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.

McGregor issued CA boxing license, denied Nevada license

December 1, 2016

MMA Fighting reports that Conor McGregor has obtained a boxing license from the California State Athletic Commission.  However, he was not issued a boxing license in Nevada.

California State Athletic Commission executive officer Andy Foster confirmed the news that McGregor has a license.

The news comes after McGregor was stripped of the UFC Featherweight title.  Max Holloway and Anthony Pettis will vie for the interim Featherweight title with the winner likely facing Jose Aldo to unify the Featherweight title.  McGregor has not defended the title.

However, the Las Vegas Journal Review reports that McGregor was denied a boxing license in the state of Nevada.  In part, the denial is due to the outstanding fine assessed McGregor from the bottle-throwing incident at the UFC 202 press conference.  In addition, Bob Bennett, NAC Executive Director, stated that he would have to assess McGregor’s boxing ability.

Payout Perspective:

Obtaining a boxing license appears to be the next move in McGregor’s strategy to gain more leverage with the UFC.  The never-ending rumor that McGregor may fight Floyd Mayweather, Jr. with this news.  Will it happen?  I doubt it unless there are substantial monetary guarantees and legal hurdles are addressed.  From a legal standpoint, the UFC would likely step in to prevent a McGregor boxing fight from happening since he is under contract with the company.  Of course, McGregor would fight this.  But, I would suspect that the license is more of a way to annoy UFC management.

Gastelum settles with NYSAC, will fight at UFC 206

November 30, 2016

Kevin Gastelum has settled his suspension with the New York State Athletic Commission and can now compete at UFC 206 next week.

Gastelum was issued a six-month suspension due to not making weight for his scheduled fight against Donald Cerrone.  Technically, Gastelum did not stand on the scale at the weigh-ins but it was due to the fact he was not going to make it.  Gastelum paid a $2,000 fine in lieu of the suspension.

As a result, he should be cleared to fight Tim Kennedy at UFC 206 next Saturday in Toronto.  The fight was announced prior to the issue with New York being cleared.  However, the settlement should allow for Gastelum to obtain a license to fight in Ontario.

ESPN’s Brett Okamoto first reported the settlement.

Payout Perspective:

Gastelum makes out pretty well considering he’ll have to pay $2,000 in order to make his show money for UFC 206.  In his last fight at UFC 200, he made $53,000 to show and $33,000 for his win.  Thus, the $2,000 fine is not much to make the fight at UFC 206.

UFC Fight Night 101 draws 686K, prelims 654K

November 30, 2016

UFC Fight Night 101 drew 686,000 viewers on Saturday night on FS1 per Sports TV Ratings.  The prelims which preceded the main card drew 654,000.

The main card (10:00-12:56 am ET) was headlined by Robert Whittaker taking on Derek Brunson.  Whittaker won via first round stoppage.  The event drew 342,000 viewers in the adult 18-49 demo.  The 2 hour prelims (8:00-10:00pmET) drew 296,000 viewers in the adult 18-49 demo.

The ratings are somewhat surprising considering the UFC weigh-ins on FS1 Friday drew a very good 297,000 viewers which is above average for a weigh-in on the network.

Notably, the Kovalev-Ward replay on HBO drew more viewers, 834,000 (391,000 in A18-49), than during the main card.  Also, the live fight of Lomachenko-Walters drew more viewers (761,000, 347,000 A18-49) than the live UFC event.

ufc-fight-night-101

Payout Perspective:

It was the first time in a while that boxing on either HBO or Showtime drew better than a UFC event on FS1.  It was a free preview weekend for the premium cable channels which may be a reason although I am not sure if the Nielsen numbers include those not subscribed.  Still, good numbers for HBO, while the UFC event numbers were lower than the Fight Night average.  It is interesting that the main card and prelims were so close in viewership numbers.

Upheaval within PFA as Smith, Middlebrook withdraw support

November 29, 2016

Leslie Smith has written an open letter in which she states she is no longer supporting the Professional Fighters Association.  Per MMA Fighting, labor lawyer Lucas Middlebrook is also severing ties with the organization he helped found with agent Jeff Borris.

The information of a possible board of fighters was leaked to the media which appears to be the reason for the parting of ways.  Eleven names of current UFC fighters were revealed.

Smith stated that she helped compile a list of potential fighters to target for the board.  The list, according to Smith, was to be confidential but the names as well as other information about the PFA appeared in an MMA Junkie article.  She was also upset at the fact that the PFA intended to set up an agent advisory board in addition to the fighter board.

Smith wrote a letter about the situation in which she proposes the next steps in organizing MMA fighters.

Middlebrook left for the same disclosures made.  Borris does not know how the leak of information happened.

Payout Perspective:

Altruism or naivete on the part of Smith?  Smith is passionate about organizing fighters but it appears that there was a misunderstanding regarding her role with PFA.  Whether or not there was an understanding about the confidentiality of the information passed on by Smith is a question that someone at the PFA could answer.  Obviously, the Junkie article revealed a lot about PFA’s goals as well as the potential for a board.  This might be seen as showing its hand too early.  It also might be a way to gain some PR for the organization at a time when it needed to gain traction with fighters.  The concern about disclosing names for a board is that it might cause discord between the fighters and the UFC. Middlebrook leaving PFA also reflects a lack of cohesion in the organization less than 3 months into its venture.  With the anticipated announcement of another attempt to organize fighters coming up on Wednesday, PFA may lose steam even before it begins.

TUF 24 Episode 11 draws 304,000 viewers on FS1

November 29, 2016

The penultimate episode of TUF 24 drew 304,000 viewers on FS1 this past Wednesday per Sports TV Ratings.  It was the first time that the series scored over 300,000 viewers in 3 weeks.

The episode featured 2 semifinal fights which leads to the reveal of the winner of TUF 24 and faces Demetrious Johnson this Saturday.  In the first fight of the episode, Hirmasa Ogikubo defeated Alxandre Pantoja.  In the second episode Tim Elliott defeated Eric Shelton.  This sets up the final between Ogikubo and Elliott.

Per Sports TV Ratings, the event drew 155,000 viewers in the adult 18-49 demo.

episode-11 Payout Perspective:

The ratings are down from last year’s 528,000 for TUF 22 Episode 11.  The ratings are good for this season especially when you consider that the episode was on the Wednesday before Thanksgiving.

UFC looking for $450M per year for 10 years in next media rights deal

November 28, 2016

The Sports Business Journal reports that the UFC is angling to ask potential buyers for $450 million per year over 10 years in its next round of media rights fees.  The company’s current deal, which ends at the end of 2018 is for $115 million for 7 years.

The article also states that the deal will seek to have the successful bidder to produce the UFC events.  In the past, the UFC had produced its shows in-house.  One of the under-the-radar things about Zuffa was the control of the brand for the UFC which included the production of the events.  You might argue that it’s this control that gave it such a strong brand awareness which may have gone to the eventual sales price for the company.

Via Sports Business Journal:

The package the UFC will take to market will include the rights to four annual broadcast windows that Fox now holds, six annual cable events and weekly programming on Fox Sports 1, plus the UFC’s over-the-top Fight Pass service. It is not expected to include the UFC’s lucrative pay-per-view business, which will likely be retained by WME-IMG. But some media executives believe any winning bidder will have more of a say in what matches will be part of the UFC’s pay-per-view events. Whether a network will share in some of the PPV revenue is a deal point that will be negotiated, sources said.

Payout Perspective:

Despite the retraction in spending by networks such as ESPN and the lukewarm ratings for Fox events this past year, the UFC is banking on the allure that its demo of young males with disposable income and the somewhat DVR-proof live sporting event will give it leverage in the new negotiations. But will the UFC be able to broker a 75% increase over its first media rights deal.  The deal would include additional cost to the network that purchases the rights as it will need to provide production costs for the events.  However, the article indicates that the network may have more influence on what events it may have.  This might provide some incentive for potential buyers.  I am surprised that Fight Pass will likely be included in the deal as there might have been opportunity to sell those rights on its own as is contemplated by the NBA’s LA Clippers.

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