Ring Of Sports Marketing

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The Future Of The WME-IMG UFC

On July 10th reports hit the web that the UFC sold for $4 billion making it the biggest transaction in sports history. For perspective, the Los Angeles Clippers were sold for $2 billion. The only sports entity that is considered to be in the neighborhood of a $4 billion valuation is the Dallas Cowboys. What differentiates the UFC from the Cowboys is that the team in Dallas is a part of a larger organization. When one owns the UFC they nearly own the entire sport.

Below is a summary of information and insights I have onto the possible future of the new WME-IMG UFC covering the new roles of the owners, the business acumen of the investors, the marketing power of WME-IMG, what the purchase means to athletes, what global expansion will look like, what the new revenue streams are, and what the biggest risk is to the sport:

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Adidas sales jump 31 percent, announces plan to sell TaylorMade – Portland Business Journal

Adidas sales jump 31 percent, announces plan to sell TaylorMade – Portland Business Journal


Conor McGregor-Nate Diaz 2 Scheduled For UFC 202

The rematch between Nate Diaz and Conor McGregor is officially scheduled for UFC 202, which is scheduled to take place on August 20th at T-Mobile Arena in Las Vegas.

Nate Diaz submitted Conor McGregor at UFC 196.  Conor McGregor is still the UFC featherweight champion heading into this fight.  However, this fight will take place at the 170-pound limit, which is the weight that the last fight took place. ate Diaz took the fight UFC 196 fight on 10-days notice and wouldn’t have been able to make the 155-pound lightweight limit so McGregor said they could fight at 170.

Ringside Analysis:

At one point the rematch looked to be in serious jeopardy.  While originally scheduled as the main event for UFC 200, a Conor McGregor faux-retirement derailed any negotiations of the fight.  Mix in some demands made by Nate Diaz and the situation become exponentially more complicated.  Ultimately, there is simply too much money involved for the rematch not to happen.

Diaz had some grievances with the UFC so the Diaz and the UFC must have reached an agreement on marketing and payment for the rematch.  McGregor was always going to come back to fighting in the UFC but needed to negotiate his responsibilities when it comes to marketing the fights.

McGregor claims his inability to pace himself is what did him in against Diaz so we will see how much he learned from his first loss in the UFC.  It will also be interesting to see how well Diaz does when he gets a full training camp to prepare for the fight.


Bill In US Congress To Expand Muhammad Ali Act To MMA

Markwayne Mullin, a Republican congressman from Oklahoma, has sponsored a bill into the House of Representatives would expand the Muhammad Ali Act, which currently only applies to boxing, to MMA.

Under the proposed amendment to the Professional Boxing Safety Act of 1996 all combat fighters would be protected.  The law requires that a manager and promoter be separate to theoretically protect boxers from exploitative practices and conflicts of interests.  Government intervention was required to protect boxers because there is no centralized governing body for the sport.

MMA fighters have been without the protection of this act because the act explicitly only covers boxers.  The UFC signs fighters as contract workers, making the fighters unable to unionize.  Also, the UFC is a private company so has no obligation to share the financial information of the organization, making the percentage of fighter pay to revenue gained a mystery.

Ringside Analysis:

Many say that the proposed law will result in weakening the centralized power of Bellator MMA and the UFC, which has enabled MMA to explode by correcting many of the deficiencies inherent in the boxing business.  The same detractors of the bill claim that the NBA and NFL have flourished because of being a central power.  However, the difference between the NBA and, for example, UFC is that the NBA has a player’s association as does the NFL and any other huge sports organization.

Unfortunately, the UFC and the MMA world is paying for the sins of boxing.  People are largely distrustful of promotional and managerial companies because of the past examples that show exploitation is not only common but most likely inevitable.

As the UFC and other MMA groups get more powerful there does need to be some securities in place to protect the fighters themselves.  If the UFC is going to make a strong push into the “mainstream” then casual fans have to be able to trust that there are no exploitative practices happening between a promotion company and fighter.

Lastly, the more revenue that the fighters can get, which will only increase with more financial transparency between the fighters and the promotional company, the better athletes will begin fighting and will result in a better product.


Nate Diaz Discusses Talks With UFC About Rematch With McGregor

Since Nate Diaz submitted Conor McGregor at UFC 196 there was been a whirlwind of media surrounding Conor McGregor and his brief retirement while Nate Diaz hasn’t received nearly as much attention.  Nate Diaz now believes that he is going to be fairly compensated for the value he brings to the promotion.

UFC leadership met with Diaz last week and the meeting was reportedly not good for bringing Nate Diaz back and getting closer to a deal in order to make Diaz-McGregor 2 happen.

Much of Diaz’s demands are a result of his leverage in negotiations since he is the man who defeated Conor McGregor, the UFC cash cow.  Diaz cites Dana White’s history of saying that Diaz wasn’t a “needle-mover” and how Diaz felt like he wasn’t being respected for the value he brought to the organization.

Below are some of the key quotes from Nate Diaz’s interview with Ariel Helwani. NSFW Langauge

Nate Diaz on his pay rate from the UFC:

“They’re like, ‘this is free TV.’ I’m like, wait, wait, wait, let’s not get it twisted. Free for motherf*ckers at home who aren’t paying for pay-per-view. But you guys are getting paid. That’s how it works. So I understood what was going on. They wanted to be like, that’s why you’re not on pay-per-view (because you’re not a needle mover). I already knew what was up. This isn’t newly developed information for me. I was up on the game. Because I cussed a little and told people to f*ck off, this guy is stupid and we don’t want to hear that? Like I’m some educated mother*cker talking about numbers, what do I know?”

Nate Diaz on how fighters need to be valuing themselves:

“Treat yourself like a business and quit f*cking (saying) ‘I’ll fight for free.  That don’t help nobody. That’s bad karma for you for even f*cking (saying that). Stupid ass Cowboy Cerrone says that sh*t. That’s bad karma for everybody. You’ll fight for free, now everybody else has got to? Why wouldn’t they pay us? Because they got dumbsh*ts like you fighting for free. Start acting like a businessman and start treating yourself like a business and get your ass paid for being in an Octagon. The whole world watches you fight.”

Following up with:

“Entertainers are there in the front row. I’m sitting there with Lil Jon and f*cking Mike Tyson and who else? Everybody. Anyone you could think of that’s famous is sitting front row. Baseball players. These guys are getting paid millions of dollars, and we’re entertaining the entertainers. So doesn’t that make us the crème de la crème? Shouldn’t we be paid the f*ck out? Why are you fighting for free, you dumbsh*t motherf*cker. That sh*t gets on my last nerve.”

Ringside Analysis:

Nate Diaz truly feels that this is his time to act on his own best interests.  The UFC and McGregor will continue to make hundreds of millions together even if Diaz doesn’t fight, but if a rematch between the two doesn’t happen there are hundreds of millions more left on the table.

Diaz is also very frustrated that McGregor gets so much promotion by the UFC while he receives very little.  He refers to McGregor being a byproduct of the UFC marketing hype, saying that McGregor’s wins before Jose Aldo were against forgettable competitions, which means that his rise to the top was manufactured.

McGregor learned the hard way that millionaires can’t expect to compete with billionaires in fights.  However, the difference between that situation and the one Diaz’s is in is that the UFC knew that both parties wanted to connect again to make money again.  I get the feeling that Diaz, if not given the right deal, would walk away from the sport given his already solid record in the sport.

Having said that, there is simply too much money to be made for this fight not to happen and the rematch will most likely be the main event for UFC 202 or 203.


Sold-Out Mixed Martial Arts Event Invades Muay Thai Turf

Sold-Out Mixed Martial Arts Event Invades Muay Thai Turf


UFC 198 Economic Impact Report Shows $12.6M 

UFC 198 was the third most attended UFC show with 45,000 fans packing Arena da Baixada in Curitiba, Parana, Brazil, and the event itself injected $12.6 million into the Brazilian Market.

The economic impact ofRock in Rio, a music festival rooted in Rio de Janeiro, was surpassed by UFC 198.

Given that most of the source articles are in Portugese I’ll rely on the translated works by MMA Junkie referencing the Brazilian article:

This number accounts for both direct economic impact – money spent by tourists on hotels, food, transportation and shopping – and indirect effects, such as distributors. According to the research, coordinated by professor Jose Manoal Gandara, of the Federal University of Parana’s Tourism Department, 43 percent of fans in attendance were outsiders.

As reported by Gazeta do Povo, the numbers are positive when stacked against other major events. Studies conducted using similar methodology showed that, comparatively, the Curitiba visitors spent almost as much as soccer World Cup tourists spent in Rio de Janeiro (around $117 for Brazilians and $201 for foreigners) and more than two times more than those who visited Rio to watch the Rock in Rio mega festival in 2013 ($43 and $70.50).

Ringside Analysis:

Economic impact studies can be very tricky.  First, many people going to events already live in the area so there isn’t necessarily a fresh source of revenue coming in from out of town.  Second, sports and entertainment falls under luxury expenditures that result from a surplus of money for an individual.  It could be argued that people simply diverted their money away from events such as concerts, movies, and other restaurants in the city and moved them towards the UFC event.

That being said this is another example of the UFC putting a lot of money into another international city, just like in Melbourne with UFC 193.  The UFC can still call the now T-Mobile Arena in Las Vegas their home for the biggest fights but the trend of a real economic impact in foreign cities bodes well for possible better partnerships with cities.


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.


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.  


NY Governor Signs Bill to Legalize MMA in State

UFC returning to New York on Nov. 12 at MSG https://t.co/o0GYRgRc9F

New York Governor Andrew Cuomo signed legislation to legalize MMA in the state.  This signature comes three weeks after the New York State General Assembly voted to legalize MMA in the state.

From the UFC press release:

Today’s bill signing and event date announcements cement mixed martial arts’ incredible future in the state of New York, and reaffirm UFC’s commitment to a market that is home to many top stars including former UFC champions Jon Jones, Chris Weidman and Rashad Evans, and countless other title contenders.

Ringside analysis:

The UFC has announced a November fight at Madison Square Garden, immediately taking advantage of the new opportunity, which technically begins September 1 of this year.   Aljamain Sterling has already suggested that the first event in Madison Square Garden should be “New Yorkers against the world.”