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.

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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.

Nevada clarifies Conor’s fine

October 17, 2016

MMA Fighting reports that Nevada’s Athletic Commission’s executive director Bob Bennett has clarified the fine assessed to Conor McGregor from his bottle-throwing incident.  He states that the fine is $75,000 and not the $150,000 as previously reported.

Despite the fact that the $150,000 number was indicated at an open hearing of the commission, Bennett clarified that the fine was $75,000 and the value of a public-service announcement McGregor must do for the commission is 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, 25 hours of community service and media training.  The commissioners believed that amount was not enough.

McGregor was not a fan of the $150,000 fine stating that he would not fight in Nevada in the foreseeable future.

Payout Perspective:

The backtracking to clarify the fine and then blame media seems like a mishandling of the situation by the NSAC and a way to reduce the fine without drawing an appeal.  The $75,000 value seems like it was pulled out of the air without any evidence that a PSA would cost this much.

McGregor fined $150,000 by Nevada

October 10, 2016

ESPN reports that the Nevada State Athletic Commission has fined Conor McGregor $150,000 for his part of a water bottle-throwing incident at the pre-fight press conference leading up to UFC 202.

The commission decided to fine McGregor 5% of his fight purse and the funds will be disbursed between the state’s general fund and an anti-bullying campaign proposed by McGregor and his attorney at the hearing.  In addition to the fine, McGregor is to do PSAs to benefit children.  The Featherweight champion attended the hearing via phone.

The attorney general’s recommendation was to fine McGregor $25,000, community service and media training.  But that was not enough for the commission.  Their original proposal was to fine McGregor 10% of his fight purse, which would have amounted to $300,000.  However, the commission deemed it too hefty a fine.  Instead, it came to $150,000 plus the community service.

Payout Perspective:

The arrival of the punishment seemed to be something done on the fly and without much logical reasoning behind it.  While the AG recommendation seemed too low to them, they felt that they needed to exact more out of McGregor which was 6 times the recommended amount.  Certainly, they could have suspended McGregor from fighting in the state to send a message.  But, they realize that he’s set records in the state for attendance and gate in Nevada and that would be detrimental to the state.  Although McGregor can appeal the punishment by appealing in court, it seems unlikely.

Nevada Athletic Commission files complaints against Diaz, McGregor

September 21, 2016

MMA Junkie has obtained the NSAC complaints against Nate Diaz and Conor McGregor as it relates to the dustup between the two and Diaz’s camp at the UFC 203 pre-fight press conference.

As you may recall, the press conference ended abruptly after McGregor showed up late and Diaz left soon thereafter.  Verbal exchanges were made and water bottles were thrown.  The NSAC has filed complaints against the two.

The complaints, which mirror one another, cite NAC 467.885 which governs discipline for licensed fighters within the state.  It also cites NRS 467.158 which gives the commission the power to penalize a licensed fighter up to $250,000 for “disciplinary action [that] does not relate to a contest or exhibition of unarmed combat…”  Since this was a press conference, the commission would use this rule to govern the altercation.  It also cites NRS 467.110 which allows the commission to suspend or revoke the license of a fighter.

Payout Perspective:

Look for these two complaints to be settled and/or a stiff fine for both Diaz and McGregor.  Do not look for a suspension of any kind.  In reality, the commission will not want to suspend either fighter unless its known they will not fight in the state for the next 6 months or so.  While there is a need to penalize the two, it’s clear that the commission will not want to harm itself by suspending two of the top grossing fighters for the UFC.

Li Jingliang avoids USADA punishment after flagged test

September 2, 2016

UFC welterweight Li Jingliang will avoid punishment from USADA despite testing positive for trace amount of clenbuterol.  USADA determined that the prohibited substance was ingested without fault or negligence.

The flagged test occurred on May 18, 2016, prior to his fight at The Ultimate Fighter 23 Finale.  Jingliang defeated Anton Zafir in his bout.

Per the UFC-USADA Anti-doping web site: “Clenbuterol is an Anabolic Agent prohibited at all times under the UFC Anti-Doping Policy, which has adopted the World Anti-Doping Agency (WADA) Prohibited List.”  Tainted meat appears to be a possible culprit as it relates to the finding in tests.

According to USADA officials, after an investigation, it has concluded that the Clenbuterol finding is likely due to consuming contaminated meat in China.

Jingliang will not face a period of ineligibility for his positive test.

While the NSAC could feasible discipline Jingliang, I would surmise that based on this finding it is unlikely.

MMA is legal in New York, but boxing promoters are affected by new rules

September 1, 2016

Today, September 1st, will be the first day that one can apply for a New York promoter’s license to hold a combat sports event in the state.  With the legalization of MMA in New York, a proviso requiring a raise in insurance rates has caused some promoters to give pause about holding events in the state.  Mainly boxing promoters are speaking out about the new rules.

The bill which legalized MMA included a raise in insurance rates for all combat sports from $10,000 to $50,000 for general medical coverage and added a $1 million insurance policy in the case a fighter suffers a traumatic brain injury.

According to Jim Genia, there are multiple quotes floating around but the cost for a promoter would be approximately $750 per fighter up front.

Boxing promoters have indicated that they can’t afford the $1 million insurance bond and will go outside the state.  According to a WSJ article, Lou DiBella and Joe DeGuardia have spoken out about how this would hurt smaller boxing shows held in the state.

On Wednesday, the New York State Athletic Commission approved rules and regulations governing combat sports including the raise in insurance rates.  It named Anthony Giardina its interim Executive Director after a shakeup this past summer.

Payout Perspective:

While big events, such as the debut of the UFC in Madison Square Garden this November will likely be unaffected, the effect of the rule suggests smaller promotions which do not have ancillary revenue (i.e., PPV, merchandise, television rights fees, etc.) could no longer hold events in New York.  The health insurance rise in rates stem from the efforts of those concerned with the health risks of combat sports athletes.  The inclusion of the insurance policy may have been a concession when trying to pass the bill this past spring.  Likely, the insurance was also considered after the New York Office of the Inspect General released a scathing report on how the commission handled the November 2013 post-fight incident of boxer Magomed Abdusalamov.  The boxer had to take a taxi to the hospital after his fight amid multiple failures by the commission.  He remains in need of around the clock care after he suffered a stroke.  A lawsuit filed by Abdusalamov’s family against the commission is pending.

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