The over/under on PPV buys for Mayweather-McGregor is 5 million. Take the under – barely
By Zach Arnold | June 15, 2017
Will Jason Whitlock’s prediction of Conor McGregor-Floyd Mayweather devolving in a race war surpassing the rhetoric in the Quinton Jackson-Rashad Evans feud come true? Probably so, but the raw ugliness will not stop hundreds of millions of people from watching a $100 USD PPV.
The media’s expectations are not lining up with fan expectations. Before McGregor-Mayweather was signed, there were hypothetical odds of Conor being a 22-to-1 underdog. So far, the gambling lines have kept McGregor at an astounding 8-to-1 underdog price. Giving McGregor over a 10% chance to win sounds insane but there is definitely fan demand to bet some cash on McGregor. Hey, people play the lottery every day. It can’t be any worse of a sucker’s bet.
This is exactly the dream scenario that new UFC ownership WME-IMG imagined. They have been horribly distracted for the past six months in getting this fight booked. Conor McGregor dragged them along but management came to the conclusion that, given their massive debt in financing the purchase of UFC, they needed a financial homerun to dig out of the hole they found themselves in. Everyone is going to get paid. Mayweather is making 9-figures. McGregor no doubt is making mid-8 figures, perhaps higher. UFC is going to make tens of millions of dollars.
The level of incredulousness on display from the mainstream American sports media to the fan demand for the Mayweather-McGregor fight is the perfect display of cognitive dissonance in the fight industry. It’s a gross spectacle absolutely deserving of raw cynicism. The right people are disavowing this charade. The problem with dismissing this as a circus is that you can’t say the fight is going to ruin combat sports if the actual result doesn’t amount to a hill of a beans.
It’s not all roses for UFC
For the next two months, there is one major fight on the mind of fight fans. It’s Conor McGregor vs. Floyd Mayweather. It’s going to suck all the oxygen away from the rest of UFC’s upcoming schedule. It will even make a (minor) dent in the upcoming Anaheim fight with Jon Jones and Daniel Cormier.
There’s no doubt that the circus fight will take away oxygen from Gennady Golovkin vs. Canelo Alvarez. Do they keep the September 16th date? It’s hard to imagine rescheduling that fight for a later date given that NFL & College Football season is going to take away the spotlight. The decision by Golden Boy to choose what appeared to be the safer pick in Las Vegas over Jerry World in Dallas looks like a mistake in hindsight. That doesn’t mean the enthusiasm for the GGG fight has dampened at all. The question is whether or not the fans who will planning on buying that fight are going to get suckered into blowing their money on the spectacle fight three weeks before.
Remember, Oscar De La Hoya channeled his inner Trump and claimed the GGG fight with Canelo Alvarez would sell 3 million PPV buys. Now we have a circus fight which Vegas is taking prop bets on with an over/under of 5 million PPV buys.
UFC reportedly was pursuing a Seattle date (Key Arena) for August 19th. Running a UFC PPV a week before the Showtime PPV with Mayweather-McGregor is a bad idea. They may have no choice, however. They sure as hell can’t book another joke of an interim title fight as a headliner, either.
Topics: Boxing, Media, UFC, Zach Arnold | 4 Comments » | Permalink | Trackback |
Floyd Mayweather vs. Conor McGregor set for August 26th at MGM Grand Garden Arena
By Zach Arnold | June 14, 2017
WME-IMG cut a deal with Al Haymon and Mayweather Promotions to get the boxing match approved for August 26th.
The Nevada State Athletic Commission rubber stamped the fight. Of course they would. Money talks, BS walks. The fight between Mayweather and McGregor will happen in Las Vegas three weeks before the Gennady Golovkin/Canelo Alvarez bout.
Important to note: the Nevada commission approved Mayweather Promotions as the promoter for the fight. No way UFC was going to be approved as the promoter since Conor McGregor is there fighter and a natural conflict would arise regarding Dana White being both the promoter and manager of Conor McGregor. Of course, no Attorney General is going to prosecute anyone in boxing or MMA for an Ali Act violation and nobody is going to file a civil lawsuit for such a conflict of interest.
Will there be second-guessing on behalf of Golden Boy for choosing Las Vegas over Cowboys Stadium for the GGG/Canelo fight location?
In the big picture, WME-IMG got what they wanted. They are in superfight mode to try to make as much money as possible in big spurts given the massive debt financing they used to purchase UFC from Lorenzo Fertitta. How much will this Mayweather-McGregor fight suck the media & fan oxygen away from the rest of UFC’s upcoming fights?
Topics: Boxing, Media, UFC, Zach Arnold | 4 Comments » | Permalink | Trackback |
If you can’t buy star fighters, buy the next best star power on TV
By Zach Arnold | June 13, 2017
Bellator MMA just hired both Mike Goldberg and Mauro Ranallo https://t.co/EvHcaFemA2 pic.twitter.com/N1P2k5PUV4
— Awful Announcing (@awfulannouncing) June 13, 2017
Viacom and Bellator management is playing a smart game in competing against UFC on the edges. When you can’t always buy top-level fighters, the next best thing is to buy high-profile television names who fans know and/or have an emotional connection with.
The hirings of Messrs. Goldberg & Ranallo for Bellator’s New York PPV signal a strategic reality for building trust with new and casual MMA fans. For many UFC fans past and present, Mike Goldberg was the face of UFC. Mike Goldberg was the face of UFC. More importantly, Mike Goldberg was the face of the old UFC. The UFC owned by Lorenzo Fertitta that felt more stable than the current WME-IMG product. The current UFC fired Mike Goldberg and gave the media a sob story to run with that made Dana White look cold.
The best thing about having star TV personalities that aren’t fighters? They never get hurt and always show up.
The circumstances surrounding Mauro Ranallo’s hiring are even more intriguing after settling with WWE. If allowed, Vince McMahon could have really found his Jim Ross. In the fight business, the voice matters just as much as the fighters in telling a story. The pairing of Goldberg & Ranallo may feel unusual on paper but I think it holds a lot of potential. A laid back yet in-command Goldberg with high-energy storyteller Ranallo has the chance to produce some smart, funny, and edgy commentary.
I have no problem with the current UFC roster of announcers. I like them. I don’t necessary love them. Professional and serviceable. Nothing offensive. What separates the good from great announcers is emotion. Creating emotion or channeling emotion.
There’s no better example of the value of emotion in a fight call than comparing the performances of Jim Lampley (HBO) and Colonel Bob Sheridan when Buster Douglas knocked out Mike Tyson at the Tokyo Dome in 1990. Lampley was in shock but not boisteriously so. The Colonel went crazy and it was specactular. It’s the first thing I automatically recall besides Tyson losing his mouthpiece on the canvas.
There’s never a true substitute for having great fighters but having great television personalities who can tell a story, channel emotion, and communicate history is extremely valuable. Three cheers to Bellator and Viacom.
Topics: Bellator, Media, MMA, Zach Arnold | 2 Comments » | Permalink | Trackback |
A new report’s claim of median age of 49 for UFC viewers is flawed but potentially good news
By Zach Arnold | June 7, 2017
Sports Business Journal did a recent Nielsen ratings review since the year 2000 on the changing demographics for sports fans watching TV. The top-level headlines are depressing for UFC (median age 49) and WWE (median age 54) but the substantive results reveal some positive notes.
First, the data review is largely about conventional TV. The WWE Network is all about streaming. That’s a young demographic. The sky is not falling for WWE on the technology front. It’s falling on the matchmaking front, which is atrocious but fungible.
Second, no one who understands or follows the combat sports industry actually believes that the median age of a UFC viewer is 49 years old. Maybe for boxing, but not MMA. Boxing’s reputation of an older demographic that spends more money than UFC is wholly justified and I still think there’s great hope for boxing’s long term success as a TV product. Ask any casino what kind of live show they would rather have to attract gambling and every one will tell you boxing for good reason. UFC draws a younger audience with not as much cash to burn.
UFC is a product with a safe floor of viewership but a very hard glass ceiling. It’s the classic cable/internet play. What works and drives traffic on those platforms doesn’t play on network television. The big question is how safe their viewership floor remains given how volatile matchmaking has become under Ari Emanuel’s ownership.
WWE ratings have plummeted on cable. Their internet business is doing well. They still need a cable footprint to act as advertising for the online venture. I’m not worried about them.
What happened to the value of the 18-to-34 year old demographic?
As usual, the SBJ article touts soccer and basketball as the future kings of sports because they have younger demographics… except for the fact that those “young” demos are still in the early 40s.
How much does it matter? Rights fees, team values, ad rates, affiliate fees have all kept climbing as the audience has grown older. https://t.co/VWgJKx40uN
— Michael Mulvihill (@mulvihill79) June 6, 2017
Viewership for television programming is aging. That’s why the 18-to-34 year old demographic is fool’s gold. American network news broadcasts discovered this phenomenon long ago and everyone else is catching up. It’s why you see a proliferation of Viagra and Cialis advertising. TV viewers actually buy those products.
Fox Sports point man Michael Mulvihill recently admitted that he is reconsidering the value of the 18-to-34 year old demographic for sports fans. He has to. If the youngest sports fans for conventional TV are above age 40, then 35-to-49 becomes your desirable demographic. That’s right in UFC’s wheelhouse.
Additionally, the new study conducted by SBJ delivers the confirmation bias on “time poverty” and how that plays well for UFC. Every TV program is now subject to a zero-sum game. People watch five hours of TV programming a day. Either your program attracts you or it doesn’t. No second chances. Feast or famine. Sports programming is no longer competing with other sports programming — it’s competing with all television programming. The value of a five round UFC title fight has great desirability because it fits into a 30 minute TV block. A soccer game fits tight in a two hour TV block.
The time issue is about millennial viewership habits. They have the shorter attention spans and embrace new technology for media platforms. Fox Sports wouldn’t be focused on UFC’s value for “time poverty” if the median age of viewership was 49 years old.
The question is what exactly is the value of time poverty? Baseball games are over three hours. College football and NFL games are well over three hours long and creeping into four hour territory. And yet those sports remain kings while the NBA’s contract with ESPN is choking that network out like a python on its finances. Will the NBA be able to command the same price tag next decade?
Bottom line: All of these data points are interesting.. but is it useful? Is it concrete? Does it matter? Is there a true reading of the tea leaves? The more TV data I see, the more I feel that decisions are being made on a paralysis-by-analysis basis. PPV is not dead and it’s not dying any time soon. The cable companies are surviving by turning from content distributors to pipeline distributors (internet) with huge profit margins. The more things change, the more they stay the same.
Topics: Boxing, Media, MMA, UFC, WWE, Zach Arnold | 3 Comments » | Permalink | Trackback |
Report claims Spike TV has lost nearly 7% of its households in a year
By Zach Arnold | May 31, 2017
The headline is that ESPN is down 3% year-to-year in the amount of cable/satellite subscriber households. A minor bright spot is that from May to June, household numbers actually slightly increased. Nevertheless, the more interesting story for combat sports fans is what is happening with Spike TV.
The New York Post, citing data from Nielsen ratings, shows Spike losing 7% of pay TV subscriber households in a year-to-year comparison. The TV network is being rebranded as The Paramount Network. It is part of the Viacom family. Viacom has faced some rough seas after a potential reunion with CBS was nixed. Wall Street was not kind in response.
Bellator is owned by Viacom. The health of Viacom means everything for Bellator’s future in terms of how much of a budget there is to spend on producing events. Al Haymon’s PBC is gone from the network even though Spike made a public statement that they would be open to doing business with Haymon in the future if the right deal surfaced.
Even in turmoil, UFC still has the power and resources of Fox Sports to back them up. Fox Sports looks like a hell of a better proposition for the future than ESPN or Spike TV, “time poverty” notwithstanding. One interesting trend noted by Fox Sports point man Michael Mulvihill — Friday nights could becoming more competitive for sports with out-of-home ratings combined with traditional household TV ratings. Bellator has put their stamp on Friday night MMA events the same way UFC has taken over Saturday nights.
Some questions that this latest news raises:
- Will Viacom be interested in selling Bellator to a private equity investor group? At what price? How much would time on Friday nights on Spike be valued at?
- At what point does Viacom reconsider a reunion with CBS? If the reunion happens, can Scott Coker pull off the kind of magic that Gary Shaw did with Elite XC on CBS?
- How will Bellator increase its digital footprint with the traditional Viacom footprint shrinking?
- Can Bellator continue to afford getting into an arms race with UFC? (See: Rory MacDonald, Roy Nelson)
- What can Bellator and UFC do to expand their reach from being a pay-TV product to having true network appeal?
Topics: Bellator, Media, MMA, Zach Arnold | 2 Comments » | Permalink | Trackback |
Report: Oscar De La Hoya shuts the door on California hosting Canelo vs. Golovkin fight
By Zach Arnold | May 24, 2017
Oscar De La Hoya claimed Magic Johnson made him an offer to host the Canelo Alvarez vs. Gennady Golovkin fight at Dodger Stadium. Tom Loeffler trolled a few days later at a U2 concert at the Rose Bowl by claiming the Rose Bowl would be a good venue for the fight.
In the end, it was predictable gaslighting.
“It’s between Dallas and Las Vegas, so I have my meetings set already all this week and next week and hopefully I can have an answer for you in a few days.”
Both locations have no state income tax. Neither location has a 5% events tax like the city of Los Angeles or a 13% state income tax like California.
The consolation prize for the state of California will be Miguel Cotto vs. Yoshihiro Kamegai on 8/26 at StubHub Center. Golden Boy will promote that event.
The reaction to this news in Sacramento will not go over well. The Athletic Commission is fighting to increase it’s spending authority in the Governor’s hotly contested budget. Athletic Commission chairman John Carvelli, a wheeler and dealer in the dental business (Liberty Dental), has spent significant money on lobbying over the state’s Denti-Cal program for children.
Important political power brokers in Sacramento wanted the Canelo/Golovkin fight badly. The Athletic Commission and Consumer Affairs have spent the last year lobbying specifically for this fight. Tom Loeffler even received a ceremonial award from the AC. He knows how sensitive of an issue this is.
There will be internal tension at Consumer Affairs in Sacramento over this development. Andy Foster has done the best job he can to try to navigate the shark-infested waters with top politicians in the state Legislature always trying to get their hands into the AC’s business affairs. UFC has greatly helped him out with lobbying via Tim Lynch at Platinum Advisors. Even with that as the backdrop, there will be palpable disappointment and anger among Democratic leaders — specifically Southern California Democrats — who strongly believe that Canelo should be fighting his biggest fight in Los Angeles.
In yesteryear, a power player like Tim Leiweke would have gotten involved and bought the fight for Staples Center. Leiweke moved onto the Toronto Raptors and Staples isn’t buying fights like they used to. Without men like Tim Leiweke, the Athletic Commission has no juice to get an A-level boxing match. The false promises of tax breaks and empty sloganeering in pamphlets isn’t going to cut it. That won’t stop political leaders in Sacramento from applying pressure via interrogation on why they couldn’t get the fight they believe was owed to them as a God-given right.
Topics: Boxing, CSAC, Media, Zach Arnold | 1 Comment » | Permalink | Trackback |
The TV industry buzz phrase UFC is banking on in new negotiations: “time poverty”
By Zach Arnold | May 22, 2017
In an interview recorded this past weekend, Fox Sports point man Michael Mulvihill made his case that the television industry is not dying. In particular, regional sports network are monstrous cash cows and baseball is the sport best-positioned to take advantage of the current media trends because of how much content is produced. It plays in both sides of the equation: live events (standard TV formats) and recorded (digital consumption).
According to Mr. Mulvihill, Americans watch over five hours of TV daily. Cord cutting & cord shaving is having an impact but a disparate one. The impact is felt greater at a network like ESPN. The biggest threat to sports programming and television is “time poverty.” Television habits are becoming a zero sum proposition. Americans are watching five hours a day but viewership habits are hardening. Sports programming is no longer competing strictly with other sports programming for viewership time. The margin for error is getting slimmer. What if there is too much good content?
Mr. Mulvihill remarked that all the major American sports corporations are extremely sensitive to “time poverty.” MLB has implemented small measures to try to speed up games. Instead, games are now over three hours in length. Are Americans willing to spend three out of their five hours daily watching a baseball game? Viewers are hanging in with professional and college football games. Gambling can make torture fun.
According to the Fox Sports executive, two sports are primed to withstand the problem of “time poverty” – soccer (MLS) and MMA (UFC). You can watch a soccer game in two hours. A UFC title fight, with intervals and commercials, is around 35 minutes. This, according to Fox Sports, is becoming more valuable than whether or not a sport can capture the 18-to-34 year old demographic. UFC built its reputation in the television & social media industries on the fact that it’s prime demographic is right in the 18-to-34 year old sweet spot. Mr. Mulvihill believes that reconsideration is in order because younger Americans are delaying big life-changing experiences until they reach an older age – buying cars, houses, and starting families. He believes a more productive demographic to focus on is 25-to-54 and that middle-aged viewers have more purchasing power. This change in principle helps baseball (demo skews older 40s-early 50s-ish) more than it helps UFC.
The words of Michael Mulvihill should not be taken lightly. He is the man UFC will be negotiating with when it’s time to renew the Fox Sports 1 TV deal.
What about multiple television deals with different channels?
Since WME-IMG purchased UFC, the automatic assumption is Ari Emanuel pitching different kinds of UFC television packages to multiple channels (similar to the NFL, NBA, MLB).
Fox Sports just purchased rights to Big 10 college football and is splitting games with ESPN. According to Mr. Mulvihill, the two channels have been engaged in a fantasy lottery of sorts to buy dates in order to get games. Thus, Fox Sports bought the date to get first rights to Michigan vs. Ohio State.
Could such a scenario play out with the UFC? UFC has Super Bowl weekend, Memorial Day weekend, 4th of July, and New Year’s Eve. UFC can’t predict what fights are going to happen on specific dates. Selling dates as events, however, could be the avenue they pursue if they can convince a second television partner to buy some of their content.
The big question is what kind of financial value Fox Sports places on UFC content. Fox needs UFC content to justify the existence of Fox Sports 1. The network suits can argue until they are blue in the face that MLB & college football games are going to build the channel’s relevance. Certain games may pop bigger numbers than UFC programming. By in large, however, UFC programming remains the most solid performer on Fox. It’s good programming inventory. The question is at what price does it remain a good value. ESPN’s misfortunes has taken away some of UFC’s leverage. How valuable is UFC as an antidote to the “time poverty” conundrum?
Topics: Media, MMA, UFC, Zach Arnold | 6 Comments » | Permalink | Trackback |
Dana White secures UFC’s power in the Conor McGregor/Floyd Mayweather negotiations
By Zach Arnold | May 14, 2017
The best negotiating systems are those with at least two different paths to success and no downside. New UFC ownership agreed with Conor McGregor’s desires to fight Floyd Mayweather. They wanted to hit a proverbial grand slam in order to make as much cash as quickly as possible given the amount of financial debt as a result of purchasing the company from the Fertitta family. UFC held contractual power over Conor McGregor. However, new UFC ownership let McGregor figure out, on his own, what he was worth and what Mayweather would want for a boxing match. After the fishing expedition, UFC figured they could step in and figure out what made sense for their bottom line and McGregor’s bottom line.
The mistake new UFC ownership made was letting the situation drag on for half a year. It took away valuable time and resources from what they needed to use for day-to-day matchmaking negotiations. It impacted UFC’s timetable. A big no-no.
Dana White reclaimed power this week by creating a deadline, artificial or real, on the McGregor/Mayweather negotiations. He had increased his leverage a week after Golden Boy & HBO announced the impending September mega-fight between Canelo Alvarez and Gennady Golovkin. He executed on the deadline and McGregor’s side blinked. Dana says he’s ready to talk to Al Haymon.
What a perfect situation for UFC.
- If the McGregor/Mayweather fight happens, new UFC ownership is ecstatic and White can once again regain the mantle as the man in combat sports who is a closer in delivering the fights fans want to see. McGregor can now publicly claim that he made a deal with UFC and played ball. If the fight happens, he cashes in.
- If the fight doesn’t happen, McGregor can blame UFC or blame Mayweather’s camp while Dana White can put the heat on Al Haymon. There is no better public foil for Dana White than Al Haymon. Haymon handsomely cashed in on Julio Cesar Chavez Jr. losing to Canelo Alvarez. Floyd Mayweather credits Haymon in getting him multiple jets and sports cars. If Mayweather is truly about the money, how can he turn down a fight where he is at least a 95% favorite? If Mayweather says no, UFC and McGregor can proclaim victory.
Dana White has said the Conor McGregor/Floyd Mayweather fight must happen in 2017 or else it’s not going to happen at all. McGregor wants to fight twice in 2017. That would mean a fight in the Summer most likely and then a New Year’s Eve weekend fight.
The new UFC management went all-in on “hero booking.” The problem is they gave an inch to the fighters in negotiations and things became unwieldly. Dana White can now walk away from the situation, fight or no fight, as a winner in the eyes of the public and move onto boosting his day-to-day matchmaking affairs.
Topics: Media, MMA, UFC, Zach Arnold | 4 Comments » | Permalink | Trackback |
Ditching GSP/Bisping and McGregor/Mayweather is about UFC trying to regain control
By Zach Arnold | May 10, 2017
On Wednesday night, Dana White proclaimed negotiations for a Georges St. Pierre/Michael Bisping fight to be finished (for now). He claimed that St. Pierre wouldn’t be ready to fight until November of 2017. Therefore, Yoel Romero will get his title match with Michael Bisping.
The bottom line is that the new UFC, managed by WME-IMG, cannot afford to be patient with matchmaking due to how much debt they have to pay back from buying the company for $4 billion dollars.
The impatience on display this week from Dana White does not match the strategy WME-IMG implemented at the beginning of 2017. They played along with Conor McGregor’s desires to book a fight with Floyd Mayweather. They’ve spent months playing the string on booking Georges St. Pierre vs. Michael Bisping. The new UFC’s strategy was transparently obvious. They were willing to put everything to the side in order to go for the instant home-runs to make as much cash in big chunks rather than grind out the regular matchmaking schedule.
White’s pronouncements this week of GSP/Bisping getting pushed to the back-burner and stalling talks between UFC, McGregor, and Mayweather signal his loudest attempt yet to try to grab control of UFC power to restore “normal” order.
If the new UFC had the willpower to do what was necessary to make Michael Bisping vs. GSP happen, the fight would be happening as promised. It’s not happening now. This has nothing to do with the desires of other fighters or fan wishes. From my perspective, this is about a much bigger story within WME-IMG and the power struggle to figure out the best course of action to address the massive level of debt they currently have on the books for their UFC purchase.
There will be spin about the new UFC giving Conor McGregor and GSP enough rope to hang themselves on getting the marquee fights they wanted. With Canelo Alvarez vs. Gennady Golovkin getting booked, there’s no doubt incentive for UFC to put the squeeze on McGregor to soften demands for negotiations. That’s the up front story. The bigger picture? This is about Dana White and the old UFC guard attempting to re-establish their power base while rebuking the speculative financial strategy of paying off debt with “hero booking.” The new UFC was abandoning the financial path that had gotten the old UFC to the point of being sold for $4 billion dollars. The old guard in UFC is trying to correct the course but damage has been done.
Fighters are learning a very valuable lesson that when it comes time for negotiations with the new UFC: their enormous debt obligations are the weak point that can be exploited. Dana White’s attempts to regain control of UFC by strong-arming everything into normal order runs counter to the strategy from new ownership motivated by financial interests & obligations on the calendar.
The new UFC has let fighters find their own voice. The old UFC would have never allowed this to occur. Can Dana put the genie back in the bottle?
Topics: Media, MMA, UFC, Zach Arnold | 5 Comments » | Permalink | Trackback |
UFC’s massive debt load is being used against them by fighters to create unforced errors
By Zach Arnold | May 9, 2017
Dana White is telling the public that UFC “lost its date” of September 16th for the proposed Conor McGregor/Floyd Mayweather fight after Golden Boy announced Canelo Alvarez vs. Gennady Golovkin. UFC perpetuating the charade of McGregor/Mayweather highlights what a precarious position WME-IMG is in right now.
Lorenzo Fertitta would have never let Conor McGregor hold UFC hostage like this. He certainly gave McGregor plenty of perks and put up with a lot of shenanigans. What Lorenzo didn’t allow was his company to become prey for a hostile takeover. He just left the headaches for his business partner, Ari Emanuel, to deal with. Once WME-IMG paid $4 billion dollars in a highly speculative play on UFC, the whole business model changed.
- Fighters now had a price tag to start clubbering UFC with in negotiations.
- Fighters suing UFC over anti-trust allegations got new life in their uphill legal battle.
- Mark Hunt sued UFC in court over allegations of chicanery regarding profiting from the fruits of doping when UFC was sold after Brock Lesnar fought at UFC 200.
- Fighters like Al Iaquinta openly pushing back against “bonus bans” and daring WME to release him from his contract.
All of this has taken a toll on Dana White. Look at White’s current behavior. The man who sold the public on being able to put together the fights you wanted to see is now getting exposed by Oscar De La Hoya, of all people.
Desperate times call for desperate measures
The point of the fight business is to make matches that the public wants to buy.
You would think that WME-IMG’s UFC, saddled with monstrous debt, would be sensitive to booking fights that the public wants to watch. Instead of demonstrating matchmaking consistency, WME-IMG decided to play along with Conor McGregor’s hostile takeover. Give him what he wants. If he wants to fight Floyd Mayweather, then UFC gets its cut. Go for the home-run. Go for broke. Go for the fastest way to make a payday on paper. Why make money incrementally? Swing for the fences.
From the outside looking in, UFC’s strategy in dealing with Conor McGregor looks simple. Appear to give a good faith attempt on booking the Mayweather fight, watch things fall apart, and then come back to McGregor when his act has cooled off or squeeze him when the next big fight comes along. That next big fight is Canelo Alvarez vs. Gennady Golovkin.
UFC’s preoccupation with playing the leverage game on Conor McGregor has robbed them of oxygen in the matchmaking department for the rest of the company. A flood of cheap interim title matches with the end result being more fighters getting contractually tied up to UFC because of the dreaded “champion’s clause.” Fighters are starting to stand up and refuse interim title fights because of this onerous legal provision. Better late than never even if it’s a risky strategy. Luke Rockhold, like many UFC fighters, understands what the game is now:
“I don’t know, man,” he told Ariel Helwani when asked about his situation. “You can’t predict anything these days. So, [the UFC is] just chasing to pay off a debt really, is what they’re doing, trying to put these megafights together that don’t make sense. I don’t know. You never know what they’re going to do these days. Who knows.”
The reaction from UFC is the kind of cheesy, half-hearted laser pointing of Dana White publicly questioning what the worth of a fighter like Nate Diaz is.
UFC has one solid big money fight on the horizon — Daniel Cormier vs. Jon Jones. They have a second fight that could do good in Michael Bisping vs. GSP. The overarching WME-IMG philosophy on matchmaking is simple — go for the grand slam. If everything else gets plugged up, that’s collateral damage. Where else are fighters going to go?
Focus on the star power. Hang in there until a new television deal arrives. Then consider the option of flipping the company to another set of venture capitalists or the option of embracing an IPO. The strategy may pay off but the downside is incredibly treacherous. The business fundamentals that brought UFC to the point of being sold for $4 billion dollars have been abandoned. The company’s word is ringing hollow to fans and fighters.
The weather vane known as ESPN
Remember how hot and bothered ESPN got over covering UFC events over the past few years? Once Ronda Rousey’s career imploded, they cooled off a little bit. Things cooled a little bit more when Al Haymon cut a deal to air PBC events on the network. The PBC experiment backfired and ESPN ended up cutting a deal with Golden Boy. Suddenly, ESPN toned down the “boxing is dead” rhetoric to pump up Oscar De La Hoya & Canelo Alvarez.
As ESPN went in bed with Golden Boy, the on-air love fest with UFC got smothered by a proverbial wet blanket. After Canelo Alvarez easily defeated Julio Cesar Chavez Jr., an ESPN anchor had the temerity to declare Canelo/Chavez the biggest fight in the history of Mexican sports. Just as quickly, ESPN went into promotional mode for Canelo Alvarez vs. Gennady Golovkin. A real fight that fans want to see. Red meat over cotton candy. The only media defender of UFC continuing to pursue Mayweather vs. McGregor is Fox Sports 1 and that’s because they need UFC to stay relevant in order for their network to remain carried by cable & satellite providers.
ESPN cooling off on UFC is a telling sign. ESPN thought they could gain street cred among the 18-to-34 year old social media demographic by going all-in with UFC. Now they’re backing away and pushing their own business interests with Golden Boy. Unless ESPN decides to get in bed with UFC on the next television contract, I would expect ESPN to continue with its new-found half-hearted treatment of an MMA product that is frequently getting colder. That’s the price WME-IMG is paying for the gamble they’ve made in their business strategy to address the massive financial debt load they have.
Topics: Media, MMA, UFC, Zach Arnold | 9 Comments » | Permalink | Trackback |
Put up or shut up time for California in recruiting the Canelo Alvarez vs. Gennady Golovkin fight
By Zach Arnold | May 7, 2017
The California State Athletic Commission has spent a year groveling to promoters in order to attract a major fight to the state. Useless pamphlets. Pleas for money marks to pay for sold shows. False promises of tax breaks while California voters continue to support higher taxation rates. Even consideration of the Athletic Commission creating their own title belt.
Sacramento’s targeted fight has been Canelo Alvarez vs. GGG. They went as far as to kiss promoter Tom Loeffler’s ass with an award. Now a date has been set for the proposed Canelo/GGG fight: September 16th. The venue has yet to be determined.
It’s go time for Andy Foster and the California State Athletic Commission. There are major politicians who want the Canelo/GGG fight in Los Angeles, come hell or high water. Now that a date has been set for September 16th, the political & business pressure to obtain the Canelo/GGG fight is going to significantly increase in the next 45-to-60 days. It will likely be a topic of discussion at the next Athletic Commission meeting in Anaheim on May 16th.
The alternatives to California for Canelo/GGG are: Nevada, Texas, or New York. Florida is an option but an unlikely one. Texas makes a ton of sense at JerryWorld (Cowboys Stadium). Nevada makes a lot of sense given that it would be easy to get a site fee. New York, however, would be a swift kick to Sacramento’s balls. High taxation, high cost of doing business in NYC, and a terribly tarnished athletic commission. California losing Canelo/GGG to Nevada or Texas would hurt the Athletic Commission and cause political frustration at Consumer Affairs. Losing the fight to New York would produce backlash in the Legislature at a time when the Athletic Commission is requesting $200,000 in spending authority for athletic inspectors and Athletic Commission Chairman John Carvelli is spending over $65,000 in a short lobbying period for his Liberty Dental company regarding Governor Brown’s budget and the Medi-Cal dental (Denti-Cal) program. A lot of money is at stake here for both parties.
Andy Foster prides himself on being a salesman with a gift of gab. John Carvelli views himself as a deal-maker and closer. They’ve been talking big about recruiting the Canelo Alvarez fight with GGG. They must deliver this fight for California or else politicians in the Sacramento Legislature will start meddling (again) with the Athletic Commission’s business & political activities. Consumer Affairs and Sacramento wants the Canelo/GGG fight for two reasons: 1) the revenue and 2) the tickets so that politicians and their associates can go and be seen on camera. There is no bigger fight on the horizon than Canelo/GGG.
Al Haymon wins again
Another PBC fighter gets a HUGE payday when crossing the street…and loses in a big way too. #boxing
— Raging Babe (@RagingBabe) May 7, 2017
Lost in the charade that was Canelo Alvarez easily defeating Julio Cesar Chavez Jr. on Saturday night in Las Vegas was the fact that Al Haymon, once again, cashed in big on a lopsided fight.
Haymon had a piece of the action with Chavez. Chavez was a Top Rank fighter who ended up with Haymon. Chavez and Haymon made a lot of money on Saturday night.
Just a few months ago, Haymon defeated Golden Boy in court when he successfully fought off their anti-trust lawsuit in Los Angeles. Golden Boy immediately did business with him after he won. The PBC may be on the rocks but Haymon’s ventures in boxing will remain profitable for a long time to come. Reported rumors from a few weeks ago regarding ESPN considering litigation with Haymon appear unfounded — at the moment. There are no lawsuits filed in Federal court.
Topics: Boxing, CSAC, Media, Zach Arnold | 2 Comments » | Permalink | Trackback |
ESPN’s financial collapse ensures that Fox Sports is the only major TV player for UFC
By Zach Arnold | April 26, 2017
Keep in mind, @espn isn't going to stop spending money & will still spend big $ when they think its necessary.
— jamesmiller (@JimMiller) April 26, 2017
About WME-IMG’s plan of spreading UFC programming in the future on multiple networks…
ESPN overspent on NBA and NFL programming packages. They built a business plan based on outbidding everyone else for sports programming. Then cord-cutting started. In response to cord-cutting, the network became more political and more infatuated with both social media & popular culture. The spiral downward accelerated. Unable to break free from the massive television contracts they’ve signed, ESPN is in firing squad mode to get rid of their reporters and television personalities. At least the professional ones.
This is why Fox Sports has and will remain the one major television partner for UFC in the future.
Without UFC, there is no major justification for cable & satellite networks to keep Fox Sports 1 in programming bundles.
Fox Sports is the only television network that truly understands how the MMA industry operates. They’re the only television partner willing to work hand-in-hand with UFC on how to market and hype events. Fox has the money to pay WME-IMG to keep UFC. The question is whether or not WME-IMG’s gamble on tripling or quadrupling UFC’s TV rights fees will pan out. I say no. This has a similar feeling to the showdown between USA Network and WWE a couple of years ago that resulted in WWE only getting a modest increase in rights fees.
Rather than go the WWE route of going all-in for their own streaming service, it feels like (from the outside-looking-in) that WME-IMG is intent on packaging Fight Pass as part of the next TV rights deal package and letting the future TV partner manage or navigate the Fight Pass business model. Think: Turner Sports and NBA TV.
ESPN, meanwhile, is in a disadvantageous position to negotiate becoming the main home of UFC programming. They got rid of Todd Grisham. The Al Haymon/PBC experiment imploded. ESPN continues to do a piss-poor job of hyping programming that isn’t NBA or NFL-related. You don’t even see ads for future Golden Boy shows on the network. If you’re UFC, are you going to sacrifice your hype machine to the mercy of ESPN management? Not a chance in hell.
And just how much demand is there for the “new” UFC? I think a lot of the ‘new’ UFC sucks. The Ultimate Fighter franchise is as desirable as stepping on a rusty door nail. UFC shoulder programming on Fox Sports 1 is a dreadful watch, especially with Karyn Bryant getting so much air time. The cards for Fox network television events aren’t treated with importance or significance. UFC continues to highlight Mighty Mouse on network television despite not having a real plan on how to market him to the masses or push the right buttons to make him somewhat of an attraction. The inability of UFC to treat Cris Cyborg like a human is grating. UFC has failed to capitalize on making the right deals to cash in on Nick & Nate Diaz post-McGregor re-match. The matchmaking for the women’s 135 pound division is an unholy mess. How many champions can the average UFC fan name right now?
Most important of all – the massive debt load that WME-IMG is trying to manage. Perhaps that’s all they will have in common with ESPN when it comes time to negotiate a new television deal.
Topics: Media, MMA, UFC, Zach Arnold | 5 Comments » | Permalink | Trackback |
Spike TV drops PBC; what’s next for Al Haymon and the major athletic commissions?
By Zach Arnold | April 12, 2017
Spike, as @danrafaelespn reports, the first PBC network to bail. Others, industry execs say, will follow. Haymon creation crumbling.
— Chris Mannix (@ChrisMannixYS) April 12, 2017
Dan Rafael at ESPN is reporting that Spike TV has dropped PBC programming. The reporting tone at ESPN regarding Al Haymon is a far cry from when he was doing business with the network. Now the network is in bed with Golden Boy.
Rafael’s report claims that Spike TV was the only “non-premium” cable network paying a rights fee for PBC programming. This goes against what I had been told in the past regarding the deal PBC has with Fox Sports 1, but I could be factually wrong on that account. Nevertheless, PBC programming on FS1 continues while their deal with Spike TV is over.
The big picture now is the stability of PBC with other television networks. Chris Mannix claims PBC is about to get dropped by other television stations.
Things changed in a hurry for Al Haymon once PBC agreed to drop their exclusivity clauses from television contracts as part of the settlement with Top Rank. Top Rank settled their antitrust lawsuit against PBC. Golden Boy, however, did not. They lost their court case via summary judgment. However, Golden Boy got very lucky that they were not subjected to “loser pays attorney fees” status. Instead, the most that Al Haymon’s side could recover was court costs estimated to be around $35,000.
In the end, Golden Boy paid a lot in legal fees but so did PBC. That had to hurt.
While various reasons/excuses were stated for Spike TV dropping PBC, not mentioned in mass media reports is the fact that the legal climate for PBC changed once a few shareholders from the Ivy Fund in Kansas filed a shareholder derivative lawsuit against the hedge fund for financing PBC and allegedly putting $525 million dollars in a shell LLC (Media Holdings LLC). The lawsuit is attempting to get the hedge fund to claw back the money they invested into Al Haymon.
The lawsuit was filed in April of 2016. PBC had a big run in the Summer of 2016. Then things slowed down to a crawl. The shareholder lawsuit was part of (what we guestimated in past articles) a legal python strategy to choke the cash from PBC.
Even if PBC dies a slow & agonizing death, Al Haymon will have made his money. He will have cashed out big. As long as PBC isn’t subjected to future litigation by business partners or adversaries, things will be good for Al Haymon. He’ll be free and clear to do as he pleases in boxing. Can the same thing be said for the fighters he has signed to long term deals? Will fighters attempt to extricate themselves out of his management/advisory contracts?
Lost in the noise is what the impact will be on athletic commissions like California, Texas, and New York. A past breakdown I did of the revenue numbers in California showed that revenue from PBC & Al Haymon was around 15-to-20% for the state Athletic Commission. With UFC slumping and Al Haymon facing new economic realities, it’s not good news for the athletic commissions who helped propel Haymon’s rise in the boxing world.
Topics: Boxing, Media, Zach Arnold | 4 Comments » | Permalink | Trackback |