Dollars and Sense - Potential UFC Super-Fight and Fighter's Union

After beating Carlos Condit in a bloody five round battle on November 17 at UFC 154 in Montreal, Georges St. Pierre had proven that he is unbeatable in the UFC’s welterweight division. That fight was St. Pierre’s first fight since tearing his ACL, and he still looked like his same dominant self especially when the fight went to the ground. 

Photo via latimes.com

So what is next for the 31 year old Canadian?

St. Pierre’s next fight could very well come in a super-fight against current middleweight champion Anderson Silva. St. Pierre and Silva are arguably the top two fighters in the world. Being that they come from different weight classes (St. Pierre is a 170 lb. welterweight while Silva is a 185 lb. middleweight), the fight would probably be fought as a catch-weight bout somewhere in between. The significance of that is there would not be a title on the line.

Even in the catch-weight scenario where there would be no title up for grabs, a fight between St. Pierre and Silva would be huge for the UFC. Though it’s just speculation, it would most likely break the UFC pay-per-view buys record currently held by UFC 100 (Lesnar vs. Mir) with an estimated 1.6 million buys. It would also have the potential to break the gate revenue and attendance held by UFC 129 (St. Pierre vs. Shields) with over $12 million in gate revenue and attendance over 55,000 at the Rogers Centre in Toronto. UFC President Dana White says that St. Pierre and Silva are the two biggest drawers.

Nothing official has come out yet, but the St. Pierre versus Silva super-fight scenario is worth monitoring going forward.

Information from www.mma-manifesto.com

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In individual sports, there is a constant chatter about a player’s union. However, because the players are less organized than team sports and individual sports take on more of a survival of the fittest mentality, the organization of a union becomes quite an involved process.

The rumors have swirled in the UFC about a fighter’s union, but early last week President Dana White squashed pretty much all of that. In an ESPN SportsNation chat White said, “It's going to be tough to see a day with Silva or GSP is giving up big chunks of their money to guys who won't make two fights in the UFC."

What White said makes complete sense. The UFC is very much a top heavy organization in terms of the top fighters earning the most money by far. It really doesn’t make any sense for the top guys to give up money for guys that will fight maybe one time and then be forgotten before they were even known.

It is also worth noting that Dana White is the one that negotiates contracts with the fighters for the UFC, so he can control where the money goes and who has it all.

The next UFC event will be UFC on Fox 5 on Saturday December 8 in Seattle where Benson Henderson will defend his lightweight title against Nate Diaz.

UFC 150 Preview

UFC 144 was highlighted by a fight for the UFC Lightweight title between reigning champion Frankie Edgar and Benson “Smooth” Henderson.  In a fight that won “Fight of the Night”, Henderson edged out Edger in a unanimous decision that could have gone in favor of either fighter.  Tomorrow is UFC 150 and the rematch between Edgar and Henderson except this time Henderson comes in holding the belt. 

Benson Henderson

Similar to UFC 144, UFC 150 will also boast a solid main card overall in addition to one of the biggest fights of the year.  Before Edgar and Henderson square off, we will see a battle between Donald “Cowboy” Cerrone and Melvin Guillard.  We will also see Jake Shields take on Ed Herman, while Yushin Okami will also see some action on the UFC 150 main fight card.

Donald Cerrone

UFC 150 will be held in Denver, CO in the Pepsi Center.  It will be a big change from the first fight between Edgar and Henderson when they fought in Saitama, Japan.  The crowd in Japan was around 20,000; a good showing for the UFC’s first appearance back in the country in almost 12 years (UFC 29 in 2000).  The Pepsi Center’s capacity is somewhere in the 20,000 range for the event that should be sold out by the time of fight night.

Pepsi Center UFC 150 set-up

Ticket prices for UFC 144 in Japan were relatively modest compared to similar fights in the United States.  Large UFC events in the States typically see minimum ticket prices in the $100 range while the tickets in Japan started around $70.  It is important to remember though that the UFC’s gate revenues are usually based more on venue size than anything.  The UFC has seen high enough demand to sell out almost all venues that they hold events in so venue capacity is a big factor.  However, the UFC is very selective in the venues that they hold events in.  High capacity arenas are not used too often by the UFC.

One of the biggest factors of success for the UFC main events is the Pay-Per-View buys.  UFC 144 was rather successful in terms of PPV buys with an estimated 375,000.  The rematch between Edgar and Henderson tomorrow should find its way to around that number although it will be a tough number to beat. 

Every time I watch a UFC event, I always marvel at the way sponsors are wrapped into the event.  When you look at the octagon, one of the first things that jump out to you is the sponsor logos on it.  It looks like the octagon was literally built for advertising.  Major companies like Anheuser-Busch and Harley Davidson seem to have found a place in the UFC.  Look for both of them to have a major presence around the ring tomorrow night.  Major movies like John Carter and Your Highness have found good sponsorship engagement with UFC events as well.  Also as controversial as the Armed Forces have been of late with their pulling of sponsors, they have stayed true to the UFC.  Could it be the passionate fan base and a better price than NASCAR?  I don’t think you can ignore it.

 

With the UFC growing (although I believe that the growth within the United States has leveled off a bit and will continue to until New York is a sanctioned state), I wonder how the fans react to all of the advertising.  In this case, I think about NASCAR.  Fans of both the UFC and NASCAR are used all of the ads and are passionate about their brands.  Are UFC fans as brand loyal as NASCAR fans?  I think only time will tell, but I do think that they can move into that territory at some point.  The UFC’s push to have bigger free events will certainly help their case on the advertising front. 

If you happen to catch the fight, you will also see some of the best social media integration in any sport.  UFC President Dana White has made it a point to have fighters reach out to fans in innovative and unique ways.  The social media strategy is not all to credit for UFC’s growth, but it is certainly helping a great deal.  If you tune in, be sure to take notice of how they work social media into their production of the event.

UFC 150 is sure to be a huge event.  For the top three fights I’ll take Shields to (barely) beat out Herman, Cerrone to out brawl the brawler Guillard, and… (get your Bruce Buffer voice ready) STILL THE UFC LIGHTWEIGHT CHAMPION OF THE WORLD… BENSON… SMOOTH… HENDERSON!!!

We will see all the action unfold tomorrow night with preliminary rounds split between Facebook and FX and the UFC 150 main card on PPV.  

Dollars & Sense - UFC 148 Recap

Chael Sonnen may be a world class mixed martial artist, but his mouth tends to steal the show more often than not.  UFC 148 was no different.  Sonnen’s fight with Anderson Silva was touted as one of the most anticipated fights in UFC history.  Anticipated being the key word. 

Chael’s mouth accomplished some impressive feats leading up to the fight.  It got the normally quiet and humble Anderson Silva to give a surprisingly quotable interview saying he was going to break Sonnen’s teeth.  It got Silva to throw a vicious and now infamous shoulder… at the weigh-ins.  It got Silva’s blood boiling so badly that the two didn’t even do the customary touching of gloves at the onset of the first round. 

Could Chael’s mouth finally have done some good for the fighter’s career in the octagon and throw the seldom-rattled Silva off his game?  Of course not.  Sonnen looked strong in the first round, probably taking it by a slight margin.  The second round was classic Silva.  About two minutes into the second round, referee Yves Lavigne stopped the fight after a dominating flurry of punches and knees.  Silva’s TKO of Sonnen proved that the only thing that may be able to stop Silva at this point is the 37 year olds age.

To give some credit to the American Gangster, Chael Sonnen has been able to point out two of Anderson Silva’s very few weaknesses in their two fights against each other.  1) Silva has the most trouble with wrestlers. It seems that if age doesn’t beat Silva first, a wrestler will.  2) It is possible to get under Silva’s skin (for better or worse).  Judging by the result of Saturday night’s fight, I wouldn’t advise the approach going forward. 

The Dollars

The difference between the appearance fees of the two fighters was a point that I found most interesting.  Naturally, Silva, the middleweight champion going into the fight, earned more than the challenger Chael Sonnen.  The disparity however, is what struck me as interesting.  Silva brought in $200,000 for showing up to the fight.  Sonnen’s contract seemed to be a bit more incentive laden with a $50,000 appearance fee and $50,000 bonus for winning the fight.  Of course, the $250,000 in appearance fees between the two pales in comparison to the reported $2.5 million that Tiger and Phil brought in at this weekend’s Greenbriar Classic (and they both missed the cut!). 

The total appearance fees between the main event fighters Silva and Sonnen weren't even the highest of the night.  Tito Ortiz and Forrest Griffin combined to bring in $375,000 in appearances fees for their battle and Tito Ortiz’s “final fight” ($250,000 went to Ortiz and $125,000 went to Griffin).  UFC 148 Fighter salary data is from mmajunkie.com.

The Sense

Within the past few years, UFC has been under some scrutiny from fans, fighters and the government from their relatively low fighter pay outs.  The business model that the UFC uses for paying their fighters is heavily structured around incentives.  Fighters fight for bonuses like Fight of the Night and KO of the Night.  Bonuses are typically capped around $70,000. 

The UFC will be an extremely interesting case study to follow into the future because they are blazing their own trail.  Mixed martial arts is most often compared to boxing, but that’s like comparing basketball and football because they are both played with balls.  Amazingly, the sport of mixed martial arts and the UFC are still growing in popularity.  However, with growing popularity of a sport comes growing popularity of fighters.  UFC is often complimented on its innovative social media strategies.  As fighters become more and more visible, there has to come a point that fighters want to capitalize big time on their popularity.  Appearance fees have to rise eventually.  I wonder, can the UFC business model absorb rising fighter dollar demands?

One thing is for sure, the UFC has put together an impressive global approach.  The top three fighters in the world are (arguably) Anderson Silva, Jon Jones, and Georges St. Pierre.  Their countries?  Brazil, USA, and Canada respectively.  Although Japan does not have a top fighter right now, the country loves the action just as much.  This diversity at the top levels makes global expansion a demand of the fans, not just a want of the UFC suits (would they be called suits? I’m pretty sure Dana White only wears sport coats). 

Going Forward

In boxing, a majority of the money is with the few top fighters in the world (let’s start a campaign Occupy Boxing).  In MMA, the money is dispersed relatively even.  Boxing and MMA are completely different in the respect that boxing is one perfected discipline, while MMA is a combination of disciplines.  I strongly believe that that inherent difference between boxing and MMA, is why the money will always stay relatively evenly dispersed.  Why?  It is tougher for one person to dominate long enough to make the type of name for them that would command $1 million plus appearance fees.  There are many more factors to success in mixed martial arts. 

Given the UFC’s global business approach, social media presence and their plethora of unique sponsorship/branding opportunities, the Zuffa-owned company is constantly growing.  Appearance fees for fighters will more than likely be growing in the next 3-5 years with the increasing visibility of the sport and personalities alike.  Even though there is the stiff competition that comes naturally to mixed martial arts, is that competition strong enough to retard the growth of fighter appearance fees so that the UFC can absorb the costs?  With the uniqueness of UFC’s product and the tremendous platform they provide in the sports business world, one would have to think so. 

Anderson Silva is one of the few fighters that have been able to build a big name for himself in the UFC.  He kept held onto his middleweight championship belt with a win over Chael Sonnen.  Keep in mind that Silva, possibly the best pound for pound fighter on the planet, did not even have the highest appearance fee of the UFC 148 fighters.  As the UFC evolves, the model for paying the fighters will evolve as well.  Right now the UFC uses contracts with heavy incentives.  When will the fighters’ cries for more guaranteed money be answered?  Only time will tell.

UFC 148 Business Notes

According to ESPN.com, UFC 148: Silva vs. Sonnen 2 grossed $6.5 in ticket sales which makes it the highest grossed UFC event at the MGM Grand Garden Arena and also puts the event among the top 35 boxing gross gates in the state of Nevada’s history. 

Another salary note, according to mmajunkie.com, Cung Le earned $150,000 for his appearance while his opponent, Patrick Cote earned $21,000 for his appearance with a $21,000 bonus for winning (he lost). 

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