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.

UFC-Draft Kings close to sponsorship deal

February 11, 2015

The New York Business Journal reports an “imminent” deal between Boston-based startup DraftKings and the UFC which would make the fantasy sports operator an exclusive sponsor of the UFC.

Prior to UFC 182, Draft Kings announced a sponsorship deal with Jon Jones.  At UFC 183, its logo donned the Octagon mat.  Now, it soon will be the official fantasy sports operator of the UFC.

The deal was announced by one of Draft Kings’ venture capital investors at a conference in New York on Tuesday.

Draft Kings indicated that a one-year deal will include “prominent DraftKings signage at events, a large web presence, and broadcast features designed to bring UFC fans to the fantasy site.”

The company has produced $30 million in revenue last year as it brokered deals with the NHL and Major League Baseball.  Financial terms of the deal were not disclosed. Draft Kings and rival Fan Duel own 90% of the fantasy sports market.

draft kings

Payout Perspective:

The deal make sense as fantasy sports is hot at this time.  The article indicates that fantasy sports could grow to a $20 billion market.  With the NBA’s commissioner Adam Silver acknowledging that gambling should be regulated and it is inevitable, fantasy sports operators have been signing deals with leagues and teams to be its official sponsors.  The growth in this market reflects a correlation between fantasy sports, gambling and the interest in owning statistics for its use.

Report: Miller Lite signs on to be Bellator MMA title sponsor

February 10, 2015

Sports Business Journal’s John Ourand reports that Miller Lite has signed on to be Bellator MMA’s official title sponsor for its 16 events this year.

No financial details were reported.  The deal will go across Spike TV platforms (we assume this means online including the Spike TV App) including  on-air branded fight clock graphic and press-conference signage.

Miller Lite has been involved in sponsorship of Bellator events in the past and was known as the official bear for the company.  The official deal begins February 27th at Bellator 134.

Payout Perspective:

According to the report, its the biggest deal for Miller Lite in MMA .  The deal can be seen as Miller Lite affirming its support of Bellator and its new strategy.  As we know, Bud Light owns the center of the Octagon in the UFC (actually Budweiser was the center for the last PPV but you get the point).  The move shows the positive momentum for Bellator MMA as it heads into a big year for the organization.  For Miller Lite, we shall see if it makes additional moves in combat sports.  With Spike TV repackaging Friday nights with a combat sports focus, it would be interesting to see if Miller Lite brokers other deals with Glory or Premier Boxing Champions.

 

Paige Van Zant scores Reebok deal

February 10, 2015

UFC women’s strawweight Paige Van Zant has signed an individual sponsorship deal with Reebok.  Van Zant, who was a featured contestant on The Ultimate Fighter 20 last year revealed the sponsorship via her social media accounts and the official Reebok Women twitter account confirmed the signing.

The 20-year-old Van Zant is very popular and although her UFC debut in November was not televised, it was the Fight of the Night and her name received 100,000 google searches the day after.

It what should be a well-publicized, televised match, Van Zant is scheduled to face Felice Herrig on UFC on Fox 15 April 18th.  Although the final card order has yet to be made public, one would think that Van Zant-Herrig would be one of the network fights.

Payout Perspective:

Van Zant is an attractive, young and talented MMA fighter which helps her marketability.  Reebok likely needs someone like Van Zant to endorse its products, especially its workout wear for women.  Certainly, this should help elevate Reebok’s women’s sportswear.  Even though she has just one fight in the UFC, its clear from the public interest in her, that she will be a fighter to watch.

Silva sponsors, Globo stick with him despite drug test failure

February 7, 2015

MMA Fighting reports that most of the sponsors of Anderson Silva support him in spite of failing a drug test at UFC 183.

Silva denies any wrongdoing despite testing positive for two anabolic steroids.  Dana White announced his support for Silva and has kept him on as a coach for The Ultimate Fighter Brazil.

Rede Globo, the Brazilian television network partner of the UFC has voiced its support of Silva.  Similar to the UFC, it will wait until the “results are released and the Nevada State Athletic Commussion has made its decision.”

Most of his sponsors have voiced support for Silva.  Budweiser, a longtime Spider sponsor, will not comment on the issue at the moment but has not severed ties with Silva.  Hotel Urbano, a rather new sponsor of Silva’s indicated that it will continue to support Silva.

However, Brazilian soccer team Corinthians has denied currently sponsoring Silva.  Corinthians had sponsored Silva through November 2014 but has no existing contract with the fighter since.  Rather, the club claims that Silva has chosen to put its logo on his banner even though it is not paying Silva.

The rest of Silva’s sponsors from UFC 183: Do Bem, Viber and Sports Arena had not responded to a request for comment.

Payout Perspective:

The affirmation of support from Globo and Silva’s sponsors is similar to the support Reebok gave Jon Jones have his drug test failure.  Obviously, these companies have invested in Silva and hope that its brand is not tarnished by supporting a fighter that may have used PEDs.  The standard tact here is to support the fighter until its definitively proven otherwise.  Silva has denied PED use and it’s clear he has an appeal process that he can pursue.   If his appeal is denied, we shall see if the companies reassess its position.

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.

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