Report: ESPN to pay for additional UFC media rights valuing overall deal at $1.5 Billion

May 22, 2018

Variety reports that ESPN has added additional events to its agreement with the UFC which now values the overall deal at $1.5 billion over the course of the multi-year pact.

The latest news all but ensures that Fox, which secured the rights to WWE’s Smackdown on Monday, is done with the UFC after its 7 year runs at the end of 2018.

According to the Variety report, the deal adds 15 more fights to the existing deal for a total of “30 fights” covered under the overall deal.  Presumably, when they mean fights, it refers to events rather than just an individual fight on the card.

In April, the UFC and ESPN+ reached a deal for the promotion’s digital rights for $750 million.  This deal, which seemingly worked in lockstep to the WWE deal announced Monday, is for events on ESPN’s linear channels and ESPN+.  The UFC will still have PPV and its Fight Pass streaming service.

Payout Perspective:

The new report indicates another $750 million for the remaining media rights of the UFC.  The $1.5 billion figure over a 5-year period means the UFC will receive approximately $300 million a year over the course of the accord.  This is a very good deal for the UFC when you consider that they were being offered $175-$200 million for media rights (although its not clear if that included digital rights).  While it might not be as robust as the WWE’s latest deal which has them receiving money from NBCUniversal and Fox, it is a grand improvement on their last deal with Fox.

UFC Fight Night 120 draws 870,000 viewers on FS1; Prelims on FS2 draw 254,000

May 22, 2018

UFC Fight Night 129 drew 870,000 viewers on Saturday night on FS1 according to Nielsen via ShowBuzz Daily.  The prelims which aired on FS2 drew 254,000 viewers.

The event, which featured Demian Maia taking on Kamaru Usman.  Usman pulled out the 5-round victory over Maia as he was able to neutralize Maia’s ground game.  The main card drew a 0.31 in the A18-49 demo.

The prelims drew 254,000 viewers and a 0.07 in the A18-49 demo.

The post-fight on FS1 drew 256,000 viewers and 0.11 in the A18-49 demo.

Payout Perspective:

The event did well considering there was no compelling name on this card and was opposite Showtime Boxing and the NBA Playoffs featuring Cleveland and Boston.  The game was a blowout in favor of the Cavs so that may have helped.  The prelims were shuffled due to scheduling conflicts which did not help its viewership.  Overall, 870,000 is a good number for this event since it was another International card with a lot of fighters that are unknown to many in the US.

Werdum flagged by USADA for anti-doping violation

May 22, 2018

The UFC announced on Tuesday that Fabricio Werdum has been notified of a potential anti-doping violation by USADA.  The flagged test is from an out-of-competition test taken on April 25th.

Werdum’s last fight was a knockout loss to Alexander Volkov at UFC Fight Night 127.  Werdum took to social media to proclaim his innocence stating that he’s always been careful with everything he takes.

Werdum’s flagged test comes just a day after he was announced to fight in the UFC’s debut in Moscow this September at UFC Fight Night 136.  With the adjudication process for USADA, it’s unlikely he will be cleared in time.

Payout Perspective:

Werdum’s claim that there was some error in the testing and that he’s always been careful brings into question how much fighter’s detail what types of supplements they are taking and where they are from.  The two-year penalty for the 40-year-old Werdum might spell the end of his career.

Dana White to make an appearance on Twitch live stream Tuesday

May 21, 2018

Dana White will be appearing on Twitch with Daniel Cormier, Matt Serra, Michael Bisping and Chris Weidman on Tuesday night at 6:30pm PT.  White will host an EA Sports UFC session with YouTube Influencer KSI.

They will be playing EA Sports UFC 3 on Twitch live stream.  Select fans will be able to join the live stream via their Playstation 4 during the event.

Payout Perspective:

The event will be an interactive event on Twitch.  It’s a foray into the world of esports and it will be interesting to see how many people will tune in.  The event is promoting the video game which has not seen robust sales yet in a time where everyone is turning to esports/video games as a source of promoting the league brand and revenue, the UFC’s move was anticipated.

Report: Fox pays 5 year, $1 Billion Dollars for WWE’s Smackdown

May 21, 2018

Fox and WWE are close to a 5-year $1 Billion Deal for the ‘Smackdown Live’ show currently airing Tuesday night’s on NBC Universal-owned USA Network.  The deal may have ramifications with the future of the UFC’s TV deal.

First reported by ESPN’s Darren Rovell and the details provided by a report on The Hollywood Reporter, the deal is close to being complete and would pay the WWE $205 million annually and is expected to begin in October 2019.  It is 3 times what NBCUnversal currently pays to air the two-hour weekly show on the USA network.

Unlike its last television rights deal, there seems to be more of an appetite for the company’s content as The Hollywood Reporter notes that there is an even higher bid from a third party.  But, the WWE chose Fox as it will commit to promoting Smackdown in its sports portfolio which includes MLB and NFL.

The WWE’s anchor show, Raw, will remain with NBCUniversal’s USA Network.

During the upfront presentation to advertisers last week, the WWE introduced Ronda Rousey which was likely spurred interest in the package.

NBCUniversal has had SmackDown since 2010 and reportedly paid $30 million for the franchise.

As a result of the news, WWE stock has jumped up to $57.87 as of 4:01pm EDT, up almost 12.5%, which is outstanding as it trades near its 52 week high.

Payout Perspective:

Rousey is currently on the Raw brand although it’s clear she’ll likely switch to SmackDown to be on Fox starting in October.  The deal likely has some impact on whether the UFC renews with Fox.  While it has forged a digital package with ESPN’s new OTT platform, the TV deal still remains up in the air.  If Fox is willing to spend $205 million annually for the WWE, will it still open up its bank account for the UFC?  The likely play is that the programming is similar and the UFC will now look elsewhere and perhaps the unnamed highest bidder that the WWE has turned down.

UFC Fight Night 129 attendance and bonuses

May 20, 2018

UFC Fight Night 129 from Chile took place on Saturday.  UFC executive Dave Shaw announced the bonus winners and attendance.

Gabriel Benitez, Claudio Puelles, Andrea Lee and Veronica Macedo earned the $50,000 fight bonuses.  Benitez and Puelles earned Performance of the Night while Lee and Macedo earned the Fight of the Night.

The event, its first in Chile, took place at Movistar Arena in Santiago Chile.  It drew 11,082 fans.  No gate was announced.

Payout Perspective:

The attendance is very good for a new market for the UFC.  It is second to only London’s UFC Fight Night 127 this year in terms of attendance.  Aside from the main event, the fights on Saturday were good.

UFC 224: Payout Perspective

May 16, 2018

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 224 in Rio de Janeiro Brazil.

Nunes defeats Pennington

In reality, we all knew this was a mismatch on paper and it played out.  There was nothing much Pennington had to worry Nunes.  The challenger’s nose was busted open and she did not want to go into the 5th round although her corner talked her into it.  But, Pennington,  did not make it out of the 5th as Nunes stopped her in the last round.  There is a lot of controversy regarding whether Pennington’s corner should have let her go another round although she wanted to quit.  A fighter’s safety is paramount, but there is also the unfortunate stigma of quitting.  Also, this fight almost forecloses Pennington from another title shot even if she were to go on a successful winning streak.

Gastelum takes fight from Jacare

Somewhat of a surprise that Kelvin Gastelum was able to take a split decision victory over Jacare Souza in Brazil.  It was an entertaining bout and Gastelum’s standup is great to watch.  Jacare tired dramatically after the first round and Gastelum took advantage.  He should be the next in line to fight for the middleweight title with Romero and Whittaker fighting next month.

Attendance and Bonuses

The event drew 10,696 at the Jeunesse Arena in Rio de Janeiro, Brazil.  The event was the lowest attended since UFC 142 which saw a Aldo-Mendes main event.  The bonuses went to Gastelum-Jacare for Fight of the Night and Lyoto Machida and Oleksiy Oliynyk with Performance Bonuses.

The event drew 10,696 at the Jeunesse Arena in Rio de Janeiro, Brazil.  It was the second-lowest attended PPV card this year.  As is common with Brazilian cards, no gate was announced.

Promotion of the Fight

There were 7 UFC Embeddeds this time around although none of them were all compelling.

The Embedded Episodes were sponsored by the upcoming science fiction movie, Hotel Artemis which includes former WWE superstar and one-time MMA competitor Dave Bautista.

Sponsors

Since this was Brazil, there were a new set of sponsors for this event.  This included Brazilian beer Cerpa Export, in the center of the octagon.  Grupo Souza Lima, a human resources company in Brazil was also in the octagon.  Gruntstyle.com had a spot on the mats which was a first.  Hotel Artemis was also in the Octagon. Also, the Volkswagen Amarok had a corner in the Octagon as well as the Amarok V6 on the mats.

Ratings

  • The UFC 224 Prelims on FX drew 574,000 viewers according to Nielsen via ShowBuzz Daily. The telecast drew 0.21 in the A18-49 demo and 0.29 in the M18-49 demo.
  • The Prefight Show on FX drew 281,000 viewers and the Post-Fight Show on FS1 drew 218,000 viewers.  The Prefight show trended lower than the prior 3 PPVs while the Post-Fight show drew higher than the last 3.

Odds and Ends

It was the first time two openly gay fighters fought for a championship in MMA.  While this fact may have gone under the radar, it’s definitely a positive in the sport for a variety of reasons.

Mackenzie Dern missing weight by 7 pounds is a bad look for Dern and her prospects of being what the UFC wants her to be.  Fortunately, there is a 125-pound women’s division that she can move up to which we assume she will after this fight.

Brett Okamoto reported that UFC 224 staff were robbed at gunpoint in Brazil outside their hotel.  It does not appear any significant injuries as we haven’t heard anything else from the incident.

Maybe the best example of marketing occurred on the Lomachenko-Linares undercard with Teofimo Lopez during the L dance from the video game Fortnite.

Conclusion

It was a very good night of fights for the UFC, but it doesn’t look like this would be an event that will draw too many buys.  It was a heavy night of combat sports with Bellator, Top Rank on ESPN and HBO Boxing After Dark. With so many choices, its hard to suggest that this event did anything more than 250,000 buys.

UFC set to debut in Moscow this September

May 16, 2018

The UFC announced that it will hold its first event in Russia on September 15th.   UFC Fight Night Moscow will take place at the Olimpiyskiy Arena in Moscow.

Via UFC press release:

UFC has experienced a sharp rise in popularity in Russia over the past few years, with a fan base that has grown to more than 22 million, driven by the success local athletes have had in UFC. In just the past few months, Khabib Nurmagomedov captured the lightweight championship; heavyweight Alexander Volkov defeated legend of the sport and former UFC heavyweight champion Fabricio Werdum; and rising featherweight Zabit Magomedsharipov extended his overall record to 15-1, including a three-fight win streak in UFC.

“Russia is a key part of UFC’s international expansion strategy,” commented David Shaw, Senior Vice President, UFC International and Content. “The demand from our fans to bring a live event to Russia has been overwhelming, and with the vast potential this market holds for us, we knew this was the perfect time to bring UFC FIGHT NIGHT® to Moscow.”

As part of UFC’s commitment to the market, Andre Gromkovski has been appointed as Vice President, UFC Russia. Gromkovski brings with him expertise across the media sales, digital, marketing and content distribution landscapes, working with companies such as Universal Studios, FOX, Viacom and Paramount Pictures. Based in Moscow, Gromkovski will be leading the regional strategic plan for UFC Russia, working alongside UFC’s executive team in Las Vegas and the EMEA team based in London.

Payout Perspective:

This will be a major event as the UFC opens in a new market.  One would have to think that Khabib will be in the main event.  Also, Volkov and Zabit (since his fight with Yair Rodriguez fell through).  Although not a PPV, it will be one of the bigger events of the year for the company to test how strong the UFC is in a new region.

UFC 224 Prelims draw 574,000 viewers on FX

May 15, 2018

The UFC 224 Prelims on FX drew 574,000 viewers according to Nielsen via ShowBuzz Daily.

The Prelims were shifted to FX due to scheduling conflicts on both FS1 and FS2.

The telecast drew 0.21 in the A18-49 demo and 0.29 in the M18-49 demo.

The last time the UFC Prelims appeared on FX, it drew 653,000 viewers.  The Prelims for UFC 224 were highlighted by Cezar Ferreira’s submission of Karl Roberson.

The Prefight Show on FX drew 281,000 viewers and the Post-Fight Show on FS1 drew 218,000 viewers.  The Prefight show trended lower than the prior 3 PPVs while the Post-Fight show drew higher than the last 3.

Payout Perspective:

The Prelim ratings on FX are disappointing but on a night with a variety of combat sports (Bellator, ESPN Boxing and HBO BAD), the move to another channel may have confused some viewers.  Notably, the Post-Fight Show drew higher ratings once UFC programming returned to FS1.

How will SCOTUS ruling on sports gambling affect MMA?

May 14, 2018

The United States Supreme Court struck down the federal law banning sports gambling.  As a result, states can now legalize sports betting.  The ruling will certainly affect the sport of MMA.

As of Monday, New Jersey plans to be the first state to offer legal sports betting based upon the new ruling.  Delaware, Mississippi, New York, Pennsylvania and West Virginia are also expected to make it legal in quick order.

Prior to the ruling, Nevada had been the only state allowed to offer sports betting.  Oregon, Delaware and Montana maintained sport lotteries.

The major sports leagues: the NFL, NBA NHL and Major League Baseball as well as the NCAA supported the federal law but were ruled against by the highest court.

The most salient point of today’s Court ruling: “Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own.”  This statement affirms the belief that states are free to regulate if federal law does not conflict.  The Court believed the federal law in place regulated sports gambling.

Sports leagues such as the NBA and MLB are looking for “integrity fees” which would be a way to profit from the new opportunity.

For those wondering, the UFC has spoken favorably about legalization.  It may seem evident that the previous UFC owners, the Fertitta brothers, would be partial to sports gambling since their money came from the casino industry.  But, under questioning from New Jersey’s lawmaker Frank Pallone (operating on his own agenda) last December, the UFC’s Vice President of Regulatory Affairs Marc Ratner supported sports gaming.  Although he did not speak for the UFC, he indicated that the company had the infrastructure to deal with any issues with respect to match-fixing based on gambling.

Pallone first asked whether UFC was bet on in other parts of the world. Ratner stated, “I know offshore there’s betting everywhere. In Nevada, all our fights are put on the board, you can bet on the first fight through the last..Personally, not for the UFC, I am in favor of sports betting around the world, around the country especially.” He also asked about how the UFC preserves the integrity of the sport with the knowledge that gambling is ongoing.  He also asked whether gambling has helped with fan engagement to which Ratner stated it did.

We will see how states will deal with sports gambling and the impact it will have in MMA.

Payout Perspective:

Notably, PFL undertook a uniform policy but one of the bans on sponsors was that of gambling sites.  The sponsors have already been turned into the promotion so for some fighters they cannot take advantage of a potential market.  However, other leagues where fighters solicit sponsors might see an uptick.

It is still too early to see how state-sponsored gambling may impact MMA.  Daily Fantasy Sports for MMA came and went as the industry did not seem to stick with the sport of MMA.  But, the potential ease and accessibility of gambling will likely build for years to come.  With many regional MMA cards happening at tribal casinos, you can envision the venues building sportsbooks so you can make bets prior to going in and watching the fights.  This represents the good and bad of the potential future for MMA and sports gambling as the concern over the social issues (i.e., addiction) and integrity will be something to monitor.

There will be an influx of sponsors coming into the market for both fighters and leagues.  Pun intended, but you can bet on gambling being a part of the MMA landscape in the future with the potential revenue that may come from this ruling.

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