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Fox Sports: "Zach Arnold's Fight Opinion site is one of the best spots on the Web for thought-provoking MMA pieces."

« | Home | »

Friday fallout: More confusion than clarity

By Zach Arnold | October 26, 2007

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Oh yeah, there’s a ShoXC event tonight. Shayna Baszler is fighting on the card. Watch the show.

So, there were dueling press conferences between UFC and Randy Couture on Las Vegas on Thursday. Here is the audio from Couture’s press conference. Kevin Iole was at the Randy Couture press conference and Dave Meltzer covered the UFC conference call. Steve Cofield also has a ton of audio clips from the UFC conference. MMA Weekly has quotes from Couture’s media session. At the UFC press conference, it was announced that UFC and Spike TV will continue to work together through 2011. More notes at MMA Madness.

The folks at MMA Opinion are taking notice at the mainstream media’s silence about the dueling press conferences.

Bloody Elbow calls UFC’s post-fight bonuses ‘predatory’.

Adam Morgan is not Kevin Iole’s best friend in the world right now. Neither is Fightlinker. Ouch.

Forbes talking about Pro Elite:

Since a reverse merger, shares of ProElite have risen 480% in a year to a recent $14.50 for a $673 million market cap. That’s exuberant for an outfit showing an accumulated deficit and, for this year’s first half, $2 million in revenue against $12 million in losses. The Los Angeles firm promotes competitive “mixed martial arts,” which combine boxing, judo, jujitsu, karate, kickboxing and wrestling. This almost-anything-goes combat was once widely outlawed but has been gaining attention among young adult males. ProElite faces huge competition, as well as lawsuits alleging a contract breach and intellectual property theft, which the company denies. Insiders have filed to unload large stakes. A new 45-page prospectus, which says mouthy TV host Jimmy Kimmel served on the board for just two weeks, contains 11 pages of risk factors. Chairman David Marshall did not respond to messages.

The IFL is trying to reach out to Ben Rothwell.

That Oscar De La Hoya vs. Floyd Mayweather Jr. fight… HBO says it drew 2.4 million PPV buys. Why can’t UFC give out PPV numbers like HBO does?

Riki Fukuda has left KILLER BEE and is now part of GRABAKA.

Ali Ibrahim will not make it for his scheduled fight against Hayato “Mach” Sakurai on 10/28 in Tokyo at Ryogoku Kokugikan (ShootBoxing). Jani Lax will fill in for Ibrahim.

Masaaki Miyamoto was sentenced to two years of jail time for being caught with marijuana in Osaka. He also got an 80,000 yen fine and three years of probation on top of the jail sentence. The jail sentence will end any shot of Miyamoto having a retirement fight.

An interview with Monte Cox. Plus, an interview with Chael Sonnen.

Topics: Boxing, IFL, Japan, M-1, Media, MMA, Pro Elite, UFC, Zach Arnold | 49 Comments » | Permalink | Trackback |

49 Responses to “Friday fallout: More confusion than clarity”

  1. catch says:

    Good for Fukuda! Now he can get some REAL striking training
    http://image.blog.livedoor.jp/kikuta_sanae/imgs/9/a/9ac6209d.jpg

  2. Sheldon says:

    Cool. I’ve always wanted to see what a contract looks like. I can see why he’d be upset about not getting the PPV bonuses. Those could be pretty damn good.

  3. Michaelthebox says:

    He’s getting the PPV bonus; he’s upset about not getting a further bonus above that, which Zuffa often gives out to different fighters, but isn’t guaranteed.

  4. The Gaijin says:

    I believe that a further complaint was that he felt that they were not being honest about actual PPV numbers, since they are so closely guarded (there is no need to report the numbers publicly, b/c Zuffa is privately held).

    I’m pretty sure I saw someone on the comment board (here) yesterday saying that Couture triggered a clause in his contract that allows him to “audit the books” to see what the actual PPV buys were for the last fight.

  5. dice says:

    According to his contract if he was told 520 thousand buys then he should have been getting $882,500 in his ppv bonus. Randy stated it was closer to 500,000. Someone isn’t telling the truth.

    Lets see a copy of the check.

    PS I am not siding with anyone on this, I just would like to see some hard evidence presented from either side

  6. The Gaijin says:

    You’re likely not going to due to confidentiality issues. I’m wondering how much trouble Couture could be in for showing his fight contracts – I imagine (especially the way the UFC seems to do fighter contracts) that there is several types of confidentiality clauses in fighters deals.

  7. Preach says:

    You’re off with your math, dice. He’s get 3 dollars per buy when the buyrate exceeds 330k, which means that he’ll get 1,536 mio $ as soon as the UFC gets it’s money from the PPV-providers for the event(their share is 40%, usually between 3 and 6 months after the PPV happened)

  8. Ivan Trembow says:

    I would certainly HOPE that the IFL is trying to reach out to Ben Rothwell, after all the crap that went down earlier this month. Interestingly, though, it’s Gareb Shamus “reaching out” to Rothwell, not Kurt Otto. When fighters are talking about Kurt Otto like they’re hesitant to go to an event because Kurt Otto might “blow his lid,” that’s a problem.

  9. Ivan Trembow says:

    The questions about the PPV buys are not limited to Couture’s fights. Dana White went on ESPN News and said that Liddell-Jackson had drawn about one million PPV buys, and then Liddell and Jackson got their PPV bonuses based on the calculation that it drew about 620,000 PPV buys, according to the Wrestling Observer.

  10. Dru Down says:

    “You’re off with your math, dice. He’s get 3 dollars per buy when the buyrate exceeds 330k, which means that he’ll get 1,536 mio $ as soon as the UFC gets it’s money from the PPV-providers for the event(their share is 40%, usually between 3 and 6 months after the PPV happened)”

    Are you sure? I couldn’t tell from the language of the contract if the payout was tiered, or based on the total amount of buys.

    For instance, if they had 200,000 buys for Couture/Gonzaga would he receive 1.50 for each buy, or would he receive 1.00 for the first 175,000, and 1.50 for the remaining 25,000?

  11. Ivan Trembow says:

    “He’s get 3 dollars per buy when the buyrate exceeds 330k”

    not even close to true, even the highest reports that may be true say that it’s between $1.00 and $2.50 at the most

  12. Ivan Trembow says:

    Yeesh, remind me to read that particular day’s links before I comment, I didn’t see the link to Couture’s bout agreement. So disregard my previous comment.

  13. Fan Futbol says:

    Dru Down, dice, and Preach,

    It’s a tiered bonus. He gets $1 for each PPV viewing between 100, 101 and 175k; plus $1.50 for each buy from 175,001 to 300k, etc. Also, those sheets are not the whole contract — they’re Exhibits to the master agreement, which is not shown. The master agreement, of course, is what we’d need to see whether it is a contract whose duration is measure by fights (as Dana suggests) or by time (as Randy suggests).

    FF

  14. Preach says:

    I’ve noticed that it’s not an actual contract FF, but the tiered payment escaped me. Still, 992500 $ as a bonus is a lot of cash.

  15. Preach says:

    Ooops, my bad, still the wrong math, should’ve gone over to Fightlinkers first. He doesn’t get any money for the first 100k buys.

  16. Fan Futbol says:

    Gaijin,

    I’d be STUNNED if Randy’s contract (the master agreement, not these Exhibits) didn’t have an audit right. Any lawyer with a brain would insist on this. If your client gets paid based on performance information only the other side has, you’d be out of your mind to not put an audit right in the contract. It’s almost malpractice. I’m not saying you were implying there was not an audit provision; I’m just pointing out, from a practicing lawyer’s perspective, that Randy would have had the worst representation ever if he didn’t insist on an audit right.

    You’re definitely right about confidentiality — I’d be stunned if Zuffa didn’t insist on one of those. In fact, I’m surprised Randy actually showed what he showed.

    FF

  17. 45 Huddle says:

    Couture & Zuffa could easily be talking about the same deal in different ways….

    1. Are they talking about Before or After Taxes

    2. Fight of the Night Bonuses are not withheld until after the drug tests, so this is why Couture didn’t get his right away.

    3. Perhaps he is paid a PPV bonus based on when the numbers come in or when Zuffa gets the money.

    There are so many variables…. Without both of them in the same room, discussing everything… And having it telecasted… There is no way to know the absolute truth… Something tells me is is somewhere between Couture’s Story and White’s Story.

  18. 45 Huddle says:

    I am going to present some fuzzy math, but stay with me for a moment…..

    MLB made around $6 Billion this year I took the salaries from all of the teams and it adds up to over $2 Billion paid, or around 41% of all revenues are paid to the athletes. Keep in mind that most teams don’t really make a profit and many of them actually lose money or have local government subsidies for arenas.

    Zuffa will likely pay out around $20 to $25 Million to their athletes this year. Based on last years estimated, they had $220 Million of PPV’s…. But we know they take home around 40% of that. We also know that this year is likely not as profitable as last year, so let’s estimate that the UFC sold $200 Million of PPV’s for all of 2007, which would be true revenues of $80 Million (40%). Factor in live gates and let’s call it an even $100 Million.

    We also know that that they have an additional 25% from other revenues streams (made public by the S&P Report). So with some really fuzzy math, we can estimate that the UFC has around $133 Million of revenues.

    For UFC Fighters to get the equivalent to MLB players in the ratio of Revenues to Pay…. UFC Fighters would have to get paid….. $54.5 Million…. or over double what they are getting paid now.

    Now, obviously they are different sports with different expense structures. And MLB has many years to allow salaries to rise…. But I think that is a good starting number to use to see the difference between current UFC Fighter pay and what it potentially could be….

    I refuse to use the boxing model, because that model gives nothing back to the sport like a sports league or the UFC would……

  19. dice says:

    whats that preach?

    Yeah I was off 10 grand, I did my own math. I didn’t look at anyone elses.

    I did it again and got $892,500.

  20. 45 Huddle says:

    And as another reference, the NFL pays a little over half over the $6 Billion of Revenues a year to it’s athletes…. Of course, there are always fixed costs with anything, so the more money involved, the less those fixed costs become a factor and the easier it is for those salaries to increase….

    But I think the ultimate goal of the fighters would to see 40% to 50% (MLB to NFL Levels) of the UFC money to go back to them….. I think a union is needed for this. As much as I am not a fan of Couture’s (as the previous days post has shown), he is likely the best candidate to pull this off….

  21. dice says:

    Mine is different that fightlinkers because I was basing my predictions on 520,000 buys, which is what I thought randy said.

    I could be wrong.

  22. dice says:

    45 I could swear that you have previously stated that fighters are paid enough as it is right now. Now you think they should make a similar percentage as other major sports leagues.(so we now agree on something, thats crazy)

    I haven’t seen many people talking about the health insurance issue. Randy did make a comment about it at his press conference and I think that it should be something that fighters and their agents/managers press for in the near future (that is if a union doesn’t pop up soon).

  23. cyphron says:

    “Randy Couture said he didn’t receive a signing bonus, but not only did he receive a signing bonus, he cashed the check on Jan. 30,” White said by telephone from his office. “I’m holding it in my hand right now. The check was dated Jan. 15 and he cashed it on Jan. 30.”

    Who’s lying here? In any case, one of them is a bold-faced liar (or in Dana’s case, bald-faced). And I know there’s more to this than respect. Everything Randy has said is about money. And I believe it’s money that made him quit the UFC.

  24. cyphron says:

    Wait, Jan 15th or 30th? It’s Oct now. Dana is pulling my leg again.

  25. dice says:

    cyphron

    Josh gross addressed this issue today on the beatdown.

    He stated that randy asked for half of his backroom deal before the sylvia fight. After the fight he received the other half. If it was a signing bonus then he would have gotten his full bonus after the sylvia fight which according to randy he did not.

    MONEY=RESPECT

  26. Ivan Trembow says:

    “I am going to present some fuzzy math, but stay with me for a moment….. Zuffa will likely pay out around $20 to $25 Million to their athletes this year.”

    Where did you get that figure? And even if that figure is accurate, the UFC is still paying a smaller percentage of revenue to its athletes than any other major sport.

  27. Fan Futbol says:

    According an article in the Sporting News that is admittedly a few years old, the % revenue breakdowns that goes to the players in the other major sports are:

    NHL: Players get 75%
    MLB: 63%
    NBA: 57%
    NFL: 64%

    Article is at (http://findarticles.com/p/articles/mi_m1208/is_52_228/ai_n8702667).

    The UFC doesn’t come close to handing over this percentage of revenues to its athletes. Not necessarily that it should…but it certainly doesn’t.

    FF

  28. The Gaijin says:

    “Gaijin,

    I’d be STUNNED if Randy’s contract (the master agreement, not these Exhibits) didn’t have an audit right. Any lawyer with a brain would insist on this. If your client gets paid based on performance information only the other side has, you’d be out of your mind to not put an audit right in the contract. It’s almost malpractice. I’m not saying you were implying there was not an audit provision; I’m just pointing out, from a practicing lawyer’s perspective, that Randy would have had the worst representation ever if he didn’t insist on an audit right.

    You’re definitely right about confidentiality — I’d be stunned if Zuffa didn’t insist on one of those. In fact, I’m surprised Randy actually showed what he showed.

    FF”

    Oh I most certainly wouldn’t be implying that at all, just saying that I heard he activated the audit clause – my point in all that being that he seems to think there might be some fuzzy business with what the PPV buys really are and what he’s being paid.

    IMHO it would be malpractice/negligence on his lawyer’s behalf to not insist on this being in his contract. Mainly b/c that would be standard industry practice that a reasonable lawyer would have ensured was included in the contract.

    I’d love to be able to see the entire contract – but I guess thats the million dollar question of what the wording of the main contract actually said. I kind of got the idea from the way he was speaking about Arlovski’s situation that the contracts are for fights or time periods…basically a “he’s ours for 12 more months”, maybe that’s their standard form but maybe Couture’s is different.

    p.s. I’m an articling lawyer – so I’m quite aware of these things. (Or at least I think I am, but in reality I’m probably woefully ignorant of actual legal practice since my brain is mainly full of theory and policy and only a summer and a few months of articling of actual ‘work’) 🙂

  29. David says:

    Reading the comments boards is mental masturbation.

  30. m.d. says:

    Under what principle should Zuffa or any other promoter be obligated to set aside a designated percentage of its revenues to fighter payouts? Is it just altruism? Who should set the percentage? And how should the percentage be determined? Should they collectively bargain with themselves with Dana White playing management and Joe Silva playing Don Fehr or Gene Upshaw? Should they go all the way with this and set up escrow, a la the NBA, to recoup excessive payouts? Is there precedent for something like this in the history of business?

  31. Fan Futbol says:

    m.d.,

    Of course there is a collective action problem in the MMA business, no one was suggesting otherwise. The posted splits of the other leagues are just a point of reference to establish what kind of split might be obtainable for the fighters if (a) MMA matures as a sports business and (b) if labor and management had relatively equal bargaining power. Not that they will, but it’s interesting to think about.

    FF

  32. Mike David (Euthyphro) says:

    Showtime Vasquez just retired after his win on ShoXC. Craziness.

  33. Mike David (Euthyphro) says:

    …and in a move that’s sure to stir up plenty of controversy, EliteXC is using Kimbo’s street fighting footage to promote him, also calling him “street fighting legend Kimbo Slice.”

  34. m.d. says:

    I just want the people taking the potshots and throwing out one-liners to grow some balls and lay out in concrete terms what Dana/Zuffa/UFC/Fertittas should do with regard to fighter pay and provide a coherent rationale for why they should do it. Otherwise, it’s all just contributing to the ‘evil Dana White’ caricature.

  35. dice says:

    BTW FF I know it was a tiered contract. My numbers are different than fightlinkers because I used 520,000 buys. I used the tiered system when calculating my figures. So I still stand by my original estimate.

  36. The Citizen says:

    This is all bs — with so many promotions, where are the fights? There are a slew of fighters sitting on the bench. Has UFC signed them all? My dad is going to start an mma promotion out of his printshop, we are going to show the fights on the internet. It will be the first MMA fights + weapons. Scanners, copy machines, padding knives will all be legal. Show us the fights.

    I’m glad the MMA media finally has something to write about, but all we want to see is good technique and a well produced event. Is this so hard to do? I am starting to believe that it is.

  37. Ivan Trembow says:

    The ShoXC event was pretty good. Shayna Baszler was extremely impressive and would probably have the same result against Gina Carano. The announcing was improved.

    Unfortunately, EliteXC is sinking to the level of using footage of Kimbo’s illegal street fights to promote his EliteXC debut, which is pretty damn shameful. At least when the UFC signed Sean Gannon as a result of the notoriety that he gained for beating Kimbo, they didn’t actually use footage of Gannon vs. Kimbo to promote Gannon’s UFC debut, they just talked about it.

  38. Ivan Trembow says:

    Also, MultiChannel News is reporting that the three-year renewal of Zuffa’s Spike TV contract is valued at over $100 million, and remember, that’s what the figure was even before the record-breaking ratings of UFC 75 on Spike TV. So, even assuming that it’s an even $100 million and not a penny more, over the course of three years, that’s an additional $33.3 million per year on top of the record-breaking PPV numbers.

  39. Ivan Trembow says:

    You linked to an article by Kevin Iole about Randy Couture’s issues with the UFC “being about money, not respect.”

    I don’t understand this particular part of that column:

    “But it’s the way of the world that the pioneers aren’t rewarded like their successors.

    Willie Mays never made the kind of money that the stars in Major League Baseball are earning today, yet I haven’t seen a center fielder in the majors who comes close to being the player Mays was.

    Randy Couture is the Willie Mays of MMA.

    But Willie Mays never made the money that the many lesser players who followed him made. And 10 years from now, the money the fighters make will dwarf anything they’re making now. The problem in this mess is that Couture wants the 2017 money in 2007.

    And as great as he is, Couture probably won’t be fighting when he’s almost 55.”

    A) Couture is not asking for 2017 money in 2007. He’s asking for 2007 money in 2007.

    B) The Willie Mays analogy makes it seem like it’s unreasonable or at the very least unrealistic for Randy Couture to expect to be compensated like “modern athletes.” But was Willie Mays the star in several of Major League Baseball’s highest-grossing events of all time? No. Was Willie Mays one of the biggest stars in several of Major League Baseball’s highest-grossing years of all time? No. That’s where I’m having difficulty understanding that particular analogy.

  40. klown says:

    dice,

    There’s nothing the UFC management can do that would satisfy me, with regards to fair treatment of fighters. That’s because the interests of the promotion and the interests of the fighters are not inherently identical.

    The only way to defend fighters’ rights and interests is by forming a union and bargaining collectively. Everything else is hogwash.

  41. klown says:

    sorry, my comment was meant for m.d. not dice

  42. STONE COLD BILLY RAY says:

    Some of you are missing the point regarding the issues of what percentage players in other sports get, in terms of total revenues.

    It’s apples and oranges.

    For example. The NFL’s TV deals guarantee them quite a bit of money that will not fluctuate at all over the course of years. It’s easy to offer your players union ‘x’ percentage when you know you will be getting a check for $2.7 billion dollars every single freaking year.

    With the UFC, they are not so lucky. What the recent S&P reports, it clearly states that 75% of the UFC’s revenues are from ppv buys. So pretty much, Zuffa (right now) cannot be even decently sure what their total revenues will be year to year. They are dependent on a what could be called a fickle ppv buying audience. One show could do 300,000 buys….the next one 700,000 buys. That’s like a $10 million dollar swing!!!

    With such an unstable and unpredictable revenue platform, it would be business suicide to start guaranteeing large contracts that would bring fighter total pay up into the 50% range or higher.

  43. I don’t particularly want to get into all the details, but financial reporting for sports franchises is a dodgy venture at best. American sports franchises are by and large not publicly held, and very few international sports franchises are publicly held. The numbers that are released are doubtful at best (as much or more so than the visibility that we have into the UFC’s numbers).

    Additionally, there are a lot of disputes over what sorts of things should be included as the revenues, libabilities, assets, and expenses of any franchise. Some would say that stadium revenues should be part of it, some would say that they are the revenues etc of a stand-alone stadium entity. Some would say that the revenues and expenses of minor league activities should be included, some would say that the revenues and expenses of things like NESN or other cable and internet program distribution systems owned by teams or leagues should be included. In reality, when there is a release of figures, you DON’T KNOW SHIT about the basic assumptions of what is and what isn’t consolidated into that number, and as a result the numbers are almost completely worthless as a basis of genuine discussion.

    Which is why I have taken to saying that any calculations that I make on Zuffa are academic exercises. Because that’s what they are. They’re all napkin math that keeps us entertained, but we can’t rely on them.

  44. dice says:

    I agree completely and I have said the exact same thing (about unions). I know that the UFC operates just like any other business under capitalism (I use that term loosely).

    My opinion about health care differs a little when it comes to the UFC because of the nature of their business. Everyone should be given affordable health care, and like you said before, this is likely at odds of what the business’s interests are. But I think its a crime that some type of health care hasn’t been proposed already, when you put your bodies through the type of punishment that most of these guys do (practice and fights alike). The odds of a mma fighter needing medical attention in a given year is probably greater than the average population. In fact I can’t imagine going through a year of being a fighter and not needing to seek medical attention (numerous times).

    So what I am saying is that I think if some pressure was put on Dana (and other promoters) by the media and fans, that it would shed light on a topic that is discussed very little (so forming a union is the best way to defend fighters rights, but not the only way). You have to remember that the UFC has one big difference than say wal-mart, in that it is privately owned. Trying to get health insurance (or better health insurance if you already have it) in a publicly traded company is much harder than in a privately held firm (traditionally, this is assuming a level playing field, meaning both private and public companies would have similar resources, as most of us know, most private companies don’t have the same resources as a large publicly held corp. but in the UFC’s case, they definitely have the resources to make health care and pensions possible). There are a number of reasons for this but mainly, like in the UFC’s case, its easier to get 3 guys to respond to public pressure than a public corporation. It is just absurd to think that fighters should have to purchase their own private insurance, when 90% (guess) of them are still not making enough money to make this a viable option.

  45. Adam Morgan says:

    Ivan,

    You’re 100% correct. The problem with the Willie Mays analogy is that Willie paved the way for guys in 2007 to get paid the way they are. However, he’s not still playing the game.

    Randy paved the way and he is still in the game and one of the sport’s biggest stars.

    The Mays analogy makes no sense because there wasn’t the type of money in baseball then that there is now and he isn’t still playing the game.

  46. dice says:

    The new fightopinion radio show (#66) is probably the best and most comprehensive show on the current situation with Randy. Finally someone gets Swift on the radio. I have been following this story as close as possible yet I still learned a lot from the new show.

  47. Ivan,

    I came to the same realization as your point A. Randy isn’t asking for 2017 money. The statement is absolutely ridiculous.

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