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The death of Norifumi "Kid" Yamamoto at age 41
By Zach Arnold | September 17, 2018
Cancer has killed one of the biggest Japanese fight sport attractions of all time.
If you only knew of Norifumi "Kid" Yamamoto from his UFC stint, you missed what made him such a special fighter and icon in Japan. He was great and had a lot of heart.
Kid Yamamoto headlined fights that drew tens of millions of television viewers. His family is considered wrestling royalty. When K-1 went to war with PRIDE after the 2003 New Year's Eve battle, they created HERO's. HERO's was Kid Yamamoto and Kazushi Sakuraba. You can't tell the story of PRIDE's death without talking about New Year's Eve 2003 and the implosion of PRIDE.
For many years, the dream fight was Kid Yamamoto vs. Urijah Faber. HERO's vs. WEC/UFC. UFC already played the political game with PRIDE and bought the PRIDE assets. The rest is history.
When Kid Yamamoto left K-1, K-1 struggled to hit double-digit TV ratings.
Kid Yamamoto will forever be linked with kickboxing icon MASATO. Remember the ratings for Cain Velasquez vs. Junior dos Santos on Fox? Kid Yamamoto vs. MASATO in a kickboxing match drew four times the ratings on broadcast television.
The UFC stint for Kid Yamamoto was regrettable. UFC wasn't going to change their matchmaking philosophy and adopt a Japanese-style marketing plan to get a last round with Yamamoto as an ace. Predictably, Yamamoto's career in UFC went as expected. The company booked Yamamoto against Vaughan Lee at Saitama Super Arena in a decision I will never comprehend. Yamamoto lost. UFC's ambition to utilize the required business tactics to grow business in Japan diminished.
Fortunately, Yamamoto's 2012 UFC Saitama appearance didn't diminish the legacy he created in Japan or his business accomplishments. There was a final Masato/Kid Yamamoto reunion on New Year's Eve 2015 — and it managed to draw bigger ratings than Nobuyuki Sakakibara's event.
What made Kid Yamamoto fascinating is that he didn't fit the classic, traditional conservative image of a Japanese fighter. Shukan Gendai went after Kid Yamamoto for "marijuana parties." There was so much media scrutiny linking Kid Yamamoto to Enson Inoue's behavior.
Ten years ago, Enson was arrested for possession of marijuana. Trying to explain the stigma of marijuana usage in Japan to outsiders, especially Americans, is impossible. It's the same deal with tattoos and how any non-covered up tattooed person on broadcast television is viewed as associated with organized crime.
Kid Yamamoto never changed. He stayed true to himself. He didn't conform. What worked for him wouldn't have worked for other Japanese icons.
Topics: Japan, K-1, Media, MMA, UFC, Zach Arnold | 5 Comments » | Permalink | Trackback |
How do you write about the history of Japanese MMA and PRIDE? Now is your chance to help finance and promote this effort
By Zach Arnold | August 25, 2018
Author Lee Daly was crazy enough to write about the history of Japanese MMA
I'm completely bored by American MMA since the corporate takeover of UFC by Ari Emanuel. Arguing over whether UFC is worth $4 billion or now $7 billion USD as Dana White claims after the new ESPN TV deal really doesn't move my spiritual needle.
If you grew up as a fan when modern Mixed Martial Arts was boom, you appreciate how much of a drought there currently is when it comes to real human characters in the sport. I'm not talking about the overly tattooed, Neo Nazi types either.
I've kept my eyes and ear open about what is happening in the Japanese scene. One FC just announced an entry into the Japanese marketplace on March 31st, 2019 in Tokyo at Ryogoku Kokugikan. I expect 2019 to be a relatively strong growth campaign for One FC. They have been slowly inching closer towards filling up the vacuum in Japan that has been left over since the death of PRIDE.
Which brings us to a new project that Irish author Lee Daly has just finished: Before a Fall: A History of PRIDE.
Lee Daly took risks on multiple levels writing this book. First, he assumed the risk of not doing enough homework to satisfy all types of hardcore MMA fans who still worship at the alter of PRIDE. Second (and more impressively), Lee assumed the financial risk it takes to write such a book given how undefined the marketplace is for this type of writing. To create a turn-key product like this demonstrates a real seriousness.
In order to finance the launch of Before a Fall, Lee is crowdsourcing his efforts on IndieGogo and needs to raise funds in short order. This is your chance to reward someone for doing the right thing and help foster a new era of MMA writing.
The challenge of writing Before A Fall is extremely difficult. I've been an active hand in reading the book through its development stages in order to give feedback. I know the history of Japanese fighting and even I am conflicted on how I would have tackled such a project. Lee Daly managed to write a book that educates every kind of MMA fan while in the process being true to the industry's roots. It's detailed but not overly intense. Lee tells the history of Japanese MMA in a way from the people who were actually involved in making the history in the first place.
The best way to reward this kind of writing is to show that there is a market for it and you can demonstrate that there is a marketing for smart MMA writing by contributing to Lee Daly's Before a Fall: A history of PRIDE book.
Topics: Japan, Media, MMA, PRIDE, Zach Arnold | 3 Comments » | Permalink | Trackback |
Boxing refs Wayne Hedgpeth, Raul Caiz Jr. & Sr. file $100M racial discrimination claim against Andy Foster & California State Athletic Commission
By Zach Arnold | July 23, 2018
What is the value of officiating a championship prize fight?
A recent claim letter filed by attorney John E. Sweeney on behalf of boxing referees Raul Caiz Jr. & Sr. along with Wayne Hedgpeth seeks $100 million dollars in damages. The claim letter states that Hedgpeth & Caiz Junior/Senior have been racially discriminated against by California State Athletic Commission Executive Officer Andy Foster and that the beneficiary of the alleged discrimination were white referees — primarily Jack Reiss.
The legalese
State and Federal Government agencies have sovereign immunity. The California Tort Claims Act states that you have to file a damages claim with a state agency and wait 45 days for a response. The agency can either: a) accept the damages request, b) offer a settlement, c) respond with a formal rejection, or d) ignore the claim letter. Not issuing a response is legally deemed as a rejection.
In order for the claim to be within the statute of limitations, the last alleged tort act must take place within 180 days of the claim letter being filed with the state agency.
Demands in the claim letter
Fight Opinion filed a Public Records Act request with the California State Athletic Commission to get a copy of the damages claim. The Athletic Commission immediately responded by stating they had not received a claim letter from attorney John E. Sweeney. The agency's reply cited Government Code 915, which deals with amended or late claim letters.
The agency claimed that if the letter was filed with the Department of General Services, DGS had not sent the Athletic Commission a copy.
After this response, we were able to independently obtain a copy of the amended damages claim letter. The letter was dated April 27, 2018 and supposedly sent via certified mail with return receipt requested. It was allegedly sent to both the Department of Consumer Affairs and the Athletic Commission's office.
What the claim letter states
Quoting from the letter:
For the past five (5) years and continuing to date, the State of California Department of Consumer Affairs and the California State Athletic Commission have engaged in a pattern of racial discrimination against the licensed State of California Boxing Offices listed [Hedgpeth, Caiz Jr. & Sr.].
The system used by the California State Athletic Commission in assigning boxing officials, including referees and judges, to championship fights is not based on merit but on the sole discretion of an Executive Officer, Andy Foster.
Of the approximate 47 licensed fight officials in California, 33 are minorites (70.21%). Yet, the majority of championship fights for the period indicated above have been assigned to Caucasian officials.
Even when international boxing sanctioning bodies such as the International Boxing Federation ("IBF") and both opponent fighters and their representatives have agreed to use certain Claimants, the California State Athletic Commission has refused to honor their request and assigned a Caucasian referee to those fights.
Claimants have suffered general damages and a loss of earnings and earning capacity.
Claimants will bring causes of action in their forthcoming lawsuit for discrimination based on a violation of the Unruh Civil Rights Act (California Civil Code 51), California Government Code Section 11135, California Civil Code Section 43, and intentional infliction of emotional distress, and other related causes of action.
All of the required elements for each cause of action can be viewed in the 2018 Judicial Council of California jury instructions. Based on the claim letter, it appears any future lawsuit would be filed in state court.
The Los Angeles Sentinel interviewed Mr. Sweeney last week and he commented on what the details of an impending lawsuit would look like.
Topics: Boxing, CSAC, Media, Zach Arnold | 4 Comments » | Permalink | Trackback |
UFC has never made more money and encountered as much eye-bulging debt as they are right now
By Zach Arnold | July 1, 2018
Forgive me for not getting excited over a fight product that has long surpassed its expiration date.
The Bain Capitalization of UFC by its vulture investors is now complete. John Nash at Bloody Elbow notes a Moody's report claiming UFC made over $700 million USD of revenue in 2017. The company's current debt load is allegedly $2 billion USD.
With the new ESPN/Disney TV contracts, UFC is primed within the next five years to get flipped to another owner. Look at this impactful graphic created by Paul Gift regarding UFC's PPV buys over the last decade:
Preliminary econometric evidence on what some journalists have written about, #UFC's core consumer base seems to have declined over time. Translation: UFC has to give customers fights they're interested in paying for or they're more likely to do something else. pic.twitter.com/c0qC7mu6fT
— Paul Gift (@MMAanalytics) June 28, 2018
If you chart stocks, you'll immediately spot what looks like a "head and shoulders top" pattern. Given the dramatic change in the UFC business model, expect PPV buys to continue decreasing.
I don't particularly have much interest in UFC at this point outside of the physical & financial health of fighters. On one battle front, fighter Leslie Smith had initially gotten a positive ruling in Philadelphia with a regional section of the National Labor Relations Board. Smith is trying to fight the independent contractor classification that UFC uses for all its talent. However, her case has now been transferred to The Swamp in Washington D.C. for "further review."
The administrative state giveth and taketh away. You don't need to be a rocket scientist to figure out the temperature for action against UFC in DC under Trump given that UFC's owner was Trump's former Hollywood agent and Dana White was enthusiastically promoted as a prime guest speaker at the 2016 GOP Convention. Putting Leslie Smith's case on ice in DC is meant to send a chill.
What does interest me is UFC's positioning in the macro sports content wars. It's ESPN (with UFC, Top Rank, and Golden Boy) vs. former ESPN boss John Skipper at DAZN (with Matchroom Boxing & Bellator). Disney is paying a premium to try to thrive in the streaming business. There are no guarantees. It reminds me so much of mainstream American sports media companies throwing tons of cash at the MMA scene a decade ago to hire any and every writer only for everything to blow up in corporate faces. You have to get the money while the getting is good.
D'Zone CEO echoing what I told y'all about Bellator. Despite their revenue and valuation being outpaced 10-20x by UFC they average about 60%-70% the viewership and some of their "tentpole" events draw even with UFC Fight Nights on cable pic.twitter.com/Ec5kbnujpX
— smoogy (@smoogymma) June 28, 2018
The calculation behind the DAZN/Bellator relationship is fascinating. Viacom is in huge turmoil with the Shari Redstone vs. CBS & Les Moonves court battle about the possibility of a remarriage between the two media empires. Using Bellator to test the profit margins in the streaming business is an interesting play for Viacom. Do they eventually cut a deal with Netflix or Amazon and risk their platform business model to become a pure content play? Bellator's success or lack of success on DAZN will prove to be a worthwhile test case.
Topics: Bellator, Media, MMA, UFC, Zach Arnold | 5 Comments » | Permalink | Trackback |
ESPN buys the rest of UFC programming and it makes sense if they're ditching the NFL
By Zach Arnold | May 23, 2018
Both WWE and UFC are filthy rich from new television deals.
RAW is staying on USA Network reportedly at triple the original price and Fox just paid $1 billion dollars for five years of Smackdown.
ESPN and Disney just bought the rights to all UFC programming. $150 million a year for 15 shows and now an additional $300 million a year (for the next five years) to get 27 more shows. 42 shows a year, with a significant portion of events streaming on ESPN+.
The television rights fees being paid to both WWE and UFC are outrageous but also justifiable.
American sports media boss Clay Travis has been screaming that WWE television rights fees have been dramatically undervalued. How many years did television executives suppress the value of WWE content by claiming that WWE's audience demographics are young but poor? In other words, a bunch of undesirables and deplorables. Now NBC & Fox are paying WWE a premium for a consistent, stable audience. That's the value of stability in a media landscape with no stability. Timing really is everything.
As for UFC venture capitalists getting $450 million a year from Disney? As we discussed two weeks ago, this fascinating story is all about the survival of ESPN. You can't say Disney isn't going all out here. Paying $450 million a year for UFC content is a huge risk. What Fox Sports discovered with UFC is that UFC fans really care about UFC and will watch UFC programming but converting that audience into fans of other Fox Sports programs didn't pan out. Without UFC, Fox Sports 1 is largely irrelevant in comparison to ESPN. ESPN took out the major cornerstone for FS1's justification to be carried on major cable providers. Fox had no choice but to go all-in with WWE. WWE will be a big part of Fox Sports 1 moving forward, either through shoulder programming or NXT down the road.
Where does UFC fit into the equation with ESPN?
You don't pay UFC $450 million dollars a year for a cold product unless you anticipate another shoe dropping. That shoe could very well be the end of ESPN's relationship with the NFL.
It is very well possible that UFC and Top Rank programming could replace Monday Night Football if the NFL takes their ball and goes elsewhere.
The NFL's relationship with ESPN is completely dysfunctional. The NFL isn't even hiding their disdain anymore for ESPN, especially with the multi-channel broadcast of the NFL Draft on Fox. Mel Kiper is practically an American sports institution and the NFL tried to kill that off (but it didn't work).
The reason for the animosity between the two parties deals with ESPN's coverage of the NFL regarding political and medical issues. The more talk there is about concussions, doping, and the national anthem, the worse it is for the NFL's bottom line. It's worse for the NFL because the team owners are largely clueless on how to react to hot issues.
Now this same poison is ready to surface between ESPN and the UFC. The difference is that Dana White has a couple of decades of experience fighting the media and bullying those who are most critical about him. Given what has happened with the NFL, will new management at ESPN tell its employees to lay off of UFC scandals? Or will we see new conflict at a level Dana White has never had to manage before?
Bottom line? Fox offered $200 million a year to keep the UFC and the venture capitalists found a more desperate customer in ESPN willing to pay the premium. WWE immediately grabbed Fox's offer and ran with it. In the process, WWE's stock has tripled over the last year and Vince McMahon has made the kind of money never thought possible in professional wrestling.
Topics: Media, MMA, Pro-Wrestling, UFC, WWE, Zach Arnold | 2 Comments » | Permalink | Trackback |
UFC's $150M/year deal with ESPN: "Iger's taken the Disney trolley off the tracks"
By Zach Arnold | May 10, 2018
In addition to the live events, here's the UFC content coming to ESPN+ in 2019. pic.twitter.com/IzPmYk3z8Q
— Brett Okamoto (@bokamotoESPN) May 8, 2018
Amazon is Best of Breed in maximizing cloud computing but they're not stupid nor desperate enough to reportedly pay UFC $150 million dollars a year for a bunch of events. ESPN & Disney are, however.
The collapse of carriage fees on cable for ESPN means they are competing in a cutthroat streaming business market. One big competitor in the combat sports space is DAZN, who just hired former ESPN boss John Skipper. DAZN is going all-in with promoter Eddie Hearn and Matchroom Boxing for $125 million dollars a year. ESPN+ has Top Rank Boxing and will now have UFC content.
The biggest challenge for ESPN is being able to produce content that doesn't conflict with contractual obligations to the various major cable providers. In order to get UFC content on ESPN+, it was going to cost a premium. $150 million a year for 15 shows is ridiculously reckless. In comparison to DAZN ponying up $125 million a year for Matchroom Boxing? Maybe not as heartburn-inducing as first thought.
ESPN+ is $5 a month or $50 a year for a full-time subscriber. Between the amount of subscribers needed along with digital advertising, Disney's "investment" in UFC is a really risky proposition. It's the equivalent of buying a mansion as an income property in hopes of paying off the mortgage using cash flow from others.
Amazon was never going to be able to offer UFC $150 million dollars a year nor should they have even considered doing so. What Amazon could do was provide an explosive platform to grow merchandising and advertising revenues. What Amazon represented was not a guarantee but an opportunity. For
vulture venture capitalists, the guaranteed cash always beats out the promise of opportunity. The financiers aren't playing around.
If you had told me from the start that someone was willing to pay over $100 million dollars a year for streaming rights, then I would have never considered Amazon to be a serious threat. Amazon could have made Fight Pass bigger than anything UFC could have ever imagined but what's the point when Disney is throwing cash at you like a drunk sailor?
The story of UFC's new marriage with ESPN speaks much more to the state of Disney's health than it does the health of UFC. Disney is in a Comcastic death grip over the fight to acquire Fox Sports assets. Comcast pressuring Fox with a 15% premium over Disney's largely stock-based offer means a future explosion. ESPN used to be the safest, take-it-to-the-bank business play. It was the 30-year American T-note. You could never fail with all those cable carriage fees because it didn't matter whether or not people actually watched the network. The ESPN+ business model is no guarantee and Disney's reliance on UFC to save their sports network is a remarkable turn of events for those of us who covered the sport of Mixed Martial Arts from its very modern beginnings.
Topics: Boxing, MMA, UFC, Zach Arnold | 7 Comments » | Permalink | Trackback |
The $400 million dollar TV question for UFC: Balls (Amazon 100M subs) or brains (ESPN/Fox)?
By Zach Arnold | April 18, 2018
Venture capitalists want guaranteed cash. It's their fiduciary responsibility to keep foreign ownership of company debt very, very happy. It's why the reported ESPN/Fox dual offer for television rights is so tempting. An offer reportedly worth $400M/year with two stable broadcast television partners.
Betting against Disney is risky. Rejecting $400 million dollars yearly is crazy. Disney is all-in with the new ESPN+ online streaming platform. They need UFC.
The risk for Disney is that they are still renting sports content. They are not owning the content they produce, which is why Netflix has as big a market share as Disney right now. Paying $200 million a year for limited UFC rights is a huge premium for Disney. ESPN+ faces an enormous, uphill climb.
Which is why Wednesday's memo from Amazon king Jeff Bezos about 100 million Amazon Prime subscribers is a game changer. My argument for a UFC/Amazon marriage was based on 80+ million subscribers. 100 million subscribers is 25% more juice.
ESPN & Fox are offering $400 million in guaranteed cash yearly. Amazon can't make that offer but what they can offer UFC is the kind of upside on supercharging merchandising sales and streaming of live events that no one else in the world can compete with. I am a believer that Amazon's marketing power is worth tens of millions of dollars to UFC on merchandising alone. Reebok would be estactic.
Amazon was always a dark horse, at best, to get a foothold in the UFC television negotiations. Amazon can offer potential but no guarantees. Venture capitalists sell potential but take the easy money when it's on the table.
If Lorenzo & Frank Fertitta still owned UFC, would they take the guaranteed cash or would they gamble and become pioneers by expanding their sports empire with Jeff Bezos in their corner?
If current UFC ownership won't take the plunge with Amazon, a major sports entity will do so and reap the future rewards.
Topics: Media, MMA, UFC, Zach Arnold | 2 Comments » | Permalink | Trackback |
Conor McGregor lost his UFC belt and maybe his freedom but what about UFC's TV deal?
By Zach Arnold | April 5, 2018
Conor McGregor channeled his inner Mike Tyson and attacked UFC vehicles transporting fighters for their UFC 223 event in Brooklyn.
Well, on the bright side… UFC 223 got publicity.
"This is the kind of thing bad boys do in sports," chimed Fox Sports social media honcho Jason McIntyre.
Now we have Fox Sports, UFC TV partner, debating whether Conor McGregor's Brooklyn attack is worse than Malice at the Palace. MatP was considered the NBA's darkest moment even though sports fans react to it as strongly today as they did when the incident actually happened.
"He has really burnished a brand as a thug," Jason Whitlock claimed. "Can't live with him, can't live without him."
Four months ago, people were worried about Conor McGregor's safety after a reported bar brawl involving some powerful & organized individuals.
The TV angle
2018 means everything for UFC. The vulture/venture capitalists want their new television deal. There's a reason UFC went all-in on Brock Lesnar 24 hours ago. I think the water has largely been squeeze out of that sponge but I could be wrong.
The Conor McGregor situation inflamed an already delicate business situation into a crisis of confidence.
TV executives want stars. Jon Jones. Conor McGregor. Ronda… well… The stars are vanishing. Daniel Cormier will likely retire as the non-Jon Jones 205 champion. Stipe Miocic is slowly building his American profile. They're great fighters and I care about them. I'm not sure television executives are as enthused.
McGregor likely faces criminal charges and a suspension. He needs the UFC to stay active both in and out of the ring but does he need the money? Fighters always need money. UFC needs a television deal and all the money that comes with it. Are we headed for a separation?
Topics: Media, MMA, UFC, Zach Arnold | 11 Comments » | Permalink | Trackback |
Canelo Alvarez clenbuterol suspension: Why bother fighting in Nevada?
By Zach Arnold | April 3, 2018
The fight between Gennady Golovkin and Canelo Alvarez will be pushed back a few months due to Alvarez testing positive (twice) for clenbuterol.
The best MMA writer today, Iain Kidd, has a simple & accurate Bloody Elbow read on what likely went down.
The re-match will happen in a few months. The media and Golovkin's team will take their doping shots at Canelo to juice up interest. Always happens in these kinds of scenarios. The fighters and promoters will still make their money.
However, there are bigger questions to be asked now because of Nevada's actions to suspend Canelo Alvarez.
Why bother fighting in Nevada?
This is the big question now. If you're a top fighter, why do you need to fight for a WBC belt if the WBC is going to require you to go through third-party supplemental drug testing that the Nevada State Athletic Commission treats differently than by WADA/USADA standards for punishment?
Nevada's commission made it clear to third party drug testing operations to work with them and to go by certain guidelines. If this is Nevada's long-term policy, then the results of those tests must be treated exactly as they would be on a global stage.
Erik Magraken neatly explains Nevada's legal policy on mitigating circumstances regarding ingestion of contaminated products.
The end result of the Canelo Alvarez incident is the formulation of Nevada administrative case law where a positive test for clenbuterol is being adjudicated differently by a state athletic commission than it would be by an actual testing agency.
The tax breaks aren't worth Nevada's administrative headaches
You can fight in Texas or Florida and not pay state income tax. Television taxes are also relatively competitive.
Fights featuring the level of boxers like Gennady Golovkin do not require casinos to prop up for interest. You don't need to rely on sold shows.
Why are we stuck on Las Vegas? You can make your money elsewhere without as much interference, inconsistency, or incompetence. You can still do VADA testing as well.
Nevada doesn't have the prestige that it once had. Motives are constantly questioned. The state's athletic commission is no longer attached to general funding. How is it any different than other garden variety administrative agencies? The power of the purse gives promoters much better options inside and outside of America to produce fights. Better deals are to be made outside of Nevada in 2018.
Topics: Boxing, Media, Zach Arnold | 4 Comments » | Permalink | Trackback |
Pre-suading the public for full blown WWE/Fox Sports, UFC/Amazon marriages
By Zach Arnold | February 28, 2018
It doesn't take a genius to see how the following two stories are interconnected:
- Fox Sports suits, "Booger Eater" Colin Cowherd appear at WWE Smackdown in Los Angeles
- Amazon obtains rights to sell UFC PPVs in the United States
I hate to say I told you so. OK, no I don't. About a marriage between Amazon and UFC? I think it's a great business move by all parties involved.
I also think a marriage between Vince McMahon and Rupert Murdoch makes great sense for 2019. I still believe that we will eventually get a deal between UFC & Fox Sports but it will be a slimmed down agreement with more exposure on Amazon to hedge the bets. UFC helped launch Fox Sports 1 but FS1 is a treadmill channel — running a lot but heading nowhere. It needs weekly WWE programming. You can do weekly WWE. Weekly UFC is a killer.
All of this news sounds good to me. The return of Brock Lesnar to UFC? Boring, but predictable. WWE got Ronda Rousey. Conor McGregor learned his true marketing value.
Jon Jones sabotaged his career and continues to demonstrate that he has learned nothing. California did the minimum they could do but you can't rip the athletic commission too hard because it's really the UFC's call as to whether or not USADA will finish the job. Even TMZ Sports was dumping on Jon Jones yesterday. I felt bad watching Howard Jacobs, the attorney for Jon Jones, at Tuesday's AC meeting. It was like watching Ben Brafman deal with Martin Shkreli in public. How many more bites out of the apple can you get? UFC can't build their business plan around Jon Jones any more. It's time for fresh media deals to build a new group of aces.
Topics: CSAC, Media, MMA, Pro-Wrestling, UFC, WWE, Zach Arnold | 3 Comments » | Permalink | Trackback |
When is paying yourself a crime? UFC's financial landscape after Fertitta family ownership
By Zach Arnold | January 25, 2018
Over the many years of covering UFC financing on Fight Opinion Radio, my trusty co-host Jeff Thaler and I noted that Lorenzo & Frank Fertitta had no problem paying themselves in many different ways from UFC.
One of the golden rules of running a business is never to forget to pay yourself. The problem is that many businesses, at least small-to-mid-sized businesses, don't make ends meets and owners take the haircut. The bigger the stakes, the more you are encouraged to not only pay yourself but… if you're smart… create as many companies as possible to profit off of the original operation. Why just pay yourself when you can pay yourself and pay vendors that you have ownership in?
That's what the old UFC ownership did. They paid themselves quite handsomely. On the surface, nobody has presented any facts to show that there was illegal activity involved in this process. If you can pay yourself twenty different ways and financial institutions are willing to continue backing you, then that's the system in place.
What happens when you get new ownership that has its own venture capitalists? Everyone wants to know who is getting paid what — especially when some of those investors are representing foreign governments in the form of retirement pensions.
You can squeeze out extra cash by analyzing the accounting. New ownership (WME) is paying itself a yearly fee of $25 million USD. They're getting cheaper when it comes to expenses.
When WME purchased UFC, I pondered if they would go the Bain (vulture) Capital route. The gamble was that the television landscape for sports TV rights would continue to explode. That gamble appears to be on really shaky ground right now:
Both numbers blow…. to think one company is asking $400 million a year for those poor numbers is kinda mind-blowing ….. FOX would be overpaying even at the current numbers…. https://t.co/YRw3UgDIgE
— Robert Joyner (@robnashville) January 23, 2018
Before Rupert Murdoch unloaded many of his sports TV assets to ESPN & Disney, I wrote an article at Bloody Elbow stating that Amazon would be UFC's best bet for a new television deal. In order to maximize such a deal, UFC needs to maintain some sort of presence with a broadcast network. Why? Take a look at the new ATSC 3.0 over-the-air USA TV standards coming in 2019. Ultra HD 4k 120 frames per second with complete internet integration. For free.
UFC needs Fox a lot more than Fox needs UFC. A combo marriage between Amazon and Fox Sports keeps UFC as a relevant American sport with room to grow internationally. Fight Pass needs a lot of help. The room to explode UFC's bottom line on merchandising clearly exists. You need the right players, especially if you are shifting away from a heavy-on-PPV business model to a volume programming model based on television fees.
The ratings for UFC go up and down. More positive than negative but everything is relative right now. $400 million USD a year from Fox Sports is not going to happen. UFC should pray to maintain their current deal with Fox Sports and make up for lost projections elsewhere. The last thing UFC needs is to get dumped by Rupert Murdoch in exchange for a reunion with Vince McMahon & WWE.
Topics: Media, MMA, UFC, Zach Arnold | 9 Comments » | Permalink | Trackback |
Some counterintuitive advice on making money in MMA media: build offline
By Zach Arnold | January 12, 2018
Semi-regular reminder the MMA media landscape is terrifying compared to just a couple years ago. Talking to people behind the scenes and it's a fight to not lose your budget/current staff, let alone hire someone new on.
— Brent Brookhouse (@brentbrookhouse) January 9, 2018
I have enormous sympathy for many of my long-standing colleagues in the media, past and present. I've had the great honor of meeting some very salt-of-the-Earth people who grinded out a living and found their dreams crushed by a dreaded pink slip. Some of us never even got that courtesy.
I grew up around the combat sports as a child, so money was never the primary motive. It was a cultural issue for me. That's what made the political blacklisting and backstabbing all the more frustrating. I had several high-profile opportunities spiked by powerful politicians and businessman.
I never anticipated making a steady income covering a massively corrupt industry. I never blamed those who had a dream and tried to make the impossible happen. Those who made a paycheck were the lucky ones. They were fortunate. I felt sorry for individuals who bought into the dream of covering combat sports as a sustainable career. A hard way to make a hard living.
The smartest media players were the ones who figured this out long in advance and tried to spin the publicity they gained into a different venture.
Over the last two decades, I've received numerous requests from young readers who wanted to build a career in the sports media landscape. I always gave an honest answer, one that often included a warning about a majority of writers having to survive on a stipend from a promoter or event benefactor. We were embroiled in debates about Fusion GPS-style payoffs long before the masses knew what a Fusion GPS was.
The future of the sports media landscape is in quicksand. Can you build any sort of career covering combat sports? Part of me is bullish and part of me is horribly bearish about the future of MMA writing.
Why bullish? If promoters and their friends aren't paying off as many writers as they used to, at least readers will get more honesty. The trade off is less access.
Why bearish? Where to start? The truth doesn't sell. Fights sell. Promotional work sells. How do you tell the truth about a fight business that's largely built on a con? Part of selling a con is having an inventory of stories to write and tell. Right now, there's not a lot of inventory to work with. We read the MMA sites daily. It's a chore just to read the content that is available. I tip my cap every day to the grinders at Bloody Elbow and Sherdog who really are working their asses to produce content that makes you think.
The biggest factor working against MMA media, besides a cold fight product, is social media. Social media is a vacuum that sucks up all the spotlight. The Silicon Valley barons created a system where everyone does the work for them to produce content, for free, and in such a mind-numbing way that it has wrecked the world's attention span. Forget trying to sell anything other than a 1,000 word article. 750 words may be pushing it.
How do you rebuild and reframe the structure of MMA media?
Go against the grain. Build a local and regional audience and then carry it over to an online platform.
Systems over goals, always.
Build a portfolio with multiple communication channels – snail mail, e-mail list, texting, web site. Avoid social media. Make your communication as direct with an audience as possible. Media is ultimately a relationships business.
Once you build your system, grind away at each part in equal measure. Constantly engage in A/B testing to see what gets more response, then reconfigure your communications model. Find out what subjects spark a fire locally and regionally. Hammer away on it. Once you build in-roads with an audience, you can expand your topic selection.
Be selective on who you build an audience with. Make sure your splits between insiders, well-to-do supporters, and common fans is balanced. Just because you make friends with a rich person doesn't mean they're going to spend any money on you. Rich people got rich for a reason and it isn't because they spend heavy money on media.
Have a portfolio of content you want to sell: media (articles/books), videos (including documentaries), merchandising.
Once you establish an audience and establish your communications system, connect and network with advertisers or advertising agencies. Rely on an expert. Many experts. Develop an audience that's majority female.
Follow this advice and you'll be ahead of where I am. If you can hustle more cash than I have without taking a handout from a promoter, you're a better person.
Topics: Media, MMA, Zach Arnold | 3 Comments » | Permalink | Trackback |
UFC is running out of time to make the marriage with Fox Sports last
By Zach Arnold | January 1, 2018
They've got one year left on the clock.
The good news for Dana White & Ari Emanuel is that Cris Cyborg remains the most complex and compelling female fighter over the last decade. The numbers for the UFC 219 PPV look to be very promising.
The bad news is that the successes for UFC are decreasing, not increasing, at a time when the television landscape is becoming brutally unforgiving in contract negotiations. Amazon is looking like a better option each and every day moving forward.
Take Cyborg's success for example. Cris Cyborg is succeeding entirely on her own merits and without much support from UFC. Every other word out of Dana White's mouth has been entirely negative about Cyborg and yet she remains a survivor in a women's MMA business that chews fighters up and spits them out.
Remember Georges St. Pierre? He came back for a fight at Madison Square Garden with Michael Bisping and won. Bisping got squashed weeks later in China by Kelvin Gastelum. And immediately after winning the MSG fight, Dana White was back to tearing down St. Pierre after popping a big number. Instead of talking about what big fight St. Pierre would be involved in next, Dana is back to the "does he or doesn't he?" retirement spiel.
The successes are being overshadowed by UFC's failures. The biggest success of 2017 for UFC was due to Floyd Mayweather.
Floyd Mayweather vs. Conor McGregor drew under 5 million PPV buys but still made all the parties involved an incredibly obscene profit. It was also the beta testing of a possible boxing marriage between Al Haymon and Dana White. Haymon's PBC needs a boost and UFC is looking for the right carrot to entice a television partner to bite on. Enter Zuffa Boxing.
Zuffa Boxing doesn't work without Al Haymon and the parties involved know it. Zuffa Boxing works with Al Haymon. It works in helping Fox Sports keep the PBC brand afloat. It works in possibly getting UFC fighters to sign dual sport contracts. From Al Haymon's point of view, Dana White can help him very much. But what about Floyd Mayweather? Floyd Mayweather doesn't need Dana White. That's why Floyd Mayweather is checking Dana White's claims in public.
Dana White says he's negotiating with Floyd Mayweather's team. Floyd Mayweather tells the public that he's not going to let Dana White use his name to build Zuffa Boxing. The false hope of Floyd Mayweather fighting under MMA rules. Floyd Mayweather believes he is telling the truth when he says that Dana White is using his name because of the current negotiations UFC is having with various television partners.
This smells like desperation. Why is UFC focusing so much energy on Zuffa Boxing? Lorenzo Fertitta would have never gotten this obsessed over creating a new business system. He would have focused entirely on rebuilding and reloading the UFC system. He would have focused on building a little bit more loyalty, real or fake, with top fighters. Eventually, this kind of constant politicking will catch up and erode UFC fan loyalty. Nobody is teflon. Not even the NFL. Rupert Murdoch just sold a heavy portion of his sports assets to Disney. ESPN has chosen to go with boxing and not MMA. Fox Sports 1 still is a roller coaster. At a time when discipline is most needed, UFC's behavior seemingly indicates that they are making it up as they go along. They may still win despite themselves.
Topics: Boxing, Media, MMA, UFC, Zach Arnold | 6 Comments » | Permalink | Trackback |


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By Robert Pucci
When you exit the parking lot you move back in time, into the nineteen century, to the days of the early Republic and the birth of the first art movement that the new country could call its own. While the democracy that was established in the United States was seen as progressive, the culture of the new republic was seen as purely derivative of European models, dependent on the decorative arts and literature imported from England and France. Copley may have impressed the British with his portraits while the French celebrated Franklin as a scientist and frontier sage, but American culture was not taken seriously. Thomas Cole changed that when he produced landscapes that represented the raw, untamed and uncivilized vistas north of New York City, by founding the Hudson River School of Art. The house beyond the parking lot is Cedar Grove, his home in Catskill, New York, a national historic site that celebrates his life and art.
Born in England, Cole migrated with his family to Ohio, at first. The young man was trained in textile design and absorbed the traditional visual arts of England. Moving to New York, he made a living engraving and painting portraits. Although entirely self-taught, he developed a talent, proficiency of technique and style that would place him far above the average limner, whose work we tend to define as folk art rather than fine art. One summer he escaped, as he described it, the bustle of the city to paint what one writer has called the "wilder image" of forests, mountains and streams of the Catskills. Settling in the town of Catskill, and establishing a summer studio in an outbuilding of a farm, he painted three views of the Hudson River valley. His two views of Cold Spring and one view of the Catskills were displayed in the window of a bookshop where they caught the attention and admiration of John Trumbull. A Revolutionary War veteran and painter of historic subjects, Mr. Trumbull and a patron from Hartford named Wadsworth, would establish the Athenaeum there that bears his name.
Encouraged and buoyed by their support, Cole returned to Catskill and continued to paint the vistas of creeks, forests and mountains in his favored pinks, purples and lush greens. He admired the rough and uncivilized landscapes that he found there. In painting these vistas he established a new standard for a genre that had been bogged down in classical rules. The trees would not curve gently in the picture plane but be bent, some broken, while the rocks would be craggy and un-sculpted. Signs of human habitation would be limited to the occasional Native American, hiker or artist making their cameos to suggest the grandeur of the scale found in the environment. Cole also felt that he was documenting a disappearing natural legacy. He bemoaned the loggers who were harvesting trees or settlers who were building farms and villages that despoiled the virgin frontier.
Gaining fame he traveled to Europe and soaked up influences from the British masters Constable, who's romantic depictions of the countryside and its ruins would influence Cole's later work (where a ruined tower might often make an appearance) and Turner, who impressed Cole with his bold and dramatic compositions and use of color. In addition to documenting the landscapes he saw in Europe, Cole evolved beyond the wilder images of the Catskills to allegorical painting. In a famous series of four paintings he charted the rise and fall of an empire. He in turn influenced painters like Frederic Church, whose country home Olana is perched on a hill directly opposite the Cole site and presents an opulent contrast to the rather modest farm house that Cole called home.
On a very warm and humid day, with the Catskills slightly obscured by haze, I joined visitors who made the pilgrimage to the birthplace of the Hudson River School of Art. I had visited the site before and I was pleasantly surprised by the vast improvements that have been made there. Under the direction of Betsy Jacks, the Executive Director of the site who, over a 15 year tenure with her able staff, knowledgeable volunteers, strong and active board of directors, has transformed the site into a state-of-the-art 21st century museum experience.
The main house and old studio have been restored thanks to grants and fund-raising efforts. While the Cole site, is a national historic site the operating budget of Cedar Grove is raised entirely by the organization, and is only partially augmented by grants. The restoration efforts revealed original paint colors and finishes, including decorative friezes, that were painted by Cole himself as he re-decorated the house in the late 1830's. One parlor of the house is set up as a small auditorium where a five minute orientation video is displayed on multiple screens disguised as paintings. In the video we hear the words of Cole and gain an understanding of his reverence for his subject matter and his love of the life and family he raised in this house. The other parlor displays artful photographic reproductions of some of Cole's most iconic works so that the contemporary visitor might gain a sense of what these paintings, now widely scattered around the museums of the world, might have looked like in situ to a visitor in the 1840's. There are also interactive technologies that enable visitors to experience Cole's correspondence and gain insight into his other pursuits in poetry, architecture and art theory. For he was, as many creative people were before our century of specialization, a Renaissance man.
The restored parlors on the first floor lead to a second floor where visitors might be surprised by the intrusion of the 21st century. This time it is not state of the art technology, but rather the works of contemporary artists in an exhibition entitled SPECTRUM, which features the works of eleven artists. Responding to a theme developed from Cole's theory of the use of color in his paintings, their works are bold, some abstract, some conceptual, but they all seem at home mingling with works by Cole and placed within the restored period rooms.
Cole was an architect as well as painter. He finished third in a competition for the design of the Ohio State House. The final structure which still stands incorporates many of the elements of Cole's design. In the 1840's he decided to build a new studio on his property. The result was a tall wooden box in a neo-gothic style with one large north facing window. The studio served as both a working and display space for Cole's works some of which were quite large in scale. Early in the 20th century the structure was razed, however, as part of the site's restoration efforts the original foundations were uncovered. Using Cole's drawings and plans, the studio was reconstructed and is now a museum quality gallery where world class shows about Cole and the Hudson River School originate and travel to other museums.
Currently there is an excellent example of the shows presented there entitled "Picturesque and Sublime: Thomas Cole's Trans-Atlantic Inheritance." It is an exhibition of prints, drawing and paintings that demonstrate how Cole was influenced by his travels to Europe and his encounters with artists and the landscapes of the old world. Partnering with Yale University, the show has many exquisite loans, including a large watercolor by Turner that was reframed for the exhibition. The installation is first rate and the catalog finely printed and handsome.
The last stop in the tour is a glimpse into Cole's working environment, as his old studio has been restored with his easels and tools. The spartan room is exposed brick and half timbered. There are easels, a drafting table, brushes along with a mortar and pestle that would have been used to grind raw materials down to make pigment for paints. The light from the north is cool and seemingly faint. But standing in the room one can imagine Cole returning from a two-day sojourn that might have started at the Catskill creek and progressed into the mountains where he would have collected sketches. Entering the studio we can see him preparing his colors and setting about roughing in a composition, progressing layer after layer until the sketches are transformed into large scale landscapes. In fact, many of Cole's most iconic works of art, including the Oxbow, were painted here.
Betsy Jacks is the spritely and energetic Executive Director of the Cole site. Sitting in her office, in a building across the street from the site, she talks about ambitious plans for the future of the site and tourism in the region. There is a proposed skyway project currently underway. It seeks to build a direct pedestrian path from the Thomas Cole site that would lead across the Rip Van Winkle Bridge ascending to Olana on the Columbia County side. This project would attract new tourists and also improve the experience of those who wish to take the Hudson River School of Art trail. Their brochure, with a map, guides you to sites actually painted by the artists of the school. Ms. Jacks describes the strides made by the site and is justifiably excited by the prospect of a project that might quadruple the number of visitors to the Cole site. She seem undaunted by the prospect of moving from perhaps 25 to 30 thousand visitors a years to a projected total of 100 thousand. According to Ms. Jacks these projections are based on the popularity of the Walkway Over the Hudson in Poughkeepsie. Will the Cole House be able to handle this increase?
The site has already developed some adaptive strategies. From being open only on weekends, the site is now open every day of the week, save for Mondays. Tours are available during the morning hours given by well-trained guides. But they quickly fill giving way to touring at your own pace in the afternoon. Plans are underway for improved access and fencing. In the meantime visitors can enjoy a relative serenity.
On the porch overlooking the Catskills, whose purple forms rise in the distance, one can share a vantage point that Cole often used as the basis of a painting. Today visitors are offered the opportunity to take a piece of paper and a pencil then sit for a while and sketch the mountains that captivated Cole. With autumn upon us, there is no better time to visit this gem to gain insight into our first great American art movement and the beauty that Cole saw outside his front door.