UFC 182: Payout Perspective

January 5, 2015

Welcome to another edition of Payout Perspective.  This time we take a look at the much anticipated fight between Jon Jones and Daniel Cormier.

HQ_UFC_182

Jones dominates Cormier

In one of the most anticipated fights in some time, Jon Jones dominated Daniel Cormier.  It was clear that as the fight progressed, Cormier looked like he lost confidence and Jones had broke his will.  Say what you want about the crotch chop at the end, Jones is the best there is right now and he knows it.

This guy may be next for Jones:

Then again, there are rumblings that Jones may face Cormier’s training partner and friend Cain Velasquez. Although Cain is a heavyweight, Jones looked huge compared to Cormier.

Cerrone decisions Jury

One might have thought that this fight would have been a great lead-in to the main event.  Cerrone is a guaranteed “bonus” of the night, right?  Well, not so much tonight.  Except for a bunch of meaningless kicks by Cerrone to Jury, this was a forgettable fight.  Cerrone was disappointed despite winning.

Attendance and Gate

MMA junkie reports the attendance at the MGM Grand at 11,575 for a gate of $3.7 million.  There was no news on comps although the UFC were giving away tickets for the event. The gate failed to crack the top 5 of UFC events at the MGM Grand.  Notably, UFC 168, which occurred at about the same time last year, drew 15,650 for a gate of over $6.2 million.

Despite the low attendance, Dana White was bullish about the PPV buys as he indicated that the 750K PPV buys he predicted pre-event were trending to exceed his expectations at the post-fight press conference.  Although this cannot be confirmed, there were multiple reports that movie theaters and sports bars were full or near capacity.  This will not help contribute to the PPV buys but shows the amount of interest.

Bonuses

Bonuses for UFC 182 went to Paul Felder, Shawn Jordan, Jon Jones and Daniel Cormier.  Arguably, Felder was the most impressive fighter of the night (next to Jones of course) with his spinning back fist KO of Danny Castillo.

For you gamblers, Felder was the biggest underdog to win at +190 according to the MGM Grand.

Cody Garbrandt was shut out of receiving a bonus despite a strong UFC debut against Marcus Brimage.  Garbrandt was a +130 underdog.

Pre-Fight Promotion

While it was not as expected, the media day brawl back in August was the best thing to promote this fight.  Perhaps it would have picked up more steam if the fight actually happened in September than now.  Still, the promos for this fight were outstanding.  It centered on Jones and Cormier’s brawl and the subsequent ESPN dust-up caught on camera.

The UFC Embedded episodes included Jones attending a high school wrestling practice and Cerrone’s action sports (snowmobiling, car racing and flying).  It also included a backstage altercation between Jones and Cormier.

Tyson Griffin also captured the animosity on his Instagram as the two camps passed each other here and here.

The UFC special Bad Blood featured the Jones-Cormier feud.  Although this episode which aired on FS1 and replayed FX drew praise and hype from MMA folks, in my opinion, it amounted to a regular HBO 24/7 episode.  There was also a countdown show and an “All Angles” show featuring Cerrone.  Essentially, the episode was a “getting to know” Donald Cerrone show.

In addition to the television commercials, there were extensive radio buys which do not usually occur for a standard UFC PPV.

UFC 182 was shown in movie theatres across the country. From surveying social media, it appears that many people actually went to see the event at theatres. 

Also, bars across the country seemed to be packed for this event.

Sponsorships

The octagon had UFC sponsors, MusclePharm, Fram, MetroPCS, Harley Davidson, Cimemax’s Banshee, Toyo Tires and Bud Light in the center.  There was also signage for UFC 183 featuring an image of Anderson Silva sitting in a “spider” position.  Banshee also had the fighter prep point. There was also a commercial on the Cinemax show during the event.   

Cerrone was sponsored by Budweiser and attempted to giveaway beer on the Las Vegas Strip on New Year’s Eve until the UFC stopped the promotion.  Prior to the fight, it was announced that he had signed a sponsorship with Fram.  

Cormier had “Break Bones” t-shirts for the event which were made by his sponsor, CageFighter.

Jones sported his new Reebok sponsorship.  Jones’ trunks appear to be what his official uniform may be. He also has his own share of shirts from UFC.com.

Odds and Ends

  • To the dismay of some people, the UFC increased prices of its PPVs to $59.99 HD for the first three events of 2015.
  • The PPV was short on time which is odd since there have been at least two times in recent memory where a UFC PPV has exceeded 3 hours. UFC 181 had five hours squared away instead of the normal four hour block on PPV.  One would think if people were going to pay $5 more, the UFC would pay for an overrun to get some in-ring interviews of the co-main and main eventers.  Regardless, look for big ratings for the FS1 post-fight wrapup.
  • CM Punk was on the FS1 pre-fight show and did a Q&A before the weigh-ins. The company is getting the most out of Punk already and putting him out there for 182 made sense.  How much will they use him before he actually fights?
  • The commission threatened the fight purses of Jones and Cormier if there was any dustup at the weigh-ins. Thus, the awkward weigh-in staredown.
  • Steven Seagal was in attendance and “aided” Daniel Cormier prior to the fight as shown in an “Embedded” episode. Doesn’t look like it helped.
  • UFC Heavyweight newcomer Jared Cannonier utilized crowdfunding site GoFundMe to raise money for his training camp. He exceeded his goal of $5,000 by raising $6,100.  Unfortunately, he was KO’d by Shawn Jordan.
  • Speaking of training camps, Cerrone indicated he paid $20,000 to bring in fighters to spar with him. He is set to make slightly over $100,000 for the fight.
  • The UFC announced big additions to its Fight Library with the acquisition of libraries from several promotions.
  • We already know, but Conor McGregor is getting a huge promotional push by the company.
  • Is the UFC using the “boxing strategy” as many suggest that they highlight one fight to sell for its PPV? This can be done if there is a heated feud, but probably hard to sell as frequent as its PPVs are due to lack of build.

Conclusion

After the event, Dana White indicated that PPV buys were above the 750,000 he predicted pre-event.  There were 500,000 Google searches as of Friday which would indicate a big PPV buy rate.  However, the cautionary tale of relying on Google searches is that Pacquiao-Algieri fight in November drew 500,000 searches yet only drew a reported 300,000-400,000 PPV buys.  But, the promotion of the Jones-Cormier feud alone seemed to create the kind of buzz that got fans that pick and choose purchasing PPV events to buy this one.  Any buy rate number hitting 600,000 (or above) will be a great start for 2015 for the UFC.

UFC sponsor Fram signs Cerrone, Hendricks

January 3, 2015

Donald Cerrone and Johny Hendricks have signed sponsorship deals with official UFC sponsor Fram according to a Fram press release.  Cerrone will don the Fram logo at Saturday’s UFC 182.

The deal should help with Cerrone’s training camp costs.  Cerrone indicated after an open workout this week that he spent $20,000 on his training camp leading up to his fight against Myles Jury.  Cerrone will appear in future promotional and advertising campaigns for the oil filter brand.  No financial terms were disclosed in the article.

Hendricks, who will be facing Robbie Lawler later this year, will appear in future Fram campaigns.  No financial terms were indicated for Hendricks.

Additionally, Fram has extended its sponsorship deal with the UFC through 2015.  You may recall that the brand first appeared as signage in the Octagon on TUF.  Recently we’ve seen it in the Octagon at other events as well.

Payout Perspective:

Cerrone has had unique sponsorships that are not the usual UFC fare including golf cart company EZ-Go and Budweiser.  NASCAR’s Kevin Harvick is Cerrone’s agent and one might infer that Harvick’s ties to Fram might have helped facilitate Cerrone’s deal.  As an aside, Miesha Tate is also represented by Harvick’s athlete representation agency.  Hendricks also is sponsored by Reebok, Bass Pro Shops and Zak Products among others.  The individual deals for Cerrone and Hendricks are the latest in UFC fighters signing sponsorship agreements with official UFC sponsors.  One might think we see this trend continue into 2015.

14 for 14: No. 2 UFC-Reebok announce uniform deal

December 31, 2014

There was much speculation as to when the UFC would broker a uniform deal.  The long-awaited deal will begin during International Fight Week in July 2015 according to the joint announcement on December 2nd.

Details of the deal are outlined here.

ufc and reebokThe deal is estimated at 6 years for $70 million and offers a unique distribution deal which the UFC touts will give back to its fighters based on UFC rankings.  However, with the announcement of the UFC-Reebok deal, it also means that all other fight sponsors would be eliminated from the Octagon.  There will no longer be fight banners or any other sponsor patches on shorts or t-shirts.  Fighters may not wear other sponsors during UFC related promotions leading up to an event.  This information led to many concerned fighters.  Brendan Schaub indicated that he lost 6 sponsors in light of the Reebok deal.  The Heavyweight stated that he made twice as much from sponsors as his fight purse from the UFC.  It also means the end of many sponsors we are familiar seeing such as Dynamic Fastener.

On the other end of the spectrum, Jon Jones and Ronda Rousey signed individual sponsorship deals with the brand.  The two join Johny Hendricks and Anthony Pettis as those fighters with sponsor deals with the company.

The UFC indicated it reached out to fighters about the deal prior to its announcement although a list of those fighters has not been disclosed to the public.

Payout Perspective:

It will be interesting to see how the deal will play out.  While many knew of the impending uniform deal, they did not know that fighters would be paid based on their UFC ranking.  The rankings are based on media vote which adds a layer of uncertainty to the whole situation.  One might surmise that any controversy about fighters getting paid from this deal will be immediately deflected to those media members that choose the rankings.  Then again, the entity that chooses the media members that votes on the rankings…the UFC.  Moreover, at this point, it does not seem like any of the fighters know how they will be compensated or what to expect based upon fighter rank.  Also, if you are an unranked fighter, will you be making more or less with the Reebok deal?  It will be interesting to see how this deal will play in the current antitrust lawsuit filed by fighters against Zuffa.

14 for 14:

3.  Bellator 131/Bellator on PPV

4.  Zuffa downgraded by Standard & Poor’s

5.  CM Punk signs with the UFC

6.  Rebney replaced by Coker

7.  UFC Fight Pass a success in first year?

8.  TRT banned by NAC, UFC

9.  UFC PPVs down

10.  WSOF airs on NBC

11.  UFC continues global expansion

12.  Rousey wins CSAC arbitration against Fight Tribe

13.  Cung Le drug suspension overturned

14.  Gil re-signs with the UFC

Jones reveals truth about losing Nike sponsorship

December 30, 2014

MMA Fighting reports that Jon Jones did not lose his Nike sponsorship due to his media day brawl with Daniel Cormier.  But while under oath with the Nevada Athletic Commission in September, he told the commission that he lost it due the brawl.

The public revelation of this came out during a media call on Monday in which Jones was promoting UFC 182 set for this Saturday.

Jones informed the media of this during the conference call (via MMA Fighting):

When I was in front of the commission, I definitely worded it wrong.

Nike did not drop me because of that fight  and I kind of owe an apology to Nike for saying they dropped me because of the fight. They actually didn’t. Nike has been known to support its athletes through much worse things than a brawl in the middle of MGM [Grand].

As we pointed out back in September, there’s a list of athletes that have been let go by Nike for far more severe indiscretions.  Jones being let go due to this brawl did not seem to fit.  Yet, he informed the commission that he lost Nike as a sponsor due to this fight.

Payout Perspective:

Essentially, Jones did not speak the truth (sometimes this is called lying) when placed under oath by the Commission.  As we all know, just like in the movies, being under oath carries a “penalty under perjury.” Basically it’s falsifying the affirmation of telling the truth.

The commission has the authority to discipline an individual that provides it with “false or misleading information.”  The discipline may include suspending or revoking a license under NAC 467.885.  While Jones did misstate that he lost Nike due to the brawl, the bigger question in my opinion is whether that information led to the commission’s decision on the discipline for Jones.  Thus, if the commission based its fine and community service on the fact he lost Nike, there may be an issue.  But, if the commission would have decided the penalty regardless of losing Nike (or Nike was an additional factor), Jones’ misstatement might not bear any subsequent penalty.

At the hearing, the commission did appear impressed with Jones’ remorse, thus, this revelation that Jones’ Nike deal was not nixed because of the media day fight may be a non-issue to the commission.  On the other hand, the commission might be upset with Jones here and call him back before the commission to have him clarify his statement and/or ask him why he said he lost Nike as a sponsor when he did not.  A penalty might occur simply as an example that you cannot misspeak before the commission.

DraftKings announces partnership with Jon Jones, launch of Fantasy MMA

December 23, 2014

On Tuesday, fantasy sports web site DraftKings announced a partnership with UFC Champ Jon Jones in conjunction with the launch of Daily Fantasy MMA on its web site.

In its first method of sponsor activation, DraftKings is offering a contest with winners of the first DraftKings MMA event getting a chance to meet Jones as well as an all-expenses paid trip to UFC 183 on January 31st in Vegas where Anderson Silva faces Nick Diaz in the main event.

Citing the young MMA demo and its potential for growth are the primary reasons why DraftKings has decided to embark on the new fantasy site and the partnership with Jones.

draft kings

Details of the contests are here.

DraftKings, a Boston-based company, has forged partnerships with Major League Baseball, the World Series of Poker, World Poker Tour and the Breeders Cup.  In addition, DraftKings has an official partnership with the New England Patriots (coincidentally Jones’ brother plays for the Pats).   It also has individual deals with the Boston Bruins, St. Louis Blues and the New York Rangers.

According to DraftKings’ press release, there are more than 41 million people in the U.S. and Canada that play fantasy sports.  DraftKings offers contests for experts and casual players.

Financial terms of the deal were not disclosed.

Payout Perspective:

There are other sites out there with Fantasy MMA options but this new deal with Jones could see DraftKings as the “official” Fantasy site for the UFC.  When UFC exec Lawrence Epstein told ESPN back in October that the UFC supported the expansion of betting in the U.S., one might conclude that this was one of the potential reasons.  Similar to the NBA, which also publicly supports a gambling option in the U.S., fantasy sports operators have forged deals with leagues to be its official operator.  The NBA has a deal with DraftKings’ rival, FanDuel.  One of the potential reasons for these partnerships is to solidify ownership of the rights to the statistics of the leagues.  This is another way that leagues, such as the UFC, can monetize its information.  Whether there is an ownership right to statistics is a debatable subject.

As for the partnership, this is another sign that the UFC is actively pursuing sponsorship options.  On Monday, news broke that it is in advanced negotiations with Monster Energy Drink and earlier this month it entered into a deal with Reebok.

We will see where this sponsorship goes and what it may mean for the UFC.

Monster Energy Drink nears sponsorship deal with UFC

December 22, 2014

MMA Junkie reports that Monster Energy Drink is nearing a multi-year, multi-million dollar deal with the UFC.  The deal is reportedly worth $7 million which would elevate the energy drink brand with Reebok and Budweiser.

Monster Energy Drink is/was a sponsor of Bellator.  Bellator appeared at a Monster Energy event in October and there was speculation that there were more crossover events to come.  Apparently not.

Coincidentally, the report comes a couple days after Rampage Jackson announced his return to the UFC.  Jackson is a Monster Energy sponsored athlete and wore a Monster hat in the video where he announced his return.

Sources in the Junkie article indicate that the deal may help fighters that may be losing out on sponsorship dollars due to the changes in the UFC policy.

Monster is a publicly traded company on the NASDAQ and holds one-third of the energy drink market.  It is owned by Hansen’s Natural Soda Brand and is based out of Corona, California.

Payout Perspective:

It looks like the UFC may have replaced Xyience.  With the news of Monster Energy Drink potentially coming to the UFC, it likely puts Monster headphones on the outs.  One would assume that any deal between Monster and the UFC would mean the end of the headphone company’s sponsorship.  This would ensure that there is no confusion between the headphone maker and the energy drink.  Two sponsors with the same name will simply not work.  Thus, we may never see fighters wear those headphones to the Octagon again.  As for Bellator, it looks like it may be in need of another sponsor.

Reebok signs Rousey, Jones to sponsorship deals

December 16, 2014

The UFC announced that Reebok has signed Jon Jones and Ronda Rousey presumably as spokespersons for the brand.  The announcement comes on the heels of the recent announcement that Reebok would be the official global outfitter of the UFC.

The deals appear to be individual sponsorship with the brand and both will have the opportunity to provide a measure of input to the new UFC apparel as well as “a new collection of footwear and apparel specifically created for the more than 35 million people around the world who participate in combat training to stay fit,” according to the press announcement.

No financial terms were provided.

Both fighters announced their new sponsor deal on social media.

My girl @rondarousey and I are about to smash this @reebok game!! We’re about to take fitness apparel to a whole new level!

A photo posted by Jon Bones Jones (@jonnybones) on

Payout Perspective:

This is an interesting sponsorship deal considering that all UFC fighters under contract will be sporting Reebok by July. We assume that Jones and Rousey will take more active roles promoting the brand based on the information provided in the announcement. Certainly, these are two of the most high-profile fighters that Reebok could sign on the UFC roster. Currently, Jones and Rousey join Johny Hendricks and Anthony Pettis as UFC fighters with individual Reebok deals.

Schaub loses 6 sponsors in light of Reebok deal

December 10, 2014

According to a recent podcast by UFC Heavyweight Brendan Schaub, he has lost 6 sponsors due to the recent UFC-Reebok uniform deal.  On The Fighter and The Kid podcast this week, Schaub claims that he had made twice what the UFC pays him from sponsors.

Schaub lost to Travis Browne at UFC 181 this past Saturday.  Schaub made $32,000 as disclosed by the Nevada State Athletic Commission.

If we are to believe this to be correct, Schaub would have made six figures with a win plus his sponsorship money.  Even without the win, Schaub would be making close to six figures.

(h/t:  MMA Mania)

Payout Perspective:

We might see more stories like Schaub’s in the coming months as the Reebok deal goes into effect in July.  Certainly, current sponsors may seek to leave the UFC as they might revisit their respective marketing budgets and either find fighters in other organizations to sponsors or leave the MMA landscape altogether.  MMA Fighting has an interesting perspective on the Reebok deal from managers with UFC clients.

The obvious concern about the Reebok deal is that fighters will lose money from sponsors without knowing what they will be earning through this new arrangement with the UFC.  Furthermore, managers are not able to say whether the Reebok deal will be better or worse than their current earning potential.

UFC 181: Payout Perspective

December 9, 2014

Welcome to another edition of Payout Perspective.  This time we take a look at UFC 181 which took place at the Mandaly Bay Events Center in Las Vegas, Nevada

CM Punk signs with UFC

Usually we start off with the main events, and there were two very good ones, but the big news coming out of the PPV was the announcement that Phil Brooks (the artist formerly known as CM Punk – the WWE owns the trademark and we’re not sure if terms of his settlement included continued use of the name) has signed with the UFC.  Brooks is 36 and has no formal experience in MMA unless you count his training in BJJ and Kempo.  Recently, Brooks talked about a variety of health issues he had while in the WWE as well as the indication he has had a lot of concussions (12 or 13 per the Cabana podcast).  The concussions do not even count the ones that were not medically recorded.  We will definitely talk about this more but as it relates to business, this is a calculated risk for the UFC.  It should bolster a UFC for the sheer curiosity from former WWE fans.

Lawler edges Hendricks for UFC title

Robbie Lawler started and finished the second fight with Johny Hendricks in a flurry.  And it might have been the last flurry in the end that solidified the win for Lawler.  Maybe Hendricks fell into the same trap of confidence as he did when it appeared that he had defeated GSP.  Hendricks had turtled up in at least two rounds allowing Lawler to seemingly pound away at him.  Even if the blows did not hurt, the appearance made it seem that Lawler had the advantage.  In the end,  Matt Hughes had the opportunity to put on the belt for the new champion.

Although a third fight would make sense, Rory MacDonald was in attendance and should be the next in line to challenge for the belt.

Showtime crisp in title defense

Anthony Pettis is good.  That’s an understatement.  Despite a shaky first round against Gilbert Melendez, Pettis took advantage of a shot from Gil and quickly secured a guillotine.  He’s now subbed Benson Henderson and Gilbert Melendez with ease.  It’s clear that Pettis is the tops of this division.  Pettis is athletic and quick and if he avoids significant injuries (wrote this before news of his hand), he can be a force in the UFC.

Up next for Pettis should be Khabib Nurmogomedov who showed up at the press conference to ensure Showtime knew who he was.

Attendance and gate

MMA Junkie reports the attendance and gate at the Mandalay Bay Events Center in Las Vegas. The attendance announced post-event was 9,617 for a gate of $2.488 million.  The last event at the Mandalay Bay was UFC 170 in February 2014 for Ronda Rousey-Sara McMann.  That event drew 10, 217 for a gate of $1,555,870.

Promotion for the Fight

UFC Embedded was the main driver once again and offered some good background on Hendricks-Lawler and Pettis- Gil.  It also covered the Pettis Wheaties box cover announcement and the Reebok uniform announcement.  Hendricks’ sponsor, Bass Pro Shops, received some exposure as Johny was seen shopping for a rifle at the outdoor sporting goods store.

The UFC released Hendricks-Lawler I online which one must consider was one of the best fights of the year.

UFC 181 sported a comic book theme with the fight poster.  A nice change from the usual face offs.

ufc 181

UFC 181 was slated for movie theaters once again.

Sponsorships

In the Octagon were Wargaming.net, Alienware, Matefit.me, Fram, Musclepharm, Metro PCS, Harley Davidson, Air Force Reserve (a Robbie Lawler associated sponsor), Toyo Tires and Bud Light in the center.

Johny Hendricks had a new sponsor for the fight, Zak Products, an official NASCAR sponsor.

Hendricks and Pettis, already sponsored by Reebok, wore the brand into the Octagon.  Perhaps the Pettis walkout shirt is a glimpse of what to expect from the brand in July.

Dynamic Fastener made its presence known in the Octagon.  Hopefully, viewers will figure out what it does before it goes away in July.

Harley Davidson had a promotion where the winner of the Travis Browne-Brendan Schaub fight won a Harley.  For those that didn’t watch, Browne won the motorcycle.

Odds and ends

Raquel Pennington-Ashlee Evans Smith ending was a cliffhanger of sorts since FS1 cut to commercial as Pennington had the choke on Smith and it was not clear what had happened.  I recall the same thing happening with Dan Henderson-Shogun Rua.

Great wins for Todd Duffee and Josh Samman, the latter with a great headkick KO of Eddie Gordon. Gordon wore a legalize MMA shirt into the Octagon as he fights out of Matt Serra’s gym in New York.

There was some foreshadowing about 181 by Dana White on the Jim Rome Show.

Another interesting question in light of the Reebok deal.

Urijah Faber took what is becoming a normal spot as the final bout on the UFC Prelims.  It’s interesting that he’s becoming a mainstay in this position but according to Dave Meltzer he chooses to be on FS1 rather than PPV because more people watch.  It makes sense considering he is a name, can draw viewers to the FS1 prelims and is a good bridge to the PPV telecast.

Interesting that they dropped the lights for Pettis-Gil but not for Hendricks-Lawler.

The production for the promos for UFC 182 and UFC 183 were great and showed more of a entertainment edge to them.

A good read on referee Mark Smith, who is a retired Air Force pilot.  Only coincidence that Air Force Reserves was a sponsor on the Octagon mat.

Conclusion

UFC 181 was one of the best cards of the year.  From the Prelims to the main event, it came through with action fights, KOs, submissions and a surprise announcement.  Does that mean it will cash in with PPV buys?  Google searches were high on the search terms UFC and CM Punk in the U.S. as both were trending 3rd and 6th respectively with over 100K searches each.  While this does not necessarily equate to buys (e.g. Manny Pacquiao registered over 500K searches yet scored a reported 300K PPV buys), we should see UFC 181 doing well and above this year’s PPV average.  Look for somewhere between the 400-500K range.

Pettis Wheaties box revealed

December 5, 2014

At a UFC media event this week in lead up to this Saturday’s event, Wheaties unveiled the Anthony Pettis box donning his image.  Pettis won a contest this past summer to determine which next sports star should be the face of the cereal box.

Pettis is the first MMA fighter to have his image on the trademark Wheaties box.

Payout Perspective:

It’s a nice, creative image which takes advantage of Pettis’ GQ good looks yet still puts him in a position where the casual person can tell he’s an MMA fighter. The timing of the event works out as its added publicity for Pettis and the UFC for this Saturday’s PPV.  With the Reebok announcement made on Tuesday, perhaps the Pettis-Wheaties partnership will be short-lived.  But, maybe the UFC could be making inroads with Wheaties to make it an official sponsor.

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