TUF 20 Ep 5 lows; UFC Tonight’s highs

October 24, 2014

MMA Payout has learned from a Nielsen source that the fifth episode of TUF received an average viewership of 509,000 viewers.  In addition, MMA Payout has learned that the Wednesday night’s UFC Tonight scored an all-time high on FS1 with 242,000 viewers.

First, the 5th episode of TUF featured Felice Herrig defeating Heather Jo Clark in the fight of the episode.  It was one of the lowest output for this season although it did go up against Game 2 of the World Series on Fox.

TUF 20 Episode 5

UFC Tonight sported its highest viewership average ever with 242,000 viewers in the 8pm ET time slot Wednesday.  It was the debut of Daniel Cormier as the official co-host.

Payout Perspective:

There was a lot of press promoting Cormier’s debut so that might have played into the big ratings number.  As for the TUF episode, the low number was likely considering it going opposite the World Series.  The show also came off a two-week hiatus so that might have contributed to a sluggish number

Belfort never tested by NAC

October 23, 2014

MMA Fighting reports that the Nevada Athletic Commission has never tested Vitor Belfort since his appearance before the commission in July.  Instead, the commission indicated that the state of California would handle the drug testing since it appears that Belfort’s next fight would be in California.

Although there has not been any official fight announcement for Belfort-Chris Weidman, Ariel Helwani’s interview with NAC head Bob Bennett seemed to indicate that Weidman’s next title defense would occur in the state.

You may recall that the NAC granted Belfort a conditional license for a fight that was to take place in December in Nevada but for Weidman’s hand injury which caused the current delay in that fight.  The NAC told Belfort in July that he would be subject to extensive drug tests (both blood and urine) throughout the rest of his career as a result of a failed drug test this past February.

California State Athletic Commission executive officer Andy Foster indicated that he would test Belfort but nothing has yet to be planned.  Foster stated that the tentative plan was to test Belfort “three-to-five times” at random before the fight as well as fight night.

Payout Perspective:

Well this doesn’t look good for the NAC.  Certainly, the NAC could have said they intended to test Belfort but Weidman’s injury did not make it an immediate need.  But, not only does it appear that the NAC was just giving the public “lip service” about its hard line about fighters that break the rules, it now is passing off this responsibility to California. In addition, the article states that Belfort appeared willing to go through the testing as he had given the NAC all of his contact information.  For the NAC to not at least conduct one test between July and now is a disappointment.  Not only does it show that it did not follow through with its word of random testing, it is a sign to fighters that there is a possibility that they can get away with things like this.

Bellator 129 Live + 3: 683,000 viewers

October 22, 2014

MMA Payout has learned from a Nielsen source the Live +3 rating for Bellator 129 saw an increase to 683,000 viewers.  The Live +3 peak jumped to 948,000 from 780,000.

Bellator 129 saw the biggest rise in Live + 3 ratings of season 11.

Bellator 129 live +3

Payout Perspective:

Bellator 129 was not a great card and it was reflected in the ratings.  The increase in viewership in the DVR ratings reflects the possibility that many DVR the fights so that they can determine whether or not to watch the entire show.  Or, like most of us strapped for time, hear about the fights and decide which ones to watch later on.

Cain out of UFC 180 due to injury

October 21, 2014

The UFC announced that Cain Velasquez is out of UFC 180 with a right knee injury.  As a result, Mark Hunt is stepping in to replace him to face Fabricio Werdum for the interim Heavyweight title.

The knee injury suffered by Velasquez occurred during training on October 16th or 17th.  According to MMA Fighting, he will have surgery on his right knee on Thursday.  The article states that Dana White hopes that Velasquez will be able to return by March.

Velasquez and Werdum served as coaches on TUF Latin America which was to culminate in their fight on November 15th.

The UFC announced that customers can request a refund for the event due to Cain’s injury.

Payout Perspective:

Another marquee fighter beset by injury causing a substitution to a main event.  Velasquez’s injury is a blow for the event as he was a key for the Mexico City audience.  It’s clear that the substitution will affect the PPV buy rate.  The injury is a disappointment considering the sellout and the fact that the UFC had partnered with Fathom Events to have the event in movie theaters.  In his place, Mark Hunt gets the opportunity against Werdum.

Cung Le suspension lifted by UFC

October 21, 2014

The UFC announced Tuesday that it has rescinded the 12 month suspension of Cung Le.  The news comes as a surprise considering Le and the UFC were heading to arbitration over the suspension.

Via UFC.com:

At UFC Fight Night Macao on August 23rd, UFC contracted with an independent drug testing laboratory in Hong Kong to perform urinalysis testing on all fighters on the card.  Additionally, UFC requested the laboratory to test blood samples from 4 fighters for human growth hormone (HGH), erythropoietin (EPO) and testosterone.

One of the athletes who had his blood tested was Cung Le.  The laboratory results from Le’s blood test were sent to the UFC and showed that his blood had a total HGH level outside the reference range.  Based on such results, UFC officials determined that Le had violated his promotional agreement and the UFC Fighter Conduct Policy.  Consequently, UFC decided that Le should be suspended from unarmed combat competition for 12 months.

Following the announcement of Le’s suspension, UFC officials have been provided with medical advice regarding the elevated total HGH present in Le’s system.  In accordance with such medical advice, UFC has determined that Le’s elevated total HGH by itself does not prove that he took performance-enhancing drugs before the August 23rd bout.  As a result, UFC has informed Le that his suspension is rescinded.

Le had requested an appeal of his suspension, and was entitled to arbitrate the drug test results and suspension.  However, based on the lack of conclusive laboratory results, UFC officials deemed it appropriate to immediately rescind the suspension without the need for further proceedings.

The UFC organization has always been a leader when it comes to testing for performance-enhancing drugs in combat sports.  All UFC athletes know they are subject to drug testing by an applicable state athletic commission, an international governing federation, or by an independent laboratory contracted by the UFC when no regulatory body is overseeing the event.  In those cases where regulatory oversight is unavailable, UFC voluntarily chooses to adhere to the highest level of athlete health and safety protocols similar to if the event were being held in the state of Nevada.

Payout Perspective:

It’s clear that the UFC did not want to go to arbitration as it would have likely exposed the UFC’s drug testing policy (or lack thereof).  Le’s attorney Steve Pacitti and manager Gary Ibarra stuck with the situation despite the overwhelming public perception that Le was guilty.  Of course, the rescission does not mean that Le was not guilty of taking illegal substances, it’s just that the process for testing this was faulty.  As an advocate for Le, Pacitti and Ibarra spelled out Le’s case with the facts of the situation.  Namely, the lab that gathered the samples was not a WADA-approved lab.  Also, the taking of the sample from Le occurred at a time when his hGH levels were naturally high and a WADA required test was never conducted on the sample.  All of this information appears to have mounted in favor of Le and the UFC’s decision to rescind the suspension.  With the suspension lifted, we will see how ready the UFC will be to book Le for another fight.

The UFC must recognize that its current drug testing policy is shaky at best.  The fact that it was unclear what process for appeal Le had reflects the need for the company to sit down and spell out a comprehensive policy for its fighters.

Jim Ross opines on future of Fight Pass/WWEN

October 20, 2014

Former WWE color commentator Jim Ross had some interesting comments about the future of UFC Fight Pass as he seemed rather bullish on the future of the over the top model.  The comments come at a time when online services seem to be on the rise…or maybe on the decline depending on what you read.

In an interview with Bloody Elbow, Ross was quoted that the shift for companies such as the UFC and WWE to digital networks is a thing of the future.  Despite the rocky starts for each, he believes that it is a “genius-like maneuver.”

With last week’s announcements that HBO and CBS were offering online services and ESPN providing a streaming-only service for NBA content the week before, it’s apparent that over the top (OTT) network offerings are the growing trend.  But, is there enough of a market for them? Although the model seems to be geared toward cord cutters, it would seem that the addition of so many subscription services would negate any savings from cancelling a traditional cable package? Would it impact ad revenue?

Payout Perspective:

The WWE will make its quarterly earnings call on October 30th and we will see how much of a dent it has made in its goal of 1 million subscribers to its OTT WWE Network.  You may recall it made a meager increase in its goal last quarter.  The last report this summer indicated that it had added just 33,000 subscribers for approximately 700,000 total subscribers.  Even with the addition of an international market, it is unlikely that the 1 million goal could be met. This should be something that other OTT subscription services should take notice.

On the other hand, all reports suggest that the UFC Fight Pass is doing well (although no numbers have been revealed).  But, unlike the WWE, it keeps its PPVs separate from the network.  Fight Pass is geared for the hardcore fan and it would be hard to argue that it takes away from the UFC’s PPV buy rate.  While Fight Pass offers an extensive fight library and live fights from overseas, most of the marquee names and match-ups remain on PPV.

So, will digital networks like the WWE Network and UFC Fight Pass thrive in the future?  Perhaps for the young, cost-conscious consumer that is savvy enough to deal with the online world but do not want to be tied down with a traditional cable package.  But, it’s unlikely to take over.

Doritos plans 360 degree activation around UFC 180

October 19, 2014

Frito-Lay’s Doritos brand tortilla chip is seeking to make a significant mark in leading up to UFC 180: Velasquez vs. Werdum.  According to the Sports Business Journal, it is set to conduct a full-blown activation in Mexico.

Doritos is activating a 360 degree campaign in 300-plus stores across Mexico with more than 2.5 million bags printed and in market from October through November 2014.  The campaign will be supported across multiple platforms including mass media, digital, social media and business-to-business.

Payout Perspective:

The Doritos marketing strategy surrounding UFC 180 is similar to that of Tecate’s U.S. strategy (without the PPV rebates) in lead up to a Pacquiao fight.  Even though UFC 180 may not be considered a marquee event in the U.S., it is big in Mexico and Doritos believes that it is too.  With a “360 degree” marketing campaign promoting the event, one would hope to see a substantial number of viewers for this event thanks to this marketing.

UFC lists its audience profile in latest Sports Business Journal

October 17, 2014

The Sports Business Journal (subscription required) provided some figures related to the current UFC audience.  Notably, the UFC was featured in its “Sports Marketing and Properties Showcase.”

SBJ lists the UFC’ audience profile as 70% male, 45% between the ages of 18-34 and 6.5 years younger than the average age of other major sports fans.  Also worthy to note that 18% of the UFC fan base is Hispanic.

The information was provided in a special advertising section of the SBJ which was a 1 page list of UFC information likely provided by the company.

Payout Perspective:

The numbers positively reflect the organization’s position as a conduit to the youth demo.  One could probably have guessed that the UFC audience was predominantly male and skew younger.  The younger demo is likely due to the fact that a younger audience is more ready to embrace new things and would gravitate to the UFC faster than other demos.  In comparison, boxing demos skew older than MMA.  We should see the UFC hoping to expand that 18% Hispanic fan base especially with the new TV deal in Latin America and the hope for a big UFC 180.

More on Cung Le’s pending arbitration

October 16, 2014

MMA Fighting reports on the looming arbitration that will decide Cung Le’s suspension from a drug test which found elevated levels of hGH in his system.  The arbitration will be governed by the American Arbitration Association and procedures related to Olympic sport doping disputes.

According to MMA Fighting’s article, one arbitrator would be named although the parties could field three.  It appears that the arbitrators would be selected from the AAA Court of Arbitration for Sport panel. The panel is experienced in doping arbitrations which we may assume arise from Olympic drug testing disputes.

As was previously reported, it was confirmed by the UFC that Le would have a right to an appeal and it would be through AAA.  The description of the AAA arbitration process is similar in nature to that of a trial.  There would be a pre-hearing conference and then an “evidentiary hearing” (as described by the MMA Fighting article) which would determine the evidence submitted by both parties.  After this is decided, the arbitration will take place.  After the arbitration, the panel will make a decision within 30 days from the hearing.  Their decision will be binding.

It should be noted that one of the contention’s Le has made was that the laboratory that gathered the samples were following World Anti-Doping Agency (WADA) rules but was not a WADA-approved lab.  According to a law review piece by law professor Maureen Weston at Pepperdine University’s School of Law, under WADA rules, the doping report, conducted by a WADA-accredited lab, is presumed valid.  In citing the World Anti-Doping Code, the burden would be on the athlete to come forward with evidence that rebuts the presumption of doping, by showing the laboratory’s practice departed from international standards.  In Le’s case, the question is whether this presumption holds true for non-accredited lab if they followed the WADA protocol.

Payout Perspective:

This arbitration process may expose the UFC’s shortcomings when it comes to its drug testing policies especially in situations like these where it must act as its own regulator.  As we previously noted, the actual process for appealing the drug suspension was in question and we might infer, is not explicit in Le’s contract.  We state this because if an appeals process was clear, Le’s manager would have come out an indicated as much in their initial response to the UFC suspension.  Regardless, the process for the arbitration may reveal that the UFC was not prepared to drug test its fighters for this event.  Even if the reason was that the organization decided to conduct such testing on short notice, it should have had a system in place where it would have complied with WADA rules.  We will have to wait and see.

Squor offers fighters extra income using social media

October 16, 2014

MMA Junkie reports (via USA Today) on one of the newest revenue stream for MMA fighters which utilizes their following on social.  Squor pays athletes for using their platform when they are on social media.

Fighters have been paid up to $4,000 per month for just using the Squor link on their twitter feeds.  The company also offers bonuses.  UFC Strawweight competitor, Felice Herrig, confirmed that she was paid $8,900 per month for using Squor through “engagement bonuses.”  Conor McGregor was also a fighter mentioned in the article that does well each month from Squor per his use of it on social media.

Munoz’s Squor.

Edgar’s Squor.

You can follow UFC fighters on Squor here.

Payout Perspective:

It’s not clear how fighters earn their money from Squor or how Squor benefits but one might assume it’s based on the number of followers each individual has and how many of their followers click and follow the Squor link.  The monetary incentive for use of social media is reminiscent of the short-live twitter bonuses the UFC awarded.  The article does note that the “pay to post” revenue structure may one day run dry and Squor has offered a crowdfund option for fighters. For fighters, it’s another revenue stream for them that may benefit those in between fights.

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