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.
February 24, 2014
Welcome to another edition of Payout Perspective. This time we take a look at UFC 170 held at the Mandalay Bay Events Center in Las Vegas, Nevada.
Knee, not armbar, stops McMann
Ronda Rousey didn’t need her patented armbar to stop Sara McMann, but a knee to the liver downed the former Olympian. While there may be some controversy about the stoppage, things were not going well for her. Granted, she did mark up Rousey’s face. Rousey did appear to be in dominant control after the knee.
Rousey will juggle movies and training as while it’s not clear who will be her next opponent will be and when that fight may happen.
Cormier makes short work of Cummins
There was sufficient hype for Patrick Cummins in short time to give folks the belief he could give Cormier a good fight. In the end, Cormier was mad that he was hit twice by Cummins as the fight was a classic example of a mismatch. Surprisingly, Cormier still put over Cummins in that he would still have an future in the UFC.
Cummins had a good enough story (walk-on to wrestling team at Penn St., working at coffee shop) that the UFC pushed which glossed over the fact that he was incarcerated for some time.
For Cormier, he should be close to a shot at the 205 title and may have one more fight in the division before he gets the shot.
Attendance and Gate
The attendance for the event was reported at 10,217 for a live gate of $1,558,870. The announced gate was one of the lowest in Vegas for a PPV in several years.
Dana White was surprised by the gate as he proclaimed on Thursday that it would do $2.1 million.
The NSAC will have final numbers sometime later this week.
We previously reported, Ronda Rousey, Rory MacDonald, Demian Maia and Stephen Thompson received the $50,000 bonuses for the night. MacDonald and Maia was the Fight of the Night and Rousey and Thompson received the Performance Bonuses. As I stated, in the previous post, Erik Koch could have staked claim to one of the Performance Bonuses.
The salaries were announced earlier than usual and are here. Notably, Daniel Cormier had the biggest base salary ($80K and $80 to win). Rousey earned $55K to show and $55 to win for a total of $110K. She also earned the $50K performance bonus and thus earned $160K for the night – the same as Cormier. Rory MacDonald was the third top earner of the night with $150K ($50K/$50K plus bonus).
Pre-UFC 170 Issues
Three newsworthy issues occurred in the run-up to this event.
The first was the Jessica Eye situation. Eye tested positive for marijuana after her October 2013 fight which caused her win to be changed to a no-contest. Instead of admitting this and showing contrition, she took to twitter to attack those reporting about her failed drug test. Then she went on The MMA Hour to give a vague denial of the situation. In fact, after her interview with Helwani, the Texas test results that she tested positive and waived her right to an appeal, she had some explaining to do. To the UFC’s credit, it attempted to protect its contract fighter.
Via Fox Sports:
Eye was caught in a lie and there was no getting around it, but UFC president Dana White defended the fighter on Thursday saying that she honestly meant no harm in the matter. White knows that Eye got caught up in not telling the truth in one interview, and then it just spiraled downhill from there and before you know it a snowball turned into an avalanche.
In the end, Eye should have received some media relations advice on addressing the situation and decide whether or not to appear on shows to discuss the situation. Moreover, attacking press for a story that was for the most part factually correct is never a good idea. The media relations and public relations part of the business is not as easy as it looks.
The second is the injury to Rashad Evans and the subsequent replacement of Patrick Cummins. Cormier wanted a fight with someone since he had worked so hard to drop down to 205. Cummins, according to the UFC, was the only one willing to take the fight on such short notice. The UFC scrambled to create some buzz for the fight and did so with Cummins violating the unspoken rule of revealing that he made Cormier cry during training. This created ample buzz as it made the fight a little more interesting since it drew the ire of Cormier.
The third was how the PPV was promoted regarding the Olympics resume of its main eventers. The belief was that since the Winter Olympics were ongoing The UFC commercial promoting the Olympians was a dubbed Mike Goldberg voiceover which stated that Rousey was the first woman to win a medal in Judo. Of course, this could not be the case since Olympic medals have been awarded in women’s judo since the 1992 Summer Olympics. As BE points out, she was the first American women to take home an Olympic judo bronze.
Goldberg’s voiceovers are always manipulated for PPV promos in order to promote what needs to be promoted. Whether it was a willful omission or a blunder, the commercial was factually incorrect. Whether this persuaded anyone to purchase the PPV or not is de minimus yet since this was identified by the press it puts the UFC marketing folks look like they dropped the ball.
USA Judo was the notable new sponsor in the Octagon. Obviously this was due in part to Rousey’s involvement. In addition the usual UFC sponsors were in the Octagon including MetroPCS, Toyo Tires, Xyience, UltimatePoker.com, Harley Davidson and Bud Light. Also, History Channel’s series “Vikings” had signage in the Octagon as well as EA’s UFC video game coming this spring.
Cage Fighter had a coming out party of sorts for its sponsorship of Daniel Cormier and Sara McMann in the top two fights of the night. The “Rise and Grind” moniker which is associated with CF was somewhat misappropriated by Mike Goldberg during the PPV.
Cormier was wore an “Ultra Lube” hat which relates to industrial, agriculture, auto/truck, household and outdoor uses.
Training Mask, Dynamic Fastener, AutoShopper.com and PeopleFinder.com were prevalent sponsors on multiple fighters during the night.
Rousey wore a Muhammad Ali Roots of Fight t-shirt at the weigh-ins. Dana White also said some nice things about the clothing brand in a tweet. It’s a good brand which features many notable fighters, boxers and martial artists from the past.
— Dana White (@danawhite) February 20, 2014
I actually purchased a Roots of Fights T-Shirt in Vegas. Unfortunately, it came with a preset ink stain. Ugh.
Odds and Ends
A lot of talk at the pre-fight media scrum on the state of sponsorships.
Was it planned for Rousey to down McMann in front of the USA Judo signage in the Octagon?
Were you offended by Marlon Wayans’ Tweets? Comedians have no bounds so jokes like these are expected. Or should they be?
The Rock sent out his support of Rousey:
— Dwayne Johnson (@TheRock) February 23, 2014
— THREE (@DwyaneWade) February 18, 2014
Cormier’s performance at the pre-fight press conference was great as he was articulate, introspective and funny. The revelation that he never had a salad before this training camp was as shocking as White not knowing the attendance figures before they were announced. His breakdown of why street fights don’t last long (built on emotion) was great as well.
After Cormier’s admission of his love for Popeye’s Chicken, the chain provided his family with a meal after his decisive win. But, no sponsorship from the company?
If any fighter wants to brand themselves, they should check out Patrick Cummins’ web site. It tells his story in a short span and he has a memorable t-shirt he sells on his site. That is what I found when I did a google search on him. I did not find out about his jail time until later.
The UFC actively promoted using twitter. Reading tweets from the #UFC170 hashtag seems to be the newest thing to involve social media.
Stone Cold Steve Austin, CM Punk, Nick Diaz and Will Smith were notables attending the event. Please no more CM Punk to MMA talk.
According to Google Trends, Ronda Rousey was the third hottest search on Saturday with over 100,000 searches. She was behind Justin Timberlake at 2 and El Chapo Guzman at 1. Does this equate to PPV buys? It’s hard to say but UFC 170 will be a test on whether Ronda Rousey is truly the top draw for the company at this point. The fact that the Cormier-Evans fight fell through did not help. UFC 157 did a buy rate of around 500K and while UFC 168 did over 1 million buys this is partially due to the Silva-Wiedman rematch. Based on the late buzz, we could see this event doing 400,000 PPV buys.
February 14, 2014
We wrote yesterday about the rocky contract negotiations between Gilbert Melendez (22-3, 1-1 UFC) and the UFC. Today, Bellator shocked the MMA landscape by announcing a multi-fight deal with one of the best lightweights in the world in Melendez, though the UFC currently maintains matching rights.
Gilbert Melendez sits atop the UFC’s lightweight division. With victories over Josh Thomson, Diego Sanchez, Shinya Aoki and Jorge Masvidal, “El Nino” is ready for a new crop of challengers as the Santa Ana native has agreed to a multi-fight, multi-year deal structure with Bellator that can pit Melendez against some of MMA’s best, including Eddie Alvarez, Michael Chandler, Will Brooks, Dave Jansen and a host of top lightweights from around the world.
“The moment Gil was legally able to explore the free agent market, Gil’s management team reached out to me and we began figuring out how to bring Gil to Bellator,” said Bellator Chairman & CEO Bjorn Rebney. “It’s no secret that I’ve been a big “El Nino” fan for many years. Gil was one of the first fighters I tried to sign when I launched Bellator back in 2008, and he’s grown and developed into one of the best and most exciting lightweights on earth. Gil has a vision for what he wants to accomplish both inside and outside the cage and we can help make his vision a reality. We are in the business of developing and showcasing the greatest fighters on earth. That’s what we intend to do here with Gil and it’s what we’ll continue to do in the future.”
The UFC currently holds matching rights on Melendez.
Bellator’s announcement today was pretty shocking and caught many in the MMA landscape off-guard. Nevertheless, it’s a key strategic move for Melendez, who is trying to maximize his market value. This is a classic example of pinning bidder A versus bidder B, and illustrates the importance of having more than just one key player in the MMA landscape for fighters. Whether Melendez ends up in Bellator or UFC matches Bellator’s pay and signs back with the promotion, it will be a win/win for Melendez in the short run.
In the long run, for a fighter who is as exciting as Melendez, you risk making a choice that may seem near-sighted, and could miss out on potential fight of the night or performance bonuses in addition to base pay, which could end up surpassing Bellator’s proposed pay. Although the exact numbers of the deal are not available at this time, MMAPayout will report them as they become available.
Winning a title and getting a push from the UFC is invaluable for a fighter, but Bellator will do their best to match the same benefits as they tried to do with with Eddie Alvarez, such as offering exposure on Spike TV, featured in a potential PPV down the line against either Eddie Alvarez or Mike Chandler, two of the best lightweights in the world, and certainly other Viacom opportunities.
The ball is now in the UFC’s court, and it’s up to them to determine if they want to retain Melendez and match what Bellator is offering or let him walk away to a competitor.
February 14, 2014
Dana White has expressed his discontent with the current negotiations with UFC Lightweight Gilbert Melendez and has all but told the former Strikeforce Champion to look elsewhere for work.
On Wednesday’s “UFC Tonight” on FS1, White spoke out about the contract negotiations with Melendez’s representation as the parties are at an impasse with a new deal for Melendez.
Although it was not officially reported how much he made at UFC 166, he did receive a $60K FOTN bonus for his bout with Diego Sanchez. He did make $175K at UFC on Fox 7 in a loss to Benson Henderson. One assumes that Melendez would like to improve on his $175K show salary.
The MMA Report brings up a good question: whether a fighter should look for top dollar or the best competition when it comes to deciding where to fight. There is the example of Ben Askren who was let go by Bellator in order to presumably sign with the UFC. However, he chose to sign with Singapore-based OneFC where he will make $50K/$50K to start. Arguably, Askren is one of the top welterweights in the world and has a personality that would make him marketable. The knock on Askren is that his fight style is not appealing to the casual viewer. One would think that he would choose the UFC over an overseas company.
When I think of the Ben Askren choice it reminds me of NBA player Josh Childress. A Stanford alum, he left the NBA after 4 productive years and with an offer to stay in the NBA but decided to make more money in Greece. But after 2 years, Childress ended back in the NBA and cited issues with getting paid and less amenities overseas as compared to the NBA as reasons he chose to return. Thus, this is an example of why taking the most money may not be the best for a career. Of course, MMA differs from basketball if you were to just compare the physical rigors and average shorter career span of a fighter.
One of the underlying issues that may be hampering the negotiations is that Melendez is represented by the same agent as Georges St. Pierre. As we know, GSP’s departure from the UFC was awkward and may have been less than amicable. GSP spoke out about drug testing in the UFC which unsurprisingly drew the ire of White. Is the difficulty in brokering a new contract for Melendez in part due to White’s anger at GSP via his agent?
Then there’s the use of the media in the negotiations. First, there was White’s public comments on FS1. Then, in a bit of a surprise, the UFC on Fox twitter account tweeted an article it posted on its Fox Sports web site in which it mocked Melendez for the stalled negotiations. The article actually admits it has scant information on negotiations but would speculate on the reasons why Melendez has not come to an agreement.
Melendez has a short timeframe to earn as much as he can in a sport where the premise is to inflict maximum pain on your opponent. This takes a toll on the fighter physically and mentally. However, the sacrifice is worth it assuming he is compensated enough to take care for himself and his family. In MMA, it’s unlikely that a contract will make someone set for life but a fighter has the potential to do much better than he would if he or she just had a 9-5 job. We do not know how much Melendez is asking for but one might assume he wants to make sure he is fairly compensated (in his mind) for his sacrifices.
Like many sports executives, White is negotiating through the press. Calling out Melendez’s agents is a part of negotiations. A new wrinkle is the use of Fox Sports to seemingly call out Melendez for not agreeing to a contract. In other sports, the media produces pieces calling out one side or another in negotiations but the Fox Sports piece is a blatant run at Melendez. Is it fair? Should Melendez and his representatives respond with their side of the story? We shall see.