Wrong Again? Affliction a Success on PPV
I'm not quite willing to admit its true -- I'll wait until Meltzer reports on the PPV numbers -- but all indications point toward Affliction's maiden event being a financial success. First, the gate nearly covered the enormous payroll. This is huge not just for the money, but also for creating an atmosphere of a big event for those watching live. But read the bit below -- Affliction may have bought almost 25% of those tickets itself.
More importantly, Affliction VP Tom Atencio is now claiming that they exceeded more than 100,000 PPV buys. That is great and combined with the strong gate could put Affliction in the black on their first event.
So far, that hasn’t occurred. Saturday’s show did a gate of nearly $2.1 million, though a source close to the situation said Affliction purchased $500,000 of those tickets itself. Affliction vice president Tom Atencio conceded the company did purchase a large number of the best seats for use for friends and family of the fighters and the company employees, as well as VIPs, but he would not confirm an amount.
But he said the pay-per-view results, which most analysts were expecting to come in around 75,000, was well better than expected.
“I don’t have everything on that yet, but for the people who felt this was going to be a total flop in that regard, I have news for them,” Atencio said. “It’s already done a lot better than what I’ve heard people speculating. I’m not going to release the (official) number, but it’s already well beyond what people have been saying. Well beyond.”
Atencio would only say the final number “definitely” would be beyond 100,000.
Despite what many BE readers think, I at least have been rooting for Affliction to be a success from the get-go. I also think the WAMMA belt is a promising development, even if they could be relevant in at most two divisions. And I even think there may be a place for the Muhammad Ali act in MMA.
Hopefully, I'll have some time to write up my thoughts on thse matters and more soon.
But one thing I'll say about Affliction -- they know how to put the fix in and score some PR victories. Buying that many tickets was a very smart bit of accounting trickery. Being a music geek, it makes me think of a certain Brian Epstein, manager of a young Liverpool group called the Beatles, who pressured his father's record store into ordering more than 10,000 of the obscure group's first single, thereby insuring they would at least break into the top 20. From there the group made it on its own. Maybe Affliction can do the same.
Also, if they made money on this first event, expect many fools to rush in to promote MMA. The single league model will not last.
Update: MMAPayout's Robert Joyner puts the numbers in perspective and points out that Affliction will still lose money on the event:
It is up to some debate how large a hardcore MMA fanbase there is to draw from in the US. A basement figure would be the 60,000 buys range that marked the high water PPV mark for Japanese promotion PrideFC in North America. The basement level for the UFC would seem to be in the 200k range, generally the level at which their B-show UK cards sell on PPV. A number somewhere in between would seem to be the sweet spot that represents a good starting point for a fledgling fight promotion, operating on a national level. Most prognosticators put the probable sales for Banned on the lower end of that spectrum, but that looks to have undersold the growth in popularity of MMA, not just UFC. Affliction’s mix of former Pride and UFC fighters may have struck a chord with this hard core audience, spurring buys.
Another possible reason for the increase could be the effectiveness of Affliction’s marketing. Affliction used some nontraditional avenues for their promotion of the Banned PPV, foremost among them their partnership with retailer Buckle. Buckle used very prominent window displays to advertise the show and offered discounted Affliction merchandise that pushed the PPV as well as giving away Affliction: Banned literature with each purchase with information on the card. With a national reach and a demo (18-34) that hits the sweet spot for MMA fans, the marketing efforts by Affliction with the retailer may have paid off. Another marketing effort not spoken of much prior to the card was significant local radio buys for the show, many in rock formats that the Affliction brand is popular with.
Even with a higher than expected number of PPV buys, the card is almost certain to come in in the red, a fact not lost on Atencio. Atencio can justify a money losing first card, but seems to be talking fiscal sanity as it relates to future cards:
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I would rather their be one dominant league. Its good Affliction was a success, it showed there is a market for MMA outside of UFC. I would rather not see MMA fall in the boxing category. But, I am not ready to say Affliction is a competitor to UFC just yet. They still need more than one show to be a success. UFC has been doing this for years. Affliction definitly has Dana White and the Fertittas attention, expect more serious counter efforts from UFC.
by The Bronzeville Bully on Jul 23, 2008 8:51 AM EDT 0 recs
One Question...
"I don’t have everything on that yet, but for the people who felt this was going to be a total flop in that regard, I have news for them,"
“I’m not going to release the (official) number”
How can he release the (official) number when he doesn’t have everything on it yet? Atencio is posturing IMO.
http://tharealness.wordpress.com/
by Tha Realness on Jul 23, 2008 8:54 AM EDT 0 recs
Good catch
I see that as well. Just release the numbers if they are so good. Why didn’t Donald Trump have the Apprentice team work on filling the seats with bodies?
by lovingmma25 on
Jul 23, 2008 10:00 AM EDT
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There looked to be a whole lot of bodies there. In any case, adjusting it with the expectation that the UFC actually sold every single ticket for other similar shows that its been compared to of late (somehow, its hard for me to believe that Anderson Silva keeps spending $600-1000 on floor seats for every event), they basically matched UFC 63.
by D.Capitated on
Jul 23, 2008 11:04 AM EDT
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Wow. I thought 50k was a ceiling. If this is true, well done Affliction.
by Mike Fagan on Jul 23, 2008 8:59 AM EDT 0 recs
If Affliction bought that many tickets, then the sudden sell-out makes a lot more sense. There were a ton of seats left a week to go.
As far as ppv buys go, I will wait until I hear something from an independant source.
Dana used to fib on ppv buys as well.
by Lynchman on Jul 23, 2008 9:31 AM EDT 0 recs
I'm so old
What is Buckle? I have never heard of it.
In any case, I hope they’re correct with their numbers. I’d really like to see Affliction’s MMA promotion stick around, even if I do hate their clothes.
by FRANKIE on Jul 23, 2008 9:58 AM EDT 0 recs
How 100k a sucess?
Atencio himself predicted at least 250k buys to break even. By that estimate, they lost 3 million (150k * 40 * .5). 250k is just to break even with payroll, let alone all the other miscellaneous stuff.
I wish Affliction the best, but they have to pare down the payroll. Pay twice as much, not four times as much as UFC!
by cyph on Jul 23, 2008 10:04 AM EDT 0 recs
He did predict it? Where? Saying that was the break even point and saying that it was what he expected are two different things.
by D.Capitated on
Jul 23, 2008 10:38 AM EDT
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You’re like my albatross. I don’t have the link, but Google it: “affliction 250k break even”
by cyph on
Jul 23, 2008 10:48 AM EDT
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I didn’t ask you when he said he needed it to break even. When did he say that was his expectation? Because I can’t find that.
by D.Capitated on
Jul 23, 2008 10:52 AM EDT
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IT was in
An article written either by Iole or Meltzer, but either way on Yahoo.
by Luke Thomas on
Jul 23, 2008 10:56 AM EDT
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Here’s what I see:
http://sports.yahoo.com/mma/news?slug=ki-affliction061208&prov=yhoo&type=lgns
I’m not seeing him predicting 250,000 buys, I’m just seeing a prediction of “success”, which is pretty open to interpretation.
by D.Capitated on
Jul 23, 2008 11:24 AM EDT
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That reads to me like they believe that they would break even by selling roughly that number of PPVs, not that it was an expectation that they were going to.
by D.Capitated on
Jul 23, 2008 11:34 AM EDT
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Everyone in business does, cyph. Why expect anything else?
by D.Capitated on
Jul 23, 2008 11:47 AM EDT
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More affliction news
http://www.fightsport.fr/modules.php?name=News&file=article&sid=784 according to this Fedor’s second fight with be with Arlovski… The text it is French but was translated by a Fan in another forum.
by asmiley420 on Jul 23, 2008 10:33 AM EDT 0 recs
Dear MMA fans and bloggers,
Since taking a basic accounting course is probably expecting too much, let’s learn just enough to stop saying dumb things so I don’t have to go over them after every event. Here’s some starting points:
- The “gate” number is revenue, not profit. They don’t get to keep anywhere near that amount, if only because the venue takes a big cut. Most musicians
- The “purse” isn’t all of their expenses. In this case it’s probably a larger percentage than most MMA shows, but there are still a million costs to deduct from that and the PPV buys. Marketing, salaries, production costs, materials, blah blah blah. It costs a fortune to put on a show like this.
- The “buys” are never a real number. We either get a rough estimate from the promoter, which is often a lie, or a made up figure from some supposed expert/insider that probably comes from the promoter and is thus a lie.
- Even if we had a real number, they don’t keep all of the PPV revenues either. Much of it goes to the individual cable companies as well as the distributor.
- Most importantly: We all knew that the purse numbers were a lie when they were announced. How many posts did it take us to forget that?
What else am I leaving out?
Don't believe a word I say, I don't train BJJ. -- TangleBones
by jemaleddin on Jul 23, 2008 10:40 AM EDT 2 recs
Shit. To finish my first bullet: Most musicians like to point out that they make almost nothing off of CDs and get their money from touring. But they should also point out that they make nothing off the ticket sales either: they get their money from T-shirts and other merchandise.
Don't believe a word I say, I don't train BJJ. -- TangleBones
by jemaleddin on
Jul 23, 2008 10:41 AM EDT
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Which is also why...
most musicians get burned out touring. You have to play show after show after show after show to make any scratch.
Contributing Editor - BloodyElbow.com - SBNation's mixed martial arts headquarters.
"The reason a lot of people do not recognize opportunity is because it usually goes around wearing overalls and looking like hard work." -- Thomas Edison
by brentbrookhouse on
Jul 23, 2008 10:43 AM EDT
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And you're right on every single point you made
Contributing Editor - BloodyElbow.com - SBNation's mixed martial arts headquarters.
"The reason a lot of people do not recognize opportunity is because it usually goes around wearing overalls and looking like hard work." -- Thomas Edison
by brentbrookhouse on
Jul 23, 2008 10:44 AM EDT
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EVER? Sweet.
Don't believe a word I say, I don't train BJJ. -- TangleBones
by jemaleddin on
Jul 23, 2008 11:48 AM EDT
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Yeah – this is why I’m not a touring musician. Also: lack of talent.
Don't believe a word I say, I don't train BJJ. -- TangleBones
by jemaleddin on
Jul 23, 2008 11:48 AM EDT
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Really?
I’ve always heard differently, this very recent Forbes articles says that musical acts get 65% to 70% of gate receipts as revenue (and this seems to be after management fees are taken out)
http://www.forbes.com/forbes/2003/0707/078_print.html
This New York Times article quotes 90% (second to last paragraph) I have always heard this. If event is guaranteed to have high attendance, (Affliction willing to buy a large percentage of tickets itself, probably qualifies) thus guaranteeing high concession sales (where the venue makes most its money) I would think Affliction should be able to negotiate for a high percentage.
http://www.nytimes.com/2008/07/12/arts/music/12tour.html
But the economics for the acts haven’t changed much: Most advisers try to get their acts to leave the show with up to 65% to 70% of ticket sales, then use half of that sum to pay off that night’s costs. Musicians also keep up to 50% of any merchandise sales from the show, which range from $5 per head at Billy Joel concerts-fans of the Piano Man apparently don’t need a $280 embroidered varsity jacket-to $15 at concerts featuring boy bands like ‘N Sync, whose prepubescent girl fans buy multiple posters, one for each member.
by BloodJunkie on
Jul 23, 2008 3:52 PM EDT
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Good links – very interesting.
I was thinking of the info I’ve gotten from overall discussions of the topic like Steve Albini’s classic, The Problem with Music. Comparing the kind of deals and situations that big-time stars get with small-time musicians or first-time event promoters may muddy the financial waters, eh?
Don't believe a word I say, I don't train BJJ. -- TangleBones
by jemaleddin on
Jul 24, 2008 1:00 PM EDT
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Also, this is just Tom’s opinion – he does not have the official numbers yet and says that he will not release the numbers. He is probably just saying this to put a twist in Dana’s boxers.
by lovingmma25 on
Jul 23, 2008 11:43 AM EDT
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This event is shrouded in mystery, lol. They disclose 3.3 mil in salaries, but we all know it is much higher than that. They announce a near sellout of a large arena, then we find that they may have purchased a large number of those tickets themselves, which would make a lot of sense considering they weren’t near selling out not long ago.
I’m sorry, but between salary, ppv cost, arena cost, promotion, insurance and all the other things, it will be extremely difficult to make money on this show. However, I don’t think they need to make money for it to be deemed a success. I would say if they come within a couple million of the break even point, that would be a fairly big success in their first time out.
People are way to focused on this being profitable, when they should be looking at keeping the losses minimal for the first couple of years, then becoming profitable.
I would say, if they broke 100k in ppv buys, that is pretty good. Now they need to get Randy/Fedor put together and build an amazing show around that fight to gain new viewers.
"The bigger the cushion, the sweeter the pushin'"
by BJJDenver on Jul 23, 2008 10:53 AM EDT 0 recs
exactly
The goal for Affliction with this show was to get a successful positive response from the fans. And I’d have to say they did:
1) They had an exciting night of fights that produced several highlight reel KO’s and some submissions.
2) Despite an uneven TV production, those seeing the event live thought it was a huge success. The arena FELT like it was hosting a major event, and it was.
3) They’ve managed to put out good spin on gate revenue and PPV numbers that will make the cable and arena industries interested in carrying/hosting future Affliction events.
4) They have multiple winners on contract for upcoming fights—Fedor/Arlovski or Barnett, Lindland/Belfort, Sobral/Nogeira are all intriguing big time matchups that will make the November card of interest.
by Kid Nate on
Jul 23, 2008 11:15 AM EDT
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Yes. While I was bored with most of the production, I feel it can be substantially better without much difficulty.
I was not overly excited about the way the fights played out, but seeing Fedor in an amazing performance and AA regain his exciting style, definitely left a better feeling at the end of the card. They absolutely have some intriguing match ups for the next couple of shows, if they choose to make them. I agree with all of your examples.
The ONE thing that sticks with me, is that people are talking about the show and are interested in how it plays out in the end. This was one of the biggest weekends in the sport’s history, and simply having their name attached to it, should propel them for a while at least.
"The bigger the cushion, the sweeter the pushin'"
by BJJDenver on
Jul 23, 2008 11:29 AM EDT
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To clarify, I was talking about people being interested in the business side of the story. i think people are truly intrigued at how this will play out and it is almost like we are all playing Fantasy MMA Promoter, lol.
"The bigger the cushion, the sweeter the pushin'"
by BJJDenver on
Jul 23, 2008 11:32 AM EDT
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I’ve had the overall costs (payroll, advertising, and everything else) estimated to be at $8-10m, closer to 10. This would not be a break even point. I also will not believe these numbers until we get a real figure, especially because they had the gall to announce that gate even though they paid for a quarter of it.
by Michael Rome on Jul 23, 2008 11:24 AM EDT 0 recs
Some guy from Affliction came by everyone in the press section and gave us completely fake attendance numbers to report on our show. He said “13,998 sold out.” Realistically, they sold closer to 8,000 tickets to fans. Even though CSAC technically announced it, everyone knows they don’t look into this kind of shit at all. They simply announce what gets sent to them.
by Michael Rome on
Jul 23, 2008 11:59 AM EDT
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Atencio has to know that mma fans are going to be very critical; that is why he is being very cautious about what information he releases.
by lovingmma25 on Jul 23, 2008 11:29 AM EDT 0 recs
Just some financial cold water here…With a payroll around 5 million, an ad campaign around 2-3, megadeath, building costs, staff, flights, legal counsel, and more, costs were quite high. At Affliction’s PPV rate, 100,000 buys + the amount of tickets they sold would make them about 3.2 million in revenue. The only unknown is shirts, though I highly doubt over a million in revenue on shirts. That would still leave them 5 million or so in the red on the show. I don’t think they brought a lot in on ads, just because they didn’t have any mega name sponsorts in the ring.
It was impossible to make money on this first show. If they really did 100k, that’s a lot better than expected. The UFC lost 2 million a show for a long time, if Affliction is willing to stick around they may be off to a promising start.
I’m not buying the numbers because he doesn’t have a final number yet. All he has is early buys and he is making a guess based on those.
by Michael Rome on Jul 23, 2008 12:04 PM EDT 1 recs
They need to think like a dot com
Oh sure, they might be losing 5 million on each show. But they’ll make it up on volume! :-)
Don't believe a word I say, I don't train BJJ. -- TangleBones
by jemaleddin on
Jul 23, 2008 1:53 PM EDT
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Yep.
Also, if your guesstimate’s are correct Michael…they’ll be roughly 15 million in the hole after 3 shows…give or take…Hmm
http://tharealness.wordpress.com/
by Tha Realness on Jul 23, 2008 12:10 PM EDT 0 recs
You can count the arena’s cut one of two ways too. Either you count the whole gate for affliction and subtract their cut as a cost, or just do that at the beginning. We don’t know the cut, but again without a proven history like the UFC it was probably substantial.
by Michael Rome on Jul 23, 2008 12:18 PM EDT 0 recs
The funny thing is…just last week Atencio was talking about running 3 shows and looking at where they were financially…basically saying that they knew they were gonna lose their ass on the first show etc…..now he’s talking like they did well beyond expectations? Nothing THAT dramatic is happening within a week to make THAT much of an improvement with the first show.
http://tharealness.wordpress.com/
by Tha Realness on Jul 23, 2008 12:25 PM EDT 0 recs
Maybe
he has signed Tito Ortiz and is banking on his power to pull in ppv buys.
by lovingmma25 on
Jul 23, 2008 12:28 PM EDT
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I really don’t think Tito is as big of PPV draw anymore…unless he’s matched up against someone well known or something
http://tharealness.wordpress.com/
by Tha Realness on Jul 23, 2008 12:42 PM EDT 0 recs
I believe that his last fight for the UFC did pull in large numbers and Dana has not released those numbers due to their hate for each other. I also believe that this Saturday when Spike plays that same fight card that most viewers that did not buy the ppv, will be tuning in to see Tito’s last fight in the UFC. This Saturday’s event on Spike TV may do better than the Silva vs. Irvin event. I think that whole fight card was awesome.
There is no doubt that he does bring in the ppv numbers. Frank Shamrock has stated that he and Tito will have a rematch sometime at the end of this year (or early 2009); that fight could be on the November Affliction card – we all know that would pull major buys. Babalu has called out Tito – that will pull ppv buys.
Of course this is all my speculations based on Trump’s prior comment about brining Tito to the Affliction organization.
One last comment on this is that I know Tito will demand more money than what Tim Sylvia made. Maybe Affliction was waiting to see how they would do the first time around before signing Tito.
by lovingmma25 on
Jul 23, 2008 12:51 PM EDT
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Tito’s still among the biggest names in the sport and commands more mainstream attention than virtually anyone other than, perhaps, Kimbo. Oscar De La Hoya hasn’t beaten anyone worth a crap in years (realistically, Mayorga was blessed to run into a guy like Vernon Forrest when he did), and yet he’s still the biggest PPV draw alive and fighting.
by D.Capitated on
Jul 23, 2008 1:00 PM EDT
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Normally I would say that the buys for TIto’s last fight were because of the Penn-Sherk excitement (and B.J.’s fans blew the roof off the place), but Tito had by far the second biggest crowd reaction of the night. The man is still relevant as a top level draw in mma, even if his skills aren’t.
by Day Man on
Jul 23, 2008 2:28 PM EDT
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Correct
Tito got the largest applause even in defeat. How often does that happen? Not very. Either way it goes – like him or not – Tito is a money maker for MMA.
If Affliction does make him an offer, does that mean Tito will be wearing their shirts? He pretty much only wears his Punishment line of clothing. Or maybe they’ll let him put an ad on the ring floor like he did for his last UFC fight.
by lovingmma25 on
Jul 23, 2008 2:46 PM EDT
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Yea, he would be VERY valuable for a smaller promotion. However, the question is whether he’s worth what he’ll demand. He would only be worth it if they scrapped the high salaries of a couple guys already on the roster to pay for him. Eliminating Sylvia and Lindland in exchange for Ortiz would be a smart business move.
by Michael Rome on Jul 23, 2008 1:02 PM EDT 0 recs
Smart business move is right
What hype can Sylvia and Lindland bring? None, Tito is really good at hyping up a fight and putting on an exciting fight, even if he’s getting beat up.
by lovingmma25 on
Jul 23, 2008 1:07 PM EDT
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Ding! We have a winner. Tito is free marketing. You would basically see him on every talk show and radio show that would have him, endlessly hyping up his fight (and himself).
I think his last contract with the UFC had him at a quarter million a fight. Unfortunately after seeing the Affliction payroll I don’t see him accepting less than 7 figures, well, because Sylvia got 800 grand.
I don’t see the UFC even offering what they used to pay him for him to come back and Elite XC isn’t built that way (building up your own talent? brilliant!).
I happen to agree with Rome that he would be an excellent get for Affliction if they can get rid of the crazy contracts for fighters who (while top level) add zero to the bottom line because they cared about outside of hardcore mma fans who were gonna buy the show anyway.
Affliction needs to stick to a simple formula: Top dollar for the people who bring in the PPV buys, slightly above UFC deals for young exciting fighters that they can build up within the organization that will eventually sell PPVs on their own.
by Day Man on
Jul 23, 2008 2:38 PM EDT
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Affliction is seriously screwed if Sylvia’s pay is used at each bargaining table. The Sylvia contract may well be the undoing of Affliction.
by cyph on
Jul 23, 2008 3:30 PM EDT
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WAMMA belt bad
How could Kid Nate think that the WAMMA belt would be a good thing. UM boxing anyone? And the ALI act? If it doesn’t work in boxing let’s not adopt it for MMA
by BrandedToKill on Jul 23, 2008 1:25 PM EDT 0 recs
Tito Ortiz probably actually is worth 4-5 times more in terms of revenue than Tim Sylvia.
by Michael Rome on Jul 23, 2008 3:38 PM EDT 0 recs
I'm Sure Affliction knows this...
The problem is so does Tito Ortiz and so does EliteXC Tito is no doubt looking to start a bidding war so he can get compensated accordingly.
by BloodJunkie on
Jul 23, 2008 3:56 PM EDT
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I would even say more than that after losing to Fedor. Most of his value was tied up in his UFC title runs and his legitimacy as a test for Fedor. Now that thats gone, hes just an unexciting (though extremely talented) fighter commanding almost as much money as an entire UFN card.
People buy PPVs because of Tito, I doubt you could find 100 people who don’t know him personally that would buy a PPV because Tim was in it.
by Day Man on
Jul 23, 2008 4:54 PM EDT
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Right. I guess my point is, if you could find a “Legend” Heavyweight for Tito to beat and build up a Tito/Fedor fight with some kind of television preview show, it would have the potential to do 300,000+ buys, even though we’d all know the charade.
by Michael Rome on Jul 23, 2008 7:40 PM EDT 0 recs
That would make the Sylvia/Emelianenko fight look competitive by comparison.
by Richard on
Jul 24, 2008 3:54 AM EDT
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