MMA Universe

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

MMA Junkie reports that the ratings for Strikeforce: Rockhold vs. Jardine earned an average of 344,000 viewers on Showtime. In addtion, Strikeforce salaries were released with Robbie Lawler topping the salary roster.

Strikeforce Saturday night earned a 0.93 household rating. It is the second-lowest rated Showtime-Strikeforce show for 2011-2012 out of 9 shows during the period. The low ratings occurred despite a free preview weekend on Showtime. It did compete with the NFL’s Saints vs. Lions game. But, its a disappointing 2012 debut for Strikeforce under the new Zuffa-Strikeforce contract.

The salary payroll totaled $566,000 with Lawler receiving $150,000 with no win bonus. Main event winner Luke Rockhold received $90,000.

Via MMA Junkie:

Luke Rockhold: $90,000 (includes $25,000 win bonus)
def. Keith Jardine: $30,000

Robbie Lawler: $150,000 (no win bonus)
def. Adlan Amagov: $10,000

Muhammed “King Mo” Lawal: $95,000 (includes $15,000 win bonus)
def. Lorenz Larkin: $17,000

Tyron Woodley: $60,000 (includes $30,000 win bonus)
def. Jordan Mein: $9,000

Tarec Saffiedine: $31,000 (includes $15,000 win bonus)
def. Tyler Stinson: $4,000

Nah-Shon Burrell: $8,000 (includes $4,000 win bonus)
def. James Terry: $9,000

Gian Villante: $20,000 (includes $10,000 win bonus)
def. Trevor Smith: $4,000

Ricky Legere: $10,000 (includes $5,000 win bonus)
def. Chris Spang: $6,000

Estevan Payan: $8,000 (includes $4,000 win bonus)
def. Alonzo Martinez: $5,000

Payout Perspective:

It will be interesting what Showtime will do to attract more viewers to its product. The ratings are disappointing considering the free preview allowed more viewers the opportunity to watch. A Tate-Rousey fight will be huge for the promotion (on many levels) in March. Unless we missed it, there were no Fight of the Night, Sub or KO of the Night bonuses. We’ll see if salaries will escalate for Strikeforce stars like Lawal and Melendez to compensate for not being able to jump to the UFC. Zuffa could offer its “locker room” bonuses to those stars as its form of compensation.

The New York Times and LA Times feature Gina Carano in its Sunday editions as she is starring in the new Steven Soderbergh movie “Haywire”

The articles give a background on Carano’s upbringing and her experience in getting into MMA. Each article gives an account of her meeting with Soderbergh which occurred a week after losing to Cyborg Santos in July 2009.

Payout Perspective:

Carano and her movie, “Haywire” were prevalent in and around the Octagon on Friday night. With the press she is doing for the movie, Carano could bring positive publicity to Strikeforce and woman’s MMA. She has the looks and athleticism to be very successful in movies. We will see how her acting is in the movie. Dependent on the success of the movie, it will be interesting to see the direction of her MMA career. Will she continue her MMA career or will more movie offers come her way which would take her away from the Octagon.

Arguably, Carano is one of the reasons (along with Cyborg, Tate and Rousey) Zuffa is keeping woman’s MMA. We’ll see how long it will take for her to get back.

The New York Times and LA Times feature Gina Carano in its Sunday editions as she is starring in the new Steven Soderbergh movie “Haywire”

The articles give a background on Carano’s upbringing and her experience in getting into MMA. Each article gives an account of her meeting with Soderbergh which occurred a week after losing to Cyborg Santos in July 2009.

Payout Perspective:

Carano and her movie, “Haywire” were prevalent in and around the Octagon on Friday night. With the press she is doing for the movie, Carano could bring positive publicity to Strikeforce and woman’s MMA. She has the looks and athleticism to be very successful in movies. We will see how her acting is in the movie. Dependent on the success of the movie, it will be interesting to see the direction of her MMA career. Will she continue her MMA career or will more movie offers come her way which would take her away from the Octagon.

Arguably, Carano is one of the reasons (along with Cyborg, Tate and Rousey) Zuffa is keeping woman’s MMA. We’ll see how long it will take for her to get back.

The second biggest business story of the year shook the state of MMA. In March, Zuffa purchased its biggest rival, Strikeforce.

It was reported that the purchase price was $40 million which included some debt repayment by Zuffa for Strikeforce. The deal occurred as Silicon Valley Sports and Entertainment, main financial backer of Strikeforce, wanted to refocus its business on its NHL, the San Jose Sharks and other business. It is also believed that it may be trying to acquire an NBA team to San Jose.

Excellent coverage of the purchase is here and here is the text of the official Zuffa press release. Prior to Zuffa’s purchase, MMAPayout learned that there were other bidders for Strikeforce but Zuffa came up with the biggest monetary deal.

Prior to the purchase, Strikeforce was in the midst of its Heavyweight Grand Prix which was supposed to create interest in what was arguably the best divsion in the sport. Surely, Strikeforce execs were hoping for a Fedor-Overeem Final. Fedor’s upset loss to Bigfoot Silva made the GP less appealing. And, a futile effort to hold a card in Japan for its HW Grand Prix caused a delay in the tournament.

From the start, Zuffa stated that UFC and Strikeforce would operate separately although Zuffa execs (you know who) would provide input on its show starting with its April 9th show. The constant talking point was “Business as usual.”

But, that’s not the case as we’ve seen numerous Strikeforce fighters move over to the UFC. Notably, Strikeforce welterweight champ Nick Diaz. Other fighters such as UFC 141’s main eventer Alistair Overeem came over to the UFC after time fighting in Strikeforce. In addition, some Strikeforce staff were let go and replaced by Zuffa employees. Finally, Scott Coker has lost a lot of power in the new regime as it appears from interviews that he no longer has any say with the direction of Strikeforce.

Recently, Strikeforce and Showtime agreed to renew its television contract which was somewhat of a surprise considering the fact that many believed that Strikeforce would be consumed by the UFC.

It will be interesting to see the Strikeforce product in 2012. How will it compete, or complement the UFC product? Who is the face of Strikeforce? Certainly, a Gilbert Melendez and Mo Lawal would have fit in nicely with the UFC creating interesting fights. But, it appears that they will be in Strikeforce for at least the next year.

Links to MMAPayout coverage regarding the Zuffa-Strikeforce purchase can be found here:

- Zuffa Purchases Strikeforce, Agrees to Blockbuster MMA Deal

- Mystery Strikeforce Third Bidder, Early Signs Of Sale, & UFC Purchase Notes

- Exploring Why SVSE Walked Away from Strikeforce & MMA

This year Zuffa offered its 400 fighters in the UFC and Strikeforce health insurance beginning this past June. Zuffa is paying the premiums for all of its fighters under contract.

The accident-insurance coverage covers up to $50,000 (annually) of medical costs for each fighter. Its an unprecedented move to cover fighters and its a sign that the organization is moving in the right direction if it wanted to be thought of as a major league sport.

So far, fighters have taken advantage of the health insurance without any issues. Cub Swanson became the first fighter to utilize the health insurance one day after it went into effect.

While insurance may not be the most exciting business story of the year, it is one of the more important ones for the fighters covered.  A fighter’s health is very important from the business side of things as we know from this year’s constant reshuffling of main events. Insurance may alleviate some of the concern for the mid to low tier fighter that is concerned about what happens if they are hurt while training for a fight. While the $50K may not cover a serious surgery or procedure, it still helps with the  financial burden placed on fighters that likely fought without insurance prior to Zuffa’s coverage.  In a related story, this week, Combat Sports Insurance announced an accident-related insurance policy that would allow any pro MMA fighter to receive insurance for just “a little over $20  month.”

This year Zuffa offered its 400 fighters in the UFC and Strikeforce health insurance beginning this past June. Zuffa is paying the premiums for all of its fighters under contract.

The accident-insurance coverage covers up to $50,000 (annually) of medical costs for each fighter. Its an unprecedented move to cover fighters and its a sign that the organization is moving in the right direction if it wanted to be thought of as a major league sport.

So far, fighters have taken advantage of the health insurance without any issues. Cub Swanson became the first fighter to utilize the health insurance one day after it went into effect.

While insurance may not be the most exciting business story of the year, it is one of the more important ones for the fighters covered.  A fighter’s health is very important from the business side of things as we know from this year’s constant reshuffling of main events. Insurance may alleviate some of the concern for the mid to low tier fighter that is concerned about what happens if they are hurt while training for a fight. While the $50K may not cover a serious surgery or procedure, it still helps with the  financial burden placed on fighters that likely fought without insurance prior to Zuffa’s coverage.  In a related story, this week, Combat Sports Insurance announced an accident-related insurance policy that would allow any pro MMA fighter to receive insurance for just “a little over $20  month.”

It has been speculated for months, but it was finally made official today.  Strikeforce and Showtime have reached an agreement to televise live MMA for 2012, starting with the January 7th event headlined by Keith Jardine vs Luke Rockhold, which will air during a free preview weekend for the premium cable TV network.

Showtime Networks Inc. and world championship mixed martial arts (MMA) promotion STRIKEFORCE® have entered into a new broadcast agreement to continue producing live MMA events on the premium television network, SHOWTIME. The agreement was announced jointly today by Stephen Espinoza, Executive Vice President and General Manager, SHOWTIME Sports®, Dana White, UFC® President, and Scott Coker, STRIKEFORCE CEO.  

Under the new agreement, SHOWTIME will produce and televise up to eight live events. STRIKEFORCE athletes such as lightweight champion Gilbert Melendez, middleweight champion Luke Rockhold, women’s featherweight champion Cris “Cyborg” Santos, women’s bantamweight champion Miesha Tate and other world-class MMA fighters will continue to compete for the organization on SHOWTIME.

The new deal kicks off during the network’s Free Preview Weekend, Saturday, Jan. 7, as champion Rockhold defends the STRIKEFORCE 185-pound title against dangerous veteran Keith Jardine at The Joint at Hard Rock Hotel & Casino in Las Vegas, live on SHOWTIME at 10 p.m. ET/PT. Notable STRIKEFORCE contenders such as Robbie Lawler, “King Mo” Lawal and Tyron Woodley are also set to compete on the televised card, which—as part of Free Preview Weekend—will be available in more than 60 million households nationwide across SHOWTIME, SHOWTIME HD™ and SHOWTIME On Demand®.

Beginning with the Jan. 7 card, SHOWTIME will also televise undercard fights for all STRIKEFORCE events live on SHOWTIME EXTREME. The live SHO Extreme preliminary telecasts will afford network subscribers with expanded live fight coverage by up to two hours and provide invaluable exposure for the sport’s next generation of STRIKEFORCE contenders.

Under the new deal, the World Grand Prix Heavyweight Tournament champion will be determined when Josh Barnett battles Daniel Cormier. The winner will compete again on SHOWTIME under the STRIKEFORCE banner in the months to follow.

“Since its advent on SHOWTIME in 2007, live mixed martial arts has always performed well with our subscribers, particularly in the younger demographics,” said Espinoza, who now heads the division of the network responsible for programming live boxing, studio shows from National Football League and NASCAR as well as multiple sports documentary series. “As the one and only premium network in the MMA business, we are proud to renew our commitment to the sport and to our partners at Strikeforce.  This agreement ensures that we can continue to deliver the edge-of-your-seat programming that each live MMA event produces in the New Year and beyond.

“This exciting announcement could not have come at a better time,” he continued. “During our nationwide Free Preview Weekend a whole new crop of MMA fans will have the opportunity to sample the Strikeforce brand free of charge.”

“We’re excited about this renewal with SHOWTIME and I expect to put on some big STRIKEFORCE events next year,” White said.  “I never thought I would say this, but I am very much looking forward to building STRIKEFORCE and working very closely with SHOWTIME.”

 “SHOWTIME has been a great TV partner for us and we’re happy to renew our agreement with them,” Coker said. “Together, we’ve put on some really amazing events and we’re going to keep doing that with this new deal. We have a great core of talented fighters on our roster and MMA fans are in for a real treat.”

STRIKEFORCE®: MELENDEZ vs. MASVIDAL airs live on SHOWTIME this Saturday at 10:30 p.m. ET/PT (delayed on West Coast) as lightweight champion Gilbert Melendez defends the title against hard-hitting contender Jorge Masvidal. In the night’s co-main event, women’s featherweight champion Cris “Cyborg” Santos meets gifted Japanese star Hiroko Yamanaka.

Payout Perspective:

There are many aspects to consider here as to who the winners and losers are in this deal. Women’s MMA is a big winner as it now has secured a home for at least all of next year.  If Strikeforce was shut down, Dana White said he would not have had women fighting in the UFC.  The losers here are the current Strikeforce fighters who wanted to cross over to the UFC, such as Gilbert Melendez, Jacare, Tim Kennedy, and King Mo Lawal, who appear to be staying in Strikeforce to give the brand and the network some meaningful fights.

Here are some other notes from the press conference:

- Strikeforce: Rockhold vs. Jardine event on January 7th held in Las Vegas, will air on Showtime’s free-preview weekend, which will makesthe channel available for free to more than 60M homes.

- Showtime says the Strikeforce deal does not preclude extending their deal with M-1, but they will be focusing on Strikeforce now.

- After the HW GP is completed, Zuffa will remove the HW division in Strikeforce. The winner of the HW GP will fight one more time under the Strikeforce banner and then the HW division will be removed. A handful of HW’s will transfer over to the UFC i.e. Fabricio Werdum vs Roy Nelson.

- Scott Coker will continue to be the front man for Strikeforce, although Dana White will oversee Strikeforce and will attend events. White will also be involved creatively with Showtime and discuss production.  He states that its a partnership between Showtime and Zuffa, so changes will be coming.

- Strikeforce will begin to crown new champions soon, starting with the Welterweight and Light Heavyweight divisions.

- They will keep 145 lbs solely for Cyborg and 135 lbs for the rest of the female division, although Zuffa believes there is no depth in the 145 lbs division.

- Showtime will televise up to 8 Strikeforce events in 2012 with prelims airing on Showtime Extreme. No more Challenger events.

- Prelims will air 5-7 PM on Showtime Extreme, followed by the main card live on Showtime.  Showtime will record prelims on Saturday, so if the main card ends quick, prelims will air.

- Dana White states that Strikeforce will not be a secondary brand and their champs will be viewed as legit.

- Fight bonuses not decided yet, but it looks like they are leaning to finally adding those next year.

- Between TUF, UFC events on FOX, FX, and FUEL and now with the addition of Showtime, there will be around 50 events in 2012.

MMA Junkie reports that the Strikeforce-Showtime relationship may continue as Dana White stated to the web site that a deal for Strikeforce to continue on Showtime is imminent.

“Showtime lives,” White stated to MMA Junkie.

Scott Coker appeared on Inside MMA on Monday to talk Strikeforce:

Coker didn’t reveal too much about the future of Strikeforce.

According to White, Strikeforce fighters are staying put although it was rumored that Strikeforce lightweight champion Gilbert Melendez would move over to the UFC.

Payout Perspective:

The move to continue the Showtime relationship is interesting considering the amount of programming Zuffa intends to put on Fuel TV. Its also surprising with the Fox deal that there would be a need to continue with the Strikeforce promotion on Showtime. Keeping Strikeforce talent such as Melendez in Strikeforce is disappointing considering Melendez has outclassed his division in Strikeforce. Certainly, a superfight with Frankie Edgar would create some PPV buzz.

One think about keeping Strikeforce  is that it keeps women’s MMA. While its unlikely to see women in the UFC anytime soon, keeping the women’s divisions in Strikeforce would have Zuffa observe whether its something that fans want to see.

MMA Junkie reports that last week’s Strikeforce Challengers 20 on Showtime scored a lowly average of 143,000 viewers. The numbers indicate the lowest rating for the series as well as a 30 percent decrease from the previous Strikeforce Challengers edition which averaged 203,000 viewers.

The show received a 0.42 household rating (via Wrestling Observer, subscription required).

The show featured Ronda Rousey submitting Julia Budd with an armbar. Replays were gruesome as Budd’s arm was bent a way it should not have. In addition, Lumumba Sayers knocked out Antwain Britt in the first round.

Payout Perspective:

With Bellator and the UFC holding cards on Saturday night, Strikeforce Challengers seemed overlooked. This does not bode well for the series and we will see what impact the dismal ratings may have for the future of Strikeforce on Showtime.

MMA Junkie reports that Dana White is taking over the company’s negotiations for a new deal with Showitme. Lorenzo Fertitta was the lead in the negotiations prior to Ken Hershman leaving Showtime for HBO.

White called Hershman a “deal blower” in an MMA Fighting interview with Ariel Helwani. With Hershman out of the picture and Showtime wanting to continue in the MMA business, White stated the negotiations “went really well.”

Payout Perspective:

This is an interesting development as most believed that Zuffa/Strikeforce-Showtime would mutually end its contractual relationship when the existing agreement ended. Perhaps Zuffa sees Showtime as a network it could keep Strikeforce Challengers or a “Challengers” type series if Strikeforce dissolves. Or, he wanted to meet the new team in charge of Showtime to gage a potential competitor in the MMA business. With UFC content heading to Fox, a contract with Showtime would mean Strikeforce will continue in 2012. But, with most of its top fighters rumored (or already in the organization) to be in the UFC, only Strikeforce Challengers may survive.

Zuffa created a subsidiary called Forza LLC to control Strikeforce who was taken over from Silicon Valley Sports and Entertainment in March of this year. Since then, there’s been much debate as too whether Zuffa/Forza will continue to operate the promotion or just kill it off.

Strikeforces’ television contract with Showtime expires mid-February 2012 and both sides have been relatively quiet as to the future the promotions programming on the network. However, UFC President Dana White recently commented on the Strikeforce/Showtime situation at the UFC 135 pre-fight press conference:

“Who knows what’s going to happen? The way this thing works is, it depends on Showtime. The ball’s in their court. They need to decide whether they want to keep Strikeforce around or not”

Showtime has yet to comment on their plans moving forward. They do have an option to extend the deal through 2014, however, the ball that’s been left in their court doesn’t have much of a bounce left.

Over the past 5 months Strikeforce had their top draws cherry-picked by the UFC, an impressive list that includes former Strikeforce heavyweight champ Alistair Overeem, former welterweight champ Nick Diaz and Strikeforce light heavyweight champ Dan Henderson. It’s almost certain the Strikeforce lightweight champ Gilbert Melendez will join them. By hollowing out the promotions champions, Zuffa’s actions speak louder then words and Showtime should be getting the message now loud and clear.

So is there even a business case left for keeping Stikeforce around in 2012? Using the publicly available data we took a closer look at the performance of the two Strikeforce ownership groups, Silicon Valley, and Zuffa/Forza. We sampled data from the last 9 events under Silicon Valley ownership, between October 9 2010 to March 25 2011 that included 5 major tier 1 events and 4 smaller tier 2 Challengers events. We compared the average TV Ratings, Attendance, Gate and Payroll to the first 9 events under Zuffa ownership, between April 1 2011 and September 23 2011 that included 4 major tier 1 events and 5 tier 2 events.

Payout Perspective:

In the midst of losing their top talent, the rough estimation is that Strikeforce has seen TV ratings dip 5%, attendance drop 32%, live gate profits down 11% and an increase of 26% in fighters payroll since Zuffa took control in March 2011.

From Showtimes point of view, the ratings are stagnant and Zuffa is (or has) impeded the ability for Strikeforce to improve upon their ratings. Showtime is drawing approximately 2.5 times more viewers with boxing programming then with Strikeforce. M-1 Global, who also broadcasts MMA events on Showtime will air their next to last event on October 14th. With no word on a Showtime/M-1 contract renewal, perhaps Showtimes focus will shift solely back to boxing leaving the MMA programming by the wayside.

For Zuffa, they’re in a position where they have just signed a huge network television contract for the UFC with FOX, which includes distribution on the cable channels FX and Fuel TV. Plus, Spike TV appears set to continue broadcasting UFC content, counter-programming or not, throughout 2012. So for Zuffa’s primary brand there’s no shortages on the television front. There has been zero push for Strikeforce since the ownership change and none look to be in sight. The numbers aren’t terribly good and there is no momentum, I see little benefit for Zuffa to continue their support for Strikeforce. It’s plausible they would continue to broadcast Strikeforce on Showtime in an attempt to help limit potential competition but I think if Showtime is to continue with MMA programming, it won’t be under the Zuffa/Forza/Strikeforce banner.

On November 12th, the UFC’s debut on FOX will no doubt break the television ratings record for 2011, and quite possibly the all-time record of 4.3 million viewers held by Elite XC on CBS, which is to-date the most watched MMA event in history.

So far in 2011 (as of October 4th), the UFC’s March 26th Fight Night 24 broadcast on Spike TV featuring Antonio Rogerio Nogueira vs. Phil Davis is the ratings leader with 2.2 million viewers. It was the highest rated event since the September 2009 broadcast of UFC Fight Night 19: Diaz vs. Guillard, which had 2.5 million viewers.

The February 5th UFC 126 Prelims, also broadcast on Spike TV comes in second with 2 million viewers. The televised fights included Donald Cerrone vs. Paul Kelly and Chad Mendes vs. Michihiro Omigawa. The event coincided with the UFC 126: Silva vs. Belfort Pay-Per-View.

The third ranked televised event was UFC Fight for the Troops 2, that took place January 22nd on Spike TV and was headlined by Melvin Guillard vs. Evan Dunham and co-headlined by Matt Mitrione vs. Tim Hague. The event garnered an audience of 1.85 million viewers.

I also gave Strikeforce: Fedor vs. Silva an honorable mention. The event, which was broadcast February 12th on Showtime only chalked up 741,000 viewers, however, Showtime is only available to 1/4 of the households Spike TV is in. This event was watched by 2.98% of Showtimes total available viewership as opposed to UFC’s number 1 event seen by 2.20% of Spike TV’s total viewership.

It’s no surprise that the top rated MMA television shows all were broadcast on Spike TV, a network that’s in close to 100 million (99,947,000) households, which has 86% market coverage in the United States. The UFC’s other broadcast partner, Versus, is in approximately 76 million households (66% coverage). MMA programming on Versus only broke the 1 million viewer mark three times since 2008, UFC on Versus 1: Vera vs Jones, WEC 34 and WEC 41. It will be very interesting to see what happens in terms of ratings, when the UFC moves to FOX in just over a month.

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UFC Fight Night: Nogueira vs. Davis
March 26, 2011
Viewers: 2,200,000
2.20% of total Spike TV Households (99,947,000)

UFC 126 Prelims
February 5th, 2011
Viewers: 2,000,000
2.00% of Spike TV Households (99,947,000)

UFC Fight For the Troops 2
January 22nd, 2011
Viewers: 1,850,000
1.85% of Spike TV Households (99,947,000)

Strikeforce: Fedor vs. Silva
February 12th, 2011
Viewers: 741,000
2.98% of Showtime Households (24,833,000)

During UFC 135′s press conference, MMAFighting’s Ariel Helwani spoke to UFC President Dana White regarding their current relationship with Spike TV, Bellator airing on Spike.com, and what we can expect from UFC shoulder programming in 2012.

Spike currently owns the UFC library through 2012, and by doing so, cannot air content from another MMA promotion – such as Bellator – until the deal expires or UFC buys back the library.  When Helwani asked White if the UFC was planning on buying the library back from Spike, he firmly stated that the “UFC will be on Spike TV in 2012″.  That of course means that Spike would then be contractually obligated to UFC programming throughout next year and Bellator would stay on MTV 2 and Spike.com until the life of the contract expires.

When Dana was asked about Bellator airing on Spike.com on the same day as UFC live programming, white stated the following:

“If you really look at what I call ‘the spirit of the deal’, it’s the wrong thing to do. The thing is, you have to understand, in my opinion it’s Spike not being honorable. They’re not being honorable. And they know. Kevin knows, Brian, all the guys who have dealt with me at Spike TV, I’ve been nothing but honorable with them. Everything that I did was to build the UFC and Spike TV. I’ve been a fantastic partner. Whatever they’ve needed from me I’ve done for them and helped them get to where they are today, just like they’ve helped us get to where we are today. And what they’re doing, if that’s the case, and they’re running these things on Spike.com, that’s not the spirit of the deal and they are being 100% not honorable. “

In terms of Strikeforce and their future, White stated that their existence relies completely on whether Showtime wants to stay in the MMA business.  Their deal is up on February/March of 2012 and a decision of whether to exercise a 2-year option – which would extend the current TV deal until 2014 – has to come from Showtime by the end of October.

When asked about Women’s MMA, White suggested that Women’s MMA will be promoted under the Zuffa banner “as long as Strikeforce is around”. Since ZUFFA acquired Strikeforce,  their champions and most marketable fighters – Nick Diaz, Alistair Overeem, and Dan Henderson to name a few – have since signed to fight in the UFC and have vacated their Strikeforce belts. Cung Le, another main staple in Strikeforce, is scheduled to be part of the UFC 139 co-main event, which will take place in San Jose, Strikeforce’s old home-base.

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Payout Perspective:

The library rights that Spike currently owns is a key chess piece here being utilized by the UFC and Spike.  By keeping UFC programming on Spike, they can continue to distribute their content on Spike, which is synonymous to many as the home of MMA and the UFC.  They are also essentially keeping Bellator off of Spike for another year.  At the same time, Spike can use UFC’s programming to counter live events which will be shown on FOX, FX, and Fuel TV.  They can also use UFC programming to promote Bellator on MTV 2 and Spike.com, which they have been doing for months now, ever since negotiating a future deal with the UFC earlier this year.

As for UFC’s new partner, FOX, keeping the library on Spike prevents FX and Fuel TV from airing any shoulder programming, which will make it that much tougher to convert current Spike viewers to switch over.  Without having access to shows like Unleashed, previous TUF seasons, and old UFC events, Fuel TV and FX will have to solely rely on live events in 2012, which will not produce enough programming to get MMA fans to tune in to FX or Fuel TV on a regular basis to catch UFC programming, as they have become accustomed to at Spike TV.

In the end, it seems that UFC programming will be on multiple platforms in 2012.  The problem is that this scenario creates an interesting transitional stage for the UFC.  We can already see this with the first UFC on FOX event, which will only feature one bout.  The co-main event of Ben Henderson vs Clay Guida currently has no TV platform because Spike still has rights to UFC content through 2011, with the exception of the UFC doing network events.  FX and Fuel TV are cable channels, which is in the same tier as Spike TV. Unless FOX or another network channel – highly doubtful – chooses to air the prelims, we will most likely see the co-main event and other prelims on the card air on Facebook or on one of FOX’s website, which is a huge blow to the fighters and their sponsors.  The exception would be if the main event – Cain Velasquez vs Junior Dos Santos – ends quick enough so that FOX can try and air some prelims, but there’s not much of a guarantee with a 1-hour time slot.

The Strikeforce welterweight women’s champion, Miesha Tate, has signed a sponsorship deal with Toyo Tires. Tate wore the Toyo Tires logo on her fight shorts when she won the title from Marloes Coenen in July.

Via Toyo Tires press release:

Tate is a native of Tacoma, Washington, and was the 2010 WMMA (Women’s Mixed Martial Arts) Fighter of the Year.  Associated with Team Alpha Male, the 25-year old, 5-foot 6-inch Tate fights in the 135 lb. weight class and has a background in wrestling and Jiu-Jitsu.  In addition to wearing the Toyo Tires® logo on her fight shorts, Tate will also promote the Toyo Tires brand through appearances and additional marketing efforts.

Payout Perspective:

Even though many are counting down the days of Strikeforce, Tate has scored a sponsorship deal with Toyo Tires. Its a good deal since it involves her inside and outside the ring. This helps the Miesha Tate brand and forges her identity in women’s MMA. Certainly, with Gina Carano out of action, Tate is becoming the face of women’s MMA. Tate joins the Toyo Tires stable which recently signed Anthony Pettis and Mark Munoz.

MMA Fighting had a piece on the state of sponsorships in MMA. It was a revealing look behind sponsoring of fighters in MMA.

Overall the piece depicts the sponsorship game as a huge investment for companies with a tenuous rate of return. For fighters, its a necessity to supplement their fight income as well as keep them financially afloat waiting for their next fight. For agents, its the likely primary goal in helping their clients.

Via MMA Fighting:

If you’re a company looking to sponsor a UFC fighter, the hit to your pocketbook varies depending on everything from the fame and popularity of the fighter you’re doing business with to the location of your logo. Walk-out T-shirts can be among the most expensive items, sometimes edging into the six-figure range, while a small decal on the thigh of his shorts might only run you a couple thousand dollars.

There is also the dreaded sponsorship “fee” or “tax” which the UFC has imposed on sponsors:

…most (sponsors and/or agents reached) put the cost of the tax at about $50,000 per year for the majority of apparel and supplement companies in the UFC, though the fee has been knonw to vary according to the sponsor and the situation…

Then, there is the issue of the return on investment. If a company pays to play, will viewers buy what your selling, let alone know who or what you are. Hayabusa’s Ken Clement told MMA Fighting:

“It’s trackable, but it’s very hard to be objective,” Hayabysa’s Clement said. “It’s the simple question of how many fans watching the UFC saw your logo and recognized it, and of those, who cares? …It can be looked at quantitatively, but there’s a lot of guesswork involved.”

Agent Dean Albrecht breaks down a company’s goals to sponsor a fighter in three categories: advertisement, sponsorship and endorsement. As defined by Albrecht, advertisement is the lowest tier of sponsorship as the relationship between fighter and sponsor is short-lived. The agreement is usually meant strictly for eyes to be on the sponsor’s logo.  These are usually one-time sponsorship deals or done on a flat fee. Sponsorship is more of a commitment between the fighter and sponsor where the sponsor has the fighter wear its logo over a period of time. The idea is to become brand ambassadors for the company. Endorsements are an elite level of sponsorship as the relationship between fighter and sponsor is more exclusive. Its where the fighter will do more than just wear the sponsor’s patch or shirt during fight night. The fighter will exclusively wear the sponsor’s gear in and out of the cage.  They will also make appearances for the sponsor.

Payout Perspective:

An interesting tidbit of the article was the fact that less sponsors are interested in Strikeforce and focus more on the UFC. The fact that Zuffa imposed its tax on Strikeforce seemingly is driving sponsors from the organization. We reported this summer on sponsor Ranger Up as it no longer found it economically feasible to sponsor its Strikeforce fighters. Could this have been a harbinger for the impending demise of the organization?

The article reflects on the work of the agent as they broker the deals with sponsors for their fighters. This is something that is very important for fighters as we all recall the lack of sponsors was the reason Matt Mitrione famously relieved Malki Kawa of his duties.

With the Fox deal, we shall see if the sponsorship industry heats up. While we may see the downturn of certain companies, we could see major mainstream sponsors dipping its toes in sponsorship of fighters, perhaps in the “advertisement” stage of sponsorship. Hopefully, for all involved there could be a time where we see bigger commitments from sponsors.

MMA Junkie reports the ratings for Saturday night’s Strikeforce and Bellator events. Strikeforce received a dismal 274,000 viewers while Bellator garnered 235,000 viewers.

Despite featuring the semifinals of the Heavyweight Grand Prix, Strikeforce received a 1.04 household rating among men 18-49 and a 1.17 among men 18-34 according to MMA Junkie.

Via MMA Junkie:

Strikeforce’s Showtime broadcasts traditionally average 453,000 viewers. Additionally, first two events devoted to the grand prix averaged 628,500 viewers and are the top-rated broadcasts in Strikeforce-Showtime history.

Meanwhile, Bellator, on MTV2 received 235,000. An immediate MTV2 replay of Bellator 49 drew 153,000 viewers. The number is in line with recent improvements in viewership for Bellator.

Payout Perspective:

Although the two ratings are somewhat similar, Strikeforce ratings are far more disappointing. For Bellator, it was the first time that Spike.com streamed its fights. The numbers seem pretty consistent which is a good sign since it went up against a night full of college football (e.g., Notre Dame vs. Michigan) and Strikeforce on Showtime.

For Strikeforce, the ratings show the vanishing interest in the organization and by extension the Heavyweight Grand Prix. The ratings were similar to those of a “Challengers” show. Certainly there was extra competition Saturday night but with a big card the ratings were way down. There is usually much more press the week of the Strikeforce event leading up to the fights. It seemed like the big story was the Nick Diaz drama. Also, the breaking news of Cung Le main eventing UFC 137 against Vito Belfort the day of the Strikeforce event seemed wrong as well.

MMA Junkie reports the payroll from Saturday’s Strikeforce: Barnett vs. Kharitonov totaled $942,000. The Ohio State Athletic Commission released the payroll information on Monday.

Via MMA Junkie:

Josh Barnett: $150,000 (no win bonus)
def. Sergei Kharitonov: $100,000

Daniel Cormier: $100,000 (includes $50,000 win bonus)
def. Antonio Silva: $100,000

Luke Rockhold: $50,000 (includes $25,000 win bonus)
def. Ronaldo Souza: $70,000

Muhammed “King Mo” Lawal: $85,000 (no win bonus)
def. Roger Gracie: $80,000

Pat Healy: $17,500 (includes $5,000 win bonus)
def. Maximo Blanco: $13,000

Mike Kyle: $44,000 (includes $22,000 win bonus)
def. Marcos Rogerio de Lima: $5,000

Rafael “Feijao” Cavalcante: $60,000 (includes $30,000 win bonus)
def. Yoel Romero: $10,000

Jordan Mein: $16,000 (includes $8,000 win bonus)
def. Evangelista “Cyborg” Santos: $20,000

Alexis Davis: $6,000 (includes $3,000 win bonus)
def. Amanda Nunes: $7,500

Dominique Steele: $5,000 (includes $2,000 win bonus)
def. Chris Mierzwiak: $3,000

Payout Perspective:

The Heavyweights each receive 6 figures Saturday. I include Cormier since he received his $50K win bonus in addition to his $50K base. This likely is due to the fact he was an originally an alternate. Also, no win bonuses for Barnett or King Mo.

Its interesting that attendance and gate were not reported, when its usually announced after every other event. From the looks of the event on television, it did not seem like there were many in attendance which is a shame since this was a very good night of fights. If you are to believe some reports, there was poor attendance and Strikeforce comped many tickets. With a hefty payroll, it had to be a big money loss for Zuffa.

With the report of Cormier out with a broken hand, will Zuffa wait for him to recover to finish the HW Grand Prix or will there be a substitute to finish off this once good, now ill-fated idea. As many speculate, Strikeforce folding seems as imminent as Bellator moving to Spike. As Alistair Overeem, Jason Miller, Nick Diaz and Cung Le have left the promotion for one reason or another, each has emerged in the UFC. It seems like a matter of time before all Strikeforce fighters are folded into the UFC.

LA Times reports that Alistair Overeem has signed with the UFC and will be taking on Brock Lesnar on the December 30th NYE show being held in Las Vegas.

“Brock is a big name, a dangerous guy, and this is a dream matchup,” Overeem told The Times on Tuesday, just after signing a standard UFC fight contract in the office of Chairman Lorenzo Fertitta. “Brock’s a big guy, an exciting wrestler with his takedowns.
…
“I want to see this fight myself. Overall, I’m a different fighter. A striker, athletic, big. These are going to be two big trucks going at it on a collision course.”

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Payout Perspective:

Some notes from the announcement:

- The fight will be a 5-round non-title bout (PPV event). Overeem was stripped of the Strikeforce HW Title when he was released from Strikeforce just a few weeks ago.

- Alistair Overeem signed a multiple-fight standard contract, which means he is exclusive to the UFC and will not be allowed to participate in Kickboxing or Golden Glory events.

- It is expected that the winner of this bout will challenge the winner of Cain Velasquez vs Junior Dos Santos for the HW title.

- Overeem was offered a title shot against the Velasquez/JDS winner but Overeem didn’t want to wait that long.

- This event will take place on a Friday night, outside of the norm for the promotion who usually holds PPV events on Saturday nights.

- The UFC was looking to run the NYE show from Abu Dhabi this year from that same Friday night, but instead moved the event to Las Vegas on that same day.

- Yesterday night, the UFC announced that they would be heading back to Japan on February 26, 2012 and would be holding their event at Saitama Super Arena, which will be configured to seat 20,000 fans.  Alistair Overeem would be be one of their biggest draws if they could get him on that card along with “Kid” Yamamoto and Yoshihiro Akiyama to name a few.  Yushin Okami could also be used, but will have to bounce back after a crushing defeat to Anderson Silva in Brazil at UFC 134.

- With the addition of Lesnar vs Overeem, the UFC will most likely host a 1 million PPV buy event this year.  The last time they went through a year without hitting one was back in 2007. Last year, the UFC hosted 3 1 million PPV buy events, two which were headlined by Brock Lesnar.

Sherdog.com reports that Affliction and M-1 Global have settled its two year old lawsuit. The federal lawsuit, filed in Los Angeles, California, was set to go to trial this October.

Fedor Emilianenko and M-1 Global’s attorneys filed a Notice of Settlement in late August informing the Court that the parties involved in the lawsuit had come to an agreement. The papers filed noted the settlement and requested to vacate all pre-trial deadlines and the October trial date.

As you might recall, this lawsuit stemmed from the failed Affliction PPV, “Trilogy.” More background info is here.

Also, J.R. Riddell of Sherdog.com provides a synopsis:

 [Fedor and M-1 Global's] complaint alleged that after Josh Barnett refused licensure by the California State Athletic Commission because of a reported positive stroids test, Affliction breached its contract by refusing to promote the third and final fight called for under their “Fight Agreement.” They claimed Affliction did not undertake “all reasonable efforts” to find a fighter to replace Barnett…

One of the claims made by M-1 was that Affliction was trying to repair its relationship with the UFC and no longer wanted to promote its third PPV.

The lawsuit saw key figures in MMA deposed including UFC head Dana White, at the time Strikeforce head Scott Coker, Affliction’s Tom Attencio and Fedor.

This past June, the Court denied the parties’ motions for summary judgment (requests to dismiss the case on a party’s behalf). At the time, the Court advised the parties that they mediate the case in order to settle the matter short of trial. However, the parties did not settle. But, as with most heavily litigated cases where the result may be in doubt, the parties carved out a settlement short of the trial date.

While the Notice of Settlement filed with the court gave the parties the opportunity to reopen the case within 30 days of the notice, it is unlikely that would happen. In most instances, the parties leave this window in the event a party fails to hold up its end of the settlement (e.g., pay the negotiated settlement). More important to the litigants and their clients, the court deadlines were vacated meaning that further legal work (and legal fees) are avoided.