Former ESPN/WWE anchor Grisham joins UFC

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.

Payout Perspective:

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.

Gawker turns on Daulerio in Hogan sex tape case

December 4, 2016

It appears that Gawker Media, LLC is turning on former Editor in Chief A.J. Daulerio per an article in the Wall Street Journal.  In legal papers filed in the Gawker’s Chapter 11 bankruptcy case, the company cites to the Florida jury verdict that awarded Hulk Hogan $140 million as violating employment terms while Daulerio was with the company.

The company is seeking to sever its ties with Daulerio as it is rejecting his request that Gawker continue to pay his legal fees over the fight over the video.

After the judgment, Gawker and its founder Nick Denton filed for Chapter 11 bankruptcy.  Most of Gawker websites were sold at auction to Univision for $135 million.  In legal filings, Gawker argued that Daulerio was to blame and cited the belief that Daulerio maintain that the Hogan video stay online despite the former pro wrestler’s contention it be removed.

Hogan and Gawker have reached a settlement of the jury verdict but the parties are now looking to how to fund Hogan’s $31 million settlement.

The WSJ article suggests that the move by Gawker is a strategy for the company to force Daulerio to accept a settlement of terms to pay the Hogan settlement.  Daulerio is said to owe $100,000 as part of the payment for the settlement with Hogan.  Apparently, Daulerio has not signed off on the deal due to “how he can discuss Mr. Bollea’s case.”  Daulerio, who was individually named in the original lawsuit, has considered appealing the decision on his own.

Gawker creditors have until Monday to vote on the settlement plan.

Payout Perspective:

It will be interesting to see what happens on Monday.  It was clear that this was a possible outcome when Gawker filed for bankruptcy.  Despite defending Daulerio in the civil trial, they now are turning to the interests of its creditors in the bankruptcy case.  As an individual, it would be hard to see how Daulerio could still fund his own appeal of the Hogan judgment.  Will keep you updated.

Record economic impact for WrestleMania 32

November 18, 2016

The WWE announced that WrestleMania 32 generated $170.4 million in economic impact for the Dallas/Arlington region this past April.  The results come from a study conducted by the Enigma Research Corporation.

The $170.4 million is a new record for the economic impact the WWE’s annual event does for a host region.  It is the 5th consecutive year that WrestleMania generated more than $100 million in economic impact.

Last 5 WrestleManias and their economic impact

Wrestlemania 27: Atlanta – $62 million

Wrestlemania 28: Miami – $102.7 million

Wrestlemania 29: NY/NJ – $101.2 million

Wrestlemania 30: New Orleans – $142 million

Wrestlemania 31: Santa Clara – $139 million

 Payout Perspective:

It’s not shocking that with the event taking place at AT&T Stadium that the WWE would set an economic impact record.  Obviously, the study was commissioned to maximize on the impact the event had on the area as it will serve as a marketing tool for cities to lobby for the event for their city and/or region.  This news happened the same week that the WWE is set to roll out a new business model for its four annual major PPVs (WrestleMania, SummerSlam, Survivor Series and Royal Rumble) which includes bringing all of its WWE brands to the city for shows.  Thus, NXT, Raw, Smackdown Live will have shows in the city in addition to the PPV.  For the WWE, the plan is to have more fans seek out the events as destination “vacations.”  This would have more of an economic impact on cities hosting these events.

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.

WWE not actively promoting Lesnar at UFC 200

July 5, 2016

Despite receiving the blessing of the WWE, the company will not be actively promoting Brock Lesnar’s fight against Mark Hunt this Saturday at UFC 200.

The WWE’s Stephanie McMahon told Business Insider that Lesnar’s appearance at UFC 200 is a “special case” but not a cross-promotional opportunity.  As the WWE has done in the past, it differentiated the two companies that seem to be inextricably compared.  McMahon stated that the “UFC is not a competitor to the WWE because we [WWE] are entertainment and UFC is competitive sport.  It’s very different.”  She also made it clear that while they were not supporting the fight, the more awareness Brock’s appearance makes at 200, there is value for the WWE brand.

While the WWE may not overtly support Lesnar’s octagon appearance this Saturday, it’s clear that the WWE is the indirect recipient of mainstream press.  For its part, the WWE is taking advantage of the publicity.

It announced that Lesnar will be on the cover of this year’s WWE video game, WWE 2K17.  It also announced that Lesnar’s opponent for Summerslam would be announced this week on USA’s Smackdown show.

Payout Perspective:

It’s an interesting “hands-somewhat-off” approach that the WWE is making.  It’s clear that Lesnar is the biggest draw for the UFC this weekend and this should please the WWE.  But, in order to stay true to its brand and the entertainment component of the product, it is not doing anything out of the ordinary to promote Brock’s presence at UFC 200.  It’s clear that the WWE could have done a special on its own network centering on Brock’s return to the octagon or even make more mention of it during its television programming.  Is it a mistake?  The WWE is keen on its brand and the decision to keep UFC Brock and WWE Brock separate (even though the UFC may not) seems like a thought out decision.

Lesnar making return to Octagon at UFC 200

June 5, 2016

Brock Lesnar will be returning to the UFC and is slated to fight a yet to be named opponent on July’s UFC 200 card.  The WWE has given Lesnar permission to fight on the card despite being under contract with the UFC.

This UFC promo during the 199 PPV made the news official:

It appears that his opponent will be announced this Monday on ESPN.

Payout Perspective:

This seems like a risky move for the WWE since Lesnar will be fighting one month before the company’s second-biggest event of the year, Summerslam.  You might recall it was in LA a couple years back that Lesnar made his decision to re-sign with the WWE despite entertaining an offer with the UFC.  Apparently, the WWE is fine with the risk.  And you can say that the UFC is fine with the risk as well.  You might recall that Lesnar’s final fights were less than stellar.  Of course, there was an injury Lesnar was going through at the time but he is older and has not fought since December 2011 when he was stopped by Alistair Overeem.  Lesnar was not even in one of the featured main events at Wrestlemania this past year and he has no story lines actively going with the WWE thus far.

Lawsuit over WWE Network royalties promptly dropped by former wrestler

April 12, 2016

Former WWE wrestler Rene Goguen (fka Rene Dupree) has voluntarily dismissed his lawsuit against World Wrestling Entertainment.  The news comes just days after announcing it filed a class action lawsuit against the company for unpaid royalties related to the WWE Network and Netflix.

Goguen claimed breach of contract, breach of fiduciary duty, unjust enrichment and violation of the Connecticut Unfair Trade Practices Act.  The dispute arose out of what Goguen and his attorneys believed were a part of his Booking Contract that he was due royalties for “technology not yet created.”

WWE attorney Jerry McDevitt stated that Goguen signed a contract in 2011 “that destroys his ability to bring these types of claims” according to The Hollywood Reporter.  Aside from the contract, THR pointed to a case which states that state-based rights of publicity are trumped by the federal copyright act.

Goguen Dismissal

Payout Perspective:

The voluntary dismissal obviously means that Goguen’s attorney realized that they did not have a legal shot at surviving a motion to dismiss.  This probably stems from the contract alluded to by McDevitt.  It likely was a waiver of claims related to the WWE Network and Netflix.  One might infer that when the WWE contemplated the Network, ensuring that all performers under contract pre-network would not be able to claim royalties was a necessity to mitigate these types of claims.  The WWE’s lawyers are very aggressive when it comes to legal strategy and one might surmise that the WWE would have sought legal fees from plaintiffs’ attorneys.

2015: The year in pro wrestling

January 9, 2016

We leave the last review of 2015 to that of professional wrestling.

Let’s do some quick hits before we get to the high spots.

  • New Japan debuted on AXS TV to rave reviews. Mauro Ranallo and Josh Barnett served as the English commentators for the shows.
  • Ranallo recently made the move from New Japan and commentating boxing events to being the voice for WWE’s Smackdown. He debuted as the new voice as it the Smackdown brand moved from USA to SyFy this year.
  • Lucha Underground on the El Rey Network was the most-talked about independent hit. The mix of telenovela and independent wrestling action served as something different for wrestling fans.  The second season of the show was in peril as it lacked the necessary funding and a television deal.  However, news surfaced late in the year that it would return to the El Rey Network for a second season starting in January.
  • ESPN and the WWE entered into a partnership in which the sports cable network will feature a weekly segment with WWE wrestlers. 2015 saw ESPN expand a little more into the world of entertainment which included covering Summerslam (which was in Brooklyn, NY this year) and the announcement of Brock Lesnar’s re-signing with the WWE.
  • Lesnar’s signing in early 2015 was big news as it seemed as though he was going to head back to the UFC. He was in attendance at UFC 184 in Los Angeles. He re-signed with Vince McMahon in LA as the WWE was at the Staples Center at the time.  Also in LA at about the same time was Dana White who was promoting the Aldo-McGregor fight.
  • The much maligned TNA Wrestling organization was dropped by SpikeTV and then picked up by Destination America.  Soon thereafter, Ring of Honor was added to Destination America as a syndicated show for the network.  However, it has since moved once again to POP TV.
  • Ronda Rousey appeared with The Rock at WrestleMania in Santa Clara, California. The annual event drew in $139 million in economic impact for the Santa Clara/San Francisco region.
  • The WWE and TapouT announced a joint venture in which performers would wear the former MMA brand which revamped itself into an athletic performance brand.
  • The WWE was one of the many sports leagues to announces a deal with a fantasy sports operator as it announced a deal with DraftKings.

Hulk Hogan banished from WWE as a results of racist comments

Hulk Hogan was terminated by the WWE this past July after audio of a racist rant surfaced.  The audio relates to racist remarks he made 9 years ago.  It appears that the discovery was made as a result of an ongoing Gawker lawsuit in which the former pro wrestler sued the media outlet for publishing a sex tape.  Hogan’s Gawker lawsuit continues into this year as a trial date last summer was continued.

CM Punk sued by WWE physician

UFC contracted fighter CM Punk was sued by a WWE physician for libel.  The lawsuit stems from comments Punk made on Colt Cabana’s podcast about the type of medical treatment he received from the doctor while with the company.  The podcast was one of the most listened to podcasts from Cabana, who was also named in the lawsuit.  A motion to dismiss the case by Punk and Cabana’s lawyers was denied and the lawsuit continues.

More head injury lawsuits filed

The estate of former WWE performer Nelson Lee Frazier sued the WWE for wrongful death as a result of multiple head injuries/concussions while a wrestler with the WWE.  Matt Osborne’s estate filed a similar lawsuit.  In addition, Billy Jack Haynes,, Vito LoGrasso and Evan Singleton also filed lawsuits related head injuries they claimed they suffered while working in the WWE.  The WWE is aggressively defending these lawsuits claiming that they were filed by “ambulance chasing” lawyers.  The WWE file motion to transfer the lawsuits to the company’s home state of Connecticut.

In a unique strategy, the WWE filed a lawsuit against several former WWE stars seeking a declaratory judgment against them. The lawsuit would seek a ruling that any allegations of head trauma are “time-barred” by the statute of limitations.

Via our July post:

The WWE strategy is a result of the growing swell of lawsuits filed by former WWE performers claiming that the company knew or should have known about the risks of head trauma and that they suffered injury as a result.  Although not a named defendant in the lawsuit, the WWE names (and blames) plaintiff attorney Konstantine Kyros for the litigation.  It identifies several notice letters (below) which request that the WWE not destroy any information it may have.  The lawsuit identifies the existing lawsuits Kyros has filed on behalf of former WWE stars including Billy Jack Haynes.

The lawsuit requests a court ruling indicating that the defendants’ claims are time-barred by the statutes of limitations/repose under Connecticut law.  Essentially, the defendants did not file their claims on time.  This is always a very hard issue to consider as most of the claims that wrestlers could make occur when they are still contracted by the company.

The WWE Network

What was once thought as a foolish idea, now reveals that the WWE Network was ahead of the curve with it’s over the top platform.  With UFC Fight Pass making efforts to produce more content for its network reflects the fact that digital platforms are not going anywhere.  Of course, we don’t think the UFC is going away from its PPV business but its digital service is becoming more of an economic driver for the company.

The WWE Network has kept its strategy of offering a free month for new subscribers in growing its current paid subscribers.  Further, the expansion of the network to other countries has helped its subscriber base grow.  In January 2015, it surpassed 1 million subscribers.

Q1: 918,000

Q2: 1,156,000

Q3: 1,173,000

The fourth quarter has yet to be reported, but through September 2015, the WWE has brought in almost 2.3 million unique subscribers and half of those were active as of September 2015.

WrestleMania 31 brings $139M in economic impact to SC/SJ region

November 4, 2015

WWE announced that WrestleMania 31 generated $139 million in economic impact for the Santa Clara/San Jose region this past March according to a study commissioned by Enigma Research Corporation.  

The $139 million in economic impact is second to only WrestleMania XXX in New Orleans.  It’s the 4th straight year that the region hosting WM has cleared $100 million in economic impact for the region.

The event last March drew 76,976 fans at Levi Stadium in Santa Clara.  The release also brought up some other interesting notes:

-78% of the fans that attended WrestleMania were from outside the region and stayed an average of 3.3 nights.  Thus, a boon for local hotels, restaurants and other businesses.

-$22 million was spent on hotels and accommodations within the Santa Clara/San Jose region.

-$6.2 million was spent by visitors to the Santa Clara/San Jose region at area restaurants

Last 5 WrestleManias and their economic impact

Wrestlemania 27: Atlanta – $62 million

Wrestlemania 28: Miami – $102.7 million

Wrestlemania 29: NY/NJ – $101.2 million

Wrestlemania 30: New Orleans – $142 million

Wrestlemania 31: Santa Clara – $139 million

Payout Perspective:

WrestleMania is undoubtedly a destination event for many.  One need only look at the economic impact it has for the region especially the hospitality and restaurant industry.  The event can significantly impact local businesses and the WWE has created an event that it can leverage to its benefit in the future.  With certain parts of the country looking for an infusion of economic revenue, an event like WrestleMania could help.  

WWE reports Q3 results

October 29, 2015

The WWE announced its earnings for Q3 2015 on Thursday.  The company reported net income of $10.4 million ($0.14 per share) compared to a loss of $5.9 million ($0.08 loss per share) in Q3 last year.  The results bested most analyst expectations although the stock for the day dropped almost 13% as a result of profit taking.

Total revenue generated for the quarter ending September 30, 2015 were $492.6 million, up from $402.1 million the prior year period.  North America revenue were $373.6 million, up from $318.9 million from September 30, 2014.

The net revenues were $166.2 million at the end of the 3rd quarter as opposed to $120.2 million at the same time last year.

As for the WWE Network, it has about 1.3 million subscribers at the end of the quarter which is better than last year’s 515,000.  WWE CFO George Barrios indicated that the average for the WWE Network was 1,173,000.  At the end of Q3, the WWE Network had 1.233 million paid subscribers and 73,000 free subscribers as a result of the WWE’s rolling “free” months for new customers.  It’s up from the 1.15 million at the end of Q2 but down from 1.33 million at the end of Q1.  The Network revenues are up to $118.6 million.  Last year, at the end of Q3, they were $87.8 million.

The WWE plans to launch the network in Germany and Japan in January.  It also will be available on the Indian subcontinent on November 2.

According to the WWE press release, it has secured 37 new advertisers from the NBC Universal Upfront.

Vince McMahon touted the success of the reported earnings to the value from the WWE’s content.  He also emphasized the television rights deal and network revenue in attributing the international growth which was reported at 43% through the first 9 months of 2015.

Other notes from the earnings call:

Live events revenue increased 20% to $26.1 million from $21.8 million which related to 6 additional events and higher average ticket prices in North America.

Consumer products increased 21% to $22.4 million from $18.5 million in the prior year quarter.  WWE Shop showed an increase over last year’s third quarter as it was up to $6 million from $4.3 million in revenue.

Per Chris Harrington, the WWE barely touched on the ongoing concussion lawsuits only that there have been “increased legal expenses.”

The WWE introduced a 3 month subscription card at Walmart providing a “no credit card required” payment option.

There were 360,000 PPV buys equating to $4.5 million revenue for three events in Q3.  Thus, on average, despite the network about 120,000 households per event still purchase PPVs.

Payout Perspective:

The key takeaway might be that the WWE expects its WWE television rights fees and the growth of WWE Network subscribers will be the key drivers of WWE’s future revenue growth.  The WWE’s move to produce more live, original content for its Network is evidence that the company is investing heavy into its OTT platform as key for the future.  It’s interesting to note that the WWE did not address the reason for its “increased legal expenses.”  Then again, it’s likely that it did not want to make any comment on ongoing litigation.   Overall, the earnings report reflects a healthy company with earnings growth.

Next Page »