November 26, 2015
The Sports Business Journal reports (subscription required) that UFC sponsors Bud Light and Monster Energy Drink will roll out major national promotional campaigns for UFC 200 starting early 2016.
Monster Energy drink, the current sponsor of the center of the octagon, will kick off a national promotional campaign in January in approximately 45,000 retail outlets. The “Win a trip to UFC 200” promotion will be supported by digital and social campaigns as well as promoted on PPV broadcasts.
But Light, the prior sponsor of the center of the octagon, will start a “Road to UFC 200 Sweepstakes” in approximately 5,400 Circle K Stores with displays within the stores.
The promotions will run for three months and feature Ronda Rousey in their displays/materials. The Bud Light promotion will also include Conor McGregor.
The promotions make it clear that it does not promise Rousey or McGregor at UFC 200 although it’s likely that one or both will be on the card. The campaigns focus on the historical mark of UFC 200. The article notes that sponsors that use sports properties in national retail promotions like long lead times and recognizable athletes. It points out that the nature of combat sports makes this uneasy. Rousey is the prime example. Despite losing at UFC 193, she will still spearhead the campaign. No word if Holm would be a late replacement although it might be hard to do so at this late date. If McGregor were to lose in December, the campaign would start off flat as it would feature two fighters coming off losses.
November 25, 2015
With her surprise win at UFC 193, Holly Holm has usurped Ronda Rousey as the first woman of the UFC. Holm has spent the last 11 days doing the media rounds as the new UFC women’s bantamweight champion. Will she be able to be as big a star as Rousey?
The media blitz has helped with getting to know Holm. Since her stunning second round KO of Rousey, Holm has seemingly been on every media outlet talking about her victory. The UFC jumped on the Holm hype train immediately as she was everywhere after her victory. She made appearances at the Clippers-Warriors game and the Canelo-Cotto fight – two big events where the stars came out to attend and Holm was one of the brightest of them all.
Even a photo opp with Floyd Mayweather, Jr., everyone’s villain, was not questioned (remember his domestic violence issues) due to her newfound status.
In a bit of irony, Holm made an “appearance” on ABC’s “Good Morning America” to talk about her win. Well, it seemed more like b-reel but GMA devoted some time to Holm’s upset. Recall it was Rousey, who was the first UFC fighter to make an appearance on the show that caters to a big female demographic. It was Rousey that appeared on GMA this summer to announce her fight with Holm.
Additionally, Holm has been on ESPN, Fox and everywhere in between. Her most recent newsworthy, mainstream story is a Q&A for the New York Times.
It was just a few months prior Holm appeared nervous and disinterested in being at the “Go Big” press conference in September hyping the company’s cards for the rest of 2016. She was on the stage with a variety of fighters including Rousey and Conor McGregor. Now, Holm may be the second biggest star in the company to only Conor McGregor.
Does Holm’s upset help the UFC with its business? From one perspective, you can argue that the company had invested a lot in Rousey and with her wins and heir of invincibility, she was able to turn the success into a nascent movie career in addition to a number of sponsorship opportunities that most fighters would never obtain. The UFC was able to reach out to many mainstream outlets it never could since it lacked a female athlete with her ability. As a result, the UFC was able to sell PPVs and everything around Rousey was a revenue driver for the company. With her loss, the UFC loses out on the name notoriety and the momentum Rousey had with the fan base. It now has to start over with an unknown commodity.
With Holm, the UFC gets a new face and a new attitude. Holm is much different than Rousey which might appeal to a whole new base of fans that might have been turned off by Rousey. For all of her popularity, Rousey was a polarizing figure to many. For the cynic, give Holm some time and we’ll find something to not like about her too. But, so far, Holm has been a pleasant surprise.
Certainly, Holm will attain her share of sponsors although there might be a certain contingent that might wait until she fights again. Perhaps a rematch with Rousey.
The UFC has built upon the momentum of the UFC 193 upset to promote Holm. In some ways, building Rousey has set the footprint and opened doors for the UFC to pitch mainstream outlets and attract a female demo.
November 25, 2015
USADA has issued a two-year suspension to Mirko “Cro Cop” Filipovic for the use of human growth hormone prior to his canceled fight with Anthony Hamilton at UFC Fight Night 79. Cro Cop withdrew from the fight and announced his retirement from fighting prior to the news of his failed drug test.
Cro Cop is the first UFC fighter to be penalized under the UFC anti-doping policy.
USADA announced the suspension on the UFC-USADA web site. The statement indicated that Cro Cop had been tested out of competition on November 4, 2015. But, prior to the test results being revealed, he told the UFC he had been using hGH. On November 9, 2015, he admitted to USADA of using hGH.
Filipovic’s period of ineligibility began on November 9, 2015, the date he first admitted to his anti-doping policy violations to USADA. In addition, Filipovic has been disqualified from all competitive results obtained on and subsequent to October 30, 2015, the date on which he first used hGH in violation of the UFC Anti-Doping Policy, including forfeiture of any title, ranking, purse or other compensation.
The UFC issued a statement on Cro Cop’s suspension:
UFC recognizes the two-year sanction issued today to Mirko Cro Cop by the U.S. Anti-Doping Agency (USADA) for violations of the UFC Anti-Doping Policy.
UFC secured the services of USADA, a third-party agency, earlier this year to administer its Anti-Doping Policy to ensure that all athletes compete on an even playing field, free of performance enhancing drugs. UFC appreciates Cro Cop’s disclosure and admission of usage of a prohibited substance, and supports the issuance of necessary sanctions to maintain a clean sport.
Cro Cop has subsequently announced his retirement from the sport after a storied career. UFC recognizes his accomplishments in the sport of mixed martial arts and wishes him well in future endeavors.
While there is an appeal process for the disciplinary action, it appears that Cro Cop’s admission of the use would reflect that he will just take the punishment. At 41, his career comes to an end on a bad note. Then again, the issue of whether or not other commissions/organizations will honor this ruling is another question. So, if Cro Cop were to consider making a comeback, would he really have to wait 2 years based on USADA’s ruling?
November 24, 2015
The Las Vegas Review Journal reports that the Federal Trade Commission has ended its second investigation of Zuffa without any findings of wrongdoing of the company’s business practices. Although the investigation has ended, the FTC indicated that it reserved the right to investigate the company again if it saw a need.
In a letter to Zuffa from the FTC, it indicated that the closing of the investigation should not be construed that a violation may not have occurred, just as the opening of the investigation should not be construed that a violation had occurred.
UFC’s Chief Legal Officer Kirk Hendrick issued a statement on the FTC’s decision:
“Earlier this year the FTC informed us that it was conducting a non-public investigation, which we believe was instigated by former fighters or their attorneys to bolster a civil action against UFC,” Hendrick added, “After meeting with the FTC, we are pleased that they have sent us a letter stating that no further action is warranted and the investigation is now closed. We maintain full confidence in our business practices and continue to believe that the plaintiffs’ allegations are meritless.”
The letter from the FTC, obtained by the Las Vegas Review Journal is below:
The FTC investigated Zuffa after it had acquired Strikeforce in 2011. The investigation came to close with no findings in early 2012. A Freedom of Information Act request for documents from that first investigation revealed little as to their investigation.
Although the reason for the second investigation was not made public one might conclude it was due in part to the antitrust lawsuit filed by former UFC fighters.
Good news for the UFC as it is clear of the investigation. Moreover, it need not dedicate legal resources for this. The FTC indicated that it may revisit the issue but one would think it is unlikely to occur unless something comes out of the antitrust case.
November 23, 2015
The Las Vegas Review-Journal reports on the UFC and its operations as a media organization. The write-up reflects the evolution of the UFC’s production to promote itself.
The article indicates that the company has 85 full-time employees including 15 at offices overseas that are dedicated to in-house production operations.
The UFC saves 35 percent of the costs as opposed to hiring an outside production company. Even if they were to hire someone, the UFC believed that no one understood its branding and advertising.
It also talks about the “Embedded” episodes which were geared toward the 18-25 demo. Notably, it reports that the Embedded series drew 38 million viewers during fight week for UFC 193.
The Rousey-Holm video which gained wide acclaim is an example of the UFC thinking of promoting itself outside of the box. With its digital consultant, the promo was produced and the company developed a strategy for its release. Four versions of the video were made. Ellen DeGeneres released the video featuring Rousey, while Golden Boy’s Oscar de la Hoya (focusing on Holm’s boxing bacground) released the Holm version.
UFC Fight Pass is also an example of the building out of the company’s media capabilities. Recently, an original show on Fight Pass featuring Dana White debuted on the online platform. It drew 1.1 million views.
The article captures the organization’s dedication to original content and controlling its own message. The UFC’s model for promotion is similar to that of the WWE in that it controls its product closely. Thus, even though it has the ability to hire outside companies to produce content, it does it themselves. It’s also interesting note that it is becoming more creative in how it disseminates its content. Notably, the Rousey-Holm trailers were exclusively provided to Ellen (the Rousey-focused promo) and Oscar De La Hoya (Holm-focused promo). As the UFC continues to evolve its media arm, we should see more targeted promotional campaigns for its product.
November 22, 2015
MMA Junkie reports the attendance and bonuses from Saturday night’s UFC Fight Night 78 on FS1.
The event drew 10,410 fans at the Monterrey Arena in Monterrey, Mexico. No live gate was announced. The event was lower than the two other events the company held in UFC. Both UFC 180 (21,000) and UFC 188 (21,036) were held in Mexico City and PPVs.
Bonuses were given to the main event, Neil Magny and Kelvin Gastelum, for Fight of the Night. Also Andre Fili and Polo Reyes earned Performances of the Night.
Diego Sanchez/Ricardo Lamas were shut out for the $50,000 bonuses but Magny/Gastelum was a very good fight on a night of not memorable fights. Fili and Reyes were not on the 3 hour main card. The attendance at the is said to be around 17,599 so the 10,410 is low for the arena but still very good for this type of card.
November 20, 2015
UFC 193 is on track to be the second-largest PPV in company history according to Lorenzo Fertitta. In speaking with Kevin Iole of Yahoo! Sports Fertitta indicated that it was currently tracking third but would finish behind only UFC 100.
UFC 100 drew 1.6 million viewers in July 2009. Fertitta confirmed that UFC 193 sold in “excess of one million on pay-per-view.” It appears that early PPV estimates have it around 1M-1.2M buys per Dave Meltzer.
UFC 189 was originally reported at hitting 1 million PPV buys but that estimate was scaled back to 825,000. The last time that a UFC PPV hit 1 million PPV buys was UFC 168 which featured Weidman-Silva II and Tate-Rousey II (via MMA Payout Blue Book).
Ronda Rousey’s last PPV fight at UFC 190 drew 900,000 viewers.
Notably, UFC 193 Google related searches hit 9 million and was the most search topic on Saturday and Sunday. It should be noted that the search experienced a slight dip on Friday but obviously surged ahead for Saturday.
In comparison, Mayweather-Pacquiao hit about 12 million google searches the weekend of their fight this past May.
Also to consider, UFC 193 Prelims on FS1 drew 1,394,000 viewers. It was the most-watched Prelim event on FS1 with Ronda Rousey on the PPV main event.
It’s clear that if these indicators are correct, UFC will have its best PPV year to date with UFC 194 probably adding to a huge year of PPV business for the company. It shows the attraction of Ronda Rousey. One should expect that a rematch will garner big PPV numbers again. The question will be whether Holly Holm can maintain the PPV momentum of Rousey.
November 19, 2015
MMA Junkie reports that Zuffa’s Standard and Poor’s business outlook has been elevated from “negative” to “stable” based on its success in its Pay Per View business in 2015. The company’s corporate credit rating remains the same at BB negative which is below investment grade.
Standard & Poor’s Financial Services publishes financial research and analysis on stocks and bonds as well as being one of the Big Three credit-rating agencies. It issues credit ratings for the debt of public and private companies. S&P serves as a resource to investors for a key measure of its success.
In October 2014, S&P downgraded Zuffa, LLC from BB to BB-as a result of “greater EBITDA volatility.” It had maintained a “BB rating” since December 2010. It was previously downgraded in November 2007 from BB to BB-. A couple weeks later, it downgraded the business outlook from “stable” to “negative.”
In October 2014, it identified Zuffa as having $535 million in credit with $60 million in “senior secured revolving credit facility due in 2018 and a $475 million senior secured term loan due 2020” per that S&P report.
Monday’s news is a good sign that the company is recovering from its dip in 2014. While a lot of the numbers are kept under wraps and we’re forced to cobble together how much the company makes, the PPV buys have rebounded from the past couple years on the strength of the first three PPVs of 2015 as well as July’s UFC 189 and Ronda Rousey’s fights at UFC 190 and 193. Also, the international expansion and the assumed proliferation of UFC Fight Pass have provided additional revenue streams for the company. Obviously, you have to offset these gains with its expenses which include the new anti-doping policy implemented with the help of USADA and three big legal battles it is currently involved in (the UFC antitrust lawsuit in Nevada, the appeal of the November 2011 lawsuit against New York and the new lawsuit against the state of New York filed this past September seeking a preliminary injunction to hold an event in New York in April).
Also, on the same day that this news came out, Bloody Elbow unveiled its third installment of its deep dive into UFC finances.
November 19, 2015
In light of the Holly Holm victory over Ronda Rousey on Saturday, one of Holm’s sponsors, Intel Pharma wished her congratulations. The company sells supplements containing substances banned by the World Anti-Doping Agency and federal law.
According to MMA Junkie, the company has offered products it claims contain prohormones and a steroid alternative known as Selective Androgen Receptor Modulators (SARMS). It appears on the WADA banned substance list.Anti-doping experts have sounded off against this business relationship as not looking good for the new champion. Holm’s manager, Lenny Fresquez, indicated that they were aware that the company sold products containing banned substance prior to signing the sponsorship deal. “Holly didn’t really use them so it’s not a big deal,” Fresquez told USA Today, “I’m sure she didn’t use any of them. She might have taken a picture with one.”
Fresquez indicated that the sponsorship deal was for just one-fight and they have not decided whether to extend the deal.
Intel Pharma CEO, Landon Suggs, stated that his company stopped producing and selling products with SARMs “no later than June” before the sponsorship deal with Holm. Suggs stated that it issued a recall for the products as well.
The company also updated its Facebook page on November 17th congratulating Holm. It had not updated the page since October 9th.
We, at Intel-Pharma, wanted to create an innovative supplement company that customers could trust to provide the best products and personal service in the industry. As a new company we have learned hard lessons along the way, but those same lessons have reinforced our initial stated mission, which is to be the most innovative sports supplement brand on the market. Long before UFC 193 was announced we were interested in partnering with Holly Holm’s to be one of our featured athletes because she shares our values of faith, family and hard work. That hard work is what was on display Saturday in Melbourne, Australia. There is no other “secret” to Holly’s success other than that hard work, along with an incredible team of coaches, sparring partners, family support, and just plain crazy athleticism. As unbelievable as it may have seemed to the greater population at large, Holly’s success was not a shock to those of us who knew of her talent long before Saturday. And we couldn’t be more thrilled for her that the world now knows what we always believed.
One would think that Holm will not continue the relationship with Intel Pharma since winning the women’s title from Rousey. Certainly, her win should open up more doors for sponsor opportunities. Also, the price for her name probably went up with the win. Her accomplishment should not be sullied by this association despite how innocuous it might be. The fact is that the company is associated with banned substances that Holm, as champion, should not be associated with even if Holm never took the product.
November 17, 2015
The UFC 193 Prelims drew its second best rating this year averaging 1,394,000 viewers on FS1 Saturday night per Sports TV Ratings. In addition, the pre-show and post-fight show on FS1 drew big ratings.
The UFC pre-fight show from 4:35pm-5:00pm PT drew 576,000 viewers on FS1. It was the second-highest pre-fight show rating on FS1. The post-fight show started late on FS1 due to a double OT Pac 12 game. Still, it pulled off the highest rating for a post-fight show on FS1 with 490,000 viewers.
UFC Prelim ratings when Ronda Rousey is in main event
UFC 157 – 1,267,000
UFC 170 – 936,000
UFC 168 – 1,500,000* (co-main with Chris Weidman)
UFC 175 – 1,000,000* (co-main with Chris Weidman)
UFC 184 – 1,205,000
UFC 190 – 1,322,000
UFC 193 – 1,394,000
The UFC Prelim average for 2015 thus far is 998,000 viewers. Notably, if you were to take out the 3 PPVs in which Rousey fought, it would drop down to 885,000 viewers.
UPDATED: The UFC 193 prelims drew 885,000 viewers in the Adult 18-49 demographic, the most-ever for a UFC Prelim on the network. The prelims peaked at 1,776,000 viewers in the last quarter hour (6:30pm-6:45pm PT)
The UFC 193 weigh-ins drew 161,000 viewers per Sports TV Ratings.
The post-fight show also did well although I am trying to confirm the viewership rating. Will keep you updated.
The post-fight show’s ratings were high due to the news of the upset. Still, the overrun by the college football game may have detracted more viewers from tuning in. The post-fight show did start on FS2.
One can probably deduce that the reason for the strong ratings are due to Ronda Rousey being in the main event of the PPV. In fact, televised UFC Prelims in which Rousey has been in the main event have drawn an average of 1.225M viewers (not counting UFC 168 and 175). Including the events where she was the co-main event with Chris Weidman it goes up slightly to 1.232M viewers. Notably, only once has a PPV prelim drawn less than 1 million viewers.
It’s clear that Ronda Rousey is a huge draw for the UFC. Even on televised UFC Prelims where she is not fighting, the ratings go up. It will be interesting to see if Holly Holm will be able to draw this much attention.