Emmanuel and Whitesell No. 4 on SBJ’s Most Influential in Sports Business for 2016

December 6, 2016

WME-IMG’s Ari Emmanuel and Patrick Whitesell have made Sports Business Journal’s Most Influential People in Sports Business for 2016.  Emmanuel and Whitesell are key members of the new ownership group for the UFC.

SBJ noted the ascension of these two (last year they were No. 12 on the list) but noted the following in choosing them so high on the list:

Whether you’re with them or against them, you can’t ignore their influence. Their vast access to talent and intellectual property, global reach and forays into content production and distribution give them a seat at the table of virtually every major sports negotiation.

Obviously, the acquisition of the UFC this past year was one of the major shakeups in the sports due to the $4 billion price tag.  Despite the concern over the leveraged purchase by federal regulators, the purchase drew eyebrows from the sports and financial word.

Notably, Adam Silver tops the list at No. 1 followed by Bob Iger and John Skipper tied at No. 2, Roger Goodell at No. 3 followed by Emmanuel and Whitesell.

Payout Perspective:

To put this ranking in perspective, they rank ahead of MLB Commissioner Rob Manfred (No. 5), Dallas Cowboys owner Jerry Jones (No. 8) and NHL Commissioner Gary Bettman (No. 10).  With its latest acquisition, the UFC, it has a sports property that is still emerging and find itself with several looming issues ahead including the possibility of fighter unionization, the ongoing antitrust lawsuit as well as an upcoming media rights deal.

Ali Act sponsor claims UFC attempted to influence witness list of congressional hearing

December 6, 2016

Bloody Elbow reports that the UFC threatened not to participate at a Congressional subcommittee hearing on MMA and the possible expansion of the Ali Act set for Thursday.  The power play was due to Randy Couture’s participation as a witness at the hearing.

According to the bill’s sponsor, Republican congressman Markwayne Mullin, the UFC attempted to influence the hearing by refusing to participate at the hearing.  The hearing is before the subcommittee on Commerce, Manufacturing and Trade.

The witness list is now public and it appears that based on Congressman Mullin’s statement, the UFC threatened to withdraw the presence of Jeff Novitsky from the hearing.  Novitsky, who is the Vice President of Athlete Health and Performance will be speaking on behalf of the UFC.  The UFC denied Mullin’s statement that they attempted to rescind its participation via Novitsky.

Payout Perspective:

It will be an interesting hearing on Thursday as Couture, Novitsky, Lydia Robertson (Treasurer of the Association of Boxing Commissions and Combative Sports) and concussion researcher Dr. Ann McKee of Boston University will be testifying.  Mullin’s assertion that the UFC did not want Couture to testify could be true.  The UFC and Couture have had contentious past and the UFC likely does not want him to speak about his side of the story.  Whether or not the UFC attempted to get Couture off of the witness list is another issue.  Certainly, the company has lobbyists working on its behalf and they have talked to legislators including co-sponsors of the Ali Act Expansion Act.

TUF 24 Finale draws 1.032M viewers, Prelims 887K

December 6, 2016

The Ultimate Fighter Finale on FS1 Saturday drew 1.032 million viewers per Sports TV Ratings.  The Prelims drew 887,000 viewers.

The main card aired from 10:00-1:32am on FS1 and featured Demetrious Johnson successfully defending his title against TUF 24 winner Tim Elliott.  The main card drew 531,000 viewers in the adult 18-49 category per Sports TV Ratings.  The prelims drew 430,000 viewers in the adult 18-49 category.

The event did slightly less than this past summer’s TUF 23 Finale which featured Joanna Jedrzejczyk versus Claudia Gadelha.  The show, which aired on a Friday night drew 1.086 million total and 657,000 in the A18-49 demo.  The prelims for TUF 23 drew 642,000 total and 352,000 in the A18-49 demo.

The TUF 22 Finale last December drew just 883,000 viewers with the prelims earning 294,000 viewers.  The main card last year featured Frankie Edgar versus Chad Mendes.

Here’s a look at a history of TUF cards in recent history:

TUF 18 (December 2013):  1.13M viewers, Prelims 938,000

TUF 19 (July 2014): 1 million viewers, Prelims 774,000

TUF 20 (December 2014): 989,000, Prelims 719,000

TUF 21 (July 2015): 691,000, Prelims 470,000

TUF 22 (December 2015): 883,000, Prelims 809,000

TUF 21 (July 2015): 691,000, Prelims 470,000

Payout Perspective:

Saturday night’s main card did a respectable rating, especially the prelims which drew the highest rating since December 2013.  I am not sure whether the ratings are an indication that Demetrious Johnson is good for TV, but not on PPV but he’s done well when on FOX cards but not on PPV.  Overall, good ratings for the event.

UFC names new CFO

December 5, 2016

The UFC has announced that Andrew Schleimer will take over as the Chief Financial Officer (CFO) for the company.  He replaces Nakisa Bidarian who will be leaving at the end of December to join Frank Fertitta III and Lorenzo Fertitta in new investment vehicle for the Fertittas.

Via UFC.com:

Most recently, Schleimer served as EVP & CFO of Digital Turbine Inc. (previously, Mandalay Digital Group), a NASDAQ publicly traded digital company founded and formerly chaired by Peter Guber. There he oversaw the company’s development and acquisition strategy including its 2015 merger with Appia, the leading independent mobile user acquisition network.

Prior to that, he served as EVP, Strategic Development & In-Park Services for Six Flags, where he oversaw all in-park revenue, international development, and licensing across the company’s 30-park global footprint.

Schleimer began his career as an investment banker with UBS where he advised on over $150 billion of M&A transactions in the technology, media, telecommunications, and consumer products space. He graduated from Cornell University with a Bachelor of Science.

Bidarian was named UFC CFO this past January.

Payout Perspective:

A short stint for Bidarian who appears to be landing with the Fertitta brothers in another business venture.  The new CFO reflects the evolving changes after the acquisition by WME-IMG.  A former investment banker, he will provide the company with the financial leadership in guiding the new owners.

TUF 24 Episode 12 DVR + 3 viewership: 628,000 viewers

December 5, 2016

Episode 12 of TUF 24 drew 628,000 viewers on FS1 per Nielsen when factoring in DVR +3 information.  The DVR ratings represents a 41% bump from Live + SD viewership.

The average viewership for DVR +3 ratings was approximately 564,000 viewers.  The highest viewed episode this season was episode 3 which drew 441,000 viewers Live +SD and drew a total of 682,000 viewers when factoring in DVR + 3 viewership.

episode-12-dvr

 

Mighty Mouse tops TUF 24 Finale payouts

December 5, 2016

MMA Junkie reports the TUF 24 Finale payouts from Saturday’s event from The Palms.  Flyweight champion Demetrious Johnson led the payouts as disclosed by the Nevada State Athletic Commission.

The disclosed total payout was $1,242,000.  Johnson earned $350,000 with no win bonus.

Champ Demetrious Johnson: $350,000 (no win bonus)
def. Tim Elliott: $100,000

Joseph Benavidez: $140,000 (includes $70,000 win bonus)
def. Henry Cejudo: $50,000

Jorge Masvidal: $120,000 (includes $60,000 win bonus)
def. Jake Ellenberger: $78,000

Jared Cannonier: $24,000 (includes $12,000 win bonus)
def. Ion Cutelaba: $12,000

Sara McMann: $56,000 (includes $28,000 win bonus)
def. Alexis Davis: $27,000

Brandon Moreno: $24,000 (includes $12,000 win bonus)
def. Ryan Benoit: $15,000

Ryan Hall: $34,000 (includes $17,000 win bonus)
def. Gray Maynard: $51,000

Rob Font: $33,000 (includes $16,500 win bonus)
def. Matt Schnell: $10,000

“Maestro” Dong Hyun Kim: $20,000 (includes $10,000 win bonus)
def. Brendan O’Reilly: $12,000

Jamie Moyle: $20,000 (includes $10,000 win bonus)
def. Kailin Curran: $20,000

Anthony Smith: $30,000 (includes $15,000 win bonus)
def. Elvis Mutapcic: $16,000

Devin Clark: $20,000 (includes $10,000 win bonus)
def. Josh Stansbury: $12,000

Payout Perspective:

A nice raise in payment for Johnson who made a show purse of $135,000 at UFC 197.  He made $60,000 as a win bonus against Henry Cejudo this past April for a total of $195,000.  The $350,000 matches that made by bantamweight champion Dominick Cruz in his last title defense at UFC 199.  The $350,000 is still less than the $500,000 made by champs like Daniel Cormier and Robbie Lawler (when he held the title).  Heavyweight champion Stipe Miocic made $600,000 for his last title defense in September.  Of course, it’s not even close to Conor McGregor’s purse.  Tim Elliott likely made the most out of any TUF winner in their first fight outside of the show with $100,000 to fight the champ.

TUF 24 Finale attendance, gate and bonuses

December 4, 2016

MMA Junkie reports The Ultimate Fighter 24 Finale attendance, gate and bonuses from Saturday night’s event at The Palms in Las Vegas.

Sara McMann, Anthony Smith, Jared Cannonier and Ian Cutelaba earned $50,000 bonuses.  McMann and Smith earned the Performance bonuses while Cannonier and Cutelaba had the Fight of the Night.

McMann submitted Alexis Davis while Smith earned a TKO victory over Elvis Mutapcic.

The event at the Palms drew 1,800 for a live gate of $143,000.

The numbers were announced post-event

Payout Perspective:

Rob Font could have earned a Performance Bonus for his stoppage of Matt Schnell.  The attendance and gate is the maximum for the venue as 1,800 for $143,000 is the usual numbers for The Palms.

Fed gives second reprimand to Goldman over UFC deal

December 2, 2016

Bloomberg reports that Goldman Sachs Group Inc. (Goldman Sachs) has been reprimanded by Federal Reserve regulators for the second time due to its debt deal to purchase the UFC for $4 billion.  Regulators consider the loans as “substandard.”

In addition to Goldman Sachs, Deutsche Bank AG, which was the lead underwriter for the junior portion of the deal also has been notified by regulators.

Goldman Sachs had appealed an earlier warning about its deal structure which included add-backs to increase the earnings before interest, taxes, depreciation and amortization (EBITDA).  The EBITDA for the UFC was placed at $170 million but then rose to an estimated $300 million when presented to debt investors to finance the sale.  The higher EBITDA allowed for WME-IMG to borrow $1.8 billion for the deal.  According to a Wall Street Journal article, future “step up payments” for future television contracts and other licensing agreements were factored into bringing the EBITDA up to $300 million.  Notably, the UFC has made it public that they will be seeking a $450 million per year television contract once its current agreement with FOX ends in 2018.

With yields for the UFC loans at 8.5%, investors were eager to purchase the debt.  The demand was so high, that the UFC lowered the interest rate on the junior debt twice the week the loans went to market.

Payout Perspective:

The concern with the sale is the “add-backs” which were factored into the profitability of the company.  If the balance sheet provides too much of a flowery outlook, investors might be led astray.  A company inflating their cash flow projections would appear to be able to take on more debt due to its liquidity.  But, if the projections are not realistic, there is the concern for a default.  Investors are looking for high yields to make money and this deal, with its yield on loans, is enticing despite the fed warnings.  We shall see with a new administration coming in January, if these type of deal structures will continue to be pursued.

TUF 24 Episode 12 draws 386,000 viewers

December 2, 2016

The 12th and final episode of TUF 24 drew 386,000 viewers on FS1 Wednesday night.  The season drew an average live viewership of just 343,000.

In the TUF final, Tim Elliott prevailed over Hiromasa Ogikubo to become The Ultimate Fighter.  While the show’s concept this season was unique, Elliott’s win was leaked months ago and TV guides listed Elliott’s name as Demetrious Johnson’s opponent before Wednesday’s episode showed the final.

episode-12

Payout Perspective:

This season did much worse than last fall’s TUF 22 which featured coaches Faber and McGregor.  Still, last fall seemed like low ratings with an average live rating of 522,000.  But, this season’s average was lower.  Even the ATT v. Blackzilians TUF season (TUF 21) drew a better season average with 393,000 over the 12-episode season.  I thought the TUF 24 fights were entertaining but whether it was the fact that people knew the ultimate result or that they are tired with the concept, live viewership is decreasing.

Show Money Episode 14 talks MMAAA

December 2, 2016

I jumped on with Paul Gift and John Nash of Bloody Elbow for Show Money Episode 14.  We mainly talk about the MMAAA and touch on Conor McGregor’s move to obtain a boxing license.

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