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

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.

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.

Governor Cuomo signs NY MMA Bill into law; UFC announces event at MSG November 12th

April 14, 2016

New York Governor Andrew Cuomo signed the MMA bill into law making professional mixed martial arts legal in the state.  As a result, the UFC announced a “major Pay-Per-View event at Madison Square Garden on Saturday, November 12.”

The UFC also announced another event in upstate New York to occur by the end of this year.

UFC in NY

Via UFC press release:

UFC will be adding another live event in Upstate New York before the end of the year. The organization has pledged four events per year for the first three years after passage of the bill. The events will be held in Upstate cities such as Buffalo, Rochester, Syracuse, Utica, and Albany, in addition to Madison Square Garden and the Barclays Center.

Today’s bill signing and event date announcements cement mixed martial arts’ incredible future in the state of New York, and reaffirm UFC’s commitment to a market that is home to many top stars including former UFC champions Jon Jones, Chris Weidman and Rashad Evans, and countless other title contenders.

“I want to thank Governor Andrew Cuomo, Assembly Majority Leader Joseph Morelle, Senator Joe Griffo and the many other leaders in the state of New York for legalizing and regulating the sport of mixed martial arts,” said UFC Chairman and CEO Lorenzo Fertitta. “Our commitment to bringing incredible live events to New York starts immediately, as we’ve planned a major Pay-Per-View event at Madison Square Garden on November 12. It’s going to be a historic, monumental moment for this sport and our passionate fans when the Octagon finally arrives in New York.”

“Today marks a great day for both MMA fans and New York,” said Joel Fisher, executive vice president, Marquee Events and Operations, The Madison Square Garden Company. “We think it’s only fitting that the first UFC event is taking place at The World’s Most Famous Arena and look forward to these world-class athletes becoming part of The Garden’s storied history.”

Payout Perspective:

For those wondering, the New York State Athletic Commission, who will oversee MMA in the state, will be up to speed by September 1, 2016.  Essentially, this is when the law will come into effect as explained by Jim Genia.  Although no names have been pinned to the November 12 debut in New York, you can expect New York natives Jon Jones and Chris Weidman to be prime candidates for the event at Madison Square Garden.  Also, Ronda Rousey is rumored to be back in the octagon around this time so that would make sense as well.  Certainly, Bellator and WSOF will be working to have events in New York as well.

NY Times op-ed asks Governor Cuomo to veto MMA Bill

April 6, 2016

Despite the fact that the New York Assembly passed legislation to legalize MMA in the state, Governor Andrew Cuomo has yet to sign the bill into law.  Thus, the New York Times published an op-ed piece calling for the governor to veto the MMA bill.

The opinion piece by Nicole Gelinas of the Manhattan Institute is a valid but antiquated argument about the reasons not to legalize MMA in the state.  The op-ed highlights the issue of health and safety as a reason to continue the ban on the sport.  The writer argues that the legalization of MMA in the state will “cause more traumatic brain injuries among vulnerable young people.”  To double down to emphasize the risk, the writer gives a worst case scenario that these injures could result in “lifetime disabilities.”

The editorial goes on to do what everyone does when they don’t want to address a controversial issue. Put it off for a later date.  The op-ed states that there needs to be more time to study the issue.  And while there is an acknowledgment that the NFL has similar issues with head injury, it is better organized as opposed to MMA’s “gig economy.”

Payout Perspective:

There are (at least) two sides to every issue.  While the anti-MMA editorial in the NY Times calls for Governor Cuomo to veto the legislation based on health and safety reasons.  The fact is that unregulated MMA goes on in New York and there are legally run MMA gyms already in the state.  The article does not address this.  While it is valid to say that MMA fighters are susceptible to head injuries, it’s scare tactics to infer that the sport may lead to “lifetime disabilities.”

It’s clear that the op-ed is against combat sports and believes that banning the sport would benefit the state.  The reasons are similar to those that are not familiar with the sport and see as much more violence than sport.  Does the op-ed hold any persuasion with the Governor?

WSOF set to acquire NY-based MMA World Expo

April 1, 2016

The World Series of Fighting has announced that it has signed a letter of intent to acquire the New York City-based MMA World Expo.  The organization said that it plans to stage a series of bouts at the Javits Center in Manhattan this December.

Via WSOF press release:

“This is a very exciting and momentous time for our great sport, so we could not be more thrilled to take significant steps towards becoming owners of the MMA World Expo, which has been consistently delivering an incredible fan experience for the last six years and which will make for a great home for live World Series of Fighting action at a landmark location in Manhattan,” said World Series of Fighting CEO Carlos Silva.

In anticipation of New York legalizing professional mixed martial arts in the state, WSOF opened a satellite office in midtown Manhattan late last year.

Payout Perspective:

The acquisition makes sense considering that MMA in New York is now legal.  It could have been something that the company had been eyeing for a while.  The Expo is an event that WSOF could build around as one of the organization’s “big” events of the year.  We will see how the execution plays out.

New York Assembly passes MMA bill

March 22, 2016

The New York State Assembly passed legislation that would legalize mixed martial arts in the state.  The bill now needs the signature of the governor for New York to be the final state to legalize MMA.

The passage comes after years and years of lobbying efforts, two lawsuits and an appeal that was set to occur next month.

The legislation came to the State Assembly for vote and after over 2 hours of assembly members having their chance to speak, the bill passed.

The green in the twitter picture indicates “Yes” votes.

The UFC issued a press release immediately after passage and will hold a press conference at 4:30pm PT Tuesday.

From the UFC press release:

UFC® Chairman and Chief Executive Officer Lorenzo Fertitta applauded the overwhelming, bipartisan New York State Assembly passage of legislation to legalize and regulate professional mixed martial arts (MMA) in New York. The passage of A.2604-C, sponsored by Assembly Majority Leader Joseph Morelle and 72 other Assembly sponsors, means the bill has now passed both houses and will be sent to Governor Andrew Cuomo for his approval.

Lorenzo Fertitta thanked all in Albany that helped in the effort.

“This has been a long time coming and on behalf of our New York UFC athletes and fans, I want to offer heartfelt thanks to Speaker Heastie, Majority Leader Morelle and all the Members of the Assembly – Democrats and Republicans – who voted for this bill.”

Payout Perspective:

Perhaps the UFC press conference will reveal a date for the UFC to head to New York.  Bellator and other promotions will be able to hold events in New York as well.  The UFC indicated that it would hold an event in the state by the fall but maybe that could be moved forward depending on when the state will be able to establish its protocols for regulating MMA.

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