The majority of people on this site have been overwhelmingly negative toward afflictions business model. I was on the fence, the salaries look to be huge and PPV buy rates not enough to capitalise the project. On the other hand I think UFC dominance will only last so long, affliction might crack the market or keep just about in the black and glean profit from increased t-shirt sales.

One fanpost has already discussed why it could, long term, be profitable for a affliction to take a large hit now, i.e. the promotions game is an aggressive marketing campaign.

mmapayout, in an article titled Affliction’s Day of Reckoning May Be Further Away Than Anticipated, expand on the point made by HonorableJudgeIto.

Out of the 125 million in annual sales the MMA brand alone accounts for about $25-35 million, that obviously does not include people buying t-shirts due to exposure at MMA events that are not part of afflictions MMA brand. The figure of t-shirt sales related to MMA is probably somewhat higher, but even sticking to this figure you are looking at around $10-14 million in profit from MMA. Added to this “the company believes that these events help sell those shirts. Large sales spikes have been reported around both of its events”.

This makes the loses forecasted by journalists and fans alike on events seem less danming.

With regard to fighter payroll, part of the wage surely covers the fact that they are draped in affliction apparel in the build up to the fight. Also, it may include a contract for a particular fighter’s line of t-shirts. To sponsor every fighter on a card would be quite a hefty bill. I know this is speculation, but is a logical conclusion to come to give the size of the fighter’s payroll.

With Golden Boy promotions and the Trumps involved the promotion gaining media attention and access to considerable business acumen. De La Hoya and Trump also provide a nice image booster, similar to the boost provided by putting an affliction t-shirt on “Rampage” Jackson. They are sponsored to make the company look good. When a fan sees Golden Boy a great promoter + Trump a great business man, they can trust the product being sold.

As a result of the 5 million comment by Larry Merchant we have got an even grater insight into the make up of GB’s relationship with affliction. See these articles for more details: mmajunkie and sherdog. This quote sums it up:

 “Affliction] in turn, he said, would then cover all expenses, including paying the purses of the fighters and marketing the event. Golden Boy’s end of the deal, Schaefer said, would be to run the operational side of things and arrange for licensing, handle the fighters’ medicals, book the venues and deal with the relevant state athletic commissions. Affliction Entertainment does not have a promoter’s license.

Golden Boy also promised to make De La Hoya available to help market and promote the events.”

On the bases of what I have been reading lately it looks as though there may be life in affliction yet. The deals with GB and Trump seem to make sense and articles on sherdog and mmapayout seem to indicate that PPV sales were stronger then expected, although it’s too early to say for sure. Schaefer states in the sherdog article that affliction have put up $5 million for the event. If you take away $500k they would have spent on sponsoring a similar event to this level and the $1.5 million live gate, this would mean they need to hit $3 million in PPV sales to break even. If the PPV provider takes 50%, that means about 130k buys. If the reports are true this would not be beyond the bounds of reason. I know my figures are very simple, but what they do show is that it would not be outlandish to claim that DOR, overall, has done enough business to warrant a third outing by affliction. I have also not factored t-shirt sales into the analysis, these could add substantially to profit. So maybe it’s not all doom and gloom in the land of gaudy t-shirts.

This is inspired by a previous fan post by Zack Gobie and a front page article by Michael Rome. I actually responded to Zack Gobie’s fan post with a point somewhat similar to this but as it was somewhat off topic, the same could be said for posting a comment on the Rome article, I decided to create a new fan post.

I would be interested in knowing all your views on the potential effects of these super fights (BJ-GSP, Mir-Lesnar, ect) on the MMA landscape long term? Obviously in the short term it means cash and publicity, both, by themselves, positives.

These massive fights may turn into a negative in the long run for the UFC and the sport. I feel there is a chance that fighters might out grow the brand and even the sport, like boxing at the moment (for example ODLH in the US, Hatton and Calzaghe in the UK etc).This could have a few long-term negative implications:

Mid tier fighters may find it hard to gain traction with fans as publicity will be overshadowed by larger fights
Fighters become too big for the UFC and demand greater freedom and start upsetting the applecart (wanting protection from certain fighters, more freedom with where they fight, fighting for the biggest money as opposed to the best competition and bigger pay checks which could prohibit a card having mid tear fighters for financial reasons)
Popularity in MMA overtakes the popularity of the UFC (only a negative for the UFC in my view).
Constant weight division jumping to create super fights between champions
Fights between popular fighters being marketed as important but having no relevance to a title or rankings overall.

Is the UFC growing the sport and fighters too quickly? Could they lose control of major fighters to upstarts the likes of WAMMA and Affliction that are willing to massage egos and overpay fighters? To give a hypothetical example, what if GSP could sell a PPV by himself? We would start seeing GSP vs a top 20 fighter for a "world championship" with no fights of note on the undercard as successful PPV. If this happens the UFC will have major competition in the future and may have to switch gears as a promoter to keep up. This will move the sport to a model similar to that of boxing, something I believe to be bad all round.

Is this just in the nature of capitalism or am I being too negative in my analysis? Will we all start sounding like elderly boxing enthusiasts in ten years time remembering the good old days? I personally don’t know what will happen. However, I think there could be negative implications to the sport growing to such a huge level. I’m playing devils advocate here, I have not heard this take on the popularity of the sport discussed before and I think it is a discussion worth having.

Saturday Night Fights may continue on CBS without influence from the ProElite management. It looks like CBS/Showtime can take complete control of the company due to a breach in the terms of ProElite’s loans.

Basically ProElite has nothing left CBS/Showtime now owns it all

Mmapayout broke this story, it’s bassed on a submission made by ProElite to the Securities and Exchange Commission

ProElite Violates Loan Terms, CBS/Showtime May Seek Remedy : MMAPayout.com: The Business of MMA

Summary of PROELITE, INC. - Yahoo! Finance

This may well not be the end of things for the EliteXC brand; however, Skalla and the jackasses that ran the company into the ground will surely be out.

“Standgate” may not be the reason CBS/Showtime pulled out of negotiations, they can pick up the organisation for nothing. <!-- / message -->