Pacquiao will command over $2 million for shorts ad space

April 21, 2015

Manny Pacquiao will recieve an extra $2.25 million in sponsorship money for ad space on his boxing trunks for his May 2nd bout against Floyd Mayweather according to Pacquiao’s business manager Eric Pineda.

Pineda told World Boxing News that at this point there are six companies that will have its logos on his trunks.  In the past, Pacquiao has had various Filipino companies on his trunks as well as other notable sponsors including Nike and Head & Shoulders.

Perhaps, the most inauspicious sponsor on Pacquiao’s shorts was Wonderful Pistachios as he wore the sponsor patch in his December 2012 fight against Juan Manuel Marquez.  When Marquez knocked out Pacquiao, the “Get Crackin” sponsor patch on the back of his shorts was visible for all the wrong reasons.

Payout Perspective:

It’s clear that this fight will be one of the most watched in the history of the sport.  While Pacquiao will receive less than half of the gross revenues from the fight, he will make a nice sum from sponsors on his shorts.  For Filipino companies, placing an ad on his shorts makes sense as virtually the entire country will be watching the fight.  What will be interesting is to see whether some of the companies that have sponsored him in the past will pay the dramatically increased fee.  Also, will there be new sponsors for Pacquiao on May 2nd.  Although not confirmed to be on his shorts, Butterfinger has a marketing campaign with Pacquiao in lead-up to the fight.

WWE-Tapout announce joint venture

March 25, 2015

The WWE and Authentic Brands Group, LLC (ABG) announced a joint venture with Tapout as the brand formerly tied with MMA and the UFC will now be the official fitness and training partner of the WWE.

The partnership is reported as a 50/50 joint venture per the Sports Business Journal.  According to the WWE release, it will integrate Tapout across WWE’s global platforms including TV programming, the WWE Network, pay-per-view broadcasts, live events, digital and social media.

As one might expect, the WWE will create advertising and marketing with its Superstars and Divas outfitted in Tapout gear.  It will also be prevalent through the WWE Performance Center in Orlando, Florida and all “performers, trainers and staff” will don the Tapout workout gear.

The Tapout brand is described as “a newly repositioned fitness lifestyle brand” in the press release.  More from the press release regarding Tapout:

The next generation of Tapout™ preserves the original brand essence and drives a hard-body, fitness-centric message positioned around motivation, discipline and determination. An all new line of men’s and women’s performance apparel and accessories will launch at retail in Spring 2016. New Tapout™ branding and packaging will roll out in key categories throughout 2015 starting with beverages, supplements and fitness centers.

Payout Perspective:

There were many rumors about the partnership and the official announcement coincides with Wrestlemania week.  Although not the same as the UFC-Reebok deal, it accomplishes the same premise of partnering with brands in an effort to increase audience and revenue.  With the fitness industry apparently expanding, the WWE and Tapout will seek to make a dent into the market as well.

UFC 185: Payout Perspective

March 17, 2015

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 185 at the American Airlines Center in Dallas, Texas where two UFC titles were on the line.

RDA wins Lightweight Title

Rafael dos Anjos earned his unanimous decision against Anthony Pettis.  It was total domination by the challenger as he topped Pettis with his striking and grappling.  It was an impressive win considering the complete manhandling of Pettis and the post-fight news that he had a knee injury coming into the fight.

Up next for RDA is the winner of Khabib Nurmagomedov and Donald Cerrone this May.  But with RDA’s knee injury, we may not see this fight until December.

UFC 185

Joanna J destroys Cookie Monster

It was a mismatch. And the Champion looked to be in trouble from the start.  Joanna Jedrzejcyzk controlled Carla Esparza and the “Cookie Monster” did not look like a Champion defending her title. Jedrzejcyk’s Muay Thai background defeated Esparza’s wrestling and it was an easy win for the fighter from Poland.

In the end, the referee was looking for a way to stop the fight in the 2nd round.  Jedrzejczyk has the personality to promote fights in her division.  But, will there be anyone in her division that can match her?

Attendance and Gate

Attendance at the America Airlines Center drew a reported 17,160 fans for a gate of $2.155 million as announced at the post-fight press conference.  Despite the good number, it was still the lowest of the three PPVs held at the venue.

Previous Attendance for UFC PPVs at American Airlines Center in Dallas, TX (via MMA Payout Blue Book)

UFC 103 – September 9, 2009 – Rich Franklin-Vitor Belfort Attendance 17,428, Gate: $2.4M

UFC 171 – March 15, 2014 – Johny Hendricks-Robbie Lawler Attendance 19,324, Gate: $2.6M

Bonuses

For the second PPV in a row, there was no Fight of the Nights.  The four Performances of the Night went to RDA, Jedrzejcyk, Ross Pearson and Beneil Darush.  Each received $50,000 bonuses.  There were a lot of stoppages to choose from but one would have to concur that these four stood out.

Sponsorships

For the second straight PPV in a row Monster Energy Drink had the center of the Octagon moving Bud Light to the Octagon bumpers.  In addition, MetroPCS, Harley Davidson, Corn Nuts, DraftKings, Fram, MusclePharm and Toyo Tires.

Fram also had the fighter checkpoint.

Notably, Pettis was sponsored by Reebok, Corn Nuts, Monster Headphones and Monster Energy Drinks.  Interesting enough, no Wheaties logo worn by Pettis or in the Octagon.

Reebok sold Showtime’s gear prior to the event at UFC 185.  Wonder how sales are post-fight.

Monster Headphones also had a campaign centered on Pettis.

Post-Fight Headlines:

-The UFC saw the crowning of two new champions. Who will have the longest title run? Moreover, who will the UFC be able to sell to fans?

-Does Hendricks get another shot at the title? With the win over Matt Brown, should Hendricks get the winner of Lawler-MacDonald?

-Henry Cejudo made weight and won a unanimous decision over Chris Cariaso. Could he be on the fast track to a 125 pound title shot?

Odds and ends

-Ben Askren and CM Punk were in the corner for Anthony Pettis.

-Interesting enough, Erik Koch made a cameo during the first UFC Embedded which one might think unusual if you read “Thrown.”

-Carla Esparza wore a wrestling singlet which was a nice touch. Both Esparza and Jedrzejcyzk were sponsored by Alienware.

-Alienware, a UFC sponsor, has been active of late with its activation with the UFC.  There is a lot more visibility in sponsoring fighters as well as sponsoring the UFC Embedded online episodes.

-For the first time that I recall, the Embedded episodes had a sponsor, Alienware (“Powered by Alienware”). It was the umpteenth time we saw an Embedded episode where someone was at a barbershop getting their hair cut. This time it was Showtime at his barber shop.

-With Monster Energy as a new UFC sponsor, it appears we will see the return of awkwardly holding a soda can in the Octagon after a fight.

-UFC Prelims was on FX due to college basketball. We shall see whether the network change will affect ratings.

-There were over 100,000 Google searches for the UFC on Saturday which was far less than UFC 184 and Ronda Rousey during the same time frame.

-Texas did not do any “out of competition” drug testing for this event.

Conclusion

Prior to the PPV, we wrote whether Anthony Pettis could be the next big PPV draw for the UFC. If he does, it will be in pursuit of the belt he just lost. The card seemed like one more for the solid base of UFC fans that usually purchase PPVs. Yet, with the solid success of UFC PPVs this year, could we see another good PPV buy rate from the company. There was less buzz for this event than the previous three this year. This could reflect in PPV buys as I would assume that we get a PPV buy rate of around 325,000-350,000.

Edgar and Faber state little info given on Reebok deal

March 14, 2015

According to a recent Bloody Elbow report, it appears that many UFC contracted fighters may be still in the dark on the Reebok deal.  During a press event to promote their upcoming fight in the Philippines Frankie Edgar and Urijah Faber indicated they knew little more about the new uniform policy set for July.

Although rules were circulated about the new uniforms, Edgar and Faber stated they knew little details regarding the payouts aside from knowing that the payments from the Reebok sponsorship are tied toward fighter rankings, little else was known by the fighters.

Edgar stated he doesn’t know the breakdown of payments from the Reebok deal.  Faber stated the UFC has “given us zero additional info on the Reebok deal.”

Payout Perspective:

If you are Frankie Edgar and Urijah Faber it’s unlikely you are too concerned with payouts from the Reebok deal since both are established fighters that should have money in the bank.  But, if you are managing their careers, shouldn’t you be concerned?  So, the question is who knows about the deal and its details?  While Edgar and Faber are not champions in the UFC, they are mainstays in the company.  One would think that financial information, even at least projections, about the deal would be provided to them.  Unless they are being told not to speak about the details to the media, it’s clear that there is still uncertainty about a component of their earning power in the UFC.

Jon Jones featured in Reebok shoe launch

March 12, 2015

Jonny “Bones” Jones is featured in the latest Reebok commercial which launched March 8th.  The commercial feature Jones running in a variety of conditions to promote the company’s Reebok ZPump Fusion.

In addition to the commercial, it will be accompanied by print, digital and outdoor placements with the tag line, “get pumped” according to Footwear News.  In a press release sent out on Tuesday, Reebok announced the launch of the shoe “that uniquely conforms to any foot.”  The shoe appears to be a new take on Reebok’s “Pump” technology.

The new shoe is set to retail for $110.

Payout Perspective:

I do not know for sure, but if Reebok purchases advertising during the NBA Playoffs, it will probably feature this commercial.  As indicated in this write-up, Jones will appear in other media for the company’s launch of the shoe.  The UFC participated in a press event for the shoe last week in New York.  Jones is one of several UFC fighters to sign individual deals with the soon-to-be official clothier of the UFC.  We’ll see if the campaign will involve other UFC fighters.

UFC 184: Payout Perspective

March 4, 2015

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 184 from the Staples Center in Los Angeles, California. In the main event, Ronda Rousey fought Cat Zingano.

Gone in 14 seconds

Zero strikes but a scramble that had Cat Zingano’s arm caught by Ronda Rousey and a straight armbar ended the night very early for the challenger.

It’s too bad considering the Zingano backstory.  Even though she was a huge underdog, you would have like to see more of a fight.

For Rousey, she has received mainstream approval and sports people asking if she’s good for the sport.  Obviously, the fact that people are talking about Rousey is good for the UFC.  The question of who should see fight next is a good question.  With Rousey taking time off to do a movie, it will be interesting to see who will be set up as her next opponent.  Beth Corriea? Jessica Eye?  One fighter not mentioned was Cris Cyborg who fought on the Invicta card the night before.

ufc 184 poster

Holm defeats Rocky

It was not the strongest of debuts for “The Preacher’s Daughter” but she sustained a very good Raquel Pennington for the decision.  Holm was one of the most talked about women’s fighters not in the UFC prior to her debut.  Now, she seems destined to challenge for Rousey’s belt.  Based on Saturday, she’s not ready yet.

Attendance and Gate

According to the post-fight press conference UFC 184 at the Staples Center drew a reported 17,654 fans for a gate of $2.675 million.  Of the UFC events held at the Staples Center, only UFC 60 which featured Matt Hughes taking on Royce Gracie did better (14,802 for $2.9 million).  The Staples Center capacity ranges from 18,000-21,000 depending on the event.

Payouts

Cat Zingano ($100K) actually had a higher base salary than Ronda Rousey ($65K) although it was reported by Larry Pugmire of the LA Times that Rousey would probably clear $1 million with her cut of PPV revenues.  Also, Rousey was sponsored by Reebok, Monster and Monster Headphones.  All are UFC sponsors (presumably Monster Energy Drink has signed with the UFC).

Rousey did make $65K and $65K plus a Performance of the Night bonus to earn a total of $180,000.

In addition, Jake Ellenberger made $68K and $68K plus a Performance of the Night bonus to earn a total of $186,000.

Tony Ferguson and Tim Means earned the other $50K Performances of the Night.  There was no Fight of the Night.

The rest of the payouts are here.

Promotion of the Fight

The episodes of UFC Embedded were once again entertaining although I would argue that this time around the portion of the UFC Countdown show focusing on Cat Zingano had to be the best

The pre-weigh-in staredowns included the main eventers wearing evening gowns.

Rousey made the usual media rounds including an appearance on Jim Rome.  Something that people picked up on was a dispute between Rousey and Arianny Celeste.

Sponsors

Probably the biggest sponsor for Saturday was the “M” in the middle of the Octagon which replaced the usual Bud Light sponsor.  It appears that Monster Energy Drink has signed on as a sponsor for the UFC.  The former Bellator sponsor was shown prominently in the center of the Octagon as well as ring posts.

In addition, DraftKings announced a new sponsorship deal this week and was also on the Octagon mat.

Rounding out the sponsors on the Octagon mat included, Bud Light, MetroPCS, MusclePharm, Toyo Tires, Harley Davidson, Air Force Reserve and the movie Run All Night.  Harley Davidson had the prep point.

Holly Holm had no sponsors except UFC on her ring gear.  Raquel Pennington had a pretty nice “Colorado Rocky” shirt.

Ronda Rousey had Monster, Reebok and the UFC on her ring gear.  She also donned Monster headphones upon heading to the Octagon.  Rousey also had her jeans sponsor Buffalo on her fighter poster.  Maybe Nissan of Omaha was the best sponsor for Cat Zingano as it was clearly seen as she was being submitted.  Other notable Zingano sponsors included Sepec and Kalapaki Joe’s.

Odds and Ends

The UFC indicated that the social media campaign around Ronda Rousey did well:

Big search numbers for Ronda Rousey:

Darren Rovell took an ad hoc poll on the popularity of the UFC. The fact that Rovell is gaging his followers on its popularity shows that Rousey sparked his interest in the UFC.

Other ends…

Sponsor Mike’s Seafood on Derrick Lewis’ backside was either a good idea or a bad one.

The top three cities on Google Trends that searched for “Ronda Rousey” were Quezon City, Philippines, Los Angeles and New York in that order.

UFC 184 was in theaters once again. There were anecdotal reports of packed sports bars watching the fight.

Mark Munoz did not look good on Saturday. He failed to make weight on his first try at the weigh-ins although he subsequently made it. I would have hoped that he would make it to the Philippines card and then retire. It might be best for him to retire now.

InvictaFC had a card the night before in LA with Cyborg in the main event. Yet no real mention of her after the Rousey fight.

Essentially, the PPV ended at 9:00pm PT due to the quick main event and prelim matches were shown to fill-in time.

Conclusion

Ronda Rousey is one of the big draws of the UFC and based on searches and media coverage she is someone that casual viewers would tune into watch. The fact that ESPN talking head shows and other sports media were talking about her 14 second win on Monday reflects her popularity. But does that mean it equates to people paying $60 to watch her fight? We shall see. The last time Rousey headlined (without another co-main) was UFC 170 which drew 350,000 PPV buys. My guestimate would be somewhere around that mark and perhaps a little more 350,000-375,000 PPV buys.

UFC-DraftKings announce sponsorship deal

February 25, 2015

The Sports Business Daily reports that fantasy sports operator DraftKings has signed an exclusive partnership with the UFC.  The deal, which was rumored to occur earlier this month now makes DraftKings an official sponsor of the UFC.

The deal will include “offline and online branding assets for DraftKings” including “in-octagon signage” (which we’ve already seen) at UFC events.  One of the notable elements of the partnership is the unique UFC prizes for DraftKings players which include “trips to events, VIP experiences” with Dana White and “fighter meet-and-greets.”

Although the article indicates that daily fantasy MMA games lag behind football or basketball there’s promise that it may grow.

The UFC becomes one of several league partnerships for DraftKings which includes Major League Baseball, NHL, the Breeders’ Cup and the World Series of Poker.  It also has individual team deals with various NFL, NHL and NBA teams.

The deal was brought together by venture capital firm The Raine Group, an investor in the Boston-based fantasy operator.  It was at an investor conference earlier this month where it was reported that the deal appeared imminent.

This past December, DraftKings announced a deal with Jon Jones and the launch of Fantasy MMA on its site.

Payout Perspective:

The deal is done and makes sense considering the fantasy sports industry is booming right now.  With the UFC’s roots in the gaming industry, it was just a matter of time before this sponsorship was finalized.  It will be interesting to see if DraftKings will seek out individual MMA fighters for sponsorship opportunities.

Due to Reebok deal, James Krause states he’ll lose $20K in sponsor money

February 24, 2015

James Krause spoke out about the Reebok deal and stated that due to the new uniform policy he will be losing $20,000 in sponsor money.  In speaking with MMA Fighting, he indicated he did not know how much he will be making, but know how much he will be losing.

Krause is not the only fighter to state that he will be losing money due to the new policy.  Brendan Schaub indicated on his podcast that he would be losing 6 sponsors and that he gets paid twice as much from sponsors than he does from his UFC fight purse.

In his last bout, a loss to Jorge Masvidal at UFC 178.  Krause reportedly earned just $15,000.  He did earn a double bonus at UFC 161.

Although Krause is hopeful about the Reebok deal will bring, the fact that he is not ranked as a lightweight likely means he will not be seeing payouts close to what he received from his sponsors.  The Reebok deal is based on rankings with ranked fighters getting more than unranked fighters.

Payout Perspective:

The article is an interesting and thoughtful perspective on the impact of the new Reebok deal.  For his part, Krause is thinking ahead and planning for the future which is a good thing.  The article indicates he owns two gyms and a Metro PCS franchise (notably, an official UFC sponsor).  He also owns an MMA promotion too.  But, most fighters are likely not as financially forward-thinking as Krause.  With the fact that most fighters do not know what the Reebok deal will make them, there is great concern ahead as they lose their current sponsors.

Draft Kings dealing with potential class action lawsuit

February 17, 2015

Although the UFC and Draft Kings have yet to formally announce an exclusive sponsorship deal in which the fantasy sports operator will become the company’s official sponsor, the two organizations have something in common:  people filing class action lawsuits against them.

As The Legal Blitz brought to light in his ATL Redline post, the Boston-based DraftKings is being sued in federal court in Florida claiming that DraftKings violated the Florida Deceptive and Unfair Trade Practices Act.

Essentially, the lawsuit claims that Draft Kings misrepresented the term “free” in its advertisements in order to induce consumers to deposit money to the website.  Commercials and ads which indicate “free sign-up bonuses” that match up to 100 percent of deposits for the site are untrue according to the complaint.  As described in the complaint, customers must enter fantasy contests and receive bonuses “in incredibly small increments” and rather than the 100 percent deposit match, they receive just 4 percent of every dollar they play.

In this case, the named plaintiff deposited $25 and only received $1 in return when he played in the fantasy contests.  It’s likely that if this case gains momentum, there will be lawsuits all over the country simulating this according to The Legal Blitz.

But, as he points out fantasy sports players registering with DraftKings probably did not know that they agreed to mandatory arbitration.  He points out a 2013 U.S. Supreme Court case which dictates that arbitration provisions are binding and enforceable.

While this may not be the ultimate result in litigation, it’s probably a likely outcome.

Payout Perspective:

It’s always advisable to have arbitration agreements in contracts to reduce the potential of litigation as well as control the potential legal costs. Many things that people sign have these types of clauses.  The way the clause is drafted is the ultimate issue on whether it may be enforced.  The class action lawsuit filed here is an interesting take on the fantasy sports “gaming” industry and how closely it resembles actual gambling.  Obviously, the enticements about “free” are stretched and while many consumers were likely duped into thinking that they’d be getting an incentive for playing, they will probably “let it go” in order to play.  Unfortunately, Zuffa probably does not have as easy a road to resolving its class action lawsuit.

European Judo Union cancels event due in part to UFC sponsorship

February 14, 2015

Bloody Elbow reports that the UFC will end its sponsorship with the European Judo Championships due to threats that the entire event would be cancelled as a result of its affiliation.  However, it appears from its web site that the event scheduled for Glasgow has been cancelled according to the official web site of the organization.

The partnership was to help facilitate the development of future fighters.  David Allen,  the UFC’s senior vice-president and general manager of Europe, Middle East and Africa (EMEA) indicated the reason for the sponsorship:  “People practice tae-kwon-do, karate and judo individually but if you want a career to earn a living, and you’re good enough, MMA is the sport where you can become a professional athlete.”  (via Sky Sports)

But it appears that the European Judo Union does not approve of the sponsorship.

Allen via Bloody Elbow:

“We love to see sport thrive and athletes prosper, which is why the UFC prides itself on supporting all combat sports both mixed and individual disciplines. Our aim was to help Judo reach a new audience, increase promotion, help to sell tickets and create a buzz around the European judo Championships. It is disappointing to see that the European Judo Union cannot see the benefits of collaboration and celebration of all sports.”

The Eurpoean Judo Union posted a message on its web site indicating the cancellation of the event:

The European Judo Union has come to the realisation that the British Judo Association does not fit the EJU criteria to host the EJU flagship event.

The BJA had entered into a sponsorship agreement which did not meet the EJU values. BJA persisted in this, notwithstanding that it had been warned on a number of occasions that this arrangement was unacceptable to the EJU, which has a right under the event contract to approve or disapprove any sponsorships of EJU events.

In their several e-mails and telephone conversations the BJA refereed to a loss of funding. In addition, the BJA missed the agreed deadline to pay the event license fee, which is also a breach of contract.

Taking all of the above into consideration, and given the limited time to the staging of the European Championships, in order to protect the interests of the EJU national federations and European judoka, EJU Executive Committee have unanimously taken the decision to withdraw the event from Glasgow and designate as quickly as possible an alternative host who is willing and able to stage these continental judo championships.

Payout Perspective:

It appears that EJU does not like the UFC based on the statement of cancellation.  While it does not call out the sponsorship agreement, it certainly sounds like it was not pleased.  One might infer that despite the UFC’s global expansion, there is still room to educate the greater martial arts community.

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