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Merchant Explains HBO Comments and A Look Into Afflictions Future

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Sherdog clarifies Merchant's comments:

Though Schaefer graciously called the situation a case of miscommunication, Merchant’s comments misled both sports’ masses.

"I know Larry and he is a nice guy and I’m sure he didn’t want to cause any issues," said Schaefer. "The fact is Oscar is now really ticked off, because Oscar didn’t make a penny, and, in fact, paid for his own expenses [to attend the show]."

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Merchant was later informed that Affliction was the actual promoter of the event and not just a sponsor courting De La Hoya as he had earlier ascertained from his conversation with Schaefer.

"… This is hard for someone with my experience to compute. When somebody says ‘$5 million sponsorship,’ I have a different interpretation," said Merchant. "This never even occurred to me that Affliction was the guys behind this and that Golden Boy was just putting its brand on it and was not taking any risk and would make money on the end. This is a whole new financial model from what I’ve known in boxing."

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Affliction Day Of Reckoning seems to have left a great impression on De La Hoya, and now it appears that Golden Boy is looking forward to Affliction's 3rd event.

"I actually saw Oscar later on that night and we compared notes," said Schaefer. "He was so excited. He said, ‘The atmosphere, the venue, the fights were all great fights –- it was just amazing. I’m an MMA fan.’"

Schaefer also said preliminary pay-per-view buy numbers look promising.

"When I saw them, I was very, very positively surprised. And so that looks very good," he said. "So, I think at the end of the day, Affliction is going to be able to recuperate most of their expenses."

Schaefer said himself and Binkow met Tuesday to begin initial plans for another event. Affliction Vice-President Tom Atencio said Saturday that the next show could take place in May or June.

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More hope for Affliction from MMAPayout regarding the Day of Reckoning Event and PPV buys:

Any chance that the card reaches solvency will be based on their PPV performance. MMAPayout.com has been made aware of rumors/reports from those within Affliction of strong pre-buy numbers that project a higher than generally expected final number, but all figures are way too preliminary at this point have any validity.

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In our report on the gate last night, we indicated that the buzz on the day of the event was that there were strong pre-sale numbers for the PPV and that using those numbers to project final PPV sales indicated a stronger than expected performance, one that would put Affliction in the ballpark of their break even point. Schaefer’s comments add some credence to that notion, if the numbers come in like they expect. Such an increase would be unexpected.

And Afflictions business side:

An item from the January 26th edition titled "Youth Will Be Served" focused on the success of youth-oriented retailer Buckle. The company posted a 13.5% year-over-year gain in same store sales for the month of December’s, a stunning success in the current environment. For some perspective retail heavyweights Macy’s, Gap, American Eagle, and Abercrombie & Fitch posted declines of 4%, 14%, 17%, and 24% respectively in the same month.

Buckle is one of Affliction’s closest retail partners and was previously featured on the canvas at Affliction’s first MMA event. The article credits Affliction Clothing and MEK Denim as two of the hottest brands that have made the store successful. In 2008 overall sales for Buckle rose 26% to $780 million. While all of that is not Affliction, the point is: they’re selling a lot of t-shirts. More importantly, the company believes that these events help sell those shirts. Large sales spikes have been reported around both of its events.

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So while Affliction may ultimately decide that its money is better spent outside of live event promotion, that decision will likely not rest entirely on the financial bottom line of the events themselves, but rather their contribution to the company’s overall finances, i.e. its clothing line.

Without understanding this essential difference between the company’s financial calculus and that of its chief competition (Zuffa) it is impossible to accurately and fairly evaluate the success or failure of the company’s promotional efforts.

\The FanPosts are solely the subjective opinions of Bloody Elbow readers and do not necessarily reflect the views of Bloody Elbow editors or staff.

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