« Will Kimbo Slice replace Marcus Jones on The Ultimate Fighter? | Home | Smell the desperation — Kazushi Sakuraba to fight Rubin Williams at DREAM 11 »
Kimbo Slice vs. Roy Nelson outdraws RAW on cable
By Zach Arnold | October 1, 2009
A 3.7 rating, which will drive Vince McMahon into a tailspin and give heartburn to anyone having to deal with him this month in WWE. The quarter-hour rating for the Kimbo/Nelson fight itself was well over a 4.
In our comments section, Rob Maysey talked about just how much the media influences the numbers in American MMA and how media-initiated the business is as opposed to the media simply responding to what fans want.
If all of this talk sounds bizarre to you, it should be. The media apologists for this are out of their minds. It’s the equivalent of you paying for a concert ticket and going to the event and realizing that the performing artist is lip-syncing the entire time, only to read the next day in the newspaper or see on the local telecast the critics praising the artist for screwing over the fans and taking their money by ‘working the marks’ over.
If the UFC apologists in the media want to get all Southern Fried Carny on us, then let’s use an appropriate wrestling term to describe what we saw on Wednesday night. Screwjob seems like a tame phrase. We could use the term fuck finish but realistically speaking, the finish was ‘perfect’ and it was the fans who get fucked.
The good news is that UFC did great ratings for the fight. You would think that it would be a great indicator of the company’s health, right?
Maybe not so fast.
MMA Payout has two critical reports (here and here) about Zuffa LLC’s finances. Long story short — UFC is still an event-driven company financially, they’re not losing as much internationally any more, and they took out a $100M USD loan — but a fair amount of money the company is generating is going to the owners as dividends.
What does that sound like is going on to you?
Topics: Media, MMA, UFC, WWE, Zach Arnold | 84 Comments » | Permalink | Trackback |
“but a fair amount of money the company is generating is going to the owners as dividends.
What does that sound like is going on to you?”
They like spending money on houses and shit.
Lots of companies do stuff like that.
“However, the fact of the matter remains that Zuffa is operating in a volatile, uncertain business environment. The company has really only been profitable for the last four years, and that’s not enough time to a.) build long-term creditor confidence, or b.) develop enough cushion to insulate the corporation from a severe industrial downturn (i.e., hedge against business risk).”
This pretty much says it all doesn’t it, The UFC is doing record numbers in a horrible economy and somehow it’s not seen as the incredibly success that it is. Sometimes it really is funny how someone can see the exact same facts and come to 2 different conclusions.
Regardless the UFC machine continues to roll on and continue to dominate, the UFC 104 buyrate is projected around 400,000 which is great. And now these record ratings on TUF will cause that stupid smile on Dana’s face to not go anywhere anytime soon.
Dana needs a lot of money to do hard work like suck up interviews by the Jim Romes and Colin Cowherds of the world
If the UFC is seen as a “growth” engine, why would you take on large debt to fund dividends?
UFC is one of those things, the uninformed will see the short-term growth and go bananas, while most investors will want to see the potential for long-term growth and not being a shitty investment.
The kinds of people that invest in something because it is getting popular but is still unproven are generally the ones that get rich on accident and look like geniuses for their risk or the ones that look like moron yahoos who didn’t know what they were doing.
Sometimes it truly amazes me the lenghts people will go to put down the UFC, regardless of the continual growth and unprecedented success. It’s always some bs reason people give to not give Dana and company the props they deserve for the way they run their business. But in the end it’s really irrelevant because the numbers and growth speaks for itself regardless of how many people are in denial about it.
“If the UFC is seen as a “growth” engine, why would you take on large debt to fund dividends?”
1) My understanding is that a large portion of the loan taken out was used to refinance existing loans.
2) There are benefits to having a certain debt-equity ratio. With the incredible success the UFC has had lately, the equity has probably overbalanced the debt. Taking on more debt and paying out dividends allows the risk to be redistributed.
3) Future growth does not pay for cool shit today, and rich people like cool shit today.
I guess I should clarify: I don’t know if any of those explain the behavior at Zuffa. But there are plenty of alternatives to handwringing, to the point where handwringing looks outright stupid. You want evidence as to how well Zuffa is doing? Open your eyes.
It’s not about UFC’s business right now.
What it’s about is:
a) The owners cashing out when the getting is good (note the terminology of aggressive pursuit of dividends)
b) Why they might be doing so. In Lorenzo Fertitta’s case, the legal fight over Station Casinos is a pretty damn good reason for him to financially take money from UFC profits and build up the legal war chest.
Additionally, there’s a couple of interesting angles to look at here regarding the debt financing for UFC — notice that the S & P prognosis is, what, a 30-40% chance of everything getting paid? The credit rating has gone down for Zuffa. However, the biggie here is that the more debt Zuffa has out there to be purchased, the more access there will be to the financial books — a position that Dana White recently said in the Sherdog interview that he did not want to have happen. Well, it’s going to be tough for him to keep things private if UFC is looking for more debt financing and people like Mark Cuban happen to buy some of that debt in order to access the books.
Zach understood my point in his first comment above.
If the UFC’s owners really believe that the UFC is at the start of a massive growth spurt, it makes little sense to take out debt to fund dividends.
From an investor’s view, what this suggests is the Zuffa’s owners believe they can do better with the cash outside of the UFC’s growth prospects.
Think about that–or as Zach so eloquently put it above, “getting out while the getting is good.”
Some rumors going around that Kimbo is back, Dana tells Herb Dean not to stop the fight, etc…
http://www.bloodyelbow.com/2009/10/2/1065855/listen-very-close
Zach, you completely missed Michael’s point.
People (or companies) finance companies (or projects) either with their own cash or with debt. The decision is (or should be) based primarily on the internal rate of return and on the availability of external financing on beneficial terms.
Right now the bond markets are extremely favorable to entities that have something resembling a solid financial state. Low interest rate debt to replace high interest rate debt, and then cash out the equity to invest it in something else. The Fertittas have a lot of fish in a lot of pots.
They’re able to finance UFC, which has a high rate of return because of it’s massive growth, with low interest rate debt, and they can take cash out of the company and invest it elsewhere, presumably into ventures that wouldn’t be able to get that kind of financing on their own.
There’s no cashing out going on here. The cashing out would be selling the company. Rebalancing yes, cashing out no.
The casinos are all but dead. Nevada is turning into a giant ghost town at the moment. Twenty UFCs this year, only six in Vegas, two of those being TUF Finales, and the rest being basically AAA headliners. They had nine Vegas events last year. UFC is practically rolling up the carpet on the way out of Vegas at this point.
Most likely they lost their shirts on real estate like everyone else in the desert southwest. It’s possible that they think they’re smart right now and they’re jumping into equities (IMHO a huge mistake, but hey, they’re entitled to stupid decisions, I suppose).
There’s just normal business (balancing of debt and equity) and then there’s a cult of The Fertittas Are Very Smart Businessmen (TFAVSB), and then there are those who just assume that everything they’re doing is stupid or motivated by panic or straight up opportunistic greed and that they’re ready to hop the first flight to the tax haven of the month at a moment’s notcie.
I think that both of the latter are poorly informed opinions.
Also, it’s extremely unusual for unsecured debtholders to have the right of audit. Cuban buying some bonds probably doesn’t give him free access to UFC’s books, no matter what MMAPayout believes, and if he wanted the kind of information he’s likely to be getting, there are much cheaper ways to do it (buy some analyst reports).
Unless he’s buying a lot of bonds in the blind hope that UFC/Zuffa will go bankrupt leaving him with the assets, I’m not seeing what he’s getting other than a nice interest rate.
Since the main demographic of the UFC closely mirrors the WWE (A White Anglo-Saxon audience with similar income brackets), the WWE connotations with Kimbo and TUF 10 are not shockers at all.
In fact, the sports-entertainment storyline within TUF 10 is another forgone conclusion of the close ties between MMA & Pro-wrestling. Unfortunately, it’s another reason why MMA will never get the respect it deserves with a mainstream sporting audience.
Another big irony is the fact that the UFC’s Heavyweight Champion also stems from the Pro-wrestling world and was given a title shot with only 4 fights into his MMA career.
At least for me, UFC is becoming more like a fabricated nightmare similar to boxing. Sure, you can say boxing has a tainted history but at least the great boxing great had real talent and fought against top caliber opponents to get to the top.
It also doesn’t shock me that the UFC is handsomely paying dividends to their owners. Who knows? Perhaps they UFC can also mirror the WWE by issuing an IPO, like they did in the 1990’s.
“If the UFC’s owners really believe that the UFC is at the start of a massive growth spurt, it makes little sense to take out debt to fund dividends.”
Only if you want to look at it as simplistically as possible.
I did a bit of research on a company a few years back, a young company in a growth industry. I saw that a lot of the top people in the management structure were cashing out big chunks of stock. I figured then what you’re figuring now.
In the time since then, that company’s stock price doubled and then split.
Lesson? Shitload of reasons to take dividends regardless of expected growth of the company.
In the case of the UFC, growth cannot be tied to the amount of money thrown at investing into the company. If marginal returns to reinvestment drop below a certain point, it may make sense for Zuffa to simply pay out large pieces of the profits as dividends. I actually expect that to be the case with Zuffa, as growth for Zuffa is largely tied to educating potential consumers, a process which can be done fairly cheaply up to a point, then becomes incredibly expensive if you want to exceed a certain basic rate and reach.
Furthermore, while I consider it likely that the UFC will continue to grow massively over the coming ten years, a disaster is always possible, or some freak change in the market. Investment in new markets requires extending the company outward, and there is zero reason to overextend the company at this point. Unless Strikeforce does the impossible, Zuffa has no real competitors in this market, and can take their time in reaching their peak without exposing themselves to too much risk.
To sum it up: you’re reaching, badly. There is no reason to think this is a bad sign, and the good signs are everywhere you look.
Holy Jump to Conclusions Toolbox.
Did I say this was a bad sign? I said it implies, as an indicator, that the owners of Zuffa do not see the level of growth going forward frequently trumpeted in the press. You seem to concede the possibility:
“In the case of the UFC, growth cannot be tied to the amount of money thrown at investing into the company. If marginal returns to reinvestment drop below a certain point, it may make sense for Zuffa to simply pay out large pieces of the profits as dividends. I actually expect that to be the case with Zuffa, as growth for Zuffa is largely tied to educating potential consumers, a process which can be done fairly cheaply up to a point, then becomes incredibly expensive if you want to exceed a certain basic rate and reach.”
Exactly right–which again would suggest, instead of a “growth” company, Zuffa is entering into the cash cow phase with growth incremental. The large investment gains have already occurred–and income and projections may have already stabilized.
Is cash-cow juggernaut a bad thing? Did I say that? It is different, however, from a company touted as still undergoing rapid growth.
So the source for Dana interfering with the referee is a UG poster. WOW
The underlying issue with being a cash cow is that when the reason for that is your low pay, the employees (see; Rampage, Hendo) will get restless. Add in doing stuff like taking on lots of overpaid contracts (The Affliction deal) and its not gonna look any better.
Luckily, the UFC has built some sort of hardcore goon squad of fans willing to defend them for anything. I suppose it helps the PR battle when they’re the most vocal out there.
On the issue with TUF outdrawing RAW. It doesn’t surprise me. RAW has goes up against some tough competition like the NFL for example. And the fact that RAW these days suck ass.
“GODDDAMMIT! Why can’t we create new stars?!” — Vince McMahon
Quit burying your young talent to DX (a gimmick that desperately needs to be put out of it’s misery) and John Cena (Cena’s overcoming the odds, AGAIN!)
I was really hoping that a kid would get killed by going through a 30,000 watt spotlight or something trying to be like Cena since Cena was able to survive that and be okay the next day after Backlash. Sounds like the only way for the WWE to stop pushing Cena.
So in other words, “Dana instructed herb dean not to stop the match” has as much credibility as “kimo is dead.”
The excuses for the low Raw rating began immediately: people boycotted the show because they don’t like Al Sharpton. And I don’t think McMahon would ever acknowledge UFC is his competitor. All signs point to adult fans leaving his product for MMA in droves, but he’ll have to admit there is a problem with his product if he admits UFC is taking away fans. And if there’s one thing McMahon never does, it’s admit he’s wrong and that there’s a superior carny in town. Plus since Dana refuses to trash him either (out of respect that he allowed him on Spike plus he’s his secret idol) he has no reason to mention them.
A lot to do about nothing. It is my experience that what Fertitta is doing with the company financially is VERY common. Most small bauinesses or medium sized businesses do the same exact thing everyday. It is the big benefit of being an owner with nobody to report to…. Like other owners or stock holders (who are technically owners anyways).
Trying to figure out what it all means it pointless. It has absolutely ZERO correlation with how successful the company is or how successful try think it will be.
It has EVERYTHING to do with protecting assets. If Zuffa goes under with all that money in the company, Fertitta can’t start a new company. By taking the money out, if Zuffa goes sour, he can just reinvest the money that is out of he company into a new one. Or if Zuffa is struggling, he can infuse money unto it at his own discretion. But it is much more wel protected the way he is doing it.
Business 101. Fertitta is a smart man!!
What is the relevance of beating RAW in the ratings? Why is that a benchmark?
As for investor and S&P ratings…. I wouldn’t put too much stock in it. Zuffa will likely never be investment grade…. BBB- or better. They just aren’t bug enough of an entity. That doesn’t mean they won’t be successful for years. It is just an indicator if their size really. And because of that, companies like S&P and Moody’s will always have negative things to say. They kind of have to to justify the lower credit rating.
All in all, there isn’t much to worry about really.
As for the rating, it is fantastic. Better then I expected.
Because they are the #1 weekly cable show with an asterisk reading “when Monday Night Football or The Closer aren’t airing.” If the NFL wasn’t in season Ultimate Fighter would be the #1 show for the week, but they’re #2 or #3 now.
That’s not why and you know it.
“So in other words, “Dana instructed herb dean not to stop the match” has as much credibility as “kimo is dead.””
Kimo is dead?
Then please tell me the real reason I am hiding.
Lemme guess: “Oh you wrestling fans love UFC because you like it when WWE gets beaten by somebody, which is why Meltzer gets a stiffy when reviewing UFC’s success”, right? Maybe for some, but not for me.
While obviously I enjoy UFC far more than anything the WWE has done, I would never celebrate Dana White being the one to do it. I see no difference between the two besides Vince has hair and keeps his insane ravings behind closed doors.
Other than that I dislike Dana White for the same reasons I dislike Vince McMahon: I don’t like dictatorship over an entire industry because “you know how to run things best”, I don’t like underpaying the guys out there putting their bodies on the line for your multi-million dollar bank account, and I really hate their childish treatment of employees who don’t act like their mindless cult members.
Mark: You characterize the UFC’s fighters as being underpaid. If that is true, it actually makes other organizations more able to compete with the UFC.
But I’m sure if the UFC doubled fighter pay effective immediately, you would complain about the UFC tightening its grip on the industry.
Why don’t you get it out of the way and list all of your gripes in one post.
The UFC’s fighters are not underpaid. They may not earn all of the marginal revenues they contribute, but from the other side, the UFC generates a huge amount of revenue that is impossible for any other promotion to even imagine.
The fighters who are underpaid are being stiffed by regional promoters, undercard boxers, or fighters in organizations like Bellator and most importantly the WEC. Especially the WEC, because you have supremely skilled fighters making literally cents on the dollar when compared with modestly skilled ex-champs like Liddell, Griffin, and Couture.
Wow, Mark is off the mark on this one. What are the chances?
“Oh Yeah” is correct here. If the UFC was underpaying it’s fighters, it would have given somebody else the the opportunity to hurt the UFC. But that is not the case.
Nobody pays more to the fighters then the UFC. The UFC has increased fighter pay substantially over the last 5 years. They have given huge contracts to their long time fighters like Couture and Hughes…. Big enough that they all had huge grins on their faces when asked about them. They are paying out more million dollar contracts then ever before. I haven’t counted, but I bet the number of guys who made over $100,000 in the UFC & WEC last year (not counting sponsorships) was over 50 fighters.
And if you want to see fighter pay go up even more, then say goodbye to stacked cards. As a fan, I would rather see 6 guys split the majority of the payout then 2. If that means they get $1 Million a fight instead of $3 Million, I’m not sad for them either. As a fan, fighters getting paid less then boxing money is actually best because i get better PPV’s.
While the DANA WHITE RULES THE UNIVERSE concept is not perfect…. It certainly beats the boxing model where each promoter takes from the sport and doesn’t give back.
And speaking of giving back….. Who else has done more for the sport in the last 5 years then Zuffa? They have greatly increased popularity in at least 3 countries (USA, UK, & Canada). They have a team of people working on getting the sport legalized in all 50 states, and in certain places in Canada. They are the only organization that really tests for drugs when they don’t have to (when going to Europe).
Mark, for me to say you are wrong here…. Would be a vast understatement.
As for the way Dana White treats his fighters…. I have two thoughts on that:
1) It’s a two way street. A lot of fighters are a-holes themselves. The way they treat their boss, many of them would be fired already.
2) There is a lot of grey area, and sometimes Dana White crosses the line, but in a way, the sport of MMA (and UFC specifically), does need a guy like Dana White in charge. As I said above, fighters can be a-holes. Just look at how badly Strikeforce is at putting cards together. Nobody fears Scott Coker, and because of that they back out of fights quicker and don’t take him seriously. For the UFC to be running as smoothly as it has been, part of that is because fighters have a tiny bit of fear of Dana White. At the end of the day, when those main guys have $100,000 or $1,000,000 in their bank account, it is hard to feel bad for them. And as a fan, it creates a much better viewing experience because the fights we want to see get done.
Damn Mark…. I just made you look really bad with your last post. Sorry to do that, but there was so much BS in your words that somebody had to do it….
Ok, then where would you like all of the profits to go? Do you want Frank and Lorenzo to take out even more money? Do you want to add an extra zero to Dana’s pay checks? Would you like to increase funding on the “UFC Mysterious International Expansion Fund”?
Personally, I’d like the guys suffering brain damage to get paid as much money as possible. Not that Dana doesn’t deserve a very nice paycheck, I totally respect his hard work of 14 hour days 6 days a week, but they’ve been pleading poverty through the best financial period they will probably ever have to the guys who get in the Octagon to make it possible. That doesn’t sit well with me. But if you like cheering on corporate executives making more and more money, then different strokes for different folks. It seems more people come on here to cheer on Frank, Lorenzo and Dana making more money for themselves than to comment on fight related news. CorporationOpinion.com
The UFC paying their fighters better than their competition has absolutely nothing to do with anyone’s complaints about them hurting the MMA market. I will guarantee you nobody ever in MMA history has ever said “Damn that UFC for paying the guys who bring in revenue so much money!” Ever. Never. Never ever. What they do complain about is stifling the market through slandering and counter programming every competitor that comes up because “only we know how to control MMA properly so they deserve to be put out of business.” If they put out a press release saying “UFC fighters to get paid more”, even the biggest critic of them would be very happy.
Nobody expects Strikeforce or anyone else to match pay. Nobody expects Brett Rogers to make as much as Shane Carwin. It’s to be expected that as a company gets successful employee pay increases except for one style of business: the carny business of independent contractors as employees at your mercy.
Mark,
Are you 10? Do you even know how businesses work? What Fertitta is doing is no different then basically every other business out there today that is private and has a limited number of owners. They are paying the fighters a fair wage…. Heck, more then a fair wage compared to what the competition is like out there. Beyond that, it really isn’t an issue of what happens to the rest of the money.
“but they’ve been pleading poverty through the best financial period they will probably ever have to the guys who get in the Octagon to make it possible.”
Show me an example of the last time the UFC has pleaded poverty. The last time I can think of is with Tito Ortiz… And it wasn’t poverty, it was with his market value. And that is called NEGOTIATIONS. And Ortiz ended up coming out of it with a huge smile on his face and even said something to the effects of: He will retire in the UFC and you will never hear him complain about money again. OH WOW!!! EVIL DANA WHITE!!!
Tito Ortiz is the biggest cry baby about money in the entire sport. Followed by Randy Couture. And they are both smiling from ear to ear right now. So what is the problem again?
“The UFC paying their fighters better than their competition has absolutely nothing to do with anyone’s complaints about them hurting the MMA market.”
You do realize that over the last 5 years, the UFC keeps getting bigger and more profitable. The most successful the UFC is, the more money the fighters will make. If the UFC starts to suffer due to competition, the fighters will likely see a cut in pay overall…..
“Nobody expects Strikeforce or anyone else to match pay. Nobody expects Brett Rogers to make as much as Shane Carwin. It’s to be expected that as a company gets successful employee pay increases except for one style of business: the carny business of independent contractors as employees at your mercy.”
Show me how the UFC has not increased pay over the last 5 years. In fact, show me how they haven’t done it each year over the last 5 years. You have no proof of this because it isn’t true. Fighter pay continues to go up.
Okay Mark…. What do you expect to happen? For Zuffa to magically bring fighter pay up to 50% of revenues? You do realize if they did this overnight that they would kill their business. Fighters would then ask for pay increases beyond that, they wouldn’t be able to afford it, and BAM…. The sport suffers.
Please Mark…. don’t ever run a business. It would crash and burn to the ground before you even put the sign on the store wall….
45 Huddle-
Please shut the hell up for your uber-biased UFC opinions.
Trust me, WE GET IT. You LOVE the UFC…you think EVERYTHING that they do is SUPER AWESOME.
WE get that you LOVE Dana White.
We get it bro.
Give it a rest.
Please.
Look, nobody is asking that Jon Jones get paid Brock Lesnar’s money. But Machida and BJ Penn should get paid Brock Lesnar’s money. Machida makes less than Chuck Liddell did prior to the TUF Boom. $70,000 to show up $70,000 to win.
Nobody is also expecting $15 million boxing paydays to main eventers either. Realistically boxing has far more endorsement deals than the UFC could ever hope to have, plus the big promoters get paid to hold cards at venues instead of paying for venues. All boxing really pays for is Athletic Commission pay offs. But would it kill them to boost an extra $10,000 to fighters?
Who has run down Dana as a piece of shit like he runs down fighters as pieces of shit?
There is such a giant gap between Scott Coker running MMA like a Revenge Of The Nerds cast member and Dana White and Vince McMahon attempting to be carny Joseph Stalins or Benito Mussolinis. Point out one example of David Stern, Roger Goodell or Bud Sellig going on tirades against employees or former employees.
Yes, we get it. BIZ BIZ BIZ DANA DANA DANA DON’T CROSS THE BOSS.
No, you didn’t. It’s just a generic 45Huddle “stop saying mean things about Zuffa” post. I’m not impressed with your performance. Never am, really.
Get a room.
Your gimmicking is putting me to sleep today. I mean, it’s been run into the ground for 3 years straight, but zzzzzzzzzzzzzzzz
I know, I know. BIZ BIZ BIZ SUPER SECRET BACKDOOR PAY OFFS GIVEN AT 3 AM AT ABANDONED PARKING GARAGES KEPT UNDER THE TABLE SO UNCLE SAM AND STRIKEFORCE DON’T KNOW HOW AWESOME WE ARE~! zzzzzzzzzzz
Who said anything about splitting profits 50-50? Ah, the old gimmick poster tactic of “I’m going to say your said something totally absurd then then use RANDOM CAPS to show I’m serious!” zzzzzzz. Your shit is so tired.
This is much ado about nothing imo. The rating is the same at BB-, it’s only the recovery rating that went down, which is meaningless for a company like the UFC.
The 100 million is a secured loan, meaning that if the UFC can’t repay it, the investors can step in and sell the UFC’s assets. Since the UFC is an event-to-event, entertainment company, if they go under then they don’t really have any assets to sell off. So that 30-40% they mention represents what you can expect to sell the UFC’s assets for, relative to your investment, if the UFC doesn’t repay the loan.
The last paragraph in the report is the most telling. It basically says that the UFC is risky because it’s event-based, vulnerable to a decline in popularity, the company is financially agressive (with the dividend), it’s a weak economy, and the company has only been successful for a relatively short period.
However, despite all this, they affirmed the rating they gave the UFC earlier, and attributes this to the brand-value of the UFC, the positive cash-flow (even in this economy), and moderate debt leverage.
It’s actually a fairly strong endorsement, the aggressive financial practices and lower recovery rating should hurt the UFC’s rating, but they’ve been performing so strongly that the rating stayed the same. Even in the most cynical view possible, it’s impossible to interpret this as a sign of weakness.
Also, there’s less taxes if you take money out of a company by way of dividend instead of paying it out as profit (one of the advantages of completely owning a business). So for all we know, the UFC could be up in profit 75 million, and Zuffa decided to cash out with a dividend instead of a company check.
Jonathan…. Thanks for commenting on me and adding absolutely nothing productive. Take your trolling somewhere else….
“Look, nobody is asking that Jon Jones get paid Brock Lesnar’s money. But Machida and BJ Penn should get paid Brock Lesnar’s money. Machida makes less than Chuck Liddell did prior to the TUF Boom. $70,000 to show up $70,000 to win.”
You really think Penn should get as much as Brock Lesnar, despite being half the draw he is? Seriously?
And if you think Machida is only getting $140,000 for a win, then you are greatly mistaken. It is well known that the main eventers and champions get more then is shown. You have to know this. Are you just playing dumb?
“But would it kill them to boost an extra $10,000 to fighters?”
This is a GREAT example of the stupid things you say on a daily basis. Let’s really take what you said and figure out how this would effect MMA, and more specifically the UFC….
25 Cards a year. 20 fighters on each card. That is $5 Million more a year. $10,000 sounds like nothing, but do the math. And it would certainly come out to be more then $5 Million. When you up the bottom pay, it disturbs everything, and the guys above that will want $20,000 more…. And the guys above that will want $40,000 more. And before you know it, you have just spent $10 Million + extra. This is why I asked if you were 10 years old. Because you are living in a fantasy world with absolutely no clue about reality. $10,000 sounds nice in your head, but THINK THE ENTIRE CONCEPT THROUGH FIRST. You obviously have not. That isn’t UFC fanboy stuff. That is business 101.
Mark…. You make fun of me a lot here…. But your ideas are so out there it lacks real common sense. Even a $10,000 increase has HUGE implications, as I have shown above. It’s not as simple as you try to make it out to be.
45 Huddle-do you have any personal knowledge of behind the scenes bonuses or are you just assuming Machida gets more because he is teh good? The UFC’s lack of transparency is bothersome, especially given Dana is known to lie about everything.
Re: the dividends, it doesn’t surprise me given the Fertittas’ other business troubles that they want to have some cash on hand.
Penn isn’t just low-paid by Brock numbers. He makes less than practically every headliner. He gets $150,000 to show up and $50,000 to win. Couture, Liddell, Ortiz, Franklin, tons of people who are far below his stature make more than he does, and Penn is one of their best draws in history. Penn did shockingly strong numbers even for a split noon-live and later taped delayed Euro show against a lackluster opponent (Stevenson). I think that speaks volumes for his drawing power.
Oh here we go again. HUGE SUPER SECRET PAY OFFS IN THE BACK ALLEY OF THE MICKEY’S FINE MALT LIQUOR BREWING PLANT, THEY’RE CONFIDENTIAL STRIKEFORCE STOP ASKING~!
Okay, UFC does around $2 million on the live gate. If a show does their minimum of 300,000 buys (and they usually average almost double that) they make $6 million after splitting with the PPV companies. And an extra $200,000 a card is going to ruin them financially? And we’re not counting what they make off of the merchandise table or selling international rights or DVD sales. And suddenly big bad Dana couldn’t put his foot down after giving one raise (which you claim he does anyway) and salaries would explode and UFC would never make a profit? So is Dana king of the world or a chump for the taking? $200,000 a card would mean nothing to Zuffa but would mean a lot to the fighters damaging their brains for our entertainment (although Dana at the post-fight press conference is your entertainment apparently.) Yeah, poor Lorenzo will have to wait another month on that new yacht. OMG I didn’t realize this tragedy. May I cry on your shoulder to cope with this horrific news?
Awwww, did I hurt widdle 45Huddles feelings? Is that why you’ve been trying all day to bring out all your troll tools to get me riled up? It failed. Everybody sees through your Zuffa-shill gimmick. “MARK U STUPIDHEAD UR DUMBER THAN STAR WARS FANS! I KNOW ABOUT BIZ I STUDY BIZ BIZ BIZ 24/7 STOP SAYING MEAN THINGS ABOUT ZUFFA OR I’LL TELL ZACH!” blah blah blah, you continue running in circles playing a MMALogic rip-off, blah blah blah, whatever.
This whole deal of comparing ratings for Raw and Ulitmate Fighter is so retarded. They were not head to head and the drop for Raw was not due to Ultimate Fighter. Ofcourse, people making a big deal about this are either UFC shills like Meltzer and Alvarez or idiot smarks who are still butthurt over their favorite non-WWE feds going out of business. Funny how they jump on the UFC bandwagon given their stance against competition is the same as it has always been for WWE.
All of you have missed the point of those short financial analyses provided by S&P. For all the hoopla about Kimbo and Spike, Zuffa still makes most money off of the PPV and live gate revenue. Without continued sellouts and success of the PPV events, Zuffa cannot survive.
Now, we’re seeing that the Fertittas (and to a very small extent, Dana) are taking cash out of the company as dividends, while choosing to borrow to meet operating needs. This is very telling: the Fertittas and White want some cash out of the bidness right now! They’re not interested in going public or selling the company for now: they are acting like owners of mature companeis when they pay themselves large cash dividends. The problem here is that Zuffa is not a mature but still growing company with plenty of risks of remaining viable as a going concern business.
What this means is that the ownesr want to take some money off the table to reward themselves. They don’t wanna take the chance of the event perhaps being barred because of accidental deaths or PPVs taking hits because of the economy. Interpretation: they’re not taking any chances. This is their baby, they built it, they want their money while they’re at it. By borrowing, they’re paying interest expense and you know the borrowing costs will erode the operating margins of the company. No matter: this is entirely understandable if we’re talking about an IBM or Tyco or GE. But we’re talking about still a fledgling entertainment business whose future could be destroyed by one ring accident.
It’s also funny how Meltzer and Alvarez cover ratings. Usually when Raw draws a number that’s considered to be strong they’re like “well ratings mean nothing look at the buyrates and blah blah blah”. Now all of a sudden this week when Raw does a 3.1 and Ultimate Fighter does a 3.7 ratings are a big deal afterall.
Brad, you must have selective hearing.
Meltzer said ratings don’t mean anything if you can’t convert a large percentage of those people to buy PPV’s.
WWE is averaging about 5 million people for RAW yet only get around 120,000 domestic buys a PPV. Thats a horrible conversion rate compared to UFC.
Reese is correct. And he says that more about TNA celebrating getting 1.2’s but only doing 35,000 PPV buys than he does about WWE. The last time I remember him saying that about WWE was for their 3 hour show where they barely promoted the PPV that weekend but made a big deal that they did over a 4.0. UFC can never be accused to not promoting a PPV on their TV coverage to put it mildly. They cram that down your throat at every opportunity.
And isn’t TNA getting like 1.5 Million people per show and getting 20,000 per PPV?
Mark….. Penn gets a percentage of the PPV Buys. Which is exactly why he didn’t want to do UFC 99, and elected for UFC 101 instead. Another fail for you.
And I think you missed the entire point on the $10,000 extra per fighter. The point is that it’s a slippery slope. You need to keep salaries in check. As soon as it gets out of control, they have lost. Yes, $10,000 is a big deal. Like I said…. It has a ripple effect. All of a sudden the 5 fight undercard costs $100,000 more. Two of the main card fights cost $40,000 more. Two more of the main card fights cost $80,000. And the main event guys want a larger amount for their base…. let’s say $200,000 total. Before you know it…. BAM, that simple $10,000 becomes closer to half a million. Obviously those numbers are just examples, but that is a very likely scenario. When you up the base pay of the entry level guys, then the guys with experience will want even more too….. When you have 200+ fights in a roster, that is a very dangerous thing to do.
And it’s just not for the PPV’s. They have Fight Nights as well. An extra $200,000 to $300,000 (base minimum) could have true implications on what they can deliver to the fans.
And Mark… You are starting to lose it….. Very funny stuff….. Got me laughing.
Alright, so you don’t think the fighters deserve to have $200,000 split among them. So where would the money be better spent? You’ve gone on record saying the UFC boom is going to continue so is a rainy day fund really necessary? (Obviously not if Dana and the Bro’s are cashing out.) Should they wait until the Octagon Girls start holding them up for money? Maybe offer Yves Lavigne the $200,000 to stop being so awful? Please tell us. You know so much about Zuffa’s inside business. What percentage does BJ get? And when does the bonus system kick in? Word is nobody gets paid unless it hits 500,000 or more. And tell Frank and Lorenzo hello the next time you go there to look over their shoulder at the cash payouts held at an undisclosed foreclosed casinos.
Well there’s no getting through your gimmick-shield so I might as well have fun at your expense while we’re all here.
I know I’m way late to the dance and this will probably get ignored. But I was impressed at the improvement Kimbo has made and the potential he showed in that fight.
I think I give Roy Nelson more credit than most. If Roy were in UFC now he’d be a mid-tier heavyweight a clean punch or two from a title shot. He’d be about where Gabe Gonzaga is now and I think Roy would beat Gabe.
Kimbo looked scared in that fight, especially early on. We saw the same thing happen to Cro Cop after he lost to Nog. It took him almost a year to get over being gun shy. Roy takes a hell of a punch, we saw that in the Arlovski fight. I would bet Kimbo would have beat anyone else on the show if he had them pinned on the cage the way he had Roy in mid round 1.
Kimbo is at about the level of guys who have 3 or 4 fights and are banging around in KOTC and those types of shows. He happened to be thrown into the limelight way prematurely. Similar to Randy Couture he’s a guy who started in the big time and never had any work your way up fights. Remember how badly Randy got embarrassed in Japan after the first time he tried to hold UFC up for money?
I don’t think Kimbo will ever be anything particularly special. I don’t see him as much more than a Chris Leben type fighter. Brawler, fun fights, crowd follows him even though he hovers around .500. But that’s fine. People seem to have a hatred for Kimbo because of his YouTube fame and the push he got from Elite XC. I still find it ironic/crazy that many of those people who bash Kimbo still defend Gina passionately. You know what? Kimbo has more skill and abilities than Gina. He’s also fought much harder competition. I thought Roy Nelson would beat Kimbo in under a minute. Instead it took him two rounds, he beat Kimbo the way Matt Hughes beat BJ the second time.
Roadblock, I’d like whatever drugs you are taking!!! They are some powerful stuff!
Kimbo has more skills and abilities and has faced better competition than Gina?!?! LOFL. Get a grip. Just bc he’s in the UFC doesn’t magically make him better nor the quality of his competition. Kimbo has zero, ZERO ground skills, no wrestling, no clinch skills and his muay thai and striking is far inferior to Carano’s.
What a hoot.
Gina has skills and ability? Sorry but the top level of womens MMA is even below amateur male MMA in skill and ability. At least in Kimbo’s backyard fights he showed head movement and the ability to throw a straight punch. I’ll take Kimbo in this argument.
Mark,
1) It’s not about deserving. It’s about keeping the UFC in business so there are future fights and future earnings for fighters. Affliction did a great job at paying fighters. The only problem is that they paid out too much and now they pay nothing. Will $200,000 make the UFC go bankrupt? Absolutely not. But like I said, it would likely end up being more then that, and it is a very slippery slope that they would be beyond stupid to go towards.
2) I’ve never said the UFC boom is going to continue. My prediction has been that this boom will last another year or two, and then we will end up seeing a lot of PPV’s get 200,000 to 300,000 per month, with 1 or 2 doing big business. I highly doubt this boom will be the norm. Then again, I never thought MMA would get this popular. And Dana & Fertitta cashing out has NOTHING to do with how they think the UFC might do in the future. It is all about protecting their assets and taking their return on their investments. Nothing more, nothing less.
3) I don’t know BJ’s exact PPV payout. But Dave Meltzer and others have talked about why fighters don’t want to go on the European Shows, and it specifically has to do with their PPV Payouts.
You don’t have to see their financials to know basic business practices. What they are doing by taking money out of the company is extremely common. There are tax reasons. There are asset protection reasons. It is also important for Fertitta to take the money out of the company sooner then later. Let’s say at UFC 104 a fighter gets killed and the UFC has to file for bankruptcy the next day. Any money taken out of the company in the last 90 days can be taken back to pay off debts. This is just ONE of the many examples of why it is smart for Fertitta to get the money out sooner then later. Need I go on?
Lastly, you keep saying I have a gimmick, but I continue to back up my statements with some pretty detailed reasoning. That isn’t a gimmick. Your gimmick is to hate on Dana White. You have said so yourself. Give it up. The UFC is good for the sport. Heck, without them there isn’t much of a sport.
“Then again, I never thought MMA would get this popular. And Dana & Fertitta cashing out has NOTHING to do with how they think the UFC might do in the future. It is all about protecting their assets and taking their return on their investments. Nothing more, nothing less.”
This is nonsense. If you believe Lorenzo, Frank, and Dana are savvy business people, which I do, how can you with a straight face claim that what they do with Zuffa money has “NOTHING” to do with their view of the company? Of course it is provides an indication.
If they believed the UFC’s business provided their best opportunity to make their largest return on investment, they wouldn’t have taken on debt to pay dividends. They would have used that cash to fund the growth, to reap those returns.