UFC and Fathom Events to show more PPVs in movie theaters

November 21, 2014

The UFC and Fathom Events are teaming up once again to show UFC’s PPVs in movie theaters.  A joint press release announced that UFC 181 will be the latest to be shown in theaters with additional PPV events in 2015 to be jointly shown via PPV and also in nearly 500 select movie theaters across the U.S.

UFC 182: Jones vs. Cormier, UFC 183: Silva vs. Diaz and UFC 184:  Weidman vs. Belfort will also appear in local theaters.  The latest PPVs to movie theaters were announced at the UFC’s #TheTimeisNow launch.

Promo poster at Bellevue, WA theater

Promo poster at Bellevue, WA theater

It appears that the move, which restarted with UFC 180, will be a constant throughout the first two months of 2015.

Payout Perspective:

Here, there are at least 6 movie theaters within the Seattle area that will be showing it. Tickets are $15.  The latest move appears to be a way for eyes to see its events and also an attempt to garner some additional revenue from sagging PPV buy rates.  Based on the latest S&P move to downgrade Zuffa’s outlook to negative, it looks like the UFC is trying to turn around its financial outlook any way it can in the first quarter of 2015 to avoid another credit downgrade.  It would seem that putting the PPVs in theaters siphons away potential PPV buyers.  Then again, with the downward trend in UFC PPVs, this is an option for fans on the fence of buying an event.

TUF 20 Episode 9: 381,000 viewers

November 20, 2014

MMA Payout has learned via a Nielsen source that Wednesday night’s 9th episode of TUF 20 drew a rating of 381,000 viewers. The rating represents the lowest-rated episode of the season.

In the fight of the episode, Randa Markos defeated Felice Herrig via armbar.

TUF 20 Episode 9

Last season’s TUF 19 had two episodes below 400Kviewers.  Wednesday night’s episode represents a new low.

UPDATED:  According to Nielsen source, the late night replay airing 10pm/1am drew an additional 122,000 viewers for the episode.

Payout Perspective:

The actual show started 8 or so minutes late as there was overrun from college basketball (Oklahoma-Creighton).  It was the coach’s challenge episode which usually is very entertaining.  This time around was not as good since the UFC decided to hold off on a physical challenge due to Anthony Pettis’ knee injury.  The episode was the lowest of the season and brought down the season average to 509,000 viewers.

Standard & Poor’s revises Zuffa outlook to negative

November 20, 2014

The Standard & Poor’s Ratings Service has revised Zuffa, LLC’s financial outlook to negative from stable on weaker operating performance.  It has indicated that it anticipates a 40% decline in EBITDA in 2014 and credit measures will weaken due to the decline.

In a press release disseminated by S&P, it stated that the negative rating reflects its “belief that Zuffa’s operating performance will deteriorate significantly in 2014, resulting in very weak leverage in the high-5x area.”

In addition to the change to the negative outlook it is affirming its “BB-“corporate credit rating.  The “BB-“ credit rating was assessed last month.  The concern for Zuffa is that a negative outlook may mean that S&P may lower Zuffa’s “BB-“ rating.

More from the press release:

“The negative outlook revision reflects our updated forecast for 2014 EBITDA to decline approximately 40% (compared to a decline of 30% previously), primarily due to a change to a marquee fight card in the fourth quarter of 2014 as a result of another fighter injury causing anticipated pay per view (PPV)  buys and event ticket prices to decline further, as well as higher remarketing expenses for the event, and additional costs related to the company’s international expansion,” said Standard & Poor’s credit analyst Stephen Pagano.

S&P now expects Zuffa’s cash flow/debt leverage to increase to the “high-5x area at the end of 2014.”  In its October 2014 report, it had predicted Zuffa to be in the 3 range.  The cash flow/leverage is based on a scale of 1-6 with 1 being minimally leveraged to 6 being highly leveraged.  Zuffa is now pegged as 5 whereas S&P had forecasted it being a 3.

Payout Perspective:

Obvious bad news for Zuffa as the change in outlook is based on Cain Velasquez’s injury forcing him to drop out of UFC 180.  It ties in directly to the assumption that the PPV buy rate will be low once again – an issue that Dana White recently acknowledged.  What the change in outlook to negative means is that it will increase the cost of borrowing by Zuffa.  As the company falls deeper into debt, its ability to obtain credit will get harder.  The forecast painted by S&P reflects the fact that it no longer believes that the company will be able to turn it around this year or next to address its debt obligations.

With the new lower, negative outlook on its debt, Zuffa will have a lot of pressure to forge new television pacts overseas and push the profitability of Fight Pass.  We may also see initiatives like a formal drug testing policy put off if costs are too high.  We will also see if Zuffa attempts to address the issue of fighter injuries which causes the instability and uncertainty of events.

MMA Payout will keep you posted.

TUF 20 Episode 8 numbers up to 840,000 viewers

November 19, 2014

MMA Payout has learned from a Nielsen source that last week’s TUF 20 episode 8 drew an additional 262,00 viewers in Live +3 ratings.  Episode 8 total viewership including adjusted average is now at 840,000 viewers.

TUF 20 Episode 8 DVR

Payout Perspective:

The average viewership after the adjusted ratings is at 812,000 viewers. After the 8th episode, the average boost in viewers from the Live rating to the DVR rating is down slightly at 287,000.

WSOF 15: 161,000 viewers

November 19, 2014

MMA Payout has learned from a Nielsen source that the World Series of Fighting 15 Saturday night on drew 179,000 viewers on NBC Sports Network up against stiff competition from both the UFC and Bellator.

The main event featured David Branch defeating Yushin Okami via TKO.  In the semi-main event, Justin Gaethje defeated Melvin Guillard via split decision.

WSOF 15

Payout Perspective:

Once again a WSOF event occurs on the same day as another event by a major MMA organization.  On Saturday, it went up against Bellator and the UFC.  The 179,000 viewers is the lowest WSOF rating since WSOF 7 (which drew just 94,000 on tape delay), yet fair considering that both Bellator and UFC had fights on during its event.  The previous low was WSOF 6 which drew just 161,000 viewers.

UFC 180 Prelims: 624,000 viewers

November 19, 2014

MMA Payout has learned form a Nielsen source that the UFC 180 Prelims on FS1 Saturday drew an average of 624,000 viewers for its two hour show between 8:00-10:00pm (5:00-7:00pm).

The prelims on Saturday peaked in the 9:45-10pm quarter hour (6:45-7pm west coast) with 771,000 total viewers (Live + SD) according to Nielsen.

UFC 180 Prelims ratings

UFC PPV Prelims since August 2013 (FS1 unless specified)

UFC 164                             809,000

UFC 165                             722,000

UFC 166                             628,000

UFC 167                             998,000

UFC 168                          1,554,000

UFC 169                             933,000

UFC 170                             936,000

UFC 171                             305,000 (FS2)

UFC 172                             750,000

UFC 173                             697,000

UFC 174                             784,000 (FX)

UFC 175                             1,000,000

UFC 177                             436,000

UFC 178                             698,000

UFC 179                             536,000

UFC 180                           624,000

Payout Perspective:

The UFC Prelims provided some very good action but a lot of names we did not know and thus it was one of the reasons it likely fell to Bellator.  The prelims did feature the Fight of the Night as well as a submission and an ear almost falling off (Leslie Smith).  UFC 180 did improve upon prelim rating for UFC 179.  The current average of UFC Prelims for 2014 is at 699,000.

UFC does not produce at “The Time is Now”

November 17, 2014

The UFC hyped up a big announcement for Monday afternoon.  However, the news came as a disappointment to most as the UFC released its 2015 calendar with Dana White making a subtle reference that the big announcement did not get done in time.

It was disappointing that there was no follow up (at least from when I was listening) on what that announcement would have been.  Instead, we were treated to a general press conference with many of the fighters that will be in upcoming fights on the stage.

One had to think there was going to be more as Ronda Rousey took over the E! Network’s Instagram account to promote the event.


The list of UFC events for 2015 is below:

2015-ufc-schedule

In the end, most of the press conference shed little light on anything new although there were several entertaining moments.  Most of those included Conor McGregor or Nick Diaz.

Payout Perspective:

One has to think that there was more than just a general schedule announcement today but White spoke the truth when he stated it (whatever “it” was) didn’t happen in time for the press conference.  Why would Ronda Rousey take over the Instagram account for the E! Network if it was just announcing a schedule? The UFC is not the NFL. Further, Bellator jumped the UFC with its announcement of its 2015 first quarter of events with its Saturday announcement. We did get an online press conference. But, in the end, the UFC failed to deliver.  

UFC 180: Payout Perspective

November 17, 2014

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 180 from the Mexico City Arena in Mexico City.

Werdum wins interim Heavyweight title

It was to be Cain Velasquez fighting in Mexico City against Fabricio Werdum.  However, an injury to Cain allowed Mark Hunt the chance to step in and seize the title.  Hunt looked good until a well-timed knee spelled the beginning of the end for Hunt.

Werdum wins the title and will eventually get to face Cain Velasquez to unify the titles.

UFC 180

Gastelum ascends while Ellenberger descends

Kelvin Gastelum defeated Jake Ellenberger with a rear naked choke in the first round.  The win should propel the former TUF winner into the top 10 of the welterweight division while it showed the Ellenberger maybe a broken fighter.  Gastelum secured a rear-naked choke with ease as it appeared that Ellenberger did not defend his neck despite his back being taken.  The win should mean a step up in fights for Gastelum while Ellenberger is teetering on the cusp of being cut.

Attendance

Initial reports in August had UFC 180 a sell out in just 8 hours after the announcement of Velasquez-Werdum and the launch of TUF in Mexico (which drew 7 million viewers on Televisia according to Yahoo! Sports).  The announcement made post-fight had the attendance at 21,000 although no official gate was given.

Bonuses

The bonuses of $50K were given to Werdum, Gastelum, Henry Biones and Guido Cannetti.  Briones and Canetti put on the Fight of the Night.  White indicated that Ricardo Lamas would also be given a bonus although that was unofficial.

Promotion of Fight

Once again one of the main drivers of the promotion was the UFC Embedded series which followed the fighters on the main card.  It caught the best moment of the pre-fight hype with Werdum-Hunt singing together.

The UFC also did a photo op with the NBA as the Houston Rockets and Minnesota Timberwolves played a game in Mexico City earlier in the week.

The UFC and Fathom Events put the event on movie screens across the country hoping that the event would gain more eyes.  Unfortunately, if we look at the tweet from Mike Bohn, it did not.

Sponsorships

The Octagon sponsors were without UltimatePoker.com, the Stations Casinos online poker site which was closed down last week.  Notably, one of the Octagon sponsors for UFC 180 was Costa Rican online gaming company, BetCris.  The sponsors included the UFC Network, UFCStore.com, UFC Fit, MateFit.me, MusclePharm, Toyo Tires, video game FarCry 4, the aforementioned BetCris and Bud Lite in the center of the Octagon.

Gastelum wore the UFC Network logo as did Werdum during pre-fight activities and but wore Bad Boy to the Octagon.

Hunt wore his own clothing brand Juggernaut on his shorts.  It’s interesting that Hunt does not have more sponsors.  You may recall he had zero as a fill-in when he fought Junior dos Santos at UFC 160.  Werdum most prominent sponsor was clothing brand Torque.

Doritos was a prominent sponsor for this event as it banked heavily on the Werdum-Velasquez matchup including producing in-store placement of 2.5 million bags with the fighter likenesses on them.  It was described as a “360 degree activation” around UFC 180.  With Cain falling out, the campaign likely fell short of its goal.

Post-UFC 180 Headline

Werdum-Velasquez should be next although White indicated that if Cain were to have another injury that forces him from action, he could be stripped of the title.

Odds and Ends

  • The WWE collaborated with the UFC during the UFC Prelims on FS1. To be exact, a 2K Sports commercial for the WWE video game, WWE2K15, infused images of the video game and UFC action.
  • The main event ended at 8:50 pm on the west coast. Only about an hour and a half of fights before the UFC showed the prelims to fill the time.
  • Bellator used the footage of Melvin Manhoef knocking out Mark Hunt from 2008 during its pre-fight hype package to put over Manhoef.
  • Jessica Eye almost took Leslie Smith’s ear off but Smith still wanted to fight.
  • Google Trends revealed that the top countries searching for UFC 180 were Mexico, Canada, Brazil and the United States in that order.
  • The Sports Business Journal (subscription required) ran a story on the Fertittas and Dana White and their ties to Las Vegas’ Bishop Gorman High School in last week’s Sports Business Journal. It was placed “below the fold.”  Prominent placement for a rather evergreen story during UFC 180 week.
  • Chael Sonnen began his duties with ESPN as an analyst.

Conclusion

It was a good night of fights but the lack of brand-name power was one of the detracting factors about this event.  When the Werdum-Velasquez fight was initially announced and the two were TUF coaches, there was much hope that UFC 180 would be one of the bigger PPVs of this year.  Entering a new market and the quick sell out appeared to be good signs for the PPV.  But, Velasquez’s injury was a significant blow to any hopes that this PPV would do well.  Without a good undercard, the UFC was placing its hopes on Cain’s drawing power.  Based on Google Trends, we are looking at a buy rate comparable to UFC 174 or 177 which drew between115-125K PPV buys.

UFC 180 attendance and bonuses

November 16, 2014

MMA Junkie reports the attendance and bonuses for UFC 180 from Mexico City.  Fabricio Werdum led the bonus winners for the night.

Dana White announced attendance at 21,000 at the post-fight press conference.  No official gate was announced although White indicated that it was the “highest gross in arena history.”

The $50,000 bonus winners announced at the post-fight press conference were Fabricio Werdum, Kelvin Gastelum, Henry Briones and Guido Cannetti.  Werdum and Gastelum earned the performances of the night and Briones and Cannetti earned fight of the night.  In addition, White stated that Ricardo Lamas would also receive a bonus for his submission victory over Dennis Bermudez.

Payout Perspective:

The top two fights on the card produced the bonus winners last night.  Werdum’s knee spelled the beginning of the end for Mark Hunt and Gastelum secured a rear-naked choke over the seemingly broken Jake Ellenberger.  The Briones-Cannetti fight was also an entertaining fight and Briones won with an uppercut that downed Cannetti which eventually led to a RNC.

Ultimate Poker closes due to lack of profitability

November 15, 2014

The Las Vegas Review-Journal reports that the Fertittas have closed down Ultimate Gaming and thereby shutter Ultimate Poker.  After 19 months, the company indicated lack of profitability for closing down its business operations.

The article stated that Stations Casinos is the majority owner of Ultimate Gaming.  Online poker revenue “fell far short of once-lofty projections,” stated Ultimate Gaming Chairman Tom Breitling in the article.  Only Nevada, New Jersey and Delaware allowed online gambling and for Ultimate Poker to accept wagers the players must be physically in the state.

UltimatePoker.com was a sponsor of the UFC.  It launched in May 2013 but with the limited amount of potential players, the once novel idea, turned to out to be a dud.

Payout Perspective:

The news of the closure comes the week before New Jersey hears oral arguments in a lawsuit filed by sports leagues (i.e., NFL, NHL, NBA and MLB) seeking a temporary injunction from passage of a law allowing the state to accept bets on sports games. Although the NBA opposes the New Jersey law, NBA Commissioner Adam Silver penned an Op-Ed in the New York Times this week supporting legalizing and regulating sports betting.  As for the closure of Ultimate Poker, expect Zuffa to look into other ways to monetize the future of gambling.  In the meantime, it means one less UFC sponsor in the Octagon.

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