Affliction MMA Events and Clothing Revenue

Listen: if it were true they could recoup all costs and these were great ads, they would be running all the time.

Realistically, Affliction is like a novelty act with 2 one off shows a year or so, maybe 3. They need to get their losses down by renegotiating. They will never compete with the UFC, but if they get some funding and structure right they can run 3 fun shows a year and provide us with enough entertainment.

Also, this analysis is problematic because it does not consider the opportunity costs. Yes, sales go up when they do their shows. I bet they used to go up a lot when UFC main eventers wore Affliction. Everything is comparative.

I don’t think Swift meant to take it that far. I think all he was trying to get at was simply the fact that rather than sponsoring other events, Affliction decided to produce and control their own events.

A key question that has yet to be answered is how separate is Affliction Entertainment from the t-shirt business itself. Is the aim really for marketing for the t-shirt business or are they really trying to compete with the UFC.

All signs have pointed towards their intention to really compete. At this point they are fighting a losing battle.

If the ploy is to be a marketing tool – I would likely deem it a failure because of exactly what Rome pointed out above – opportunity cost. With the money they spend on their own events – Affliction could likely be a major sponsor in the UFC and get much more exposure than they are currently getting (which in my mind is generally limited to the ‘hardcore’ MMA fan). Anyone who bought a Affliction Entertainment PPV has probably already made their mind up as to whether or not they buy Affliction T-shirts and they are already a loyal customer (if not they never will be).

They would gain far more exposure from advertising on UFC on Spike events. Or they would sign a crappy contract like they one Elite XC signed with CBS to give them maximum exposure but no method of making a profit (remembering the pitiful 500K EXC received for the CBS event makes me cringe).

The Red Bull comparison is more apt than people realize. Forget the NASCAR effort (which probably costs $20 million or so), they own TWO Formula One teams. We’re talking a combined annual budget of $570,000,000.

Affliction is after all a t-shirt company at the end of day, as Dana White loves to remind everyone, and ultimately any money they make on these MMA events is icing on the cake to the brand building they are accomplishing.

I just don’t see any revenue achieved from promotion as “icing on the cake.” I see it as much more important.

This is an interesting strategy I must say.

        I remember seeing some financial facts on Affliction and I was actually surprised how much $ they were making on their clothing apparel. If you can convince people to potentially buy a $40,$50 T-Shirt when the physical costs are minsicule ( I bet less than $1 made in China) you can make an insane profit.
        Ever bought an NFL jersey? They’re expensive as hell but why? Some synthetic material with a little paint is probably very cheap but the NFL has exclusive rights and can do what it wants. Fans want to own jerseys to better connect with their organizations and players so they are willing to shell out high value for a cheap product. By putting on live events it does enhance the legitimacy of their value even if it is expensive. The question I think everyone wants to know is:
      Does the $ of putting on a show with all of its logistics, organization, and commercial obstacles = the increase of $ of apparel by putting on their show?
I’ve always thought it was dumb of companies to shell out high $ just to put their logos on NASCAR cars but yet you can find 43 companies that do it. It seems dumb of Dupont ( a chemical manufacturing capacity) to sponsor Jeff Gordon but yet they do it. NASCAR fans don’t go out to buy more Dupont stuff but the intrinsic value of brand recognition outweighs the cost.
     I do hope Affliction sticks around because the monopolized structure just doesn’t work well in fighting in my opinion. If the NFL or MLB got to choose who got to fight for its title it would breed favoritism. So here is to you financial and marketing gurus at Affliction; I hope that you are right.

This is pretty much what the Yankees have done the past 5 or so years. They lose money each season in their net income with their payroll being so high and adding in the luxury taxing and revenue sharing…They knew that even though they were losing money, they were still putting the “best” players out on the field maintaining interest and buzz from the fans of New York. Now they have their new ballpark opening and signed the top-3 free agents and they just might make record revenue of $500 million…

You simply can’t point out the shows increase t-shirt sales without knowing the kind of increases they got when someone like Randy Couture wore Affliction in a major UFC main event. Without comparative data, you can’t say anything.

Losses for this show look like 3 million minimum, probably closer to 4 as I’m likely underestimating certain costs.

So the question is how do you really build any momentum with one show every 5 months? You don’t. It’s like starting over every time. I suspect they can peak around 150,000 buys, but there is no reason to believe Fedor-Barnett beats Fedor-Arlovski on PPV.

Bottom line is, they need some funding, and they also need to cut costs bigtime underneath. If they can pull that off they’ll be able to do 2 or 3 fun shows a year.

I made a post here… where is it???