MMA Universe

The Sports Business Daily/Journal had another short report from Fox Exec Eric Shanks and UFC head Lorenzo Fertitta at the 2012 World Congress of Sports.  The two spoke today at the conference during a panel discussion entitled, “How the UFC/Fox deal could be a game changer.”

For those wondering, here’s the synopsis of the talk from the brochure:

In 2011, Ultimate Fighting Championship expanded into South America and Asia, and continued its surge in popularity, particularly among the 18-34 year-old male demo. But it was the mixed martial arts organization’s seven-year agreement with Fox — to show UFC programming on the Fox broadcast network and cable TV channels FX and FUEL TV — that made the biggest splash. As part of the deal, dozens of live fights will be airing on Fox networks and, this spring, “The Ultimate Fighter” reality show will feature a new format that includes live fights, rather than prerecorded events. This session will take an inside look at the UFC/Fox agreement and its role in the growth of mixed martial arts. You will hear from Lorenzo Fertitta, Chairman & CEO, Zuffa (Ultimate Fighting Championship); and Eric Shanks, President & COO, Fox Sports.

Shanks and Fertitta spoke about the UFC-Fox deal and the issue of control being a huge factor in Zuffa’s decision to go with Fox.

Here are some additional highlights:

-  Shanks said that the 64 second JDS KO of Cain at UFC on Fox 1 wasn’t ideal but “it was exciting,” he added, “It was a knockout. It was a style of a knockout people were used to seeing. It could have gone a lot of other different directions.” As a result, it learned that fans want more action and less fluff (i.e., talking and promoting).

-  As indicated at the end of last year, the UFC and Fox are concentrating on expanding its advertising partners. In addition to sponsors RYU and MetroPCS signing on recently it has secured Dr. Pepper.  Its had success with the auto category but is still looking for sponsors in the financial services, insurance and other areas.

-  Shanks stated that there is still room to grow to procure blue chip advertisers but emphasized its strong 18-34 male demo.

-  Fertitta believes that more advertisers will sign on citing, as Shanks did, that it will take time for advertisers to understand the UFC audience.  He also cited the fact that the UFC has an “affluent fanbase” as the average income for fans is $80,000 a year and the average UFC ticket is the highest in sports at $275.

-  Fertitta also touched on the New York legalization issue stating that the brand will be elevated if (and when) MMA is legalized in the state.

Payout Perspective:

Nothing earth shattering from Shanks and Fertitta so don’t feel bad you weren’t in Dana Point, CA (the site of the World Congress of Sport) this morning unless you are a leader in sports business – in that case where were you?  Nonetheless, I find the average income of the UFC fan really high.  Of course, it’s not clear if Fertitta is referring to household income or that of an individual. Also, $275 for an average ticket is really steep and it’s ironic since we hear so much of the tons of comps that are given out at various UFC Vegas events.

It will be interesting to see what sponsors get onboard with the UFC this year.  It was expected for there to be some time for advertisers to get comfortable with the UFC product which Shanks and Fertitta acknowledge.  But, how long will it take?

A lawsuit involving the former owner of Hitman Fight Gear and TapouT/Authentic Brands Group is heating up. MMA Payout has obtained the lawsuit which was filed in Orange County Superior Court in California.

Earlier this month, the lawsuit, filed in 2011, was leaked to the MMA blogosphere.  The lawsuit, filed by Daniel Diaz, is a salacious look at the purported inner dealings behind the TapouT brand and its eventual purchase by Authentic Brands Group (ABG)

The Lawsuit

According to the lawsuit, filed on March 29, 2011, Daniel Diaz, founder of MMA clothing brand Hitman Fight Gear is suing TapouT, ABG and other related entities as a result of claimed promises and a business deal which did not go Diaz’s way.  Diaz is also suing as a member of Fight Industries, LLC (F1) (known as a derivative lawsuit where a shareholder can bring suit on behalf of the company).

Diaz’s lawsuit alleges 12 causes of action (including 4 on behalf of F1) which includes: Breach of Fiduciary Duty, Conversion, Aiding and Abetting Breaches of Fiduciary Duty for Fiduciary Gain, Fraudulent Conveyance, Breach of Employment Contract – Wrongful Termination, Unpaid Wages, Unfair Business Practices for Personal Gain and Fraud in the Inducement.

The Alleged Facts

According to the lawsuit, Diaz and his brother established “Hitman Fight Gear” in 2001. In addition, Diaz did freelance design for other brands including TapouT.  In 2005, Diaz entered into a contract with Russell Lin on behalf of a brand named Roxwell.  Diaz would receive a 10% commission “on anything Roxwell made for TapouT” according to the lawsuit.  Diaz’s lawsuit alleges that his designs under Roxwell for TapouT were a success and his income was “steadily increasing.”

The lawsuit indicates that Marc Kreiner’s role with TapouT affected Diaz’s commissions under the Roxwell contract.  According to Diaz, Kreiner attempted to undercut the Roxwell contract by attempting to lower, by 10% the cost of goods on the TapouT-Roxwell contract.

According to the complaint in 2007, Punkass and Kreiner met with Diaz regarding “Hitman Fight Gear” in an attempt to purchase the company.  A limited liability corporation, F1, would be set up to purchase Hitman on behalf of TapouT.  Diaz agreed to a sale of his company in exchange for 1,125,000 Class B shares of F1 and an employment contract with the company.  In addition, Diaz would give up his contract with Roxwell. Diaz claims that he was led to believe that the Hitman brand would be given the backing to become as big as the TapouT brand.

However, Diaz claims that the F1 company was used for the personal benefit of Kreiner.  One of the allegations claimed in the lawsuit was that Kreiner was “accepting (indeed, demanding) bribes from vendors of both TapouT and F1.”  (page 9 of the lawsuit) The lawsuit alleges a “kickback” scheme which vendors would receive as high as “one dollar per t-shirt which – over the life of the contract – might pay the vendor hundreds of thousands of dollars as a “kickback” to the vendor for providing Kreiner with demanded gifts.” (page 9-10 of the lawsuit).

In addition to this claimed scheme, Diaz alleges the misappropriation of TapouT and F1 funds for Kreiner’s personal use.

Diaz claims that he was not reimbursed for business expenses, which were included in his employment contract, due to the fact that F1 purportedly lacked the money to pay him.

TapouT-ABG transaction

The lawsuit claims that after TapouT and F1 were depleted, the companies were purchased by ABG for the following:

1) the payment of some of the debt Kreiner and Caldwell managed to accumulate through their alleged scheme of skimming cash and other assets out of the company;
2) future cash payments to Kreiner and Caldwell, only, the amounts of which, were to be withheld from Kreiner and Caldwell pending the resolution of remaining creditor claims against those assets

The purported transaction would leave the companies with little or no assets to pay its creditors.

Diaz claims that ABG discovered the conduct claimed by Diaz when ABG conducted its “due diligence” prior to purchasing TapouT and F1.  Diaz claims that ABG used this information against TapouT and F1 (and to Diaz’s detriment due to his interest in F1) as leverage in negotiations by driving down the purchase price.  In addition, Diaz states that ABG attempted to buy his “silence” through an employment contract with the new ABG TapouT entity. When Diaz refused, he believed that ABG went around Diaz.  This led to, as Diaz alleges in the lawsuit, the diminution in value of F1 rendering his shares in the company worthless.

The Underground post

Earlier this month TapouT and ABG went into court seeking the return of stolen documents and disqualifying Diaz’s attorneys. The reason for this was due to an internet posting on MMA.tv (also known to most as The Underground) in which an article was posted which detailed the lawsuit.  A link to the article has been taken down. This was about the same time that details of the original lawsuit hit the twittershpere.  The internet post was discovered by an attorney for TapouT/ABG and a request to cease and desist was made to Diaz’s attorneys.

Prior to the posting, the parties agreed to a protective order during the discovery process which essentially means that the documents produced to each side would remain confidential.  Among the documents produced included information related to the purchase of TapouT.  Lawyers for TapouT claim that Diaz published information that were deemed confidential. In addition, TapouT lawyers state that the comments section after the article included information provided by Diaz which only would have been known by those privy to the documents under the protective order.

Some of the information has been released by others via twitter and/or other web sites.  Essentially, the inflammatory information Diaz provides relates to the claimed indebtedness of TapouT prior to its sale to ABG.  Also, some of the comments include information already identified in the Complaint related to the claims of a “kickback” scheme.

Despite the post and comments section, the court decided against immediate punishment for Diaz.  The Minute Order provided by the court stated the order sought by TapouT was denied.  The order did not include an explanation.

Payout Perspective:

The lawsuit appears to be heating up and there is a trial date set for this September.  The lawsuit is obviously personal for Diaz and the posting on The Underground reflects this.  The allegations against TapouT and ABG are serious and there may be more coming out of this lawsuit which may reveal a lot about one of the biggest brands in MMA.

The Wrestling Observer reports that Zuffa is taking a familiar strategy in going after online piracy. In Zuffa’s lawsuit against illegal streaming web site Greenfeedz, Zuffa has obtained Greenfeedz user information which may lead to Zuffa going after the users.

Its alleged that Greenfeedz illegally streamed PPVs UFC 130 through 142.  The web site has been shut down. As part of the legal action, Zuffa has obtained information of users of the web site which may lead to tracking down the users that viewed illegal streams of the UFC events on Greenfeedz.  No action has been taken yet against any individual that used Greenfeedz.

Payout Perspective:

The Zuffa strategy is reminiscent of rock band Metallica’s legal battle against Napster in the late 1990s-2000s.  Metallica sued Napster for copyright infringement and as an offspring of the litigation Metallica sued three universities (USC, Yale and Indiana University).  The colleges were brought into the litigation as Metallica claimed that the universities were complicit to copyright infringement by not blocking Napster on its campus computers.  Metallica also obtained information on 335,435 Napster users which it requested Napster block from its service as copyright infringers. In its lawsuit against the three colleges, Metallica (and Dr. Dre, another plaintiff) included slots for unnamed students in its lawsuit which it claimed would add as defendants later. It could have took the extra step in suing the users but eventually did not.

We will see if Zuffa will follow through with suing users of the illegal streaming web site. Based upon Zuffa’s strong stance against piracy, it could sue users as an example. Similar to the Metallica situation, Zuffa hopes that the threat of suing end users will dissuade some from visiting the likes of Greenfeedz.

The Ultimate Fighter Live debut on FX drew an average of 1.28 million viewers, as previously reported on MMAPayout.We will now take a closer look at the quarterly ratings breakdown, viewership ratings pattern, and expectations coming into the show.

The UFC ratings press release labeled the ratings as a “strong start” to the series, and according to John Solberg of FX, “Transformers” and the UFC led the channel to a #1 ranking on Friday (prime time) for the A18-49 and A18-34 demographics. We will now take a closer look at the numbers in our Ratings Breakdown analysis.

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TUF Live FX Debut Ratings Breakdown:

Viewership for First Hour (15 Minute Intervals):

1,505,000
1,454,000
1,446,000
1,364,000

Viewership for Second Hour (15 Minute Intervals):
1,389,000
1,160,000
1,236,000
1,181,000

Viewership for Third Hour (15 Minute Intervals):
1,173,000
1,052,000

Total Average Viewers: 1.28 Million

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TUF Live FX Debut Comparisons (Same  Friday  Time Slot):

TUF LIVE Premiere (FX) – 1.28 Million Average Viewers

TUF Friday’s (Reruns on Spike TV) – 653,000 Average Viewers

Bellator 60 Live (MTV 2) – 169,000 Average Viewers

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Historical Comparisons and Notes:

TUF Premiere Episode Averages Seasons 1-14:  2.0 million viewers

TUF 14 Premiere on Spike – 1.5 million viewers (lowest of the 14 seasons)

TUF 13 Premiere on Spike – 1.5 million viewers (lowest of the 14 seasons)

TUF 12 Premiere on Spike – 1.6 million viewers

TUF 11 Premiere on Spike – 1.9 million viewers

TUF 10 Premiere on Spike – 4.1 million viewers (highest of the 14 seasons)

TUF 1 Premiere on Spike – 1.7 million viewers

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Expectations from the UFC:

From a Dana White interview MMAWeekly.com performed regarding the matter:

“Now that we’ve got this new platform, going on big Fox and FX, the amount of viewers that are going to watch, I mean this season of the ‘Ultimate Fighter’ with no promotion whatsoever is pulling between 1.5 and 1.8 million viewers (on Spike),” White said.
…
“We’ll more than double that when we go onto FX. I mean we’ll probably have more than 3 million viewers on FX watching the ‘Ultimate Fighter’.”

Expected Viewership: More Than 3 Million Viewers (Actual: 1.3 Million)

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UFC’s Reaction:

Dana White’s answer after ratings were reported and asked if 1.3M was, as he tweeted, “:) sweet!”:

“yup!!! On a Friday night when our demo is out.”

White’s answer when asked by a fan if they could move their time slot away from Friday to improve ratings and not miss their demo:

“that’s when FX wants us on”

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Payout Perspective:

There are a few things to point out here.  The most obvious and important one is the ratings pattern, which constantly declined throughout the show.  That is not a good sign for the UFC who was hoping to make a big splash for their debut episode on FX.  The second observation to point out here  is that TUF Live lost one third (33%) of their audience from start to finish, which also isn’t great.  The event was heavily promoted all over FOX properties and all over the internet, which makes the 1.3 million that much more disappointing.  It was also the lowest TUF season debut in the history of the series, although it did win the A18-49 and A18-34 demos as well as their head to heads with Bellator on MTV 2 and Spike’s TUF repeats.

The main complain that was loudly heard from the fans was that the show format just didn’t seem to work live.  There were many awkward moments with no commentary while the fights were going on and you heard talking and conversation from Dana White and the TUF coaches Dominick Cruz and Urijah Faber discussing their observations, but it just didn’t seem to work out. John Anik’s usage seemed particularly odd, as he could have been doing the play-by-play but instead was relegated to doing interviews and announcements.  Most casuals we received feedback from labeled the event as “2.5 hours of random guys fighting one rounders that someone was filming from some underground location”.

The positive here is that this will not be TUF’s normal format, and their 30 minutes of drama and 30 minutes of fighting should improve the quality of the show, but you have to wonder how many first time viewers will return after that many turned their TV sets to another channel.   It will be difficult to gain traction with the Friday night time slot, but FX has made it very clear that it only wants to show UFC content on Friday nights and Saturdays on their network.Again, the typical format should be much more favorable to the casual and TUF fans, so we will have to wait and see how the next few episodes do to see if fans come back and settle in.

The Ultimate Fighter Live on FX drew 1.28 million viewers according to a press release provided by the UFC. The ratings won the new Friday night MMA wars at it did better than SpikeTV’s UFC’s Ultimate Fighter Fridays and MTV2’s Bellator 60 live event.

Via UFC press release:

The series debut of The Ultimate Fighter® Live on FX got off to a strong start Friday night (3/9/12, 9:00-11:38 PM) delivering 1.28 Million Total Viewers, 953,000 Adults 18-49 and 538,000 Adults 18-34, and ranking among the top five cable programs on Friday in Men 18-34 (#2), Adults 18-34 (#3), Men 18-49 (#4), and Adults 18-49 (#5)

The Ultimate Fighter® Live (9-11:38 PM ET) was up +58% in Adults 18-49, +96% in Men 18-49 and +124% in Men 18-34 vs. year ago time period.

Compared to other MMA telecasts on Friday evening, The Ultimate Fighter® Live Season 1 debut significantly outperformed Spike’s repeat counter-programming of The Ultimate Fighter® Season 10 by +189% in delivery of Adults 18-34, +162% among Adults 18-49, +208% with Men 18-34, and +167% in Men 18-49, and it also battered live MMA bouts on MTV2 by +703% in delivery of Adults 18-34, +947% among Adults 18-49, +568% with Men 18-34, and +842% in Men 18-49.

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Payout Perspective:

Bear in mind that its the UFC press release, but the numbers show that TUF Live won the night of MMA. This can be attributed to the UFC and Fox marketing machines which hyped the show almost everywhere.  Bellator 60 garnered just 169,000 viewers as the season premiere ratings are down from last season. Promising news for Bellator was that online streaming of its preliminary bouts on Spike.com were up 58 percent from season 5’s average. No numbers were given but we shall assume that its a sizable increase.  It will be interesting to see how competitive (or lopsided) the MMA Friday night ratings will be over the next couple months.

“UFC Primetime: Diaz vs. Condit”, a three-part series which aired on three consecutive Friday nights on FX, drew 657,000 viewers for it’s FX network debut.

After the debut episode, each of the following weeks saw a decline in viewership and overall, the three-part series averaged 540,000 viewers on FX. In January of 2011, the same time period on FX averaged 1.2 million viewers.

Here are the viewership numbers for all three episodes:

- “UFC Primetime: Diaz vs. Condit” (Episode 1): 657,000 viewers
- “UFC Primetime: Diaz vs. Condit” (Episode 2): 520,000 viewers
- “UFC Primetime: Diaz vs. Condit” (Episode 3): 442,000 viewers

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Here is a list of the viewership numbers for all Primetime debut episodes:

“UFC Primetime: Velasquez vs. Dos Santos” (UFC on FOX): 2,000,000 viewers (FOX)
“UFC Primetime: Rampage vs. Evans” (UFC 114): 1,200,000 viewers (Spike)
“UFC Primetime: St-Pierre vs. Hardy” (UFC 111): 1,000,000 viewers (Spike)
“UFC Primetime: Lesnar vs. Velasquez” (UFC 121): 974,000 viewers (Spike)
“UFC Primetime: St-Pierre vs. Penn II” (UFC 94): 880,000 viewers (Spike)
“UFC Primetime: Diaz vs. Condit” (UFC 143): 657,000 viewers (FX)
“UFC Primetime: St-Pierre vs. Shields” (UFC 129): 610,000 viewers (Spike)

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Estimated PPV Numbers for Primetime Featured Events:

“UFC Primetime: Velasquez vs. Dos Santos”: N/A
“UFC Primetime: Lesnar vs. Velasquez” (UFC 121): 1,050,000
“UFC Primetime: Rampage vs. Evans” (UFC 114):  1,050,000
“UFC Primetime: St-Pierre vs. Penn II” (UFC 94): 920,000
“UFC Primetime: St-Pierre vs. Shields” (UFC 129): 800,000
“UFC Primetime: St-Pierre vs. Hardy” (UFC 111): 770,000
“UFC Primetime: Diaz vs. Condit” (UFC 143): 400,000

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Payout Perspective:

The “UFC Primetime: Diaz vs. Condit” three-part series was one of the lowest rated in the history of the Primetime specials.  It also sold only 400,000 PPV buys, which is almost half the next lowest Primetime special PPV event – St-Pierre vs. Hardy for UFC 11, which sold an estimated 770,000 PPVs.

Now, we should take into account that the Primetime special was supposed to be GSP vs Diaz, which would have done much better numbers. Curiously after GSP pulled out due to injury, the UFC scheduled Diaz vs Condit for the Interim WW Title and went ahead and continued their plans to film the Primetime special.  As a result, it was one of the lowest “Primetimes” ever.  Another factor here to consider is the cost of producing these Primetime specials, which is estimated to be between one and two million dollars.  You have to wonder if the ROI for this event was worth it for the UFC.

In terms of viewership on the new FX platform, the Primetime special numbers depict a negative trending pattern as viewership started to decline after the first episode.  As for reasons for the lower than expected viewership numbers, the time slot is not a desirable one considering that historically, networks have struggled to keep the 18-34M demographic in front of their TV sets on Friday nights. Another factor to take into account is the difficulty to move a show over from one network to another. It appears that FX is still going through a transitional phase trying to migrate the UFC fanbase that has called Spike TV home for years.

MMA Worldwide reported that Oklahoma is being threatened by litigation from the UFC for imposing a 4% tax on PPV in the state.  As a result, the Oklahoma state athletic commission is not taking on any new applications for licenses from MMA promoters.

Via MMA Worldwide:

Unfortunately, after March 31st of this year, combat sport competitions will come to a grinding halt in the state of Oklahoma. The state is under a threat of a lawsuit by none other than the UFC. It seems the UFC wants the state to drop a 4% pay-per-view tax imposed by the state, but without it… they will no longer have the funds necessary to regulate any boxing or MMA events held in Oklahoma.

The article states that over 200 events happen each year across the state. If the state loses out on MMA, the events could remain in the state but on tribal grounds and casinos. It also provides a copy of the letter. Click on the image to read it.

Payout Perspective:

An interesting strong arm tactic by the UFC and it would be interesting to see on what grounds the UFC would sue the state.  If you are in Oklahoma, the impact of viewing live MMA might not be harsh considering that the events could move to tribal casinos in the state where federal law trumps state. The state is in a bad position as it claims it needs the revenue from the PPV tax but wants to keep in the good graces of the UFC (and stay away from a potential lawsuit).

The New York District Attorney and Attorney General have filed its reply brief in support of its motion to dismiss two counts of Zuffa’s lawsuit against New York.  MMA Payout takes a look at some of the arguments rebutting Zuffa’s opposition.

If you’ve been following the lawsuit, the New York was given the opportunity to file a limited motion to dismiss on the issues of Equal Protection and Due Process.

New York contends that Zuffa’s argument that courts have considered post-legislation changed circumstances fails because facts still exist which address the reasons for the law.

New York addresses Zuffa’s opposition brief in which, among its arguments, relied on the fact that courts have looked to changed circumstances when conducting a review of a law.  New York makes the argument that post-legislation changed circumstances cannot destroy a law’s rational basis since such circumstances would not have affected the law’s rational basis in the first place. In fact, New York argues that courts have more freedom to consider post-legislation circumstances to uphold a law than to overturn it.

Another interesting argument used by New York to rebut Zuffa’s contention that MMA is safer now than when the MMA Ban was enacted is that Zuffa points out to safety regulations and precautions it has enacted and only vaguely refers to other MMA organizations. As such, New York contends that there is still “‘a reasonable conceivable state of facts’ that might warrant the prohibitions of the 1997 legislation.” Basically, New York argues that while the UFC may have enacted safety changes, it cannot support its argument with facts from other organizations.

New York actually turns Zuffa’s safety reforms on its head citing the fact that Zuffa admits its a combat sport with risk and that its mandatory waiting period for concussions and insurance reflect the fact that the sport includes risk. Thus, New York argues that the 1997 legislation banning MMA might be a rational response to these safety issues. As a result, New York contends that regardless of the changed circumstances that have occurred since the law was enacted in New York, the state had a rational reason to enact the law.

In response to Zuffa’s claims that either amateur MMA is not regulated and the fact that other perceived dangerous sports are not regulated, New York rebuts these concerns by pointing to the legislative branch as the authority to either regulate or amend a law if it flaws are found in the law.

Notably in footnote 3 of its reply brief it makes the argument (which one might add may beyond the scope of the motion) that the First Amendment does not apply to mixed martial arts citing Courts have been unwilling to extend free speech protection to sports or athletics.

(H/t: Fight Lawyer Blog for the Reply Brief)

MMA Payout will continue to follow the proceedings and report on the Court ruling when it occurs.

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Welcome to another edition of Payout Perspective. This time we take a look at UFC 144 from Tokyo, Japan with Zuffa’s first show in the country. The fans saw a great main event with Frankie Edgar defending his title versus former WEC titleholder Benson Henderson.

Henderson takes title from Edgar

It was worth the price of the PPV. A back and forth fight that saw the fight turn on a vicious upkick which rocked Edgar. Henderson was the aggressor despite Edgar landing more strikes. Edgar showed the heart of a champion but the size disparity was clear.

For Henderson, the win was redemption from the “Showtime Kick” almost 14 months earlier. How ironic that Anthony Pettis headkick of Joe Lauzon propelled him into a title shot against Henderson…the man he took the WEC belt from with that highlight reel kick.

For Edgar, it seemed too soon to ask about dropping a weight class. If anyone deserves a rematch, its Edgar, the guy that upset the legendary BJ Penn…and then dominated him to prove it wasn’t a fluke in the rematch. We’ll see what’s ahead but the initial outlook sounds like a move down to face Jose Aldo.

Bader gets win against overweight Rampage

A couple fights removed from reviving Tito Ortiz’s career, Bader took control of his own by defeating an unimpressive Rampage Jackson. This was not the best Jackson as he missed weight and claimed a knee injury as the reason. Still, a win is a win and gets Bader back on track.

For a guy that begged to be on this card, Jackson didn’t look like it. He was probably the most popular of the non-Japanese fighters on the card, yet it was clear he wasn’t at his best. Does this mean the end for him or does he get motivated once again for another run in the division.

Okami upset

Tim Boetsch came back from a 2-0 round deficit by knocking out crowd favorite Yushin Okami in Round 3. Okami was dominant in the first two rounds and looked like the guy that was supposed to fight Anderson Silva in Brazil. Unfortunately, he didn’t finish the fight and was upset. It stunned the crowd and Joe Rogan went nuts.

Attendance and Gate

A very good crowd for a Sunday morning in Tokyo. Although no numbers were made official, the UFC indicated that ticket sales were going well. There was a late surge in ticket sales and WOWOW confirmed at least 15K seats were sold (H/t: Tony Loiseleur of Sherdog). The Saitama Super Arena could house 22,000 for an event.

Bonuses

According to MMA Junkie, bonuses were $65,000 each and went as follows:

- Anthony Pettis – KO of the Night
- Vaughn Lee – Submission of the Night
- Edgar/Henderson – Fight of the Night

Sponsorships

The Octagon included some Japanese signage (WOWOW, Shindai and Unity) along with the core of Tapout, Xyience, Toyo, Corn Nuts and Bud Light. UFC Undisputed 3 and Jason Staham’s upcoming movie “Safe” also were in the Octagon.

Zach Arnold of Fight Opinion noted the lack of Japanese sponsors. Its interesting considering that in Brazil, there was more of a presence of Brazilian sponsors as they sponsored fighters.

Full Metal Jousting took a more active role as it sponsored the tale of the tape. As an aside, I’ve actually started watching the show after hearing about it. This article thinks it could be the next UFC.

No MetroPCS this time in the Octagon although it was still a named sponsor.

Anthony Pettis had Corn Nuts, Toyo Tires and Xyience as his prime in ring sponsors. Certainly, sponsors think highly of Showtime.

I think if more agents want to get more visibility for his fighter and their sponsors should tweet their sponsors:

#ufc shorts of @JoeLauzon – @MicroTechBUZZ @Venumfight @TrainingMask @PunchDrunkGamer@kaiwaaoficial @alienware lockerz.com/s/185952470

— KOreps.com (@ko_reps) February 21, 2012

Although not shown, the tweet includes a picture of Lauzon’s fight shorts. Its a good use of twitter and cuts out having to squint to see the logos.

Frankie Edgar had something similar.

Thanks to all of my sponsors for @ufc 144: @TeamGaspari, @Affliction, @TRXtraining, @Venumfight, @MicroTechBUZZ, @MetroPCS.

— Frankie Edgar (@FrankieEdgar) February 19, 2012

Pre-Fight Hype

The Philadelphia Inquirer had a piece on Frankie Edgar prior to Saturday night’s title defense.

The UFC Countdown show was very good and gave a great profile on Benson Henderson’s background including his relationship with his mother. Henderson can definitely be a face for the UFC and his story could be much broader than just North American audiences.  Although it dedicated less time to this, the Jake Shields portion was very good as it talked about the death of his father.

As we covered here, the UFC did “person on the street” interviews about the state of Japanese MMA. It also brought back some of the memories of Pride for the hardcore enthusiasts.

GSP paid a visit to a Japanese martial arts school. Also in the video, Dana White visits the mayor. Roy Nelson also took a tour of Japan which included eating some exotic foods.

As we indicated previously, Rampage Jackson was promoted heavily for his return to where he made a name for himself.

NY Giants defensive lineman Justin Tuck made a call to Frankie Edgar to wish him luck prior to his fight with Benson Henderson. As I stated in the earlier post, I thought Edgar was a Jets fan.

Post-UFC 144 Headlines

- The obvious headline is who’s next for the Smooth one? It looks like its Showtime although I wouldn’t be mad with a rematch with Edgar. I think Pettis gets the shot because its an easy sell for the eventual PPV. How many times will we see the Showtime Kick as a lead-in to the fight?

- What’s next for Edgar? It seemed like immediately after Edgar lost, he was being ushered into the Featherweight division. It was a close fight and he deserves a rematch for the belt. Yet, it almost was a foregone conclusion that he’ll drop down and get a shot at Jose Aldo. I’m not opposed to this, in fact I think they should actually make this fight at 155. But, I disagree with the circumstances in which Edgar is seemingly made to move on.

- What should Rampage do? When you look at the past couple years, God’s Street Soldier (a reference to his tat) is steadily declining. His return to Japan was promoted but his performance was hindered by a knee injury. Is it a matter of injuries or a matter of discipline? The UFC may have to consider what to do with Jackson next

- The UFC’s visit to Japan brought back memories of Japan’s MMA scene  and the problems surrounding it. Zach Arnold of Fight Opinion has much on this subject. It was also featured on both Spike TV MMA Uncensored and HD Net’s Inside MMA. Overall, most believe the UFC’s visit was a success. We’ll have to see whether or not it will make Japan an annual visit. And, what does this visit do, if anything, for the local state of MMA.

Odds and Ends

Disappointing night for Japanese fighters with Kid Yamamoto, Yoshihiro Akiyama and Yushin Okami. Okami especially disappoining considering he looked excellent through two rounds and then fell victim to the punches of Tim Boetsch.

Hatsu Hioki was one of the bright spots for Japanese MMA and is being considered as a potential challenger to Jose Aldo.

The interpreter did a great job at the weigh-ins and at the event. Either she had a great memory at the weigh-ins or she was making it up. At the event, she had a pad of paper to write things down as well as a spiffy pen topper.

Bart Parlaszewski shaved his sponsors and agency into his crooked mohawk. Do you get an extra bonus for this?

Very nice moment post-fight with Henderson finding his mom in the front row and her mom wanting an immediate picture of her son with the belt.

I may travel down to Tacoma and see if the UFC champ is minding the store at Peter’s Grocery this week.

While I was skeptical, the four hour PPV went well with only one match tacked on at the end (the Facebook match) as filler.

Conclusion

We may see a positive buy rate for UFC 144 considering the return to Japan, Rampage Jackson and the Edgar/Henderson title fight. Yet, with Edgar headlining in his past two fights, he’s averaged just 237,500 buys. Perhaps he wasn’t the problem as he faced Gray Maynard in both. But, UFC 136 was a rematch of a great fight and Chael Sonnen returned on the same card. And, it just received 225,000 buys.

The fact is, the lower weight divisions have yet to draw big numbers. Even with Rampage’s return to Japan, this card seemed like one for the dedicated fans and my guestimation would be around 275-300K buys.

MMAPayout will be taking a look at the storylines heading into UFC 144: Edgar vs. Henderson, which will be held at The Saitama Super Arena in Japan on Saturday February 25, 2012.

UFC Sells Out Long Awaited Return to Japan

UFC officials today told MMAjunkie.com (www.mmajunkie.com) that ticket sales are still moving briskly for this weekend’s event at Saitama Super Arena in Saitama, Japan, and the fight card is expected to sell-out all of the nearly 20,000 available seats.

Furthermore, UFC officials are so encouraged by the buzz surrounding UFC 143 that plans for a return to Japan are already under consideration, and multiple annual visits – as well as a version of “The Ultimate Fighter” – are also possible.  (MMAJunkie)

Quinton “Rampage” Jackson Misses Weight

Quentin “Rampage” Jackson missed weight by 6 pounds last night at UFC 144 weigh-ins. Jackson claims that this was due to an unspecified injury and as a result he will forfeit 20% of his show money to his opponent, Ryan Bader. (MMAPayout)

UFC Japan Sponsors Plus “Pay-to-Play” TV Deal with TV Tokyo, – Event Set To Air at 3AM in Japan

“This is why Dentsu backing UFC is so critical. A multi-year deal to promote shows in the country means nothing unless Dentsu, which has plenty of juice, can convince sponsors to back them to get the events on TV. If an outlet like TV Tokyo, which historically has plenty of pay-to-play examples for buying programming time, is taking a pass on the UFC… that spells trouble. WOWOW doesn’t cut it. You need a major broadcast TV network backing you or else you are going nowhere on a big scale in Japan.”

- TV Tokyo will air 90-minute highlight version of UFC Japan show from 3:15 AM to 4:45 AM JST after the show is done.

- Don Quijote & UFC Undisputed 3 are the TV sponsors.

- This was a last-minute deal by Dentsu. (FightOpinion)

MMAFighting Hit’s the Streets of Japan and Tests UFC Brand Strength and State of MMA

UFC 144 will mark the promotion’s first event in Japan in over 11 years, and its return to the “Land of the Rising Sun” has forced the MMA community to once again figure out just how healthy the Japanese MMA scene is. With that in mind, we hit the streets of Tokyo to find out whether the locals were UFC fans and why they think MMA has fallen on hard times in the country. (MMAFighting)

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UFC 144 Marketing and Advertising

The UFC has been doing a pretty good job of sucking in those hardcore nostalgic MMA fans who hold Japanese MMA and their tradition in high regard.  Although some may have wanted the UFC to be held in a white ring and have a ramp with Lenne Hardt announcing the fighters, Dana White was not shy to remind MMA fans and Media that this isn’t PRIDE and that the Japanese promotion who was top dog only a few years ago is dead.

Having said that, the posters released for UFC 144 have been great, adding some of that Japanese and PRIDE feel to them while maintaining the UFC’s brand.  Key to the UFC this time around is to spread brand awareness and create some roots for future expansion into not only Japan, but Korea, Philipines, and China, who they feel have even more potential at the moment as untapped markets.  At this time, it’s going to take a good amount of time and effort to elevate the MMA scene in Japan to what it once was.

UFC 144 Poster + UFC 144 Rampage Poster:

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Japanese fighter Megumi Fujii Tweeted an anime version of the UFC 144 Japan poster:

On Thursday night, Spike TV’s new MMA show, “MMA Uncensored Live”, made a successful debut drawing an average of 547,000 viewers to the network.

The debut airing on Spike TV earned a 0.4 HH rating, a 0.5 in M18-34, and a 0.62 in the M25-34. Overall, MMA Uncensored Live drew an average of 547,000 viewers. Comparing timeslots, MMA Uncensored Live was up +41% in M18-34 and +51% in M25-34 compared to last year.

MMA Uncensored Live focused on UFC 144′s return to Japan, where hosts Craig Carton, Nate Quarry and Mike Straka discussed the fall of one of MMA’s most famous promotions of all time, PRIDE Fighting Championships.  Honorary guests for the evening were Dan Henderson and “mystery guest” Nick Diaz.

MMA Uncensored Live is scheduled to air Thursday nights on Spike TV at 11PM EST.

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Link: MMA Uncensored Live Debut Episode

MMA Uncensored Live is set to make its long-awaited debut tonight on Spike TV, where it will focus on UFC 144 and the demise of one of MMA’s greatest promotions, PRIDE Fighting Championships, with former PRIDE champion Dan Henderson as the honorary first guest of the show.

Spike’s Press Release:

Coming to you from the heart of New York City in Times Square, MMA Uncensored Live will feature debate and discussion, interviews, in-depth features, highlights and interaction with the viewers through Twitter, Facebook and other social media channels.

We’re gearing up for a premiere on Thursday, February 23 at 11/10c, right after IMPACT WRESTLING. What’s more, we have three fine gentlemen to help you navigate all the news, opinion, interview and rumors we can fit into a half an hour. Let’s meet them now.

Craig Carton – Host
Craig currently co-hosts one of the most popular morning sports radio shows in the country, WFAN’s “Boomer & Carton” alongside NFL great Boomer Esiason. He’s been in the sports broadcasting game for over twenty years, having started at WGR Buffalo in 1991. Since then, Carton has worked in sports strongholds like Cleveland, Philadelphia and Denver, and has brought his irreverent energy to sports fans across the country through syndicated radio networks.
We’re happy to have Craig back, as he also used to host Weekend Pre-Game on Spike.

Mike Straka – Fight Expert
Mike is a familiar face to any fan of MMA, considering he was the first mainstream media broadcaster to cover the sport. He’s the host of “The MMA Experience” on Fight Now TV, as well as “TapouT Radio” on SiriusXM Sports, and was the host of HDNet’s Fighting Words With Mike Straka.

Prior to that, Mike served as vice president and executive producer of FOX News Digital, as well as a FOX News Channel on-air personality. He’s the author of two books, most recently 2011′s “Fighting Words”, published by Triumph Sports.

Nate Quarry – Fight Expert
Nate “Rock” Quarry is no stranger to Spike audiences. The founding member of Team Quest was Team Couture’s first pick during the first season of Spike’s “The Ultimate Fighter”. He followed up his tenure on TUF with three UFC wins before being stopped in his quest for the Middleweight Title by then champion Rich Franklin.

Nate won four of his last six fights, including a fight of the night win over Tim Credeur in September of 2009.

We’re excited to have these guys on board, and can’t wait for February 23, when we kick off “MMA Uncensored Live” at 11/10c! We’ll see you there.

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Spike TV announced this morning that one of the true legends of mixed martial arts, Dan Henderson, will be the first guest on the new primetime magazine show “Spike’s MMA Uncensored Live”. “Hendo” is a former Strikeforce and PRIDE champion, and most recently defeated Shogun Rua in an all-time classic at UFC 139.

The premiere “MMA Uncensored Live” will also take a look at the rich history of mixed martial arts in Japan as the UFC descends on Saitama for UFC 144. The show will explore the roots of modern MMA, the sport’s meteoric rise, and how the corrupt business practices led to its downfall in Japan.

The panel will then breakdown UFC 144, which features a light heavyweight match between Ryan Bader and Japanese favorite Quinton “Rampage” Jackson, as well as a lightweight championship match between Frankie Edgar and challenger Benson Henderson.

Spike’s MMA Uncensored Live – Preview Cut
Get More: Spike’s MMA Uncensored Live – Preview Cut

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Payout Perspective:

MMA Uncensored Live’s debut will focus tonight on the demise of PRIDE and their dealings with the Yakuza, where corrupt practices eventually brought down the biggest MMA promotion at the time. The project was lead by long-time Japanese MMA reporter Daniel Herbertson, whose work was aided by the years of coverage provided by Zach Arnold of FightOpinion.com. Dan Henderson as the honorary first guest is a great choice for the show, as I’m sure he will be able to tell his own stories regarding PRIDE and Japan as a former PRIDE champion.

Another interesting storyline here is that initially, Spike TV announced the name of the show as “MMAJunkie Live”, where MMAjunkie.com would be involved in producing the show.  In the last month or so, Spike TV changed the name to MMA Uncensored Live and MMAJunkie’s affiliation with the show was no more. MMAJunkie made the official announcement yesterday via Twitter:

We’re no longer involved with @Spike_TV‘s new MMA show but sincerely wish them the best of luck with tomorrow’s #MMAUncensored Live debut

— Dann Stupp (@MMAjunkieDann) February 23, 2012

We just couldn’t make this project work (sorry for lack of details), but @Spike_TV will do a good job. Definitely check it out tomorrow.

— Dann Stupp (@MMAjunkieDann) February 23, 2012

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There was some talk a few weeks ago that not only will MMA Uncensored Live focus on covering MMA, but they would heavily feature the Viacom owned MMA promotion, Bellator Fighting Championships, to condition the Spike TV MMA fanbase to the product. UFC programming will cease to air on Spike after 2012. The plan is for Viacom to move Bellator from MTV2 to Spike TV in 2013. MMAPayout sources inform us that “creative differences” was the official reason for the split between MMAJunkie/Spike.

The Sports Business Journal reported on the drop in ratings of NBC Sports Network as it rolled out its new name and brand last month. The article also comments on the fact that NBC found it difficult finding advertisers for the UFC when it was on the network.

For those that don’t know, NBC Sports Network was known as Versus prior to its re-branding at the start of the year. The SBJ article (subscription required) stated that NBC had a hard time finding advertisers for the UFC. Yet, UFC programming averaged 124,000 viewers on Versus. These ratings doubled the average for the channel. The article also states that the loss of the UFC has hurt NBC Sports Network ratings. Still, NBC described the UFC as “off brand,” a show that brought ratings but the network had a hard time finding a way to monetize it.

Payout Perspective:

While the UFC portion of the NBC Sports Network article was a small example compared to the overall theme of the article which was the slow start for the network, its an interesting take of the pull of the UFC. Its also an example of the obstacles the UFC still faces in trying to appeal to mainstream advertisers. We will see in the coming year if the UFC has problems on Fox, FX or Fuel with retaining and obtaining mainstream advertisers.

Zuffa filed its response to New York’s motions to dismiss its Equal Protection and Due Process causes of action in its Complaint. It also argued that the Court should consider the changed circumstances in determining the MMA ban in New York state.

As you may recall, New York filed a motion to dismiss on two causes of action in Zuffa’s Complaint and indicated that it may file a further motion to dismiss the rest of the lawsuit.

Zuffa’s 39 page response is broken into two sections. The first section addresses the issue of whether a court may look into a changed circumstance when conducting rational basis scrutiny under the Equal Protection and Due Process Clauses. Zuffa provides the court with a plethora of cases which have courts looking into changed circumstances while asserting that there are no rulings to the contrary.

The second section of the response brief contends that there are issues of fact with both its Equal Protection and Due Process claims  to survive the motion to dismiss.

(H/t: Fight Lawyer)

Payout Perspective:

As you may recall, the Court requested briefing on the following issue:

Defendants will submit a limited motion to dismiss addressing only the issue of whether due process and equal protection analysis requires the Court to determine whether there was a rational basis for the law at issue only at the time it was passed, or whether the Court must determine whether there is a rational basis for the law at present (in other words, whether the Court should take into account a change in factual circumstances that makes the law no longer rational, even if it had a rational basis at the time of passage). Defendants’ motion is due 1/27/12. Plaintiffs’ reply is due 2/17/12.Defendants’ response is due 3/2/12. (js) Modified on 1/9/2012 (tro). (Entered: 01/06/2012)

Essentially, will a court look at the changing circumstances that occurs over the course of time when considering if a law has a rational purpose.

Zuffa contends that the defendants should have briefed the court on the issue above instead of New York’s “full blown” motions to dismiss. Zuffa has an argument if you look at the “addressing only the issue” language in the first sentence of the court order. However, its likely that the court will rule on New York’s motions.

Zuffa, as most parties do in a brief, argue the differences in the opposition’s cited cases in its brief. Here, it argues that the cases cited by New York do not address the specific issue at hand: whether courts take into consideration changed circumstances when conducting a rational basis analysis under the Equal Protection and Due Process Clause.

In the second part of the response briefing, Zuffa identifies facts that should have its causes of action survive a motion to dismiss. Much of this has been detailed in the Complaint.

New York’s Reply Brief is due March 2nd. We will keep you posted and have more in the coming days.

Dave Metzler’s Wrestling Observer reports that Cox Communications is offering a lower-tier channel alternative for its subscribers. If this model is followed by other cable providers, it could mean less viewers for fans of MMA and pro wrestling.

According to the Wrestling Observer (subscription requried), the lower tier service Cox is offering includes the major networks (NBC, CBS, Fox), local affiliates and major networks which include WGN, TBS, CNN, Galavision and USA. The package is offered at $35 a month.

ESPN, Spike TV, SyFy, FX, MTV and likely Fuel would not be carried on this tier. Instead, these channels would be available for $60 a month package. Metzler points out that the lower-tier option could curtail the amount of fans that MMA fans could garner through television. The question will be how many subscribers will move to the lower tier and how many cable providers will follow the model outlined by Cox.

Payout Perspective:

The Cox economy cable model seems like it would hurt Bellator more than it would impact the UFC. With the UFC-Fox relationship, viewers subscribing to the new Cox tier would still have the Fox network fights.  If Spike is shut out of the lower tier, it would mean that Bellator would only be available online to those without access to the network. Also, much of the UFC’s content will be on FX and Fuel so those subscribers would be missing out on most UFC programming. This is a sign of the impact the economy is having on consumers as some will seek to curtail their cable bill by moving to a lower tier. With some consumers cord-cutting a lower priced cable tier seems like a reasonable way some cable providers will look at in trying to retain subscribers.

MMA Junkie had a recent article on the managers’ role in representing fighters. With the recent departures of Jose Aldo and Mauricio Rua from their representation, the need for managers has come into question.

The Junkie article looks at long time manager Alex Davis as he discusses the need for a fighter to have good management. He also addresses the question of whether top notch fighters need representation anymore. This comes on the heels of Rua’s statement (which could have been taken out of context) that the UFC does not want its fighters to have managers.

Via MMA Junkie:

“Some people will say that once a fighter reaches a level where he enters the UFC, he doesn’t need management anymore, but usually a manager has worked very hard to get him to that point without ever getting properly rewarded for his efforts,” Davis said. “Only once a fighter is at the top can a manager have a chance at making something in the deal, which is only fair. Not only that, but its not like, ‘Hey, great, now I am in the UFC. My problems are over!’ Far from that. Things get way more complicated.

Davis identifies more responsibility outside of just fighting that the fighter must consider once he makes it in the UFC. There are many tasks that a manager should handle while the fighter concentrates on training.

In addition, the manager may have contacts with sponsors and promoters in helping the younger fighter achieve his goals.

Payout Perspective:

Manager and agent may be two separate jobs or one in the same. Certainly fighters can have both or one individual to handle both duties.

One need only look to Matt Mitrione, Brandon Vera and Alistair Overeem more recently as examples of what happens when you have issues with management. Mitrione publicly fired his manager, Vera lost a year due to a contractual dispute and Overeem is currently in litigation with Golden Glory.

Then there are Georges St. Pierre and Frankie Edgar who left Shari Spencer to go with closer ties to manage their career.

Still, there are many MMA management agencies that take care of their fighters in securing sponsorships and public appearances. This can go a long way in getting fighters the visibility, notoriety and opportunity to increase the value of their own personal brand.

Heavy MMA had a good two part (one and two) series last year on the role of an agent.

The Junkie article points out the reasons that a good manager is necessary in a fighters’ career. Certainly, there are many responsibilities and tasks a manager needs to do in helping fighters prepare for their next fight while making sure they maximize their opportunities.

The question is how much is a manager worth to a fighter? For top tier fighters, do they need a manager? Can the fighter have someone do the same tasks for less, without having to give up a portion of their purse or sponsorship payout. We will see if consolidation of management duties becomes a trend in MMA. There is a definite need for good representation, but at what cost?

Welcome to another edition of Payout Perspective. This week we take a look at UFC 143 at the Mandalay Bay Events Center in Las Vegas, Nevada where Nick Diaz took on Carlos Condit for the interim welterweight belt.

Condit frustrates Diaz for interim belt

We saw the Stockton Slap but Carlos Condit executed his game plan to perfection in eluding Diaz’s boxing skills and a last round submission attempt to win the interim title. The bout was reminiscent of Frankie Edgar versus BJ Penn at UFC 112 in Abu Dhabi. In that one, Edgar executed a game plan to perfection that by Round 5 you knew that the favorite was in trouble. Same here with Condit.

For Condit, a date with GSP is in the future. Despite his post-fight interview where he quit MMA, Diaz will likely be back and a Josh Koscheck fight seems about right. Even in defeat, a Nick Diaz post-fight interview is always entertaining.

Werdum outlasts Big Country

A solid debut for Fabricio Werdum who edged out Roy Nelson in a battle of BJJ black belts. A very good fight that won Fight of the Night honors. Werdum may not be ready for the top tier of this division but maybe a couple more impressive victories could earn him a return bout against Junior dos Santos.

Koscheck defeats Pierce

A closer bout than most thought. Arguably, Pierce could claim he should have won. Not sure why Josh Koscheck is such a hated man but Nick Diaz is gaining fans for being about as bad. Of course, Koscheck’s post-fight “salute” to the fans won’t help his plea for fans.

Attendance and gate

MMA Junkie reports that UFC 143 drew 10,040 fans for a gate of $2.3 million.

Bonuses

MMA Junkie also reported the fight night bonuses for UFC 143. Each fighter received $65,000.

Fight of the Night: Fabricio Werdum versus Roy Nelson
Submission of the Night: Dustin Poirer
KO of the Night: Stephen Thompson

Poirer and Thompson were the clear cut winners for their divisions as Poirer had an impressive submission and Thompson’s educated foot won him a KO.

Sponsors

The octagon included a couple new logos including the UFC’s new official corn nuts sponsor, Corn Nuts. Also, the History Channels’ new show, Full Metal Jousting. The show is from the producers of the Ultimate Fighter. It also included MetroPCS which also ran commercials during the prelims. In addition, UFC Undisputed 3 was featured as the UFC is pumping up the game for its release as you can purchase the game via GameStop. The Octagon also had its usual mainstays of Harley Davidson, Musclepharm, Tapout, Dodge and Bud Light.

The Corn Nuts sponsorship included a “corn”er cam. A nice play on words. It will be interesting to see what future activation plans it has with the UFC. MetroPCS  also sponsored the Judge’s Call which occurred right before the judge’s decision.

The US Marines, as always, sponsored the Tale of the Tape for Koscheck-Pierce. RYU was also a featured sponsor although its signage was not featured.

Every time Josh Koscheck fights I’m reminded that Lugz is still around.

Roy Nelson was sponsored by the History Channel’s new show for his fight. Maybe it was fitting that his white shorts were stained with blood for “Full Metal Jousting.”

UFC Primetime

Good reviews for this set of shows. It was a little weird for the show to feature GSP’s rehab but this may have compensated for the lack of Diaz information. An interesting snippet from the last episode of Primetime: Nick Diaz didn’t know who was playing in the Super Bowl. We will try to update you with ratings if we can obtain them.

Post-UFC 143 Headlines

Condit versus GSP. Its not the matchup that most, including GSP, wanted. But we will see this fight sometime later this year. Perhaps, this is Montreal’s fight to have since its spring card was delayed.  It should be a good battle although the UFC could have marketed a Diaz versus GSP fight easier. Nonetheless, the UFC could get Diaz versus Koshcheck which could get a lot of interest albeit not for a title.

What would Nick do? UFC Primetime got more out of Nick Diaz than most have seen. But, how likely would Diaz do another behind-the-scenes look after this loss. His disdain for any type of media coverage is evident. But, he’s a compelling figure that many have grown to like (or hate). Regardless of what fans think, he’s an asset for the UFC that they must manage.

Dustin Poirier may be the only hope for the 145 division against Jose Aldo. An impressive fight with some great jiu jitsu. We’ll see how he progresses.

Odds and Ends

- I liked the new intro to the PPVs. I’m wondering why they didn’t go with something like this earlier. Long live Gladiator Man.

- Good move by the UFC and Fox to go back to the weigh-ins without commentary. I think for those that tune in to watch them, they like to see and hear the whole thing rather than get analysis.

- What do you think Nick Diaz was saying to Lorenzo Fertitta right after the fight?

-Diaz said he was paid way too much for MMA in his post-fight in Octagon interview. I thought his complaint was that he wasn’t paid enough.

- It will be interesting to see the numbers for the UFC in 3D in theaters. Based on twitter, there were very positive reviews but we’ll have to see if that equates to good attendance.

- We saw the first commercials for TUF on FX.

- For those watching the Super Bowl, here’s the Kia ad with Chuck Liddell. He’s in the commercial briefly around the 1:00 minute mark.

Conclusion

A good night of fights but Diaz-Condit didn’t have the star power of GSP. The co-main events and undercard featured good match-ups but only for hardcore MMA fans. How many casual viewers knew Mike Pierce? It will be interesting to see how much the 3D in theater attendance takes away from the PPV buy rate. A buy rate above 250,000 should be considered a success.

Earlier today, Josh Gross from ESPN.com broke the news that the Federal Trade Commission has closed a non-public investigation into the UFC’s purchase of Strikeforce as of last week.

ESPN reports:

Documents published on the FTC website dated January 25, confirm the FTC’s Bureau of Competition conducted an investigation to determine whether the $34 million acquisition of Explosion Entertainment, LLC, by UFC’s parent company, Zuffa LLC, violated Section 7 of the Clayton Act or Section 5 of the Federal Trade Commission Act.
…
In closing letters issued to counsel for Zuffa and Explosion Entertainment, FTC secretary Donald S. Clark stated, “Upon further review of this matter, it now appears that no further action is warranted by the Commission at this time. Accordingly, the investigation has been closed.”

The full letter from the FTC is below (H/T: FightOpinion.com):

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Office of the Secretary

January 25, 2012

Stephen Axinn, Esq.
Axinn Veltrop, and Harkrider LLP
1330 Connecticut Ave., NW
Washington, DC 20036

Re: Acquisition of Explosion Entertainment, LLC (Strikeforce) by Zuffa, LLC (UFC)
FTC File No. 111 0136

Dear Mr. Axinn:

The Federal Trade Commission’s Bureau of Competition has been conducting a nonpublic investigation to determine whether Zuffa, LLC’s acquisition of Explosion Entertainment, LLC may violate Section 7 of the Clayton Act or Section 5 of the Federal Trade Commission Act.

Upon further review of this matter, it now appears that no further action is warranted by the Commission at this time. Accordingly, the investigation has been closed. This action is not to be construed as a determination that a violation may not have occurred, just as the pendency of an investigation should not be construed as a determination that a violation has occurred. The Commission reserves the right to take such further action as the public interest may require.

By direction of the Commission.

Donald S. Clark
Secretary

Earlier today, Yahoo producer Dave Doyle announced that this was his last day as MMA/Boxing editor over at Yahoo! Sports.

Doyle stated the following message via social media website Twitter:

Today is my last as MMA/boxing editor at Yahoo! Sports. It’s been an awesome ride working with great folks. Thanks for everything.

Sources tell MMAPayout.com that the cutting back on non-mainstream sports by Yahoo was due to their tumultuous 2011, which saw Yahoo’s stock dip under $17 and saw gross revenues decline by over 20%. Along with Doyle – who had been with Yahoo since 2007 – another key member of Yahoo’s MMA team is long-time MMA and Pro Wrestling reporter Dave Meltzer, who has also been a part of Yahoo since it ramped up it’s MMA coverage in 2007. His contract is also up this week.  At this time, it is unsure whether Meltzer will be able to continue his affiliation with Yahoo Sports, as the struggling company tries to workout it’s budget for the new fiscal year.  Longtime Boxing and MMA reporter Kevin Iole and Cagewrite Blog members Steve Cofield & Maggie Hendricks are reported to be staying with the team.

Yahoo will now shift their coverage to more mainstream sports ( NFL, NBA, and MLB) instead of those that are more niche such as combat sports (MMA/Boxing), Golf, and NASCAR.  Rumors of a possible shakeup within Yahoo! Sports first began around the Summer last year. The dismal fiscal results in 2011 made sure those early rumblings came to fruition.

As for Yahoo’s 2011 fiscal results, Forbes stated the following:

“Even with gross revenues declining by over 20% in 2011, Yahoo’s Q4 2011 results were hardly a surprise, as the company completed a tumultuous year filled with leadership and investor squabbles. For now, CEO Scott Thompson has acknowledged that the company has to deliver more monetization on digital content in 2012, which is a must for Yahoo to stop its shrinking presence in the online ad space.”

Yahoo will now try to focus on it’s core business, which will include selling off foreign assets and letting non-performing Yahoo! properties go, as Yahoo’s CEO Thompson has stressed “effective allocation of capital” is a priority moving forward.

This isn’t the only mainstream sports media shake-up that has impacted MMA recently.  In November of 2011, AOL’sMMAFigthing.com was sold to Vox Media – parent company to SB Nation- as AOL struggled to compete with media giants Google and Facebook in the last few years, a problem Yahoo has also been facing.  A few days later, USA TODAY Sports Media Group (Gannett) made the announcement that they had acquired MMAJunkie.com, one of the biggest MMA media sites in the industry.

The New York District Attorney and Attorney General filed separate motions to dismiss two claims in Zuffa’s lawsuit in New York City. While the lawsuits seek to dismiss only a portion of the UFC complaint, it appears that the defendants are leaving open a motion to dismiss the entire complaint in total at a later date.

Courtesy of the Fight Lawyer, the two motions are below:

Attorney General’s Motion to Dismiss(function() { var scribd = document.createElement("script"); scribd.type = "text/javascript"; scribd.async = true; scribd.src = "http://www.scribd.com/javascripts/embed_code/inject.js"; var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(scribd, s); })();

District Attorney’s Motion to Dismiss(function() { var scribd = document.createElement("script"); scribd.type = "text/javascript"; scribd.async = true; scribd.src = "http://www.scribd.com/javascripts/embed_code/inject.js"; var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(scribd, s); })();

Payout Perspective:

The crux of both arguments appear to be that despite Zuffa’s claims, the fact remains that New York had a rational basis for enacting the ban at the time it was drafted. And based on this, the statute was not vague and overbroad as it relates to the due process and equal protection claims. They cite to case law which supports the theory that despite changes over the years that may, arguably, antiquate a statute’s purpose, under a rational basis review of a law, so long as there was a rational purpose for it at the time of its introduction it is valid.

Both motions argue that the proper forum for Zuffa’s claims is with the legislature and that if Zuffa wanted to enact change, it should direct its efforts to the legislature.

Via the District Attorney’s motion to dismiss:

…as a proper exercise of judicial restraint, federal courts must uphold a statute that was rational when enacted, even when post-enactment developments cast doubt on the wisdom, logic, or providence of prior legislative decisions

It also argues that legislatures are given “substantial latitude” when it comes to enacting laws under a rational basis review of the law as “imperfections and even inequality must be tolerated.”

The defendants’ motions are persuasive and could set the dominoes in line if the court grants the motion to dismiss Zuffa’s claims. As indicated in its motions, both parties contemplate a further motion to dismiss the rest of Zuffa’s claims if it is successful with this motion.