Affliction 2 Buyrate (Possibly) Between 150k-200k
by dropkick101 on Feb 5, 2009 10:36 AM EST
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PrintThere was a lot of talk involving the potential buyrate of Affliction: Day of Reckoning. Most gave the company little chance of success based on the fact that the show was sandwiched in between a hefty serving of Zuffa fight cards, among other things. While there are no official numbers yet, we do have some ballpark figures from those close to the company:
Published reports citing Golden Boy CEO Richard Schafer have put the figure between 150,000-200,000 buys, giving the promotion a low estimate--at $44.95 a pop--of between $6,742,500 and $8,990,000 in net revenue.
Atencio, citing his company's desire not to discuss money a la the UFC, put it this way: "We did 50% better than our last event."
Whether or not these numbers get the organization out of the red remains to be seen, but it is definitely positive information for Tom Atencio and friends. For the record, this writer said a few months back that the show could "potentially do 200k buys or more" and was verbally assaulted by many of the readers of this blog. With three UFC events in a row setting records, it looks like Affliction has been able to ride the growing success of MMA.
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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That would lead me to believe that UFC 94 numbers may not be near the 1 million mark.
"My job is a decision-making job, and as a result, I make a lot of decisions." --George W. Bush, The Decider, Lancaster, Pa., Oct. 3, 2007
He does realize....
That Affliction only gets about half of the PPV money right? Then u figure in Golden Boy’s cut and I’d be surprised if they made $3 million from it.
yeah, then you take out marketing costs and logistical costs of putting on an event, then add in concessions, advertisers/promotions, t-shirt sales, and you get a final number – and we don’t have that information. it would seem likely they still didn’t pull a profit, but they at least lost a bunch less than last time. any new business venture is going to lose money initially, you just want to minimize the loss so that you can continue operating to the point wher eyou can make it back. the question is whether affliction has lost too much. whatever the case, these numbers are still a good sign for them.
from same article:
But assuming the standard 40 percent take for promoters in a pay per view event and a 50 percent improvement from 100,000 buys, a low estimate for Afflction/Golden Boy’s pay per view take would be $2,697,000. Combined with total gate receipts of $1,429,557, the event could have produced $4,126,557 in gross revenue, excluding other sources like merchandising and sponsorships.
The total cost of the event is still unknown, although I’ve heard numbers ranging anywhere from $7-10 million. Regardless, even at the buy rates Affliction and Golden Boy are claiming, they still likely lost a great deal of money.
http://www.mmaconvert.com/2009/02/05/tom-atencio-on-ppv-we-did-50-better-than-our-last-event/
There a huge between $7 – $10 million. Why didn’t the writer just guess between $5 – $10 million than he would have a chance of being 99% correct.
Anyways here are the hard cost I’m sure I know:
$3.3 million Fighter Payroll
$2 million M-1 Global – $300k already paid to Fedor
$250k Arena rent
? Lighting effects
? Press Conferences . . . it doesn’ cost a lot to rent a banquet hall and fly fighters in
??? Advertising . . . anyone want to accuse Affliction for spending too much on advertising?
Anyways that’s $5.25 million in hard cost. I would guess with everything else they probably spent a total of $2 million more. They knew 200k in PPV was going to be the ceiling so I don’t see how they would over spend beyond on that.
He wasn’t guessing he was reporting the range he had heard.
Do you know that arena rent was $250K? How much does it cost to staff an event and pay all the non-fighters involved with Affliction? Taxes, fees and licensing expenses? Event prduction? TV production? Insurance cost? Golden Boy’s fee or percentage? Trump’s fee or percentage? Advertising (it might not of been enough but they did spend money)? Losses from cancelling Day of Reckoning the first time? There are all sorts of expenses to putting on a show.
Sorry, I was making fun of what he was reporting, $7-$10 million isn’t a revealing figure.
Arena cost are around $250k, I’m pretty solid on that figure. WNBA games and kid shows rent arenas which fill half way for very cheap tickets and still make buck.
Taxes, fees and licensing expenses. I’ve seen a couple figures before on licensing fees for other events the cost don’t run that high, nothing compared to these other expenses. Taxes are added onto the price of tickets at purchase and if you lose money on a venture their isn’t much of an income tax.
The rest of the items you mentioned get a bit confusing when talking Affliction and their deals. Part of the $2 million contract with M-1 Global is M-1 provides some of the staff, event production and commentators for TV. Affliction Clothing was using their staff to fill in the rest of the grunt labor. Also, part of the $250k arena cost pays staff who handle some of those duties.
Insurance, Golden Boy and Trumps percentage, who knows? Safe to assume they get a cut but there is only speculation as to whether they are or are not funding some of the costs for the event.
I know it’s a big range but just like everything else in this sport big ranges are all we ever get in terms of numbers.
Taxes will come out in numerous means, so who knows but it is an expense. I don’t think the license and fees are too much either although I don’t know if CSAC gets a percentage cut of the event like some other states do(I thought it was a 5% cut of ticket sales?).
As far as what M-1 supplies as far as personel, I can’t imagine the bring in too many people from overseas to work a event and I doubt they fly in any equipment at all, that would be very expensive in it’s own right. There is a heck of a lot that goes into production of a show of that size. I’m sure just the video side of things was extremely expensive to produce. The grunt labor isn’t an issue (most likely supplied by the arena) but the skilled labor would of been significant and there are a lot of people that work behind the scenes of a promotion that have to get paid too.
I don’t know what insurance rate they got but I’m pretty sure CSAC requires $50k of short term insurance on fighters for an event paid for by the promoter, that wouldn’t be negligable and doesn’t count any event or location insurance they would of taken out too.
Golden Boy and Trump’s involvement is the real question here and I’m sure we will never get a straight answer. Still I am sure Golden Boy was paid a significant fee for producing the event.
The press conference cost could be misleading, the way Affliction has them could add up over time, not to mention the cost of the employees who work these events. Stil I’m sure it was less than the money they wasted wrapping a whole NASCAR for example.
Whatever happened to...
Afflictions collapse?
http://www.bloodyelbow.com/2009/1/29/740362/affliction-is-done
Guess the rumor wasn’t true.
just because these numbers are an improvement over the last show doesn’t mean the company isnt going to shut down. i think thats still up in the air after they finish up the third show.
Can we wait until they actually schedule/book their next show before we declare them fully solvent?
by Derek Suboticki on Feb 5, 2009 5:24 PM EST up reply actions
I liked his predictions on Dropkicks old thread
I got a good laugh from his bullshit on that one
Gimme 1 Round!
This is definitely interesting and a bright spot for Affliction if true. However, I wouldn’t get overly excited over this report. Even if the PPV buys number is legit, they still have a cost structure issue, and there are several entities involved. All of which have to capture value from these shows.
Well, there last event did a liberal 85k buys.
So, 50% of that is 42.5k buys, which I’ll round up to 43k because I’m a swell guy and I hate fractions.
So, according to wacky earring guy, they did 128k buys this time around.
According to the most recent Wrestling Observer, Golden Boy receives 20% of the PPV revenues for renting the venue and handling the commission. That obviously comes out of Afflictions take of the PPV revenues. And let’s say they get 50% of the gross PPV revenues (which they don’t; it’s probably 40% or less, but for the sake of argument). After Golden Boy gets their 20% cut, Affliction get 30% of the PPV revenues. At $50 per buy at 128k buys, that works out to $1.92 million.
Then, there’s the live gate: $1.5million on 8k+ paid. Adding that to the unrealistically high PPV revenue, and Affliction grossed $3.42 million on their Day of Reckoning show.
We then take into consideration the payroll for Day of Reckoning, which a quick glance here shows as $4.6 million. So, we subtract the $4.6 million in payroll expenses from the gross revenues of $3.42 million, and Affliction ended up losing $1.18 million.
None of this takes into account ancillary revenues from the sales of t-shirts to the total reported attending audience of ~13k. But, I feel like if Affliction can make enough in revenues from t-shirt sales at an event with such little promotion and with such heavy papering that it would behoove them to forgo the promotion business and focus on selling shirts at UFC and other MMA events, where costs and workload would be reduced exponentially, making returns on shirt sales all the more favorable.
"BJ on the BE" - Kierkegaard
Also fees from HDNet (Undercard for North America), Bravo (U.K.), HBO Plus(Mexico and Latin America), and all those other companies that broadcasted the show.
Affliction, unlike the UFC, has other revenue coming into them (Buckle, etc), which makes it pretty tough to say how much they lost/gained from an event.
The Buckle is a flashy overpriced clothing store that puts up Affliction event posters in their store before PPV’s.
So is it more like Hot Topic or Nordstroms, both of which can probably be described in that way (posters aside) depending on who you are.
"BJ on the BE" - Kierkegaard
Affliction entertainment is paying The Buckle to advertise the show not the other way around. There is a difference between Affliction entertainment and Affliction clothing. What are these other revenue streams that Affliction entertainment has that Zuffa doesn’t?
Are they for sure getting rights fees from HDNet, Bravo, and HBO Plus, or is this a situation like The Ultimate Fighter on Spike where the promoter pays for everything and the network gets the pleasure of filling time with their product?
I’m not privy to the numbers, either way. Inform me.
"BJ on the BE" - Kierkegaard
I know HDNet for sure helps out any MMA org financially when they get broadcasting rights to their content.
Spike is a bit different than Bravo in the U.K. and HBO Plus, I believe, but not certain.
Well, we don’t know what financial contributions they are giving to Affliction at any rate. Maybe HDNet is just covering the production costs of Affliction events that air on their network and that’s it. That’s what they are going to be doing with Ring of Honor and I feel like they probably do the same with some of the smaller MMA promotions on HDNet because…I mean, why would you pay to broadcast some of those events?
"BJ on the BE" - Kierkegaard
UFC had to do that the first time around with Spike, typically all TV networks make the show carry the gamble on costs. Once good ratings come in, it’s the TV network that gets raked over the coals. I bet UFC is now sticking it to Spike . . . but Spike is willing to pay because their programming brings viewers.
Loretta Hunt reported 115k buys for Banned. Meltzer’s final report said it was about 100k. So going on those figures (the best we have), 50% more would be 150k-175k.
Nope, his most recent report was:
“The first event did about 100,000 buys, which was the best number for a non-UFC MMA event in history, but a major money loser for an event Atencio had previously said would need 250,000 buys to break even.” – Dave Meltzer
Argue not with the Smoog
He’s a real person that actually does comb the WWW for information. Not a ZUFFA employee sitting at a keyboard with a cup of coffee and a clipboard that tells him what points the company wants to drive home for that day.
Gimme 1 Round!
Golden Boy and Affliction are here to stay! This is a card that had to compete with 2 UFC events and a Marquee boxing fight right across town. If this event was able to generate 150-200k in PPV buys plus a substantial gate you can expect to see a hell of a lot more of Affliction FC. Lets face it the brain trust at Golden Boy are not dumb, they can see the massive growth of the UFC in the last 5 years and are making excellent headway with there own brand inside the first 2 shows. They’ll lose 15 million to in a year to make 50 million over 5. Theyre doing an excellent job of differentiation their brand from the UFC and are growing a substantial fan base.
YAMATO DAMASHII
No one should believe any numbers coming from Atencio and company, the first show got about 85k buys yet Tommy Boy continues to claim that is did well over 100k. Unless Meltzer backs up these claims i’m calling bs on anything that is said by anyone dealing with Affliction and so should everybody else.
"The first event did about 100,000 buys, which was the best number for a non-UFC MMA event in history, but a major money loser for an event Atencio had previously said would need 250,000 buys to break even." – Dave Meltzer
That estimate was for the first show. It’s my belief based on my own observations that they spent much more advertising the first show than DOR.
He also vastly understated, thinking he would set it low and then they’d hit it. They also weren’t giving away nearly as much of the buyrate money to others (showtime and goldenboy) for the first show. My impression is they are making about $14 per buy. Some have said it’s less, but we’ll use that number for the sake of math.
From what I understand under their rate normally they’d get 20, but at 20% to Goldenboy it brings it down to 16, and they are giving showtime a cut as well. In other words, given the fact that their “gate” was mostly bought themselves, they probably need closer to 390,000 buys to break even.
Total costs of this show (4.6m payroll) + major advertising campaign and other assorted costs have been estimated to me around 6.5 million. They sold (at the absolute best) 1 million of their gate, and I’ll give them that for the sake of this. At $14 per buy, they’d need 392,000 buys to break even. If they’re getting less than 14 it’s even worse.
And I should say I believe the people who tell me that the number is lower than 14. Showtime PPV access does not come cheaply.
Ouch.
Da ist keine Stelle, die dich nicht sieht.
by Eugene Schelfaut on Feb 6, 2009 1:33 PM EST up reply actions
No, it wasn’t. 7 days before the event, thousands of empty seats you could widely pick up in groups of 15. Then, overnight, a huge number disappeared. They were bought by Affliction. The gate was as legitimate as Enron’s accounting.
Correct, they had plenty of seats available in block sections to be purchased days prior to the event.
If the arena would have sold out they would have grossed under $3 million in live gate and above 14k tickets sold.
Prior to event they had sold around 40% of their tickets. Tickets were sold off one section at a time by ticket price range, explains why you could buy blocks of seats for each ticket level. 3-7 days prior to the event, there gate was around $1.3 million in sales: 55% of the floor sold, 50% lower deck sold and 30% upper deck sold.
According Kevin Iole they gave away around 3300 tickets which takes up the remaining floor/lower deck seats and part upper deck. Than they sold there remaining upper tier tickets for $39.99 the day of event to fill up arena to 13k attendees, 8900 paid. Which does put the gate around $1.5 million.
The $1 million dollars you hearing is how much money in tickets they gave way in that 3300 batch but they didn’t count those tickets as revenue in their gate report.
No, it’s not.
They did not sell 8900 tickets. Kevin Iole is just reporting CSAC numbers of comps. In addition to comps, just like for their first show, they purchased large blocks of tickets that go into the paid number, and then gave those away too.
He reported the ticket sales for Affliction Banned with number that CSAC said paid and the number that actually paid.
For DOR he just reported one figure because this time around they were the same.
The only difference is last time he had a source telling him it and this time he doesn’t. I don’t know anyone among MMA journalists or in the UFC or elsewhere that believes that paid figure is legitimate.
Affliction should absolutely get involved with strikeforce now, imo. Get Fedor a couple of easy fights on CBS an get him “out there”.
I don’t really need the UFC and 5 other promotions struggling to stay afloat. I would much rather have those shows work together and co-promote cards as “competition” to the UFC. get all the fighters under one big umbrella, etc. Sort of like EXC was doing, but in a successful, less scummy manner.
If you're not submitting, you're just rolling around with another guy.
Not if Cokers smart
Dana might let him on Showtime or maybe even on CBS. If they do anything involving Affliction they become a threat to be killed with fire
Gimme 1 Round!
They couldn’t afford to put Affliction’s big names on tv, Fedor alone would cost more than CBS is willing to shell out for entire events, the margins are going to be tight putting on shows with Strikeforce current talent. Strikeforce now has a decent tv contract but that doesn’t mean that they are all the sudden backed by a huge war chest of liquid funding.
Now Affliction doing like they did with EliteXC where they basically eat the cost of one match on the show would be another story but that probably would draw the UFC’s attention.
FIrst off we need to understand what revenue is…
Affliction doesn’t get the $45 so you can’t count that as revenue. The PPV companies get the money then they pay showtime which then pays golden boy and affliction.
Golden Boy is getting 20% of the $45…
Affliction’s REVENUE is about $11 per.
Now let’s move on to the ppv buys:
One high-level source said that Affliction’s pay-per-view did about 10 percent less than its inaugural show in July. The source said the first show finished with between 90,000 and 100,000 sales, while the second show did between 80,000 and 90,000
Source: http://sports.yahoo.com/mma/news?slug=ki-ufcbiz-013009&prov=yhoo&type=lgns
Further, Attencio, when pressed would not guarantee that there would be a third show:
The easy-going Atencio, who would not guarantee that Affliction would promote a third show after sustaining huge losses on the first two, agreed with White that MMA has yet to hit mainstream.
Source: http://sports.yahoo.com/mma/news?slug=ki-ufcbiz-013009&prov=yhoo&type=lgns
Affliction as you see it is done… and Zuffa will not be liquidating their liabilities…
The best bet for affliction is to assign their fighters to Strikeforce in return for their t-shirt business being a primary sponsor for strikeforce events.
This way they can actually get some sort of return for their expenses (advertising that actually gets eyeballs for their shirts) and help ensure an outlet for them in this market space – outside of Zuffa which they are blacklisted.
As for strikeforce:
Everyone knows the numbers…
With the TV deals, Strikeforce can run a national b-league profitably. Strikeforce doesn’t have 40m plus to burn like Elite did so unless they get another revenue source (afflitcion teaming up with them) they will not be challenging Zuffa for top tier fighters.
The conundrum with this:
Even though this will work on showtime it will not with CBS – because in order to make the numbers work on CBS you need a UFC PPV caliber card (and payroll)…
so either the CBS deal will eventually die out and they will just stick with Showtime or they will make their play challenge Zuffa.
The challenge here will be: getting to PPV and making it work fast enough – before you bleed dry.
We all know the numbers… if Zuffa wants to bleed Strikeforce dead – it can be done within 18 months and even earlier depending on how aggressive they get.
Now the Monte’s of the world will not be fighting the contract transfers because for Monte it’s more important that another viable option is their for all his fighters than to get Robbie Lawler a new contract with more money.
by mmalogic on Feb 6, 2009 7:25 PM EST reply actions 1 recs
My understanding is the CBS deal has been reworked. It’s still not good, but not the ultimate doom it once was.
If the Goldenboy number is actually 20% on the 45 dollars as opposed to 20% on the 20, that makes a huge difference which does push it to 11 per buy. That’s something worth finding out.
But yea, the conundrum as you put it is you have to give it all away just to get good enough ratings to survive, so how do you sell PPV shows? Need a much deeper roster of stars.
Well according to you, EVERYONE is a zuffa shill.
by iiowyn on Feb 6, 2009 8:41 PM EST up reply actions 1 recs
No
Only logic -
Subo is a fanboy
Cyph is beyond fanboy into ZUFFA lovechild
you’re a fan… New or old I can’t tell
Logic is the only person i’ve smelled shill off of.
Gimme 1 Round!
One problem with bleeding Strikeforce is they own their own arena. In addtion to what they make at the gate to offset their payroll they also keep the arena’s parking fees and money off concession stands which gives them an edge over other promoters. It’s near an extra $500k in revenue for a full arena.
The thing is, Zuffa can do it, they could get into a price war and make strikeforce pay way too much. But I don’t think they will. Not in their long term interests.
Zuffa would win a price war. However, avoiding a price war is exactly the reason they are so intent on crushing all other promotions off the bat.
Once they bump up the payroll for fighters there is no going back. The price of labor never does go back down without a huge skirmish, monopoly or no monopoly.
The big question in a possible price war scenario is how much sponsorship money the TV deals could get the fighters. Currently, other promotions have to bid much higher than Zuffa in order to match the greater sponsorship money that being on a UFC card can get for the fighters.
Zuffa doesnt need to get into a price war…
The current prices that are set would bleed Strikeforce dead.
Strikeforce can remain profitable and viable as a national b-league with these TV contracts.
This is not the time to challenge Zuffa… if they are smart they should just try their best and sacrifice the CBS ratings and worst case the time on CBS is gone. No worries as the meat here and most long term promise is the time on showtime.
Once Strikeforce gets it’s footing then it will be better prepared to deal with Zuffa.
by mmalogic on Feb 6, 2009 9:02 PM EST up reply actions 1 recs
Mark Cuban owns his own arena, has his own channel, and a ton of cash…
even he saw the futility of going up against Zuffa.
by mmalogic on Feb 6, 2009 9:04 PM EST up reply actions 1 recs
That is funny! Mark Cuban backed down, really?
Mark Cuban is the premier .dot business man. He starts a company, makes it show some promise than sells the business for an astronomical amount to some poor buyer who will never recoup that money.
Cuban isn’t the guy interested in wasting his resources building something slowly that may pay off in the long haul. Cuban’s business plan would be the 3 show Affliction model than ideally sell. He is great at it and uses the money for his hobby which are the Mavericks.
Do you not know that he had plans for putting on more than 6 shows in 08? Do you not know that after putting on one show – he then stopped and shelved it?
So now what pray tell is “backing down” if that’s not it?
by mmalogic on Feb 6, 2009 9:19 PM EST up reply actions 1 recs
His plan was to put on Randy vs Fedor fight which would have brought in big numbers. Using the favorable data he would have sold it for high profit.
HDNet fights has never put on another event and went totally with running other promotion’s events on the channel. Yes Mark Cuban wanted the Randy vs Fedor fight but that wasn’t the only thing he was trying to do, Cuban said he was going to break into the sport as a promoter but they haven’t done anything at all since.
The problem with the quote is who is Kevin’s high level source? He was quoting UFC management throughout the article so it suggests that Kevin’s high level source for Affliction’s business totals is also someone in UFC management who didn’t want that quote to go on record. They guy on record, Richard Schaefer was quoted at 175,000 – 200,000. Affliction stated 100k the first PPV, which did around 100k.
Golden Boy is getting 20% of the $45…
Affliction’s REVENUE is about $11 per.
I’m sure people are getting a piece of PPV total. However, you and Micheal Rome are lowering Affliction’s piece day by day and have yet to state how you know any of this.
Meltzer also reported his early estimates are way lower than Schaefer is saying.
We know that Goldenboy is getting 20, Dana is aware of the deal and Affliction has not denied it at all. The only question is whether the 20 is of Affliction’s cut, or if it’s 20% of the 45 and then eats into Affliction’s cut. I hope it’s the former.
and I should say I’m willing to buy the show doing 150-200. If 93 can do 320, why not? It’s still disastrous based on their model. You don’t get showtime and goldenboy for free.
Disastrous is the 55k in buys Pride recorded. 150-200k is below par but it still leaves the promotion on the fence.
success has to be measured in amount in v. amount out doesnt it? If strikeforce runs a show with a 1 million payroll and gets 100k, and Affliction spends 5 million to get 150k, isn’t it obvious that strikeforce is the more successful show?
by Michael Rome on Feb 6, 2009 8:21 PM EST up reply actions 1 recs
why? Afflictions costs were 3 times higher than prides…
Even if you believe attencio where buys were around 155k that’s only in line with pride’s cost to return ratio or worse.
by mmalogic on Feb 6, 2009 9:07 PM EST up reply actions 1 recs
There is one difference. A promotional company has a chance of cutting cost while keeping customers. Chances of gaining more customers while cutting costs is much more difficult which was the scenario Pride was in.
It only means the math in the industry changed…
whereas before a non-ufc promotion can do 50k now they can do 100k… only the cost of doing a show also went up from back then.
And the cost will continue to go up as the non-ufc promotion ppv draw goes up.
NOTHING HAS CHANGED.
by mmalogic on Feb 6, 2009 9:22 PM EST up reply actions 1 recs
The Day a non-UFC MMA show can do 250k buys… those are the days Zuffa’s current payroll will more than double.
No matter where the industry is… second place will never be profitable if you’re going up against Zuffa.
When pride did 50k the market space was such that UFC ppv averages were pretty low.
The Last 4 UFC ppv’s have spiked meaning the buyers in the market has increased so now you have an environment where non-ufc mma shows can possibly do 100k buys.
The problem is “inflation” (fighter pay) is controlled by Zuffa… so having a dollar today is not the same as having a dollar twenty years ago.
by mmalogic on Feb 6, 2009 9:28 PM EST up reply actions 1 recs
Could you pass along a link to Meltzer report. I haven’t seen anything from him regarding DOR. I know he has a private newsletter but any good tibit usually spreads around like wildfire.
The only quotes I’ve seen on buys are Iole column, Schaefer and the guy from MMAPayout (which accounts for nothing)
“Independent estimates have ranged from 80,000 to 120,000, which, to me, is still really good for a group with no television if they didn’t have their salary structure so out of whack.”
It is impressive to see respectable numbers from DOR. I guess some people had low expectations of the PPV and it appears to surpassed most people lackluster expectations. In the end it is in the best interest for MMA that Affliction does well. UFC shouldn’t be the only major organization on the block in my opinion.
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