UFC fines Jones $25K

January 17, 2015

The UFC announced it has fined Jon Jones $25,000 for violating the UFC Code of Conduct Policy.  Jones failed a drug test in early December which revealed cocaine in his system.  The UFC was informed of the drug test results on December 23rd.

Results of the tests were not made public until after the fight January 3rd and Jones checked into drug rehab.  However, his stint in rehab was short-lived according to his mother who stated he only stayed one night.

The UFC stated that the $25,000 fine would be donated to a substance-abuse prevention program.  In its release the reason it delayed discipline on Jones was so that it would be able to receive results of urine and blood tests taken the night of the fight.  The UFC indicated that the test results from fight night were negative.  Per ESPN, the NSAC has yet to confirm.

Jones will appear on FS1 to give an exclusive interview with the network about the failed drug test.

Payout Perspective:

The fine amounts to public relations for the UFC.  $25,000 donated to a substance-abuse prevention program makes sense but the penalty should have been more punitive whether it is monetary or through other means.  Dana White indicated on the Jim Rome Show this past week that Jones probably has $15 million sitting in the back.  Jones reportedly made $500,000 at UFC 182 despite losing $50,000 for his part in August’s media day brawl.  So the fine is miniscule to Jones relatively speaking.

So, what should have the UFC done? It could have fined him more money.  It could have requested that Jones continue with drug rehab before returning to the UFC.  It could strip him of his light heavyweight title until he has addressed all of his personal issues (i.e., drug problems).  While $25,000 is a hefty fine for most people, Jon Jones is not most people.  Certainly, the UFC could have invoked a harsher penalty to reflect its concern for Jones and send a message to the rest of its independent contractors that regardless of who you are, all must abide by the UFC’s code of conduct policy.

UFC releases Athlete Outfitting Policy

January 16, 2015

The UFC Athlete Outfitting Policy was revealed Thursday and it has brought up the question as to the independent contractor status of UFC contracted fighters.

Bleacher Report was the first to report on the new policy which details the responsibilities of fighters and their corners.  A newly established UFC Equipment Department has been put in place to implement the uniform policies.  This weekend’s UFC Fight Night 59 will be the first time the Equipment Department will meet with fighters to go over the new policies.  The department will work with fighters to come up with a uniform that will fit their own style.  Presumably, this means that fighters can choose between board shorts versus vale tudo-type tights.

Fighters will be able to choose the colors provided with the higher-ranked fighter per UFC rankings getting first choice.  A fight between two unranked fighters will work with matchmakers to come up with colors.

While this policy is not new for a sports league to implement, it stirs up the issue of the limits the UFC can instruct its fighters, who are characterized as independent contractors, to do their job.  MMA Fighting’s Luke Thomas brings up this issue in which he questions the boundaries that the UFC is pushing.

The short story is that there are advantages for an employer to have independent contractors instead of employees.  For example, the employer does not pay certain employment taxes, health care, wage and hour considerations, pension and are not subject to certain liabilities.

Payout Perspective:

The basic legal premise to determine whether a worker is an employee versus an independent contractor is whether the employer “retains control” over the worker; essentially, whether the employer can tell the worker how to do his or her job.  There are many iterations and interpretations of what retaining control is and whether the employer must exert actual control.

Although there are some differences, the WWE has a similar policy.  All of the costumes the wrestlers wear to the ring are approved by the WWE.  Even Brock Lesnar’s short sponsors were approved by the company.  Like UFC fighters all of the wrestlers in the WWE are independent contractors as well.  That does not mean this is right, it’s just another example.

At the UFC-Reebok press conference, Dana White indicated that he had spoken with UFC fighters about the uniform policy before the announcement.  Yet, there have not been any fighters that have come forward to say that they were contacted prior to the press conference.  Moreover, it’s not clear if any fighter provided their input on the deal.  The UFC will indicate that it is working with its fighters to come up with their own style for the uniform.  Thus, there is input as to what is created for each fighter.  So while fighters must abide by a uniform policy, there are some variations within the policy that allow for each fighter (and presumably their corners) to include their own style.   It’s just that the styles will be limited to what is approved by the new UFC policy.

But, it’s clear that the new policy has eliminated a certain amount of freedom previously known to the UFC fighters.  Not only are they giving up their sponsors (that aren’t Reebok), they must now abide by a certain set of rules or else there will be penalties.

One has to think that the UFC worked with its lawyers to shape this policy.  Still, we’re in that legal gray area where on one end you must ask whether the UFC is retaining control over its independent contractors by implementing these rules in restricting what they wear.  On the other, you ask whether giving workers a uniform is enough control over them to label them an employee rather than an independent contractor.

McGregor hosts Saturday afternoon movies on FX

January 15, 2015

In addition to all of the hype and promotion for Conor McGregor in lead-up to this Sunday’s UFC Fight Night: McGregor vs. Siver, McGregor will be hosting a Saturday afternoon fix of movies on FX featuring Irishmen.

On Saturday afternoon, January 17th, FX will play Gangs of New York, The Fighter and Taken 2.  McGregor will host the afternoon of movies as he will be interjected during breaks offering his own commentary.  An example of this is below:

Additionally, Fox is running a promo across its digital and social media properties with McGregor offering “Conorisms.”  Note that the promo indicates McGregor-Siver occurs after the AFC Championship game.

Payout Perspective:

This is a unique investment in McGregor.  Not only is McGregor hosting an afternoon of movies on FX, which is a bigger and broader audience than FS1, it has provided a slate of Irish-themed movies to tie-in with the UFC Featherweight.  We will see if this support from FS1 sister property will help with the viewership.

McGregor signs deal with Reebok

January 15, 2015

On Wednesday Conor McGregor signed a sponsorship deal with Reebok making him the 5th fighter to sign an individual deal with the UFC’s official clothier. The fighter announced the deal via twitter.

Financial terms of the deal were not announced. McGregor joins Jon Jones, Ronda Rousey, Johny Hendricks and Anthony Pettis as UFC fighters that have signed individual deals with Reebok.

Via MMA Fighting:

“Conor’s hard work, determination and confidence have gotten him to where he is today,” Reebok Brand President Matt O’Toole said in a press release. “His passion and his commitment to continual self-improvement are a true reflection of the Reebok brand.”

Payout Perspective:

With all of the additional lead-up for McGregor for a UFC Fight Night, the Reebok news seems appropriate.  McGregor has marketing value as is exemplified through the fact that there have been two produced episodes of “UFC Embedded” for Sunday’s event despite the fact that the “Embedded” series have been limited to promoting PPVs until now. McGregor also participated in the ESPN “car wash” this week.  The deal should help with the UFC-Reebok brands internationally as well.

Report estimates UFC 182 PPV buys between 740K-820K

January 14, 2015

MMA Fighting reports the PPV buy rate for UFC 182 to be in the 740,000 to 820,000 range making it the biggest PPV since December 2013.

UFC 182 which featured Jon Jones defending his heavyweight title against Daniel Cormier was heavily promoted.  It received higher than average attention and resulted in the best UFC buy rate in over a year.  In addition, reports of packed sports bars and movie theaters to watch the event showed that the buzz featuring a contest between bitter rivals appealed to many.

For Jones, it was the best PPV buy rate since his UFC 145 main event drew 700,000 PPV buys.  That event was sold based on a bitter rivalry as well.  At that point, Jones was thought to be a PPV star.

UFC 182 was the best PPV buy rate since UFC 168 in December 2013 which drew 1,025,000.

Dana White had predicted the event to draw 750,000 PPV buys and then indicated it would exceed that amount immediately after the event.

As pointed out by Dave Meltzer in the MMA Fighting article, UFC 182 went up against the NFL Playoffs featuring the Pittsburgh Steelers-Baltimore Ravens which drew 28 million viewers.  It was one of the biggest TV audiences for an NFL Wildcard game in the NFL’s history.

Payout Perspective:

There was a time when Jon Jones was thought to be the next PPV star and draw this type of buy rate regardless of his match-up.  This has not come to full fruition and with the revelation that he used cocaine prior to UFC 182, it may taint his image.  The interest for this fight was greatly aided by the media day brawl back in August and the subsequent venom between the two fighters.  The UFC picked up on this and packaged it into slick promos and focused on the one fight rather than take time to focus on others.  The marketing for this fight worked and its reflected in the buy rate.

For those wondering, Google searches for UFC 182 were at 400K over fight weekend.  The event drew enormous traffic on MMA web sites; an average of over 1 million viewers watched the Prelims and a record-breaking rating for the post-fight show on FS1.  All of this amounted to a PPV buy rate somewhere between 740K and 820K.  Do you think it should have done better?  Should we just chalk this up to new expectations when it comes to PPV?  The good news was that all of the promotion provided a great deal of interest and 2015 is off to a very good start PPV-wise.

JDS, Overeem top UFC on Fox 13 salaries

January 14, 2015

MMA Fighting reports the salaries from December’s UFC on Fox 13.  The salary figures were released the regulatory body for the event, the Arizona Racing Department.

Nate Diaz drew a fine of 20% of his purse due to not making weight.  Thus, Diaz made only $16,000.

Via MMA Fighting:

Junior dos Santos ($130,000 + $130,000 = $260,000) def. Stipe Miocic ($30,000)
Rafael dos Anjos ($41,000 + $41,000 + $4,000* = $86,000) def. Nate Diaz ($20,000 – $4,000* = $16,000)
Alistair Overeem ($100,000 + $50,000 = $150,000) def. Stefan Struve ($40,000)
Matt Mitrione ($33,000 + $33,000 = $66,000) def. Gabriel Gonzaga ($38,000)

Joanna Jedrzejczyk ($10,000 + $10,000 = $20,000) def. Claudia Gadelha ($10,000)
John Moraga ($25,000 + $25,000 = $50,000) def. Willie Gates ($8,000)
Ben Saunders ($14,000 + $14,000 = $28,000) def. Joe Riggs ($16,000)
Drew Dober ($8,000 + $8,000 = $16,000) def. Jamie Varner ($20,000)
Ed Herman ($47,000) vs. Derek Brunson (N/A) cancelled
Bryan Barberena ($8,000 + $8,000 = $16,000) def. Joe Ellenberger ($10,000)

David Michaud ($8,000 + $8,000 = $16,000) def. Garett Whiteley ($8,000)
Henry Cejudo ($15,000 + $15,000 = $30,000) def. Dustin Kimura ($15,000)
Ian Entwistle ($8,000 + $8,000 = $16,000) def. Anthony Birchak ($8,000)

Payout Perspective:

According to MMA Fighting, the IRS took a portion of non-US fighters upfront.  So, while JDS’ reported fight purse was $260,000, it dropped to $182,000 (minus 30%) per MMA Fighting.  One might expect that the $50,000 bonus JDS received on top of his fight purse was also taxed.  Two years ago this past December, Nate Diaz made $50,000 in his loss to Benson Henderson at UFC on Fox 5.  He now is at $20K/$20K although missing weight dropped him down even more.

UFC Increases PPV Price in 2015

January 13, 2015

As MMAPayout previously reported, the UFC started to charge consumers an estimated $59.99 HD/$49.99 SD for all PPVs scheduled in 2015, which  at the time included UFC 182: Jones vs Cormier, UFC 183: Silva vs Diaz and UFC 184: Weidman vs Belfort.

UFC185_60usd

There was some talk that this increase was just for “The Time Is Now” promoted events and that the price point would be lowered to what it was before.  That assumption looks to have been an incorrect one, as it appears the UFC will permanently increase their PPV price point this year to $59.99 HD/$49.99 SD as shown on UFC.TV.

 

Payout Perspective:

Why is the PPV price increase to UFC 185 such a big deal compared to UFC 182-184? Well, for starters, this event is being headlined by Anthony Pettis vs Rafael Dos Anjos for the lightweight title. Neither are what you would consider PPV draws. In fact, you could make an argument that the UFC could get away with that price hike for UFC 182-184 due to 182’s big grudge match, 183’s big fight between Silva vs Diaz, and 183’s big fights between Weidman vs Belfort and Rousey vs Zingano.  All those cards include UFC’s biggest stars who have done their biggest PPV numbers in the past couple of years.  Well, that’s just not the case looking at how UFC 185 is shaping up.  UFC 185’s co-main event will now be Johny Hendricks vs Matt Brown, which should be a really good fight, but are those two fights in addition to Nelson vs Overeem good enough to justify it? That’s a question consumers will answer on March 14th with their wallets.  What this really means is that the UFC has permanently increased the PPV price in 2015 since lowering their price would only make certain cards stand out as being lesser in value.

As we stated before:

UFC President Dana White went on record (MMAFighting) years ago, stating that PPV prices would never be raised and would stay at their regular price of $54.95/$44.95 SD. That tune changed for UFC 168 in December of 2013, when the PPV price was raised to $59.95 HD/$49.95 SD. Dana White went on the record once again and stated that the PPV price hike was “just for UFC 168″, since it was justified by placing some of UFC’s biggest stars in highly anticipated match-ups (Weidman, Silva, Rousey, Tate).  White stated PPV prices would go back down to their regular price after UFC 168’s one-off price adjustment.

Essentially, the UFC is applying ad-hoc variable PPV pricing to their product, which is something the UFC has criticized and has tried to stay away from since their parent company, Zuffa, took over.  Fans have demanded variable PPV pricing for years as justification for not purchasing cards that were not as “stacked” as others yet cost the same amount. The UFC’s belief, however, has always been that consumers are buying the UFC experience via PPV, regardless of who is fighting on the card for the most part.  The UFC never wanted to admit in the past that some cards have less worth than others, which is a perception that has been shattered the past few years.  If the UFC wants to keep that perception that all PPV events have the same value, a uniform PPV price hike may be the next logical step in this experiment, but for a company who has struggled so much recently with their PPV business model, increasing the price on a product that many fans feel is over-saturated and watered-downed may prove to be quite the risky move.

Jon Jones exits rehab after one night

January 13, 2015

A Binghamton, New York station first reported that Jon Jones left rehab after just one night.  The report comes from Jones’ mother who spoke with WBNG’s Travis Eldridge.

The UFC light heavyweight champion is scheduled to be in attendance to watch his brothers Chandler and Arthur Jones play against each other in the AFC Championship game on Sunday afternoon in Foxboro, Massachusetts.  Coincidentally, he will be at the game while the UFC holds a Fight Night in Boston.

Jones’ mom stated that she was “glad” that her son was caught as it “stopped him in his tracks.”

The article states that despite the one night stay in rehab Jones is getting “more educated on the subject.”

Payout Perspective:

The news is surprising and one may only surmise that his stint in rehab amounted just to public relations.  Do you think the UFC, Dana White and Reebok are really pleased with Jones’ one night stay?  Unless Jones decides to re-admit himself and/or does something more than just “educate” himself, the rehab stint is hollow.

An aside to this news is that Jones will be at the Patriots/Colts game at Foxboro.  As we know, the game runs opposite UFC Fight Night 59 on FS1.  We will see if CBS picks up on the third Jones brother watching his other two playing.  Also, it will be interesting to see if someone attempts to interview Jones at the game.

NSAC calls for committee on drug issue

January 13, 2015

MMA Junkie reports on Monday’s Nevada State Athletic Commission hearing in which the commission addressed potential changes to its testing.  A committee was proposed to address the issue as the commission appeared cautious in addressing the issue.

Obviously, the subject came up in light of the discovery that a December 6th random drug test of Jon Jones revealed the use of cocaine.  Jones entered drug rehab only after his defense of his light heavyweight title at UFC 182 January 3rd.  The timeline for the revelation of the drug test is interesting with the results being made available to the commission on December 23rd and were relayed to the UFC sometime after that.  The question of when Jones knew is unknown.  The other issue is why was Jones tested for a drug that was not banned “out of competition.”

The commission proposed forming a committee to look into its testing which will include whether it has the jurisdiction to make changes to its current policy.

Payout Perspective:

If you ask me, it feels like the NSAC is punting here and a committee is a comfortable means to delay the actual solution which is making a decision and taking steps to drafting concrete rules.  I do not believe a timeframe was set on this or any goals of this committee.  What one can expect next is the formation of a committee that will conduct studies, evaluate rules and draw up proposals.  All of this will take lots of time, and in the end nothing will change.  Let’s hope that this is not the case.

Rumored UFC Fight Night 62 Cancelled

January 13, 2015

According to MMAJunkie, the rumored UFC Fight Night 62 event, which was planned to be streamed on March 7th on Fight Pass,will no longer take place.

UFC Fight Night 62 was set to take place in Windsor, Ontario, Canada on March 7th and streamed on UFC Fight Pass.  Due to the removal of the event, UFC will now host 44 shows in 2015 and will not hold an event in Canada until UFC 186, which will take place on April 25th from Montreal’s Bell Centre for UFC 186.

The news was first reported by TriStar’s strength/conditioning coach Jon Chaimberg on Twitter:

Everyone please push to have @ChadLaprise on the montreal card.windsor got cancelled, and this kid is hungry @danawhite @seanshelby #ufc

— Jonathan Chaimberg (@JonChaimberg) January 12, 2015

 

Payout Perspective:

Due to to the cancellation of what was tentatively called “UFC Fight Night 62″, the number of shows the UFC will host in 2015 drops from 45 to 44.  It also means that there will be one less live streamed Fight Pass event in North America.  Now, it’s still possible that the UFC could reschedule this for another Canadian region, but for now, the UFC confirmed that the show was never official and has since been “scratched“.

“UFC did consider holding a Canadian Fight Night event in March. However, the organization always strives to put on first-class events in every city, and this was proving to be a challenge within the required timeframe. “

It is believed that the Ontario Athletic Commission did not have enough time to process all the required paper work to run the event on the date planned.

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