May 23, 2014
The Washington Post featured UFC president Dana White in lead up to this Saturday’s PPV. The piece focuses on White’s past and how he’s got to where he is today.
The article follows White during UFC 172. The feature does a good job in painting the picture of White’s personality. In addition, it gave the background of how the UFC came to be the organization that it is now. It also provided the demos from Fox Sports which shows why the UFC is important to Fox.
According to research by Fox Sports, the major rights holder in the United States, more than three out of four men ages 18-34 say they’re fans of UFC. The sport’s Fox Sports 1 audiences have a median age of 39 and are spread pretty evenly across the country. Seven in 10 viewers are men, and the UFC enjoys the youngest median age and the highest concentration of Hispanics among all major sports. Now the UFC can be seen in 147 countries, in 23 languages.
The article pointed out the downturn in PPV buys but put a positive spin on the issue:
With some top stars out with injuries, recent pay-per-view numbers have been down, but even if 350,000 fans pluck down $50 for a pay-per-view, that’s a $17.5 million payday. Gate revenues typically add another few million and sponsorships much more. The UFC will have more than three dozen televised events this year, including 11 pay-per-view shows.
WaPo is the latest to provide the UFC with some mainstream placement prior to its next big event. The article is nothing new to those that follow the UFC. However, the underlying strategy of article placement with outlets with high readership is noteworthy. The New York Times has written several articles about the UFC (at least two on Jon Jones) leading up to its PPVs. It’s not a bad strategy. For UFC 173, the focus was on White rather than any of the fighters on the card.
May 22, 2014
Dan Henderson delivered Popeyes Chicken to Daniel Cormier as a joke with the knowledge that Cormier is in the midst of cutting weigh but is fond of the fast food restaurant. However, the seemingly innocuous rib may be seen as a prospective PR gain for opponents of MMA in New York.
If you missed it, in the UFC’s new “Embedded” series Cormier was delivered the tasty treat by Henderson. Cormier is in weight cut mode and Popeyes would be a definite weight gainer. Cormier told the story of eating Popeye’s for comfort after learning that his fight earlier this year with Rashad Evans was off. As we know, the UFC found a replacement for Evans and Cormier returned to a diet without Popeye’s before he destroyed Patrick Cummins. It a bit of gamesmanship Henderson personally delivered the chicken to Cormier. It did not appear form the video that Cormier was personally offended by Henderson’s delivery.
Bloody Elbow points out the potential PR faux pas by the UFC. Cormier is African American and Henderson is Caucasian (UPDATED: Hendo is part Native American). Most of us knew this. The stereotype that African Americans like Chicken is unintentionally perpetrated here. BE indicates that this will likely be picked up by the Culinary Workers Union 226, the prime organization behind the efforts to block the efforts to legalize MMA in New York, as ammunition to persuade legislators to vote against MMA. The belief is that it would use this episode as painting the sport as racist.
An underlying issue in this whole Popeyes Chicken delivery is that KFC has been sponsoring TUF this season. Certainly, KFC can’t be happy its competitor is getting more publicity than the actual UFC sponsor. As for the PR issue, certainly BE has made a case for this joke to be a credible PR problem. While we know the context of how the joke was made, put in a snippet to someone already weary of MMA and a bias is born (i.e., MMA is racist).
UPDATE: 05/23/14 A reader pointed out that Hendo is part Native American. Still, the issue that someone giving Cormier chicken perpetuates some stereotype is the issue. I think its hard to utilize this since Cormier has admitted to liking Popeyes and the joke was taken without much offense by Cormier.
May 20, 2014
Last week Lorenzo Fertitta made an appearance on CNBC’s “Fast Money Halftime Report” where he spoke glowingly about the growth of business overseas including the announcement of The Ultimate Fighter Latin America. Fertitta also touched on other subjects in the brief spot on the program.
Among the things Fertitta talked about was the company plans of expanding internationally including Europe and Asia. He also identified Brazil and Latin America as “hotbed” growth areas. Fertitta talked about the upcoming TUF Latin America
Fertitta touted that the UFC has the highest average price per ticket in sports at $254. He indicated that Vegas have “pricing power” which he stated the UFC could charge fans a premium price. Brazil was another area with “pricing power.”
He also spoke about Ronda Rousey and how women have been drawn to the sport “migrating into the demographic base” as a result of the UFC women’s bantamweight champion.
There was also the New York issue which Fertitta gave the generalities on the bill. He identified that the reason the bill is held up was due to the Culinary Union and acknowledging that it has done a “great job in lobbying the state of New York to try to keep us [the UFC] out.”
Notably, Fertitta pivoted when directly asked about the ticket sales for this Saturday’s event. Fertitta is a polished, credible spokesperson for the UFC. The greatest example is how he seemingly complimented the Culinary Union’s efforts to keep the UFC out of New York during the interview (at 2:27). It’s clear that the UFC sees international expansion as an area of opportunity to grow revenue and we will see how opportunities like TUF Latin America will do for the brand.
May 15, 2014
Variety reports that the WWE has come to terms with NBC Universal and will stay with its USA and SyFy networks. While financial terms have not been disclosed, the decline of its stock price may foreshadow a lower than expected renewal rate.
In after-hours trading Thursday, the stock had fallen almost 24% to $15.50. Of course, this may also be due to the announcement that its WWE Network may not make up lost money from PPV and on-demand revenue until 2015.
Per a WWE press release, the company “reached a multi-year agreement in principle with NBCU for the renewed U.S. licensing of WWE’s flagship programs and ratings juggernauts Raw and SmackDown.”
The announcement that Nikki and Brie Bella would be attending the NBC Universal “up fronts” on Thursday was a sign that the WWE reached an agreement with NBCU for its rights fee deal. However, the deal is likely not what the company had expected.
The WWE wanted $280 million according to Dave Meltzer of The Wrestling Observer in his May 14th podcast. While some analysts had predicted that the WWE doubled its $140 million deal, it was downplayed by the WWE. In its press release announcing the domestic deal, it also announced its work on deals in the U.K., Thailand and its intent to selling its rights in India. This would be something that would not be highlighted if it received a great deal.
The WWE earned $106 million of revenue from domestic broadcast rights in 2013 and $55 million overseas according to the Wall Street Journal.
Based on the recent history of sports deals, including the news earlier this week that the MLS brokered a big deal with ESPN/Fox/Univision for five times the current value of its television deal, the WWE had hoped it would have capitalized on the market.
However, it appears that the WWE overvalued its worth. While it has strong ratings for its RAW and SmackDown brands, its advertising rates were comparatively low. There is also the perception problem. Although revenues have grown since the WWE has gone family friendly from the “Attitude Era” of the 1990s, the mainstream view of professional wrestling remains that it is low class and the choreographed violence is unappealing.
With all the good news of the launch of the WWE Network coinciding with the rise in the WWE stock price exceeding $30 for a brief time, the news of its rights fee deal may cause a short term depression for investors. In fact, the downward spiral in after-hours trading reflects this.
From NBCU’s perspective, renewing the WWE helps the value for the USA Network from a PR standpoint as Raw is one of the top-rated shows on cable. This helps its overall cable ranking. It can promote itself as one of the best in cable even though the WWE may not add much in overall financial value.
It will be interesting to see how WWE stock reacts in the next couple days when financial terms are released.
May 5, 2014
Last week the Strait Times reported on a developing story that underscored the continuing tension between Nike and the UFC. A Nike-sponsored world tour which touts appearances by Jon Jones, Anderson Silva and Georges St. Pierre is being called “false advertising” by the UFC.
The 11 city overseas tour began in Paris May 5th and runs through June 7th with a final stop in Manila. Jones and Silva are sponsored by Nike. Although GSP is sponsored by Under Armour, organizers claim he will be making an appearance.
The Strait Times, which is based in Singapore, indicates that the fighters will host a clinic and meet and greet there. Fans will pay as much as $888 for the clinic and/or $128 for the meet and greet.
The Strait Times claims that the UFC has addressed the appearances and stated that the promotion of the UFC fighters was “false advertising” and advised fans not to buy tickets as the fighters are not involved.
The report appears to show the continuing rift between Nike and the UFC. The Beaverton, Oregon sportswear giant seems to be unwilling to yield to the UFC sponsor fees. The latest sign was the lack of the swoosh on Jones during his latest fight at UFC 172. At the weigh-ins, any signs of the Nike were taped over. This included the shirts worn by Jones’ brothers who accompanied the champ to the scales. There was no word whether the three were in Paris on Monday.
April 28, 2014
Welcome to another edition of Payout Perspective. This time we take a look at UFC 172 taking place at the Baltimore Arena in Baltimore, Maryland where Jon Jones successfully defended his light heavyweight title against Glover Texeira.
Jones wears out Glover
Jon Jones fought Glover Texeira’s type of fight but still overwhelmed the challenger. Jones used his reach and generally out struck Texeira causing his mouthpiece to be dislodged on a couple occasions. It definitely looked like Jones was going 100%.
With the impressive win, Jones moves on to a likely rematch with Alexander Gustaffson with Sweden discussed as a possible place for the fight. After that, it’s possible he takes on the winner of Daniel Cormier (assuming he beats Hendo) versus Anthony Johnson.
Johnson upsets Davis
Phil Davis used most of the pre-fight publicity to antagonize Jon Jones. It could be that he did not focus on his opponent or it could be that Anthony “Rumble” Johnson was hungry for a win. Johnson may have been hungrier due to the decree that if Johnson did not make weight he would receive a lifetime ban. But Johnson looked comfortable at 205. He had crisp striking and constantly stuffed Davis’ takedown attempts.
The win propelled Johnson back to the top of the light heavyweight title picture while Davis is knocked down a few rungs on the ladder to become top contender.
Attendance and Gate
It was a near sellout at the Baltimore Arena as attendance and gate for UFC 172 was 13,485 for a live gate of $2.3 million. Capacity at the Baltimore Arena is 14,000. There was no info on the comps for the event.
The gate of $2.3 million was second best to UFC 171 this year.
The bonuses went to Takanori Gomi, Issac Valle-Flaag, Joseph Benavidez and Chris Beal. All received $50,000 bonuses.
Max Holloway, Jim Miller, Danny Castillo and Luke Rockhold all could have argued for the bonus.
On Monday, Joseph Benavidez won a Harley Davidson as a result of a fan vote of the four bonus winners.
Promotion of the Fight
Unlike past events, Jones was mostly cheered by the Baltimore crowd. This was due in part to Arthur and Chandler Jones being by his side. Arthur played for the Ravens when they won the Super Bowl. USA Today wrote an article on Arthur Jones and his relationship with his brother. Ray Lewis also was in the crowd at UFC 172 and the LHW paid homage during his walkout.
Ronda Rousey threw out the first pitch at a Baltimore Orioles game.
Chuck Liddell interjected himself into the pre-fight hype as he took the side of Glover Texeira. This grabbed some headlines as the Iceman boasted that he could beat Jones in his day.
Dana White did his usual rounds in the media including the ESPN “car wash” where he was on several of the network’s shows.
The New York Times wrote a piece about Jon Jones being the “face” of the UFC.
The usual suspects were in the Octagon: Xyience, Harley Davidson, MusclePharm, Alienware, MetroPCS and Bud Light in the center. AxsTV, Fram Auto Filters and the Air Force Reserve also had a presence in the Octagon. Toyo Tires also sponsored certain portions of the broadcast. Xyience had the fighter prep point.
USA Wrestling sponsored the “Tale of the Tape” for UFC 172.
Glover Texeira was sponsored by MMA brand, Red Nose.
Several fighters were sponsored by “The Memory Tag.” The company, according to its web site, allows customers “to put your videos on greeting cards, stickers, and postcards.”
Curious sponsor of the night was Tim Boetsch and his PS I Love You Books walkout shirt. The company offers wedding picture books. It’s not the first time that Boetsch has been sponsored by this company.
The Jones brothers walked out with their brother at the UFC weigh-ins. Noticeably, the Jones brothers wore Nike shirts with the swoosh taped over as it was apparent the UFC is not allowing Nike logos without it paying the sponsor fee. But, Jones wore Nike products without the iconic swoosh. Here is an example of the Jones shirt with and without the swoosh logo. Jones was sponsored by the new EA UFC game on fight night. Still, it was clear that the apparel (fight shorts and shirts) were Nike made despite the lack of a swoosh.
So, the question is, does it hurt Nike not to pay the UFC sponsor fee? One might argue it does not since we all know Jones wears Nike. He was in another Nike commercial and has been in recent Nike ads. Even though there was no swoosh, fans associate Jones with the Nike brand. While the lack of a swoosh may have casted doubt on whether Jones was still sponsored by the swoosh, the t-shirts would have told the smart fight fan that those were Nike made. In the end, even though Nike did not pay the sponsor fee to the UFC, it did not hurt the company presence.
Even though Nike was not an official approved sponsor, it did not go unnoticed.
— SoleCollector.com (@SoleCollector) April 25, 2014
Odds and Ends
-On the Steve Austin Podcast, Paul Heyman revealed that WWE talent receives a free pass to the WWE Network. Based on Jon Jones’ tweet, UFC fighters do not get a Fight Pass account for free.
-Did they institute a dress coat for Joe Rogan?
-Jon Jones did the “Ray Lewis dance” pre-walkout.
-Ticket demand was up from UFC 171 as the average ticket on the secondary market was $290.
-According to Google Trends, the most searches per country for “Jon Jones” on Saturday were 1) Brazil, 2) Philippines and 3) US. Sweden ranked seventh.
-An ominous sign for the PPV buys for UFC 172 was that the number of Google searches for Jones was down from his fight with Gus at UFC 165. You may recall that Jones-Gus did 310,000 PPV buys. While we recognize Google Trends may not be conclusive evidence, the less interest in Jones in lead-up to 172 may be cause for concern for PPV buys.
The local buzz appeared good for the UFC 172 and the UFC did its rounds with the national media to get the word out for the event. But, did all the hype help sell the PPV? While looking at what’s trending on Google or Twitter may not equate to how many people buy a PPV, it has been a helpful indicator. Based on this information, its likely we see a buy rate of less than Jones’ last PPV which would be something less than 310,000 buys.
April 26, 2014
The New York Times‘ William Rhoden penned a piece for the paper in lieu of the UFC event in Baltimore which deems Jones a face of the UFC. Rhoden writes, “Jones is the perfect ambassador for a polarizing sport.” Rhoden could have used polarizing to describe Jones as well.
Obviously, Rhoden is not a full-time MMA fan. If he were, he would know that Jones is passionately loved and hated by fans. Jones has had his fair share of PR troubles stemming back to his DWI in May 2012 to being blamed for the cancellation of UFC 151 later that year to the latest issues with his Instagram account. This does not include some of the off-putting comments he makes which seem to annoy the average MMA fan. With all of this negativity that is drudged up, it’s hard to recall that this was the same guy that helped stopped a robber the same day he had a title fight.
Throughout these problems, it has not hurt him from obtaining blue chip sponsors. Nike is the biggest sponsor for Jones (based on the weigh-ins on Fridays, it appears that Nike does not want to pay the UFC sponsor fee). At UFC 165, he also wore a Gatorade logo on his trunks. Few UFC fighters could obtain these sponsors.
When you look at the PPV numbers, Jon Jones is the top active UFC fighter in terms of overall PPV buys. Certainly, the numbers are skewed (i.e., UFC 94, 100) with some PPVs since he was riding the coattails of a main event. Still, the numbers are the numbers.
Jon Jones UFC PPV appearances
The PPV numbers reflect that Jones averages 610,455 buys in his PPV appearances. If you want to be more specific, in those PPV events where he has been in the main event (essentially UFC 128 – UFC 165), Jones has averaged 500,000 PPV buys. For those wondering, Ronda Rousey averages approximately 597,000 PPV buys in her three appearances.
I would expect a warm reception from the Baltimore crowd on Saturday as his NFL-playing siblings will likely be a part of the entourage during his entrance to the Octagon.
Even if Jones was not the true draw in all of his PPV appearances, he has to be considered the face (or at least “co-face” with Ronda Rousey) of the UFC based on how the UFC is marketing him and the fact he is the Light Heavyweight Champion. The UFC is in need of a fighter that can generate the interest that a GSP and/or Anderson Silva can bring to a PPV. Jones has now had 7 PPVs where he has been in the main event with moderate success. The 500,000 PPV average is very good but some of that can also be attributed to his opponents (i.e., Rashad Evans, Rampage Jackson, Chael Sonnen).
In September 2012, we took a look at the PR predicament of Jon Jones post-UFC 151 cancellation. The takeaway was that he had yet to learn to be comfortable with his role as a UFC headliner. More than two and a half years later, how has he done?
As Jones faces another test on Saturday night, his image is polarizing. He is revered by mainstream media outlets as he is come across as a genuinely nice guy. But MMA social media, web sites and those who comment on them have a different opinion.
Certainly the perceived ego and his PR gaffes have contributed to the online hate for the champ. Many have soured on him despite his dominance in the division. If Jones gets past Texeira, he will likely have at least two big fights upcoming that could draw big PPV numbers: a rematch with Alexander Gustaffson and Daniel Cormier. If Jones were to prevail, it would solidify him as one of the greatest fighters in the Octagon. But, will fans warm up to him or continue to root for his opponents.
April 21, 2014
Bloody Elbow reports that MMA sponsor Americana is offering a fighter $5,000 if they are the first to KO UFC’s women’s bantamweight champ Ronda Rousey.
You may recall that Americana MMA was the same brand that claimed the UFC priced it out of sponsoring three women fighters that were leaving the independent ranks to be a part of the newly forming UFC women’s straw weight (115lb) division. It appears the reason for the offer is based on Rousey’s statements about Cris “Cyborg” Justino and the lack of a reprimand for them.
Americana MMA would not be the first sponsor willing to motivate a fighter to beat Rousey. Dynamic Fastener offered Miesha Tate a little more than its standard sponsor payout ($6,500) and a $10,000 bonus if Tate beat Rousey at UFC 168.
This is a nice bit of PR for Americana MMA. Although it cannot afford the UFC sponsor fee, it is getting publicity (including this site here) by offering less than what a sponsor normally has to fork over to the UFC. So, the question is whether the UFC will allow its (independently) contracted fighters to collect on a “bonus” from a sponsor not associated with the UFC. Alexis Davis may have the first shot at this July 5th.
March 26, 2014
Forbes.com posted an article which features WWE chairman and CEO Vince McMahon. The article boasts the achievements of McMahon while cautioning about the risks of the WWE Network.
The article, written by Lifestyle editor Michael Solomon, is an overall positive piece on the McMahon success story. The piece highlights the company’s big investment in the network which is underscored by the fact that revenues “have barely budged (remaining at $500 million since 08) over the last few years.” This may be due to the $75 million it has reportedly spent on setting up the WWE Network. It also writes about the company’s failed attempt to establish its network as a “premium” channel to be distributed on the network. The Forbes.com piece spins this in the positive for the WWE and mostly everyone has bought into the“over the top” strategy of the network.
As it is currently set up, the network needs 1 million subscribers to break even. At 2 million subscribers, it projects adding $50 million to its EBITDA. The first numbers on the network will come out after Wrestlemania.
Due to the network, the WWE has cannibalized its PPV business which will change how the company will do business. The shift has drawn the ire of DirecTV and Dish Network. DirecTV had some harsh words for the WWE and Dish Network actually told its subscribers that it would not carry Wrestlemania XXX this April 6th. However, it has since backtracked on its stance and will now carry the show.
The article will be published in the print edition of Forbes the week leading up to Wrestlemania Sunday giving it a prime PR piece leading up to its biggest event of the year.
Television by Numbers reports the second episode of Total Divas (9pm ET/6pm PT) scored a viewer average of 1.28 million viewers on Sunday night. Thus, it did better than the last hour (936K average) of UFC Fight Night 36 although the last quarter hour featuring Rua-Hendo did 1.25 million.
Last week the WWE and Mattel, Inc. announced new kids property called WWE Slam City. In addition to merchandise, the WWE has launched a series featuring WWE characters which appears on WWESlamCity.com, YouTube and its Network. The obvious hope is that this property will facilitate continued growth in its consumer products division.
March 24, 2014
The UFC has let go of featherweight Will Chope when it was discovered that he was dishonorably discharged from the Air Force for domestic violence as indicated in court documents. His fight at UFC Fight Night 38 was scrapped due to the news.
The news, broken by Bleacher Report, occurred one day before his fight with Diego Brandao after Bleacher Report revealed the details of his legal troubles. The news broke after weigh-ins as Chope made weight and faced off against Brandao. So, it’s obvious that the reason for the cancellation and subsequent dismissal was the news of his domestic violence discharge. The issue here is why didn’t the UFC know of Chope’s background and the fact he had a criminal history.
The court documents from the Air Force deny Chope’s appeal of the severity of his sentence related to assaulting his wife. The key phrase in the court record that causes you to recoil is Chope, “physically assaulted her [Chope’s then wife] on multiple occasions.” He also “disobeyed an order given to prevent future assaults.”
Chope’s sentence of a “bad-conduct discharge and confinement for 5 months,” was upheld.
The UFC released a statement on Chope:
Tonight’s featherweight bout between Will Chope and Diego Brandao has been canceled after UFC officials were made aware of Chope’s previous military conviction. The UFC does not condone behavior of this nature whatsoever and Chope has been released from his contract.
Brandao will receive both his show and win money for the bout.
Did the UFC do the right thing? Certainly there have been other fighters in the UFC with sordid backgrounds and charges of domestic abuse. But, how did the UFC not know of this issue prior to Sunday’s bout? Chope debuted with the company in January of this year. One might imagine that legal documents, especially those in the military, may be hard to obtain. One would have hoped that the UFC would have done its due diligence especially since Chope indicated he had a criminal charge on his record.
Should the UFC have dismissed Chope? It’s obvious that he is a PR issue in the UFC especially with the Culinary Union looking for any misstep by the UFC to jump on. The UFC is trying once again to legalize MMA in NY and opponents believe that the sport is barbaric and Chope’s domestic violence charge would affirm these perceptions. Moreover, with the UFC expanding to more countries, it is trying to put its best foot forward. We will see if the UFC will undergo much more of a vetting process after this incident.
For Chope, it’s a hard situation if we believe his regret for the incident and his wanting to move forward from it. The UFC is the pinnacle of one’s career in MMA and it’s apparent that he will not get a chance to fight for the organization again.