Ring Of Sports Marketing

Date archives May 2016

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Dana White Denies Report Of UFC Up For Sale

Yesterday, ESPN writer Darren Rovell reported that the UFC was up for sale to four possible bidders: WME/IMG, China Media Capital, The Blackstone Group, and the reported bidding leader the Dalian Wanda Group.

While Dana White has denied the UFC is for sale Rovell still stands by his report.  Rovell has said that sources told him that Goldman Sachs has been representing Zuffa LLC in the deal.  Also, a company called The Raine Group reportedly prepared the bid book that was sent to possible investors at the end of March.  The Raine Group has advised the UFC in the past and has a connection with both WME/IMG and China Media Capitol.

Dana White on $4 billion estimated sell value:

We’re not up for sale.  We’re always working on deals and our expansion globally. I’ve been saying since this thing came out, no, we’re not for sale, but let me tell you what. If somebody shows up with $4 billion, we can talk. We can definitely talk.

Dana White on a possible partial sale:

Obviously, if I’m in the middle of a deal right now, there’s a lot of confidentiality involved in it.  We’re working on expanding. We’re working on growing the company and moving into other territories like China and Japan, Korea. So, yeah, we’re always working on deals.

White on his role in the company after a possible sale:

I don’t know. I don’t know how that would all work out, but I’ll tell you this.  The day we decide to sell, I probably don’t want to do this anymore. I love this. I love this business. I love the sport. I jump out of bed everyday excited to go to work.

And listen, me and Fertitta brothers have been together a long time.  We’re very close friends. We work well together. Something we did would be a mutual decision and we’d probably all be looking to get out.

Ringside Analysis:

I think it is more likely than not that the UFC is going to sell off some ownership shares in the company.  There is a lot of smoke for there to be no fire.  The UFC sold 10% of the company to Flash Entertainment in 2010.  The partnership was designed to bring in knowledge of the Asian market and getting contact with key decision makers.

As Dana White mentions, there is still room for growth in parts of Asia.  White also said when prompted about a partial sale that there is a lot of confidentiality involved while being in the middle of making a deal, which could lead one to believe the UFC is in talks to bring on another possible minority partner.  It also then comes as no surprise that a Chinese ownership group is in the front running to outbid competitors.

Zuffa LLC, Lorenzo Fertitta, and Dana White have always been secretive of the operations inside the company.  They frequently mention that the UFC is a private company that does not need to share financial information so it doesn’t come as a surprise that they are outright denying any claims of selling.

If one were to look at the UFC like a startup then selling the company would be a solid exit strategy, especially when the selling price is near $4 billion.  At the beginning of any venture an entrepreneur or group will decide on an exit strategy to ultimately cash out on their hard work.  It’s possible, however unlikely, that the Fertitta Brothers and Dana White have decided that it is time to exit.  Something else to take into consideration, while even more unlikely, is that the Fertitta Brothers have decided that they have pushed the company as far as it can go and that someone worth $35 billion by himself can push the company further.

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UFC Possibly Up For Sale and Estimated at $3.5-4B

According to reports the owners of the UFC have been in talks to sell the copmany.

The Ultimate Fighting Championship was purchased by Zuffa LLC in 2001 for $2 million.  Zuffa LLC and the UFC is a privately held company with the Fertitta Brothers owning 80% of the company, Dana White with 10%, and the Abu Dhabi government under the name of Flash Entertainment owns another 10%.

According to the article by ESPN’s Darren Rovell:

At least four bidders are believed to have submitted bids for the organization, including WME/IMG, China Media Capital, The Blackstone Group and Dalian Wanda Group. The winning bid, should things proceed, is expected to be for a valuation between $3.5 billion and $4 billion, multiple sources with knowledge of the negotiations told ESPN.com.

The Dalian Wanda Group is run by the richest man in China, Wang Jianlin, who is estimated to be worth $35 billion.  The group has been buying sports and entertainment companies in the last few years.

The company has slowly been getting into sports. Last year, Wanda bought a 20 percent stake in soccer superpower Atletico Madrid for a reported $48 million. In March, amid the FIFA scandal, the company agreed to sign on as a FIFA partner, the highest level of sponsorship, through 2030.

In January, Dalian Wanda Group became the first Chinese company to become owners of a major Hollywood film studio when it agreed to buy Legendary Entertainment from Pittsburgh Steelers minority owner Thomas Tull for about $3.5 billion.

Ringside Analysis:

The UFC has come a long way since it was first purchased in 2001 for only $2M.  What started as what seemed to be a passion project has turned into a monolith in the sports and business world.  In an interview with CNN, Lorenzo Fertitta said that the UFC made around $600 million last year.

The UFC has been valued as one of the largest companies in sports.  The Los Angeles Clippers sold for $2 billion a few years ago and the Dallas Cowboys are also valued near $4 billion.  If the UFC does sell for at least $3.5 billion then it would be more valuable than Real Madrid ($3.26 billion), the New England Patriots ($3.2 billion), and the New York Yankees ($3.2 billion).  

The UFC had their best year financially with the rise of Conor McGregor and Ronda Rousey making a full-on push into the mainstream.  However, there are also questions about the sustainability of the company given the sport, revenue model, and class-action lawsuit that the company faces.  The new television rights deal with FOX that renews in 2019 is going to earn the UFC $250 million. 

For years the UFC has tried to make a push to break into the Asian market so it is interesting that the favored buyer is a Chinese Conglomerate.  The price at which the UFC is projected to sell for is a strong indicator that among the wealthy investors and buyers the future for the UFC is incredibly bright.

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Canelo Would Fight Golovkin At 160 LB

A fight between Gennady Golovkin (GGG) and Canelo Alvarez would be the most financially lucrative fight in the sport of boxing.  In the past Canelo’s camp has said that there are business disagreements that keep the fight from happening such as GGG’s PPV draws compared to Canelo’s, how good GGG actually is, and the weight that the fight will be held at.

After Canelo knocked out Amir Khan, Canelo received a lot of criticism from multiple people in the ring for not fighting Golovkin yet.

Many boxing commentators, such as HBO’s Harold Lederman, believe that Canelo has been using weight as an excuse to not fight Golovkin.

Ringside Analysis:

Canelo made a big scene in the ring after he knocked out Khan about facing GGG.  He said he was not afraid of GGG and he would fight GGG at 160 pounds, which was allegedly the biggest hold-up to a Canelo-GGG fight.

The one phrase that Canelo said that gave me pause was, “I’m willing to make him an offer,” which does not exclude stipulations that would create new arguing points for the fight to happen.  However, the rest of Canelo’s speech would lead one to believe that he is ready to make whatever changes necessary in order to make this super fight happen.

The expiration date for this fight is Cinco de Mayo weekend of 2017.

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RUMOR: Floyd Mayweather Exploring Possibility of Fighting Conor McGregor

In the last week rumors began to swirl that Mayweather and McGregor might fight each other.  It seems that every week there is a new rumor about Floyd Mayweather coming out of retirement.

Allegedly, Mayweather became angry after McGregor said that he would knock Mayweather out in 30 seconds.  McGregor’s comments were the result of Mayweather saying that when black people talk trash they draw scorn from fans while white fighters who talk trash are revered and put on a pedestal.  

McGregor is under an exclusive contact with the UFC that prohibits him from competing in other combat sports, including boxing.  For this fight to occur it’s ultimately up to the UFC as to whether McGregor would be eligible.  

Ringside Analysis:

There are a few requirements that would need to be met for Floyd Mayweather to come out of retirement, which I don’t believe he will do.  Based on brand names alone, even though fans of the fight game know this would be a blowout Mayweather win, would probably top $1 million PPV buys.

First, Mayweather would need to be paid.  I think if he comes out of retirement at all he would earn nine figures as a base payment before PPV points.  With McGregor’s personality the buildup to the fight would be huge and would draw significant attention from casual sports fans.

Second, it would be a boxing match and not a MMA fight.  This really goes without saying but there’s no way that Mayweather enters an MMA contest and it is very likely that McGregor’s confidence would carry him to volunteering to fight Mayweather in the ring.

Third, he would fight somebody he knows he would beat.  I believe Floyd would easily beat anybody near his weight class not named Gennady Golovkin, and that’s only because GGG is significantly higher in weight.  In my opinion Floyd Mayweather would handle McGregor.  Mayweather has significantly more experience, is overwhelmingly more skillful, and his ring IQ far surpasses what McGregor’s is.  

Again, the UFC would have to give permission for Conor McGregor to go outside the agreed upon terms in his contract and fight Mayweather.  It is most likely in the UFC’s best interests to not let McGregor fight because a clear loss would most likely kill McGregor’s brand value even when he goes back to MMA fights.

I strongly doubt this fight will happen, but, if it does, the weeks leading up to the fight would be fantastic with the two fighters’ personalities and showmanship.  

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Is The Live Sports Rights Bubble Finally Bursting?

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VICELAND MINI-DOCUMENTARY ON BOXING IN UGANDA

Watch it Here

The documentary “Boys of Bukom” runs just over twenty minutes and is available on Viceland.  The show profiles boxing in Uganda as a promising form of gaining financial wealth, providing for one’s family, and how boxing and fitness runs through Ugandan culture.

Joshua Clottey is featured since he is from Uganda and a former IBF welterweight champion.  Also featured are two young fighters, a fight promotion in Uganda, and a fighter making the trip to fight in Las Vegas.

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The battle to protect fighters in the fastest-growing, least-regulated sport in America

The battle to protect fighters in the fastest-growing, least-regulated sport in America

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Mayweather Promotions Files for “TMT 50″ and “TBE 50″ Trademarks

On Saturday Floyd Mayweather was interviewed by Showtime’s Jim Gray.  Mayweather said he had been in talks with CBS/Showtime about coming out of retirement with some requirements being that the fight be for a world championship and be a nine-figure payday for Mayweather.

The US Patent & Trademark website show the request was made on April 21st. TBE 50 stands for “The Best Ever 50″ and TMT 50 stands for “The Money Team 50.”  The Money Team is Mayweather’s clothing brand while The Best Ever has been Mayweather’s tag attached to his name in order to align himself with the term the same way “The Greatest” is attached to Muhammad Ali’s.   

If Floyd Mayweather comes out of retirement he would be fighting for his 50th win, topping Rocky Marciano’s undefeated 49-0 record.

Ringside Analysis:

The filing is not indicative of a definite comeback for Floyd Mayweather, who recently turned 39 in February.  Most likely it is a protective move in the event of a comeback.  Mayweather Promotions is very protective of any trademarks around Floyd Mayweather Jr. in order to maximize revenue based on Floyd Mayweather’s likeness and slogans as well as protecting the brand from others who might seek a confusing affiliation in the mind of consumers.

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Mayweather Says Talks With CBS/Showtime About Another Fight Have Happened

On Saturday Floyd Mayweather answered questions from Jim Gray about possibly coming out of retirement.  The interview occurred during a PBC on Showtime program.  On the program Badou Jack fought Lucian Bute to a very controversial draw and James Degale defeated Robelio Medina by unanimous decision.

In the interview Mayweather said:

“Right now, I’m happy being on this side, but I’ve been talking with CBS and Showtime, and you just never know, but right now I’m happy on this side.”

“As of right now, some crazy numbers have been thrown my way. Upward of, of course, nine figures. I’m truly blessed, way beyond belief. I’m taking my time. I don’t really know what we’re gonna do. Right now, I’m happy being on this side, helping fighters.”

“GGG, I think that it’s best that he goes up and fights Andre Ward. I think that’d be a good fight for GGG. Andre Ward, that’s a good matchup. How can Floyd Mayweather fight at 160 when I could never even make 154? Danny Garcia, another name. Undefeated prospect – undefeated champion in two different weight classes. Very exciting fighter. You just never know. … No, Thurman and Porter both are exciting fighters, that’s a good matchup, but I’m happy being on this side.”

“If I came back, of course it’d have to be a nine-figure payday, and probably a championship fight. And a nine-figure payday.”

Ringside Analysis:

Mayweather has always been about making money before everything else.  If Mayweather were to come out of retirement it would only be fore monetary reasons as he has defeated nearly every other major fighter near his weight class.

After his first fight with Manny Pacquiao and after his fight with Andre Berto, Mayweather said he was already receiving nine-figure offers for a 50th fight but turned them down.  I view the hints at coming out of retirement as a way to stay relevant in the media and also to draw attention to his own promotional events and fights.

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Berto-Ortiz 2 Draws 1.51M Viewers to PBC on FOX

On Saturday the PBC put on an afternoon program on the west coast featuring Andre Berto knockout Victor Ortiz in the fourth round.

The fight number is a near one-third drop from the opening program on FOX that saw Danny Garcia defeat Robert Guerrero.  However, the appeal of a Garcia-Guerrero fight is better than Berto-Ortiz 2.

Ringside Analysis:

The PBC on FOX has run into the problem of having programming against other top sports and programming events such as the NBA and NHL playoffs.  All the fights shown were exciting and filled with knockouts so that may result in some slightly higher ratings next time.

While boxing is a year-round sport with no defined season it is clear that in the current sports landscape boxing takes a backseat to the other sport and that market penetration is highly unlikely when the market is so saturated.  Maybe the PBC should consider loading their program in the months between the NBA playoffs and the start of the NFL.  Starting at the beginning of May is a logical choice because it coincides with Cinco de Mayo.