the WWE announced its subscribers for the network.  To the dismay of investors, it announced it had slightly over 667,000 subscribers which were below Wall Street expectations.  While the WWE believes it will hit 1 million by the end of the year (the break-even point for the network), the stock fell almost 20% on Monday.  At the end of trading Thursday, it is down to $21.12.

The WWE received a lot of mainstream hype for the 30th edition of the biggest professional wrestling event of the year.  Most of this was focused on the new network and how it would fare airing such a heavily watched event.  To its credit, the video stream had no noticeable hiccups which were a good sign for the future of the product.  The question will be whether the negotiations for its rights deal will be affected in any way.

Payout Take:  Although the stock is taking a drop, the broader takeaway from the event was that it did not suffer any tech issues which was a major concern considering the amount of problems it had when it first launched in late February.  At least this shows that the product holds up.  The next big test for the company is a rights fee deal which is anticipated to occur sometime late April/early May.

Bellator 115 DVR + 3 numbers up slightly: 874,000

April 10, 2014

MMA Payout has learned from a Nielsen source that the DVR +3 numbers for last Friday’s Bellator 115 scored a viewer average of 874,000 with a peak of 1,232,000

The ratings which increased based on the DVR viewership reflect a modest increase from the overnight ratings. Of course, the peak viewership did go over 1.2 million for only the second time this season.

Bellator 115 graph

Payout Perspective:

While it was just a modest bump, the DVR ratings did help increase the viewership average for the season to 784,500 including DVR ratings.  Bellator 115 did have the second-highest peak viewership for the season which may say something about the popularity of Cheick Kongo, Vitaly Minakov and/or the Bellator Heavyweight division

Diaz brothers dissatisfied with pay

April 9, 2014

MMA Fighting reports that Nick Diaz will not fight in the UFC unless he receives a title shot and/or a substantial pay raise.  This comes just a day after his brother Nate spoke out about his own pay.

First, Nick Diaz was offered a fight with Hector Lombard according to Dana White at a UFC press conference on Wednesday.  Diaz told MMA Fighting that he would not consider a non-title fight “for less than $500,000.”  In the alternative, he would want a chance at Johny Hendricks for the title.  One would assume that a Hendricks fight would mean a big payday as well.  Nick Diaz’s last reported payout was at UFC 143 where he made $200,000 in a loss to Carlos Condit.  No salary was officially released for his UFC 158 fight with Georges St. Pierre although we might conclude he made a similar amount.

On Tuesday, Nate Diaz spoke out about his current salary with the UFC.  He stated that he was making $60,000 and $60,000 ($60 to show up and fight and another $60K if he won).  It’s interesting to note that Nate Diaz’s last fight at TUF Finale 18 on November 13, 2013 he made $15,000 (show) and $15,000(win) (for a total of just $30,000).  Previously, Nate Diaz had been making $50,000 just to show.  White had nothing to say Wednesday about the younger Diaz that would suggest he would give him a raise.

Payout Perspective:

The Diaz brothers at their best? Or worst?  Voicing displeasure about pay in the media is not new to sports.  One might think that the Gilbert Melendez contract has both Diaz Brothers wanting the same or similar deal.  Based on his last appearance at UFC 158, the UFC might want Nick more than Nate based on Nick being able to sell (whether knowingly or not) a fight.  As White pointed out, Nate had opportunities but some key losses (Bendo, Josh Thomson) have prevented him from making more money.

If the Diaz brothers signed contracts, its hard to argue that they deserve more money.  If they were free agents, it would be standard that a fighter would want to negotiate for more money.  Or, if the fighter was on a big win streak could there be some leverage.  Although he won 3 in a row in 2011, he has lost 2 out of the last 3 since including a title fight against Benson Henderson.  Nick Diaz has lost his last two fights since beating BJ Penn at UFC 137.  Its hard to advocate for raises on losing streaks.

Should the UFC appease the Diaz brothers?

Pacquiao seeks return to PPV prominence Saturday

April 9, 2014

This Saturday Manny Pacquiao returns to fight Timothy Bradley in Las Vegas in a rematch of their June 2012 bout which ended in controversy.  Yahoo! Sports reports on Pacquiao solidifying himself among the top boxing PPV draws of all-time.

According to an article by Steve Kim on Sports on Earth, Top Rank promoter Bob Arum believes that Saturday’s rematch can do over 1 million PPV buys.   However, people in the know (who we believe are impartial) think that 700,000 PPV buys is much more realistic.

The all-time revenue and PPV draws in boxing as compiled by Yahoo! Sports:

  1. Floyd Mayweather      Revenue:  $756,515,000 – PPV Buys:  12,643,000
  2. Oscar de la Hoya         Revenue:  $696,796,000 – PPV Buys:  14,081,000
  3. Manny Pacquiao         Revenue:  $661,061,000 -  PPV Buys – 12,193,000
  4. Evander Holyfield      Revenue:  $548,221,000 – PPV Buys – 12,583,000
  5. Mike Tyson                   Revenue:  $545,000,000 – PPV Buys – 12,400,000

“Manny Pacquiao broke the mold and blazed a very unique trail for the following reasons,” said Mark Taffet, the senior vice president of PPV at HBO Sports to Yahoo! Sports. “He’s not a heavyweight. He wasn’t an Olympian. He’s not from the very vibrant Latino or African-American demographic segments. He’s not American. He’s the only top non-American in that top five.

Payout Perspective:

Pacquiao’s success as a bona fide PPV star is an underdog story to sports execs but his ascension and subsequent global appeal can be traced back to his loyal-to a fault Filipino following and the greater Asian community as a whole that culturally sees Pacquiao as one of their own.  While he may never surpass Floyd Mayweather, Jr. in terms of revenue and PPV buys, he is the much less polarizing figure of the two.

Let’s take a look at some of the UFC’s top stars.  In comparing the top revenue/PPV buy producers in the UFC, Jon Jones leads the list of active UFC fighters with 7,375,000 PPV buys in 11 PPVs.  Cain Velasquez has 4,540,000 in 9 fights on UFC PPVs.  Anderson Silva has 8,670,000 in 16 UFC PPVs.  Georges St. Pierre is at the top of the list with 11,655 PPV buys in 21 UFC PPVs.  These numbers are based on their overall UFC PPV appearances.

UPDATED:  I’ve now included Brock Lesnar below.  Based on his average per PPV buy, the UFC probably misses him.

Jones (670,000 avg) does have a higher average per UFC PPV than GSP (550,000 avg), but GSP does have more overall buys.  We note both Jones and GSP were on two of the bigger shows in UFC history as they were on the UFC 94 (920K PPV buys) and UFC 100 (1,600,000 PPV buys) cards although GSP was either the main event (BJ Penn) or in the co-main (Thiago Alves) on those shows while Jones was on the undercards.

Top UFC PPV draws

Georges St. Pierre – 11,655,000 PPV buys in 21 UFC PPVs

Anderson Silva – 8,670,000 buys in 16 UFC PPVs

Jon Jones – 7,375,000 PPV buys in 11 UFC PPVs

Brock Lesnar – 6,580,000 PPV buys in 7 UFC PPVs (940,00 PPV avg)

Cain Velasquez – 4,540,000 PPV buys in 9 UFC PPVs

UFC makes $15K/$15K offer to Holm per fighter’s coach

April 8, 2014

MMA Junkie reports that women’s MMA fighter Holly Holm turned down the UFC offer to fight for the company revealing she may have a more lucrative offer if she accepted a boxing match this September.

Holm’s coach Mike Winkeljohn stated that the UFC offered Holm $15,000 to show and $15,000 to win (via MMA Fighting) in hopes of landing the Legacy FC bantamweight. But after a meeting between Dana White and Holm’s representatives, the UFC passed.  According to Junkie, she could earn $250,000 if she agrees to step back into the boxing ring.  The money is being offered by a European boxing promoter in hopes of setting up a matchup with Cecelia Braekhus.  Holm carries a boxing record of 33 wins, 2 losses and 2 draws.  Her last match was in May 2013.

via AXS TV

via AXS TV

Passing on Holm is somewhat of a surprise although the asking price may have been too high for the UFC.  Yet, Holm has the looks and possibly the talent to set up a marketable matchup with Ronda Rousey for Rousey’s bantamweight title.  But, Holms’ agent indicated that if she earned a UFC title shot, “her compensation would get a significant bump.”

Payout Perspective:

Should the UFC have passed on Holm?  She is very impressive in the Octagon albeit against inferior opponents.  It would be hard to compare how she would do against UFC caliber talent but it’s hard to fathom a substantial dropoff.  She does have the looks and fighting style to be a marketable commodity in the UFC.  But, the question is was the asking price too much.  Rousey started at $45,000/$45,000 at UFC 157. Notably, it was reported that the fighters for the new UFC’s women straw weight division coming later this year will make at least $32,000 (it’s not clear if this includes their appearance on TUF and if this will be their show money going forward) even before a fight. So, $15K/$15K, if true, would seem to be a low-ball offer considering the following Holm already has and the potential for her in the UFC.

While she may make $250,000 in a boxing match, this may be seen as just posturing in the media.  Certainly, one can’t deny that she may make this much but I do not foresee women’s boxing a big commodity here in the U.S. unless she wants to recommit to boxing.  But with the news of her having a broken arm and needing surgery, this makes her situation something to revisit when she returns.

The UFC needs marketable opponents for Rousey and this is why rumors of Gina Carano returning have surfaced.  A healthy Holm would make the most sense and be a good draw on PPV.  We will see if she ever gets a chance in the Octagon.

Bellator 115 salaries: Kongo tops payroll

April 8, 2014

The MMA Report reports the salaries from Friday night’s Bellator event taking place at the Reno Events Center in Nevada.  Former UFC Heavyweight Cheick Kongo topped the payroll despite losing a unanimous decision.

The salaries disclosed were provided by the Nevada State Athletic Commission.

Vitaly Minakov: $35,000 (includes $17,500 win bonus)

Cheick Kongo: $50,000

Herman Terrado: $3,000

Justin Baesman: $3,000

Kelly Anundson: $4,000 (includes $2,000 win bonus)

Volkan Oezdemir: $4,000

Mikkel Parlo: $14,000 ( includes $7,000 win bonus)

Johnny Cisneros: $2,000

Rudy Morales: $6,000 (includes $3,000 win bonus)

Jimmy Jones: $3,000

Rick Reeves $8,000 (includes $4,000 win bonus)

James Terry: $3,000

Freddie Aquitania: $6,000 (includes $3,000 win bonus)

Josh Appelt: $6,000

Sinjen Smith: $2,000 (includes $1,000 win bonus)

Jason Powell: $1,000

Benito Lopez: $3,000 (includes $1,500 win bonus)

Oscar Ramirez: $1,000

Payout Perspective:

Kongo’s salary is a pay decrease from his days in the UFC when he averaged $70,000 to show.  We do not have information on Kongo’s first two Bellator fights.  It’s clear that the Bellator payroll is much smaller than that of the UFC as a lot of the undercard and lesser known fighters are making less than $5,000 for the fight.

UPDATED with peak number: Bellator 115: 830,000 viewers

April 7, 2014

Television By Numbers reports that the overnight rating for Bellator 115 this past Friday received 830,000 viewers.  It also received a 0.4 rating in the Adult 18-49 demo.

UPDATED 04/08/14: Nielsen sources tell us that it scored a 0.44 in the adult 18-49 demo and 0.60 in the male 18-49 demo which are both season highs.  The peak was 1,131,000 which occurred at approximately 10:55pm during the main event.

Notably, its lead-in, “Cops” drew an average of 1.16 million viewers in the 8:29pm ET spot.  Other ratings of note for Friday included WWE Friday Night Smackdown receiving 2.71 million viewers on Syfy in the 8:00-10:00pm ET time slot.  A rerun of “The Family Guy” on Adult Swim in the 11:30pm ET time slot won the night with 2.33 million viewers.

Bellator MMA – 110  880,000, overnight; 1.1M Peak

Bellator MMA – 111  653,000, overnight; 964K Peak

Bellator MMA – 112  699,000, overnight; 1.037 Peak

Bellator MMA – 113  507,000, overnight; 871,000 Peak

Bellator MMA – 114  711,000, overnight; 882,000 Peak

Bellator MMA – 115  830,000, overnight; 1,131,000 Peak

See above. No info on the overnight peak for the broadcast although we will attempt to get this once the DVR +3 numbers come out. 

Bellator 115 featured Bellator heavyweight champ Vitaly Minakov and Cheick Kongo with Minakov winning a unanimous decision.

Payout Perspective:

The ratings are the second best for the season and bring back the overnight average to approximately 713,000 viewers.  The draw to 115 may have been former UFC heavyweight Kongo despite his loss.

Sony’s PS4 brand to sponsor Top Rank fights this spring

April 7, 2014

The Sports Business Journal (subscription required) reports that Top Rank Boxing has signed on with Sony for its Playstation 4 brand  to receive “prominent placement” at this week’s Bradley-Pacquiao II event and June 7th’s Miguel Cotto-Sergio Martinez PPVs.

In addition, the PS4 logo will be seen during the May 17th Juan Manuel Marquez-Mike Alvarado fight on HBO.  Although no financial terms were revealed, SBJ estimates that the scale of such a deal would exceed $1M and “could approach $2M.”

The deal between Top Rank and Sony occurred via a LinkedIn “cold call” by Top Rank Exec VP Lucia McKelvey to PlayStation exec Guy Longworth.  The two had connected via the business-oriented social network site and McKelvey contacted Longworth about a potential sponsorship opportunity.  The pitch was premised upon using boxing as a means to target young Hispanic males “both inside and outside of the U.S.”

The activation includes a PS4 logo prominently displayed at all three fights and PlayStation trailers running on the PPV telecasts.  There also would be banners and pre-roll on Top Rank’s web site as well as social media integration during all three fights.

PlayStation 4 has sponsored UFC events as well as providing signage on the indoor rock wall for the memorable coaches TUF challenge between Ronda Rousey and Miesha Tate.

Payout Perspective:

The Top Rank-Sony PlayStation news may draw the ire of every young sales associate considering this lucrative partnership originated out of a cold call.  It’s clear that this cold call is much different than other ones but the fact remains it may not have happened without the initial pitch.  The partnership should help both brands as it gives the gaming console notable visibility during three of the bigger fights this year for the boxing promotion.  For Top Rank, it’s a blue chip brand that it has added to its portfolio of sponsors during a big stretch for the company.

UPDATED – WWE Network reports 667,287 subscribers

April 7, 2014

WWE announced in a press release this morning that it has 667,287 subscribers to its network which launched this past February and “is well on its way to reaching its goal of 1 million subscribers by the end of 2014.”

UPDATED 9:05am PT – 4/7/14:  It looks like that investors are not impressed with the 667K  numbers according to Deadline.com and the sell off  is more than just investors capitalizing on the stock price.  Deadline states that at least one analyst predicted the sub number to be between 500K-800K on Friday.  The original expectation was that it was to be at 1M after Sunday’s big event.

The press release comes just one day after Wrestlemania 30 aired without major tech issues on its network.  The news appears positive for the company long term although short term WWE stock is taking a hit.  In morning trading Monday, the stock is down almost $4 as it appears that many investors are selling off the stock.

The WWE also announced that it broke the record for the Superdome (Mercedez-Benz or Silverdome if you are Hulk Hogan) as its highest grossing entertainment event for the venue.  The announced attendance was 75,167 for a gate of $10.9 million.

Payout Perspective:

UPDATE:  It looks like Wall Street is not impressed with the 667K announcement as it expected a higher number of subscribers.  The stock is taking a big hit as shares have gone done at least 20% today.  We will see how this number is spun as the WWE is set to announce a new rights fee agreement in the coming weeks.

The network announcement for its subscribers should be seen as a success as there were many concerned about tech issues that would scare many away.  However, there were few reported glitches on any platform for yesterday’s big event despite the fact it was likely the most watched day for the network as most WWE subscribers and many curious non-wrestling fans tuned in to see it.  Looking at this strategically, the timing of the announcement makes sense since one would think many signed up close to Wrestlemania to take advantage of the streaming as opposed to paying $70 on PPV.

The real test will be how (and if) the WWE can retain these subscribers.  Wrestlemania was the big carrot for the network this year and realistically a one-time thing.  How will the WWE continue to grow its subscribers to reach 1 million?

Based on this information, can we assume that UFC Fight Pass is having similar success?  While the UFC will not release any information, the speculation is that it is doing well with its digital network and since it is now available for international fans, it probably continues to grow its subscriber base.

Harvey responds to Rousey ruling

April 5, 2014

Darin Harvey issued a statement on the California State Athletic Commission (CSAC) ruling which released his former client, Ronda Rousey from her fight contract.   MMA Payout has obtained the decision siding in favor of the UFC women’s bantamweight champion and we take a look at what went wrong.

Via Inside MMA on AXS TV:

“When I first met Ronda Rousey four years ago, she was destitute and UFC President Dana White was quoted as saying a woman would never fight in the UFC. I set out to make Ronda a star and prove Dana wrong. The results speak for themselves. Ronda is now a highly sought-after model, spokesperson and actress, not to mention the first and still reigning female UFC champion. She deserves all the credit in the world for her accomplishments, but she never would have achieved such unprecedented success without the unwavering financial investment, career guidance and professional support Fight Tribe Management and I provided her.

I am not a litigious person, but I never thought for a moment that once she made it to the top, Ronda would turn her back on us and refuse to honor her legal and moral obligations. After months of radio silence and without even giving me the courtesy of an explanation I was forced to go to court to compel Ronda to private arbitration per the terms of our agreement. Before that could be sorted out, Ronda’s legal team ran to the State Athletic Commission, demanded an expedited hearing and tried to get our entire agreement thrown out on a technicality. During our four-hour hearing last week, I finally heard Ronda’s side of the story. Frankly, it’s pathetic and I’m not surprised the Commission chose not to include any of that in their written decision. The Commission did properly reject Ronda’s attempt to invalidate the entirety of our agreement, and I am very pleased with that aspect of their decision. Our case against Ronda will now proceed. I am confident that when all the facts are presented to an impartial private arbitrator, Fight Tribe Management’s contributions to Ronda’s career will be fully recognized and fairly rewarded.”

Harvey also tweeted the following:

 

Roy Englebrecht, a fight promoter in California, empathized with Harvey’s plight but also advised the following:

I have seen this happen a number of times over the years, where well intentioned people want to get involved in the fight business, but never take the time to learn about the business and some of the rules that govern it. This situation with Rhonda and Darin could have been avoided if Darin knew the CSAC rules and followed them. This manager/fighter agreement or promoter/fighter agreement in California is unique to the sport, and if not followed you will lose, as this ruling showed.

The comments are based on the ruling issued by Andy Foster of the CSAC in which it determined that the evidence and testimony at the March 28th Arbitration showed that the “Service Agreement” (as identified in the CSAC Arbitration Decision) was void as to the professional fighting services only.

The ruling, in favor of Rousey, is premised on Harvey not properly executing the fight contract on “printed forms approved by the commission.”  The Commission ruled that, “[t]he controlling contract was the subject “Representation Agreement”, which was entered into in California and specifically binds the parties to be governed by California law.” Hence, the rationale by the Commission would lead it to conclude that since the contract was not on its printed forms, the contract was void as to the fighting portion of the contract.  In addition, the Commission ruled that “a fighter-contract” is not valid unless both parties appear at the same time before the Commission, and the contract receives the Commission’s written approval.”  This did not happen as the contract, which was originally drafted in May 2012, was not executed until January 2013.  Regardless, it was not done before the Commission.

Even though Harvey’s “Representation Agreement” did not comply with the Commission rules, he still argued that he was entitled to “quantum meruit” (latin for “what one has earned”).  This is a theory in contract law allowing a party to be compensated for actual work/services performed.

Under this theory, Harvey was seeking to recoup losses incurred from representing Rousey.  Harvey indicated in an exhibit at arbitration that from January 1, 2010 to January 31, 2014, he collected $25,608 in income from Rousey fights, $23,180 from PPV fights and $20,830 from income of sponsorships.  This is offset by Harvey’s claim that he paid $170,376 in expenses related to Rousey’s fighting career which makes Harvey at a loss of $85,818 from representing Rousey.  The paid expenses included paying for training including strength and conditioning, sparring partners and living expenses.

However, the Commission ruled that Harvey was not entitled to quantum meruit since “such a finding would be inconsistent with the provisions of California law requiring proper fighter-manager contracts…”   The Commission reasoned in its decition, “[i]f Harvey, or other managers, were allowed to recover by means of quantum meruiti, it would undermine the statutory authority purposes of the Boxing Act.”  Thus, the Commission ruled against Harvey based on the overarching policy that it must protect the fighters from manager graft.  As stated in the decision, “[t]he Boxing Act is a regulatory statute, and recovery on a quantum meruit theory in the absence of compliance with the act would be inconsistent with its regulatory purposes.”

Payout Perspective:

As we indicated in a previous post, expect this case to heat up in the anticipated lawsuit and/or private arbitration.  However, this situation may have been avoided if Harvey and Rousey entered into a fight agreement as dictated by the rules of the CSAC.  If there would be further representation in other matters outside of fighting, it would seem that a second representation agreement would be necessary.  Based upon the facts, it looks as though the fighter-manager relationship was informal at the beginning with no need for things such as a signed contract.  This may explain the long lag between the date of the Representation Agreement (May 15, 2012) and the date Rousey actually signed it (January 29, 2013).  The harshness here is that for not following the rules of the CSAC, Harvey lost over $85,000 spent on her client that he will not be able to recoup.  The moral here is to follow the rules.

« Previous PageNext Page »