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.

UFC 207 Prelims on FS1 draws 1.511M viewers

January 3, 2017

The UFC 207 Prelims on Friday night drew 1.511 million viewers on FS1 per Sports TV Ratings.  It was the fourth highest PPV of 2016 and the sixth prelims telecast to go over 1 million viewers.

In addition, it drew 813,000 viewers in the adult 18-49 category.  The featured fight on the prelims was Johny Hendricks versus Neil Magny.  Magny earned a unanimous decision.

The average for 2016 was 1,097,000.  In comparison, 2015 drew an average of 1,069,000.

In addition, the pre-fight broadcast on FS1 which preceded (4:00-5:00pm PT) the UFC Prelims drew 572,000 viewers and 281,000 in the A18-49 demo.  The post-fight drew 404,000 viewers and 234,000 in the A18-49 demo.  The post-fight event went from 9:50pm-11:07pm PT.

Payout Perspective:

The ratings are very considering the prelims took place on Friday night.  The big viewership number likely reflects a big PPV buy rate.  All of the prelims except UFC 195 drew over 1 million PPV buys.  With Rousey on the PPV card, expect a buy rate over 1 million.

Complete list of UFC 207 payouts

January 1, 2017

The Nevada Athletic Commission has released the full roster of payouts from Friday night’s UFC 207.  The total reported pay for the UFC 207 was $4,683,000.

Via MMA Junkie:

Champ Amanda Nunes: $200,000 (includes $100,000 win bonus)
def. Ronda Rousey: $3 million

Champ Cody Garbrandt: $200,000
def. Dominick Cruz: $350,000

T.J. Dillashaw: $200,000 (includes $100,000 win bonus)
def. John Lineker: $43,000

 

Dong Hyun Kim: $134,000 (includes $67,000 win bonus)
def. Tarec Saffiedine: $40,000

Ray Borg: $30,600+ (includes $18,000 win bonus)
def. Louis Smolka: $37,400+

Neil Magny: $114,000* (includes $47,000 win bonus)
def. Johny Hendricks: $80,000*

Antonio Carlos Junior: $42,000 (includes $21,000 win bonus)
def. Marvin Vettori: $12,000

Alex Garcia: $36,000 (includes $18,000 win bonus)
def. Mike Pyle: $55,000

Niko Price: $24,000 (includes $12,000 win bonus)
def. Brandon Thatch: $22,000

Tim Means: $35,000 (no win bonus since fight ended in a no-contest)
vs. Alex Oliveira: $28,000 (no win bonus since fight ended in a no-contest)

As noted, by Junkie, Hendricks forfeited 20% of his purse ($20,000) for not making weight and Ray Borg forfeited 30% ($5,400) of his purse for not making weight.  The percentages were based on the amount that they were over.

Payout Perspective:

Rousey earned a bulk of the disclosed payout with her $3 million salary.  It should be noted that Oliveira may want to appeal the decision not to award a win bonus due to the failure to interpret the rules correctly.  Hendricks’ failure to make weight is another sign that he may have to recalibrate his training.  He did look better in his fight with Magny but his issues with cutting weight a a continued problem.

16 for 16: No. 1 WME-IMG purchase the UFC

December 31, 2016

The UFC was sold for approximately $4.2 billion this summer changing the face of the largest, mixed martial arts company.

Despite internal and external denials, it was clear that Zuffa was set to sell the company.  Perhaps we should have seen this coming the year prior.  Subtle changes made to the brand logo and broadcasts, making Reebok the official clothier of the company and adding a drug testing component likely solidified the company as prime for purchasing.  One of the things that appealed to the buyers was the strong brand and making investments in its brand pre-sale helped the eventual transaction.

WME-IMG made the purchase.  The deal was backed by private equity firms Silver Lake, Kohlberg Kravis Roberts and the investment firm of Michael S. Dell.  The price tag of $4 billion was surprising considering that the sport is still considered a niche.

Via our post this past July

The purchase price of $4 billion represents a 22 multiple of the UFC’s earnings before interest, taxes, depreciation and amortization.  On $600 million in gross revenue from 2015, UFC’s EBITDA is $180 million.  $180m x 22 =$3.96 billion.  The hope is that with a new media rights deal, the multiple will lower to 13-14 range which would make it a much better purchase.

The Fertitta brothers, Dana White and Flash Entertainment cashed out on their ownership interests.  White signed back on with the new owners for 5 years and 9% of the company’s net profits.  Ari Emmanuel and Patrick Whitesell are the new faces of the UFC.  They were No. 4 on a list of most influential in sports business for 2016.

The transaction was scrutinized by government regulators for its questionable buyout-loan strategy.  The Fed warned Goldman Sachs and Deutsche Bank AG, the entities that marketed the debt to investors, of abuse in inflating earnings before interest, taxes, depreciation and amortization. The EBITDA for the UFC was pegged at $170 million but then was estimated up to $300 million when presented to debt investors helping finance the sale.  The higher EBITDA allowed WME borrow $1.8 billion for the deal without running afoul of the guidelines which prevent borrowing for more than 6x a company’s EBITDA.  A WSJ article stated $48 million in expected “future step up payments to television contracts and other licensing agreements,” helped bring the EBITDA up to $300 million. Under the new owners, it is looking for $450 million per year for 10 years in next media rights deal.  This would have bolstered the anticipated EBITDA of the company.  Whether or not the UFC could garner $450 million is yet to be seen.  We’ll see if there are buyers on the market this time next year.

Regulators made a second reprimand to Goldman Sachs earlier this month.

The sale included incentives for WME-IMG which included a $175 million contingent payment upon achievement of $275 million in EBITDA (but not earlier than June 30, 2017 and $75 million payable upon achieving $350 million of LTM EBITDA (but not earlier than December 31, 2018).

A Sports Business Journal poll of its readers found 66% of the responses thought that WME-IMG overpaid for the UFC while only 3% of the responses found it underpaid.  Another 30% thought it paid the right amount.  26% of SBJ readers polled thought the UFC to be the hottest sports property of 2016.  The NBA, NFL and NCAA were ahead of the UFC (in that order).

As far as changes, the new regime is looking to institute corporate discipline in cutting costs.  The new owners trimmed staff which included consolidating overseas operations in what seems to be a focus on domestic events.  Matt Hughes and Chuck Liddell were let go by the UFC.  Perhaps indirectly, long-time PR exec Dave Sholler found a job with the Philadelphia 76ers and Joe Silva announced he was leaving the company at the end of 2016.  Also, Mike Goldberg called his final UFC fight at UFC 207. In its new media rights deal, it indicated that its partner would be in charge of production of events whereas the UFC had been in charge of it in the past.

The sale also sparked more fighters to express their discontent with the organization over pay.  With the news of the purchase price, fighters wondered their worth to the company.  The interest in organizing an association or union for the UFC came to the forefront this year as we saw a willingness by fighters to publicly state their views.  But, with an incentive to increase revenues to hit their EBITDA goals by the end of June 2017 and December 2018, the UFC will seek to cut more costs which does not bode well for fighter benefits.

2017 will be an interesting year to see how the new owners will manage the company and deal with the evolving issues that will come up.

16 for 16

2.  PFA and MMAAA seek to organize UFC fighters

3.  MMA finally legal in New York

4.  Legislation to expand Ali Act introduced

5.  UFC 200

6.  The year of Conor McGregor

7.  Bellator signings

8.  UFC pulls credentials for Helwani after breaking news

9.  Legal troubles for Jon Jones continues

10.  WSOF legal woes continues

11.  Ronda Rousey returns

12.  Alliance MMA goes public

13.  GSP declares himself a free agent

14.  Bellator 149

15.  CM Punk debuts

16.  Former Bellator employee sues company, organization sues back

UFC 207 bonus winners include Nunes, Garbrandt

December 30, 2016

Amanda Nunes, Cody Garbrandt, Dominick Cruz and Alex Garcia were the post-fight bonus winners at UFC 207.

The bonuses were announced post-fight.

Garbrandt and Cruz earned Fight of the Night for their 5-round battle.  Nunes and Garcia won Performance bonuses.  Garcia starched Mike Pyle in a vicious KO and Nunes probably ended the MMA career of Ronda Rousey with a first round stoppage.

Payout Perspective:

Hard to argue with these awards.  Certainly, the Garbrandt/Cruz fight was the best of the night while Garcia’s KO of Pyle was devastating as Pyle’s head bounced off the canvas.  And, for the second straight fight, Nunes took the soul of her opponent as she stopped Rousey.

Rousey to make $3M at UFC 207

December 30, 2016

Ronda Rousey will be making $3 million tonight as she returns to the Octagon at UFC 207.  The purse was disclosed by the Nevada Athletic Commission.

Brett Okamoto at ESPN reported a portion of the purses including the women’s bantamweight champion, Amanda Nunes.  She will be making $100,000 to show and $100,000-win bonus.  Okamoto also reports that Nunes will be receiving a PPV upside.

Rousey is not receiving a bonus if she wins.  She may also be receiving a PPV upside.

In addition, Dominick Cruz will be making $350,000 (no win bonus) in defending his bantamweight title.  Cody Garbrandt will make $200,000 (no win bonus).  T.J. Dillashaw will make $100,000 ($100,000 win bonus) and his opponent John Lineker will make $43,000 ($43,000 win bonus).

Payout Perspective:

The $3 million is ties her with Conor McGregor for the highest-reported pay for a UFC fighter. Nunes made $100,000 at UFC 200, but no win bonus guarantee.  Prior to that, she was made $28K/$28K at UFC 196.  Thus, a huge step-up in pay for Nunes this year. The $350K is the same amount Cruz made at UFC 199 when he beat Urijah Faber.  Garbrandt made $27K and $27K for his win against Takeya Mizugaki.

16 for 16: No. 3 New York finally passes law to legalize professional MMA in the state

December 30, 2016

After a long battle, the New York Assembly voted to legalize professional MMA in the state this past spring. It was signed into law by Governor Andrew Cuomo on April 14th.

Thus, on September 1st the sport became legal and regulated by the state.

Assembly votes shown in this picture.  Green is good.

After much lobbying, time and effort, the UFC opened up with the first major card at Madison Square Garden on November 12th.

Notably, the UFC 205 Countdown show included a part dedicated to showing Sheldon Silver indicted on corruption charges.  He is currently appealing his prison sentence.  It was one final shot at the individual that Dana White blamed for not allowing a vote on the bill for years.

The UFC debut did not disappoint as it enjoyed the richest gates in company history.

Not long after the initial joy of legalizing the sport, boxing promoters began to complain about the hefty tax needed to insure fighters for events.  A new insurance premium that would cover $1 million for each fighter on the card would be required for operation in New York.

In October, Promoter Lou DiBella canceled the remaining cards he was planning in the state due to the new requirement that has a $1 million minimum for each fighter in the event the fighter suffer a traumatic brain injury.  The UFC paid approximately $1,675 per fighter and approximately $44,000 overall.  It paid $40,200 for the Albany, New York show on December 9th.  This does not include the standard $50K medical and $50K accidental death insurance policies.

Of course, one has to wonder whether or not boxing lobbied against the MMA bill due to the new insurance requirement.  The new requirement does stem in part from a 2013 post-boxing incident in the state which left boxer Magomed Abdusalamov fighting for his life and a commission report found issues with the handling of the event.

New York set a tax of 8.5% on gross receipts in addition to other tax terms for MMA events.  Thus, the state collected approximately $1.5 million in taxes from UFC 205 according to the reported gate of $17.7 million.

Despite the hefty tax paid by the UFC, it reported the best merchandise sales ever for an event.

Look for the UFC to hold big events in the New York to offset the insurance and taxes it needs to pay.  Notwithstanding the cost, the final hurdle to legalize the sport in the state was a monumental hurdle the company overcame.  One might consider it a factor in the sale of the company.

16 for 16

4.  Legislation to expand Ali Act introduced

5.  UFC 200

6.  The year of Conor McGregor

7.  Bellator signings

8.  UFC pulls credentials for Helwani after breaking news

9.  Legal troubles for Jon Jones continues

10.  WSOF legal woes continues

11.  Ronda Rousey returns

12.  Alliance MMA goes public

13.  GSP declares himself a free agent

14.  Bellator 149

15.  CM Punk debuts

16.  Former Bellator employee sues company, organization sues back

Ticket demand for Rousey still there for UFC 207

December 30, 2016

The average resale price for a ticket for today’s UFC 207 is $348.  According to Nate Rattner at SeatGeek, it is nearly 3x hotter than a ticket to UFC 206 in Toronto (the average resale price was $124).

Per SeatGeek, here are the average resale prices for the top 5 UFC fights since 2010:

  • UFC 205: $1233
  • UFC 200: $1137
  • UFC 202: $929
  • UFC 194: $843
  • UFC 189: $741

In comparison, here are the prices for Ronda Rousey fights on the secondary market per SeatGeek.  Note that the last two UFC Rousey fights are not included here since SeatGeek does not track international events.

  • UFC 184: $263 (vs. Zingano at Staples Center)
  • UFC 175: $411 (vs. Davis, Weidman-Machida co-main)
  • UFC 170: $205 (vs. McMann at Mandalay Bay)
  • UFC 168: $545 (vs. Tate, Weidman-Silva II)
  • UFC 157: $186 (debut vs. Carmouche at Honda Center)

According to Rattner, the median price on the secondary market dropped 5% from $417 to $389.

In comparison, per Julia Litz at Vivid Seats, the minimum ticket price on the secondary market is $152 and the median ticket price is $525.

A look on Ticketmaster as of 8:00am PT, had scattered seats available with the get-in price being $605.

Per Kevin Iole, T-Mobile Arena will sell standing room tickets which will be the first time the arena has done it in its short history. Iole also reported on that Dana White told him that the gate looks to be about $4.5 million and roughly 19,000 in attendance.  Of course, with standing room sales, this could go up.

Payout Perspective:

The ticket sales show you that the Ronda Rousey return is a big seller despite her media blackout.  While the median price may have dipped a little on the secondary market, the news that they will sell standing room only tickets reflects the demand.  The resale market does indicate that the tickets are “affordable” for a Rousey fight.  This might be due to it being a Friday event, New Year’s Eve and not a strong co-main (although Cody-Cruz should be fun).  Still, the demand for Rousey is there for her return.

16 for 16: No. 4 Legislation to Amend Ali Act Introduced

December 29, 2016

In May 2016, Oklahoma Republican Congressman Markwayne Mullin introduced an expansion of the Muhammad Ali Boxing Reform Act to include MMA.  A Congressional Subcommittee hearing was conducted in December to discuss the issues related to mixed martial arts and how the introduced law would help fighters.

In addition to Congressman Mullin, it is co-sponsored by Democrats including Joseph P. Kennedy of Massachusetts and Mark Takano of California.  Overall, 5 Republicans and 2 Democrats have put their name to the bill.

The UFC opposes the expansion and hired a lobbying firm to influence legislators into voting down the amendment to the existing law.  Several op-eds have come out to oppose the law citing government overreach among other reasons.  It attempted to strong-arm the December hearing by indicating it would not participate if Randy Couture testified.  It backed off and Jeff Novitsky represented the UFC at the hearing.

The amendment to the Ali Act mirrors the current law with few changes but for the inclusion of combat sports.  Earlier this year, I outlined the issues with the expansion of the Ali Act which included a variety of cases where boxers sued promoters and came up with a loss.  Notably, there could have been more done with the Ali Act to ensure functionality to allow fighters an alternative to needing to file a lawsuit under the Act.

Currently, the Ali Act is in the House Education and the Workforce Subcommittee.  There is no word on whether there will be additional hearings on the subject or what the next move will be on the bill.

With the new UFC ownership and its previous relationship with the incoming administration in January I do not know how successful passage will be.  At this point, there seems to be a lot more work to do before it comes to a vote in the House.

16 for 16

5.  UFC 200

6.  The year of Conor McGregor

7.  Bellator signings

8.  UFC pulls credentials for Helwani after breaking news

9.  Legal troubles for Jon Jones continues

10.  WSOF legal woes continues

11.  Ronda Rousey returns

12.  Alliance MMA goes public

13.  GSP declares himself a free agent

14.  Bellator 149

15.  CM Punk debuts

16.  Former Bellator employee sues company, organization sues back

UFC 206 replay on Christmas Eve draw 4.72M viewer average

December 28, 2016

The final Live + SD ratings for the replay of UFC on Fox Saturday night drew 4.72 million viewers per Sports TV Ratings.

Monday TV By Numbers reported the huge ratings win for the UFC on Christmas Eve.  Only UFC 1 drew more viewers.

Payout Perspective:

Great ratings as we see a new tradition begin.  The UFC on Christmas Eve.  Another piece of good fortune with the large viewer audience was the promotion for this Friday’s UFC 207.  As many point out, cable companies have been advertising the PPV being this Saturday, not Friday.  So, at least the promotion during the 206 replay may have helped.

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