16 for 16: No. 3 New York finally passes law to legalize professional MMA in the state

December 30, 2016

After a long battle, the New York Assembly voted to legalize professional MMA in the state this past spring. It was signed into law by Governor Andrew Cuomo on April 14th.

Thus, on September 1st the sport became legal and regulated by the state.

Assembly votes shown in this picture.  Green is good.

After much lobbying, time and effort, the UFC opened up with the first major card at Madison Square Garden on November 12th.

Notably, the UFC 205 Countdown show included a part dedicated to showing Sheldon Silver indicted on corruption charges.  He is currently appealing his prison sentence.  It was one final shot at the individual that Dana White blamed for not allowing a vote on the bill for years.

The UFC debut did not disappoint as it enjoyed the richest gates in company history.

Not long after the initial joy of legalizing the sport, boxing promoters began to complain about the hefty tax needed to insure fighters for events.  A new insurance premium that would cover $1 million for each fighter on the card would be required for operation in New York.

In October, Promoter Lou DiBella canceled the remaining cards he was planning in the state due to the new requirement that has a $1 million minimum for each fighter in the event the fighter suffer a traumatic brain injury.  The UFC paid approximately $1,675 per fighter and approximately $44,000 overall.  It paid $40,200 for the Albany, New York show on December 9th.  This does not include the standard $50K medical and $50K accidental death insurance policies.

Of course, one has to wonder whether or not boxing lobbied against the MMA bill due to the new insurance requirement.  The new requirement does stem in part from a 2013 post-boxing incident in the state which left boxer Magomed Abdusalamov fighting for his life and a commission report found issues with the handling of the event.

New York set a tax of 8.5% on gross receipts in addition to other tax terms for MMA events.  Thus, the state collected approximately $1.5 million in taxes from UFC 205 according to the reported gate of $17.7 million.

Despite the hefty tax paid by the UFC, it reported the best merchandise sales ever for an event.

Look for the UFC to hold big events in the New York to offset the insurance and taxes it needs to pay.  Notwithstanding the cost, the final hurdle to legalize the sport in the state was a monumental hurdle the company overcame.  One might consider it a factor in the sale of the company.

16 for 16

4.  Legislation to expand Ali Act introduced

5.  UFC 200

6.  The year of Conor McGregor

7.  Bellator signings

8.  UFC pulls credentials for Helwani after breaking news

9.  Legal troubles for Jon Jones continues

10.  WSOF legal woes continues

11.  Ronda Rousey returns

12.  Alliance MMA goes public

13.  GSP declares himself a free agent

14.  Bellator 149

15.  CM Punk debuts

16.  Former Bellator employee sues company, organization sues back

Diaz assessed $50K fine and community service by NSAC

December 15, 2016

Nate Diaz has settled a complaint filed the Nevada State Athletic Commission for his role in the bottle-throwing incident at the UFC 202 pre-fight press conference.

Per ESPN’s Brett Okamoto:

NAC Diaz Answer by JASONCRUZ206 on Scribd

Diaz apologized for the incident in his Answer to the NSAC Complaint.  He did state that he “lightly tossed a half empty plastic water bottle in the direction of his opponent [McGregor] without the intent to strike anyone and, in fact, the bottle did not strike anyone.”   He had requested community service or suspension in lieu of monetary penalty.

Payout Perspective:

The settlement agreement does not include a suspension but a $50,000 fine which is similar to the amount given to Conor McGregor with the exception that McGregor must do a public service announcement.  The settlement saves Diaz from further legal issues related to the incident.

Commission to hear Lesnar, Jones and Diaz discipline cases

December 12, 2016

It appears that settlements have been brokered on behalf of 3 UFC fighters and the Nevada Athletic Commission.  MMA Fighting reports that the NAC announced Nate Diaz, Jon Jones and Brock Lesnar are scheduled to appear for hearing on their “proposed adjudication agreements” at the December 15th commission meeting in Las Vegas, Nevada.

Jones settled with the NAC on a one year suspension which would put him back in the Octagon by July 6, 2017 at the earliest.  He also was given a one year suspension by USADA.

Diaz hearing stems from his role in the UFC 202 pre-fight press conference.

NAC Diaz Complaint by JASONCRUZ206 on Scribd

NAC Diaz Answer by JASONCRUZ206 on Scribd

Lesnar’s complaint stems from two failed USADA drug tests after UFC 200.

NAC Lesnar Complaint by JASONCRUZ206 on Scribd

NAC Lesnar Answer by JASONCRUZ206 on Scribd

Payout Perspective:

Payout Perspective:

The anticipated settlements reflect the fact that no one wants to test the uncertainty of the punishment that the NAC may hand out.  Conor McGregor has filed a Petition for Review of his NAC fine of $75,000.  Depending on the length of the settlements, it likely means that the fighters will be able to plan their next fights.  In the case of Lesnar, it’s not clear whether he may fight in the UFC again.

Jon Jones settles with NAC

December 8, 2016

MMA Fighting reports that Jon Jones has reached a settlement with the Nevada State Athletic Commission and will serve a one year suspension.  Jones will be able to return this summer to the UFC octagon.

Jones avoids a hearing before the NAC which could have added on to a USADA suspension handed down to him in October.  A three-person arbitration panel handed down a one year suspension for Jones as he was the first UFC fighter to take USADA to arbitration.  The panel determined that Jones acted recklessly when he took a Cialis-like sexual enhancement pill without knowledge of its contents.  Jones had hoped that the arbitration panel would have been more lenient in its sentencing as a one year suspension was the original requested penalty for Jones.

Jones was to have appeared before the NAC next week at the commission’s monthly hearing.  Jones or his representatives will be there, but to confirm the agreed upon settlement, rather than deal with a punishment.

The one year suspension appears to be retroactive to the date of the discovery of his USADA drug test results, July 6, 2016.

Payout Perspective:

The settlement ensures that Jones will have a possibility to return to the UFC at about the same time that the UFC will run its annual International Fight Week.  This should/could mean the long awaited fight between Jones-Cormier could occur then assuming Jones stays out of trouble and Cormier remains injury-free.  With today’s news, Jones avoids the possibility of an additional suspension and/or prolonged legal battle.

NAC Jon Jones Complaint by JASONCRUZ206 on Scribd

NAC Jon Jones Answer by JASONCRUZ206 on Scribd

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McGregor files Petition for Review of NSAC fine

December 8, 2016

Conor McGregor has filed a Petition for Judicial Review in Clark County, Nevada for his fine levied by the Nevada State Athletic Commission for his water-bottle throwing incident this past August.

Per MMA Junkie, McGregor filed the Petition for Judicial Review on November 18, 2016 per Clark County Court Records.  McGregor is represented by Jennifer Goldstein.  The Nevada State Athletic Commission is represented by Caroline Bateman.

The commission issued a $150,000 fine this past October.  The commission clarified that it was a $75,000 fine and he was to cut a public-service announcement in an amount valued at $75,000.

McGregor reportedly made $3 million from UFC 202 not counting undisclosed bonuses or PPV points.

The state attorney general originally recommended a $25,000 fine but the commission believed that was not sufficient.

Payout Perspective:

The appeal of a commission ruling results in filing a lawsuit in the superior court which is what McGregor has done.  You might recall that Wanderlei Silva filed a similar petition for review in 2015 related to his lifetime ban.  The state court ruled in Silva’s favor, but the order was to remand back to the commission.  Silva appealed to the state Supreme Court but that did not work out.  There is potential for McGregor’s commission penalty to be reversed but it will likely mean that the court will send it back to the commission for to re-determine the penalty.  MMA Payout will keep you posted.

UFC 205 merchandise sales best ever for company

November 15, 2016

The UFC sold more merchandise during UFC 205 than for any event in company’s history according to Darren Rovell.

Reebok introduced New York-themed clothing for the event which ranged in prices from $16-$50 per a report by the Sports Business Journal.

Payout Perspective:

The UFC expected $14-$15M in live event revenue from Saturday night’s debut in New York.  The good night in merchandise is a positive sign that the UFC would achieve its benchmark.  Saturday night was a good night for the company and it appears that business was very good.

UFC 205: Payout Perspective

November 14, 2016

Welcome to another edition of Payout Perspective.  In this edition we take a look at UFC 205 taking place at New York’s Madison Square Garden.

McGregor wins lightweight title from Alvarez

Conor McGregor once again backed up his talk as he stopped Eddie Alvarez in the second round to win the UFC lightweight title.  He now holds the featherweight and lightweight titles.

It was rather easy work for McGregor who displayed his power and showed no fear against Alvarez including dropping his hands and putting them behind his back.

McGregor cut a promo which included calling the UFC “cheap” for not providing him two belts immediately and apologizing to no one.

In all likelihood, McGregor’s next fight will be at 155 and he’ll likely have his choice of Tony Ferguson or Khabib Nurmogomenov.

Woodley, Wonderboy goes to a draw

Sometimes you have to wonder about coaching.  Tyrone Woodley dominated Stephen Thompson in the first round on the ground and you could argue that his dominance deserved a 10-8 1st round.  Yet, he neglected to attempt another takedown throughout the rest of the fight.  Instead, Thompson was able to utilize his length and standup to stifle Woodley standing with the exception of a couple shots in the 4th round that almost stopped the fight.

An immediate rematch seems like the most logical thing although it seems unfair to a patient Demian Maia.

Jedrzejczyk dominates Kowalkiewicz

Joanna successfully defended her strawweight title with a 49-46 unanimous decision over Karolina Kowalkiewicz.  It was a one-sided, 5 round fight with Kowalkiewicz winning a couple skirmishes but Jedrzejcyk earning 4 rounds.

Joanna Violence does not know who’s next but she plans to fight sometime mid-2017.

Attendance and Gate

UFC 205 eclipsed the previous record gate from UFC 129 in Toronto of $12 million. The Madison Square Garden debut drew $17.7 million with 20,427 in attendance according to a UFC official post-fight.

Bonuses

Conor McGregor, Yoel Romero, Tyron Woodley and Stephen Thompson earned the bonuses.  McGregor and Romero won performances of the night and Woodley and Thompson won for Fight of the Night.

Promotion to the Fight

The UFC went all out for its debut including an ESPN Car Wash and various articles in the Wall Street Journal and New York Times.  There was local as well as national coverage promoting the event.

The Embedded episodes gave us a glimpse of the fighters getting ready for the fights focusing on the 3 championship fights.  You have to wonder with all of the episodes at hotels the UFC does not have a partnership with a hotel chain.

Sponsorships

Budweiser sponsored the 6-episode Embedded series.  It also had the fighter prep point.  Notably, Twinzz.com and IconicFace.com were in the Octagon as well.  Both made appearances at UFC 204 in England.  Twinzz.com is a hat manufacturer while IconicFaceoff.com appears to be a fantasy sports web site.

Qalo, a wedding ring manufacturer that touts silicone rings for the active person was a sponsor in the Octagon last night.  It worked with Chris Weidman in leadup to UFC 205.

In addition, Monster Energy Drink had the center as well sharing a corner with 7-Eleven.  MetroPCS, Toyo Tires, Harley Davidson, Geico and Budweiser.

The upcoming movie, “Bleed for This,” the story of boxer Vinny Pazienza was featured during the PPV.  The movie was introduced by Michael Bisping.

Tyron Woodley and Conor McGregor sported the Monster logo on their Reebok kits.

Reebok introduced New York-specific UFC 205 merchandise for this event.  It also sold Conor McGregor-specific shirts including a “I Whoop People for Truckoads of Cash” shirt.

Odds and Ends

Probably the best UFC Prelims ever as the fights could be its own PPV.  Look for it to eclipse the record-setting ratings of UFC 200.

Are MMA purists ok with the WWE-style promotion that McGregor has provided for this event?  The fur coat and faking like he was going after Alvarez with a folding chair seems very much spectacle than reality.

Miesha Tate’s retirement seemed out of nowhere.  She was still a top-ranked fighter but maybe she sees other opportunities on the horizon.

There should be a rule that all interpreters should not have man-buns as Yoel Romero’s did.

Kevin Gastelum did not make weight once again which eliminated his fight with Donald Cerrone from the card.

Despite the talk about blue chip sponsors partnering with the UFC, there were no big surprises.   Budweiser the only real change although Bud Light has been a part of the UFC sponsorship.

One of the storylines from the newfound regulations in New York is the requirement that combat sports promoters needing to provide $1M coverage for brain injury for each fighter on the card.  The UFC paid $1,675 per athlete which came out to $40,200 for UFC 205.  Boxing promoters have been outspoken in speaking out against this measure which was a part of the law that would legalize MMA in the sport.

Apparently, Bruce Buffer knew he was reading the wrong decision in the Woodley -Thompson fight.  However, he can only read what is on the judge’s scorecard.  This is why he left the cage to confer with the judges.

No Trump at UFC 205, but there were other luminaries in the crowd including Demi Lovato and Odell Beckham, Jr. (the NY Giants WR also made a cameo in meeting Tyron Woodley on an episode of Embedded.)

Does McGregor really demand an ownership stake in the UFC, or is this just pure hype and bluster?

UFC 205 pulled over 2 million google searches on Saturday night which usually means a healthy PPV buy rate.  Also over 1 million searches on Saturday were Joanna Jedrzejczyk, Miesha Tate and Ronda Rousey.  Rousey searches likely due to the unveiling of the very good promo for her return on Friday, December 30th.

Conclusion

This event should flirt with the PPV record of 1.6 million PPV buys.  Certainly, college football and the fact that many fans purchase the event at UFC.com could detract from the overall number.  However, with 3 title fights on the main card including the company’s biggest PPV star, Conor McGregor, we should see a PPV buy rate around 1.5-1.7 million PPV buys

UFC launches NY-specific clothing collection for UFC 205

November 1, 2016

The UFC announced that it is launching its first-ever event-specific product line for the promotion’s debut in New York on November 12th.  The New York collection from Reebok features city-themed T-shirts, hoodies, hats and shorts for men and women.

The price points range from $16-$50.

All UFC 205 fighters will wear a unique kit designed for the event and receive an exclusive leather jacket produced by Schott N.Y.C.

20161013_reebok-combat0061

Payout Perspective:

In the past, the UFC would produce t-shirts related to the city where an event took place.  I recall Seattle, California and Texas UFC shirts.  But, this will be the first time that Reebok will produce the outfits for the big N.Y. debut.  The special merchandise is not surprising as the promotion will look to capitalize with as many revenue streams as it can from the New York debut.  A report expects it to draw $14-$15M in “live event revenue” from the event.  The special merchandise will likely be scooped up quickly.

UFC expecting huge revenue from New York debut

October 31, 2016

With the UFC heading to New York on November 12th for UFC 205, a report states that the company will draw $14-$15M in “live event revenue” per documents obtained by MMA Junkie.

An investor presentation which Junkie obtained indicates that gate receipts, merchandise and other add-on should draw the astronomical amount which excludes PPV sales.  In addition, sponsors such as Xbox, Atos and Toyota have interest in sponsoring UFC events according to the company.

An Adweek article stated that brands are attracted to the UFC and its New York City debut due to its appeal worldwide and the important millennial demo.  While the Adweek did not state specifics, the hope for the company is that it will attract blue chip brands for its debut in New York.

Payout Perspective:

It’s clear that ticket prices for the MSG event were going to be astronomical since it’s the debut.  There are tickets available via Ticketmaster with the lowest going for slightly over $1,000 per seat.  The “get-in” price on the secondary market as of the date of this writing is $739 according to SeatGeek.  Cageside seats started at over $1,500 per when tickets went on sale late last month.  We will see whether or not the promotion can continue with such high prices as more UFC events take place in New York (especially at MSG and/or Barclay’s Center).

As for sponsors, this is where I could see the UFC doing some deals.  Whether or not they will be one offs or if they can forge relationships with blue chip brands will be interesting to see.  Thus far, we have not seen any big sponsor activation plans centered toward UFC 205.  Perhaps we see a push next week during fight week in New York.  I would think that a brand such as Microsoft’s Xbox will be a part of UFC 205 in some way.  The former Mighty Mouse sponsor will likely get back in with the company.  With the holidays coming up, the UFC demo is primed for Xbox marketing.

Lundvall’s term on NSAC coming to end

October 23, 2016

MMA Fighting reports that Pat Lundvall’s appointment on the Nevada Athletic Commission will end at the end of October.  Lundvall has served for a total of 9 years for the commission.

Lundvall, an attorney in Nevada, has been in a central figure in some of the more recent discipline hearings before the commission.  Most recently, she was a factor in the discipline hearing involving Conor McGregor.  Instead of accepting a recommendation from the state attorney general of a $25,000 fine and community service, Lundvall motioned for a $150,000 penalty which included the value of a public service announcement (PSA)which McGregor was ordered to film.

After initial reports that the fine was for $150,000, it was clarified that the amount was $75,000 and the value of the PSA was $75,000.

Lundvall was also a central commissioner in the hearing of Nick Diaz in which he was assessed a 5 year ban which was eventually reduced.

Payout Perspective:

Lundvall’s departure will be met with a sigh of relief by some within the MMA community as some of the decisions spearheaded by Lundvall seemed punitive and without much rationale behind them.  The Diaz punishment comes to mind.  Even McGregor’s punishment seemed out of ordinary and it appeared that it was done to show the commission’s muscle rather than anything else.

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