(Update – As of this morning Nickelodeon, MTV, VH1, Comedy Central and other cable channels owned by Viacom were taken off of DirecTV’s lineup early Wednesday morning, beginning a channel blackout that has angered viewers across the United States. In total 20 million homes lost access to Viacom’s channels)
DirectTV® subscribers might wake up tomorrow saying “I want my MTV”. DirectTV® and Viacom have been in negotiations and those negotiations came to a halt last night. DirectTV® claims they have made their final offer to Viacom and will be removing Viacom’s 22 channels (MTV, Spike TV, VH1, Comedy Central and Nickelodeon to name a few) at midnight tonight.
At the heart of negotiations is Viacom’s request for a 30% rate increase that would amount to over $1 billion dollars. Because of Viacom’s size they can bundle all of their channels into the negotiations. DirectTV® said, “You should be able to decide which Viacom channels you want and which you don’t.”
Viacom claims that DirectTV® subscribers have made Viacom the most watched programmer and accounted for 20% of all of its viewing. They also claim that they are only paid for 5% of the viewing and the increase is justified.
Wall Street has been talking about Viacom’s value being in decline. Cable and Satellite providers are under attack from streaming videos and Netflix. The ratings decline for networks like MTV and Nickelodeon it is creating a perfect storm for distributors to drop Viacom from its line up. A few years ago this would be unthinkable just based on Nickelodeon. UBS analyst John Janedis recently downgraded his rating on Viacom’s due to concerns related to ongoing ratings weakness. He wrote in his report: “We continue to think the concerns related to Netflix/Amazon viewing are overblown in the near-term, but from a content perspective, our sense is that returning series at MTV are under-performing, which will translate to further make-goods and a drag on ad growth in fiscal year 2013”.
Why is this important to MMA fans? The loss of DirectTV® hurts the expansion plans of Bellator, who is in partnership with Viacom. Partnership really mis-states the relationship. Viacom owns a large chunk of Bellator. Bellator can’t jump ship the way the UFC left Spike, they’re stuck until sold off. Bellator goes where Viacom goes.
Many thought the Viacom deal would allow Bellator to become the second largest American Mixed Martial Arts promotion. Suddenly Viacom itself is in danger of The Judgement by the market. With One FC’s ten year deal with ESPN STAR for Asian distribution and the DirectTV® Viacom deal hanging by a thread we may see One FC take the number two spot in the sport. Thinking that an Asian distribution deal doesn’t threaten Bellator’s North American position would be a mistake. The missing facts are: Victor Cui, CEO and owner of One FC, was at one time a senior director for ESPN STAR, and ESPN STAR is a 50-50 joint project between ESPN and Rupert Murdoch’s News Corp – the single largest media presence in North America, which includes, yes, FOX.
The House is gearing up for a battle over spending taxpayers money on sports sponsorship. The focus is on NASCAR but you cannot cut NASCAR without affecting all sports. The UFC recently inked a deal with the US Marines and many Mixed Martial Artists (“MMA”) have been sponsored by Military divisions. If the measure passes these expenditures would cease.
Republicans are divided over topics that usually unite them (spending cuts, military and NASCAR) and the Democrats are excited to have the distraction. At the heart of the battle is the $80 million dollars spent on sports sponsorships and the return on that investment. The proponents say $20 million a race is way too much. While supporters of the sponsorship programs, like Army National Guard Director Lt. Gen. William Ingram Jr. say “the program is effective. “ Without the draft, the Military needs to find ways to reach their target demographic.
There is no question that the Military’s target demographic is watching NASCAR and UFC type events. The in-content exposure is valuable and hard to miss. When marquee brands like Nike are cutting TV and Print spending by 40% in favor of Team and Event sponsorships it seems like an odd move by the House to pressure the Military in exactly the opposite direction.
As the US Marines learned with their UFC deal, there are other valuable sports properties that allow the Military to reach its target demographic and not spend $20 million per event. The model in play with the UFC makes a ton of sense for The Marines. The Marines are getting in-content branding on the most sought after sports property around. They get interaction with the athletes, digital placement on the UFC’s website and more.
Unlike NASCAR or other sports like Bull Riding, MMA also opens the door to real engagements with the target demographic. This engagement can go well beyond the recruiting phase too. We all have seen the UFC and Marine marketing program. The House should be looking at ways to get more for the expenditures. Ideas like:
MMA Athletes showing up during Basic Training to help during Combatives Training.
Military discounts on Merchandise and Tickets.
Armed Forces MMA Team – While on Active Duty the ability to train and compete at the amateur level (like they do with other sports like Boxing and Wrestling).
Veterans that were on the Armed Forces Team get immediate entry into TUF and their Pro card is paid for, in return they continue to represent their Branch of service. Guys like Brian Stann should be a sponsored athlete and a part of a program that helps transition the soldier athlete to a professional athlete.
Lifetime free entry in signature events like Grapplers Quest and NAGA for active Military and Veterans.
Ideas like those will only enhance the ROI. From a MMA perspective the price the Military allegedly spends on one race would fund all of the above programs for several years. Every service member will learn some form of hand to hand combat during their enlistment. There is no reason not to offer MMA as a Team Sport on the bases. The opportunity to enhance the return on investment has never been better.
The House needs to realize that it is less about how much they spend and more about how they spend it. If NASCAR has become too expensive then find other sport properties that reach the same demographic. If you can find sports like MMA that weave into the basic structure of current Military life then you can find others. You don’t have to spend $20,000,000 per race to reach your target demographic. You don’t have to kill off your marketing plans because one part of the plan has become too expensive. Just replace it. The sport of Mixed Martial Arts would welcome this budget and the branding would be dominant and active 24/7 like our Military.
Last night’s UFC on FX 4 main event was everything that the major brands want to avoid. There is not a lot of control during a fight. If a guy bites another guy’s ear off the world will be watching. If a guy flips off his opponent a few times on FX, the world will be watching.
The Marketing VP that tells me the sport is too violent and the athletes are too unpredictable was just proven right. The Marketing VP that was taking a “wait and see approach” is going to wait a little bit longer. It is bad enough that we have a champion calling on the Major Brands and a few weeks later show up on TMZ arrested for a DUI single car accident with women that are not his fiancee.
The baseline of this sport should be that it is a form of Martial Arts. You can promote a fight without tarnishing your brand or the value of the guy you are fighting. What did James Tooney call Randy Couture? Then Randy beat him up. So what does that make James? Trash talk is not about taking away from the athletes that compete, discounting those around you. It is about promoting yourself, building your brand and following.
Gray Maynard flipping off Clay Guida is about as far away from being a Martial Artist as you can get. In today’s connected world you cannot say you are one thing and be another. If you are the main event on a televised fight you need to carry yourself accordingly. There is a fine line between promoting a fight and losing your cool. The UFC releases athletes for sending stupid or inappropriate jokes on Twitter but is silent when a fight looks more like an episode of Jersey Shore than a UFC Main Event. The UFC should hand down some serious sanctions for this behavior, and FX should hand the UFC some serious sanctions.
Who is managing these athletes? Where is the training and education of what it means to build your own brand and respect the brand platforms that you are leveraging to build yours? Talking about Coors Light while standing on a Bud Light logo, getting DUI’s, flipping the bird on National TV, and ‘motorboating’ female journalists all hurt the sport’s growth potential. Anderson Silva is reportedly being paid $250,000 to work with Burger King in Brazil. How many Burger Kings are in Brazil vs the US? Yet there are no reports of any mainstream deals of this size for any US based Mixed Martial Artist. I can almost assure you that there won’t be anytime soon if our high profile athletes keep acting the way they are acting in and outside of the Octagon.
There will be enough people that will trash or try to diminish the opponents you face. Your role as a Martial Artist is to respect the sport and your opponents and to train hard to give yourself every advantage possible to win. The way you carry yourself will affect your earnings and the earnings of those that come after you. What do you want your legacy to be?
There has been a lot of talk about The Ultimate Fighter show and a lot of it has been kind of negative. If you look at the series with less angry eyes you will see that any show that can last 16 seasons is a successful series. NBC’s ‘Cheer’s’, one of the most successful series ever, ran 11 seasons. “The Ultimate Fighter’ (“TUF”) first aired in 2005 and is on its 7th year of being on Television going on its 16th season in the US and 2nd season Internationally. The show is now growing internationaly, in its second season in Brazil.
This got me thinking, many say the first season of TUF triggered the explosive growth that led many to claim MMA is one of the fastest growing sports in the US.. TUF and other UFC Televised fights were rating successes in the male 18-35 demographic. Marketers are still talking about how MMA is a hit with males 18-35 and by all indications growing in popularity amongst females in the same demographic. This is what the advertisers are focused on. This valuable demographic has a history of being “elusive” and has been since the early 2000’s. But it’s been seven years since the Boom of MMA, the ’18-35′ of 2005 is now ’25-42′. Who is focusing on the 25-42M demographic that helped kick start this sport? Or for that matter the early adopters of the sport: the 30-55 Male?
As the sport matures and the fan base increases within the core demographic, brands should not lose sight of the fans that helped create the early iconic brands of the sport. As we age (yeah I am one of them) so do our tastes. However we still like a lot of the same things we used to like. Most of us are passionate about the sport and that passion stands the test of time. We are the demographic that gave this sport its legs and made sure it was able to run.
Look no further than the American Express retirement commercials from the late 90’s and today to see how sophisticated brands are shifting their message. They have gone from showing gray haired grandparents quietly puttering in their flower gardens to ‘salt and pepper’ youthful looking, yet older people out in the world on adventures with sky diving, snorkeling and enjoying their retired life. American Express knows that different generations age differently and wish to be advertised to differently.
I recently turned 40 and I do not think I would wear many of the current MMA brands myself. I like my tee shirts and Chuck Taylors like most guys my age, but no foil, wings or skulls with swords in the eye sockets are going to look right at my kids parent teacher conference.
The MMA specific brands need to remember the people that bought the products that built 100 million dollar companies are getting older and we still have money to spend if you want to make products we can use. For every core demographic there are secondary demographics of younger and older fans. One thing that can’t be ignored is that these fans are getting older as the sport matures and branding and message should be adjusted to continue to reach them.
Below you will find a pretty interesting infographic that shows the habits of the Generation Y or Millennium Generation. Let us know if you agree or disagree.
If you missed it UFC Light Heavyweight Jon “Bones” Jones plead guilty to Driving While Intoxicated (DWI) today. For those of you that have never traveled to Canada you might not realize that a DWI is considered a “serious” offense. I praise Mr. Jones for taking responsibility and handling this matter as expeditiously as possible.
The effect of this conviction go beyond the sentence that will be handed down by the judge. As an example, if you are traveling to Canada, before you are allowed to enter the Country you will be asked “Have you ever been convicted of a crime?” When your answer is “yes”, you will likely be turned away. If you have been convicted of a DUI or DWI within the last ten years you will not be allowed entrance. According to the Canadian Criminal Code driving while impaired is a serious crime. The attitude is supported by most Canadian citizens.
The common person with a conviction may be considered rehabilitated “after” a certain period has expired from the completion of the sentence imposed. You must apply for rehabilitative status and demonstrate your rehabilitation. The usual post conviction waiting period is five years. After this five-year waiting period the person must submit the following documents:
- An application form IMM 1444E
- A passport size photograph
- A copy of your passport data pages
- An FBI police certificate
- A state police certificate
- Copies of court documents indicating the charge, section of law violated, the verdict, and sentencing
- Proof of completed sentences, paid fines, court costs, ordered treatments, etc.
- Copies of the text of the law describing the offence.
- Detailed explanation of the circumstances surrounding the offence
- Three letters of reference from responsible citizens.
- A non-refundable processing fee of $180 USD
Further information can be found at Citizenship and Immigration Canada’s webpages, Overcoming Criminal Inadmissibility and Overcoming Criminal Inadmissibility – Frequently Asked Questions.
It might be possible to get a temporary resident permit to enter Canada prior to rehabilitation, but this is up to the passport control officer’s discretion and requires a $200 (Canadian) fee. The temporary resident permit is meant to allow entry for exceptional circumstances, which would include reasons of national interest or on strong humanitarian or compassionate grounds, which a UFC event is not.
It remains to be seen how the Jones conviction will effect the UFC plans.
K-Swiss the parent company of Form is exiting the Mixed Martial Arts landscape. Form was one of the few companies that had a true endorsement model and activated around the athletes and sport. According to the companies Edgar filings they bought Form in 2010 for $1.6 million and lost about $3.7 million before tapping out.
From their public filing:
13. Form Athletics
On July 23, 2010, the Company entered into a Membership Interest Purchase Agreement (“Purchase Agreement”) with Form Athletics, LLC (“Form Athletics”) and its Members to purchase Form Athletics for $1,600,000 in cash. Form Athletics was established in January 2010 to design, develop and distribute apparel for mixed martial arts under the Form Athletics brand worldwide. The purchase of Form Athletics was part of an overall strategy to enter the action sports market, however, during the third quarter of 2011, the Company decided to no longer pursue operating in this line of business, as discussed below. Operations of Form Athletics have been accounted for and presented as a discontinued operation in the accompanying Consolidated Financial Statements.
Pursuant to the Purchase Agreement, the Company was obligated to pay additional cash consideration to certain Members of Form Athletics in an amount equal to Form Athletics’ EBITDA for the twelve months ended December 31, 2012 (“Form CPP”). The purchase price of $1,600,000 and the net present value of the initial estimate of the Form CPP was capitalized. The fair value of the Form CPP was determined each quarter based on the net present value of the current quarter’s projection of Form Athletics’ EBITDA for the twelve months ended December 31, 2012. Any subsequent changes to the Form CPP was recognized as interest income or interest expense during the applicable quarter.
The acquisition of Form Athletics was recorded as a 100% purchase and the Form CPP liability was recognized and accordingly, the results of operations of the acquired business were included in the Company’s Consolidated Financial Statements from the date of acquisition. A trademark asset totaling $3,150,000 and goodwill of $539,000, were recognized for the amount of the excess purchase price paid over fair market value of the net assets acquired. The amount of goodwill that was deductible for tax purposes was $507,000 and will be amortized over 15 years.
At July 23, 2010, the acquired assets and liabilities assumed in the purchase of Form Athletics was as follows (in thousands):
July 23, 2010
Contribution by K•Swiss Inc.
Total stockholders’ equity
Total liabilities and stockholders’ equity
Since Form Athletics began operating in early 2010, operating results prior to the Company’s purchase of Form Athletics were not significant and pro forma information was not materially different than what was reported on the Company’s Consolidated Financial Statements.
During the second quarter of 2011, after a review of sales, backlog, cash flows and marketing strategy, the Company determined that its investment in the Form Athletics goodwill and trademark was impaired and recognized impairment losses of $3,689,000 (see Note 5) and reversed the Form CPP liability of $2,110,000, which was recognized as interest income.
“ABSOLUTELY NO FIREARMS, AMMO, HUNTING OR KNIFE COMPANIES WILL BE PERMITTED AS SPONSORS IN ANY ZUFFA PROMOTED EVENTS.”
The announcement came down this morning, and some will say it’s just “Another way big bad Zuffa is screwing the fighters”. In reality, it won’t be long until there comes a day that no sponsors will be allowed. Why? Mainly because these companies are not “sponsors” per say. They are ambush marketing televised events. The athletes are paid based on the televised exposure not based on the athlete.
Our company has an athlete that is pro-firearm and has an endorsement deal with a small firearms training center. He is paid a monthly salary to endorse the brand and no logo placement is required. This is a true sponsorship to athlete relationship.
MMA is full of great athletes with amazing stories to tell. The UFC is providing them a platform like no one ever has. It is not what you do on that platform, it is what you do with that overall opportunity that matters. How much of the interest generated will you retain?
That is what managers need to be doing for the athletes they work for. They need to build platforms that enable them to sustain revenue and sell value to brands without the UFC exposure. You cannot guarantee the exposure in the UFC but you can guarantee leveraging the relationship and the exposure that may come.
For the most part MMA sponsorships are about logo placement on televised events. The athletes and brands rarely have a connection let alone an activation strategy. Aside from a few pre and post fight mentions there is not much (if any) activation. Even the biggest names depend more on discretionary bonuses than endorsement deals. They are making more because they are at the top. When they begin to descend it will be interesting to see how many actually end up with a brand of their own that they own and can create revenue from. Very few boxers ever converted their brand as an individual and MMA has a long way yet to create an Ali or Foreman.
It is not too late and these changes from Zuffa will only force the issue more. Stop just selling logos on shorts and start selling a brand building experience.
Jamey Jasta and Ingrained Media Partner Up to Help Promote the Hatewear Inc. Brand and the Release of the Album “JASTA” Through The Sport of MMA
Jamey Jasta and Ingrained Media Partner Up to Help Promote the Hatewear Inc. Brand and the Release of the Album “JASTA” Through The Sport of MMA
Promotion will include exposure at UFC 131, MFC 30, and a large scale Internet Marketing and Social Media Campaign.
Santa Barbara, CA (PRWEB) June 09, 2011
Jamey Jasta and Stillborn Records team up with Ingrained Media to help promote and revitalize the Hatewear Inc. Clothing Brand and promote the release of Jamey Jasta’s upcoming solo album “JASTA” which is set to be released on July 26th, 2011. Ingrained Media will secure promotional opportunities, coordinate and manage social media marketing, as well as managing other Internet based marketing campaigns through the sport of Mixed Martial Arts.
Jason Genet, President of Ingrained Media said, “We are pleased to be working with such an established artist and brands such as Jamey Jasta and Hatewear. Our team has already established a great game plan to help spread the word.” Genet continued, “Initial plans are as follows:
- Prime placement at UFC 131 on Shane Carwin’s Shorts and Banner announcing the release of Jamey Jasta’s album “JASTA” to be released July 26, 2011.
- Ad placement on over 100 Mixed Martial Arts Websites generating over 10 million impressions promoting the Hatewear Inc. Brand and the release of the “JASTA” album.
- Blogs and Exclusive Video from Shane Carwin & Brian Cobb promoting the relationship
- Prime placement at Maximum Fighting Championships 30 on Brian Cobb in the Co-Main Event Shorts, Shirt (Hatewear Brand Tee) and use of Jamey Jasta’s new single “The Fearless Must Endure” as the walk out song.
- Creation and Execution of a Custom Social Media Platform
- Search Engine Optimization and Internet Marketing
Jamey Jasta said, “It is exciting to partner with a like minded media company such as Ingrained Media. I believe that the Mixed Martial Arts community is the right step forward to expand the Hatewear Brand outside of the music community. I am a huge Mixed Martial Arts fan, so associating the Hatewear Clothing Brand with the Mixed Martial Arts lifestyle is a natural fit.”
The goal of the partnership is to re-introduce the Hatewear Brand to not only the masses but particularly the MMA market which has very similar ties to Metal music and the music industry in general. All of this will occur helping Jamey Jasta and his label increase their social media reach in connection with the release of the new “JASTA” album. “Not every MMA athlete that wears Hatewear will use Jasta’s music and vice-versa” said Genet. “For instance, the Shane Carwin Partnership is related to the release of the new album and not related to the Hatewear Inc. Brand and the Brian Cobb Hatewear deal has the album release, the music, and the Hatewear brand of clothing tied in.” concluded Genet.
About Jamey Jasta and Hatewear Inc.:
Jamey Jasta is an American musician from New Haven, Connecticut, best known as the lead vocalist of the Metalcore band Hatebreed and sludge metal band Kingdom of Sorrow. Jamey was the host of MTV2’s Headbangers’s Ball, a television program consisting of Heavy Metal music videos, for over 3 years.
Jamey Jasta owns Stillborn Records, a hardcore and metal-based record label from New Haven, and “metal music apparel” line called, Hatewear. Hatewear was once in all of the Hot Topics across the United States and Canada. In 2007, he presented the Metal Hammer Golden God awards. Jamey is the artist that wrote and recorded Andrei Arlovski’s walkout theme song, “Onward To Victory”, which can be found on Icepick’s Violent Epiphany release (Stillborn Records) and Electronic Arts MMA video game (2010). Jamey has just finished his solo album titled “JASTA” which is to be released July 26th, 2011. Learn more about Jamey Jasta at http://www.JameyJasta.com. Follow him on Twitter at http://www.twitter.com/JameyJasta and on Facebook at http://www.facebook.com/JastaHQ.
Hatewear Inc. was established in 2005 and continues to offer it’s metal music branded merchandise online and recently at various metal and rock music festivals such as Ozzfest, Rockstar Energy Drink Mayhem and UPRoar Festivals. Hatewear has been seen on such major networks as MTV, MTV2, VH1 and E! Entertainment’s Holly’s World. Follow Hatewear on Twitter at http://www.twitter.com/Hatewear and on Facebook athttp://www.facebook.com/HatewearInc.
About Ingrained Media:
Ingrained Media is a boutique marketing firm with a specialization in sports marketing. Unlike traditional agencies Ingrained Media offers a hybrid of services with a specialty on athlete development and social media marketing. Ingrained Media has been responsible for the development of both brand and athlete social media presences reaching hundreds of thousands of users on a daily basis. Ingrained Media also has a strong interest and specialty in the fields of Advertising, Promotions, and Public Relations. Learn more about Ingrained Media athttp://www.IngrainedMedia.com. Follow them on Twitter at http://www.twitter.com/IngrainedMedia and on Facebook at http://www.facebook.com/IngrainedMedia.
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(Disclaimer: Ingrained Media represents Athletes within the sport of Mixed Martial Arts. We have never done business with any of the companies listed below but certain members of our company have. Collectively these individuals made less then $1000 from their previous relationships with these companies. We have no current relationship with these companies.)
Media outlets ranging from The Wall Street Journal to all the top MMA websites have reported on the issuance of arrest warrants for several executives from the online gaming and poker sites such as Pokerstars.com and FullTiltPoker.com and that the government has shut down those URL’s . The Mixed Martial Arts industry claimed “It’s sponsors were shutdown” and one infamous agent said, “In the short-term, it will severely impact fighters’ sponsor revenue, which traditionally matched their show pay for our televised clients. I would venture to say the poker industry is equal to apparel industry as the No. 1 sponsor of fighters outside the UFC.”
We wanted to look into this situation and the billion dollar industry that will be impacted by these bans and the effects, if any, on the sport of MMA and the game of Poker..
A couple things that we need to make sure are clear: This is a US based ban that has a minimal impact on the overall international gaming market, and secondly, this is the US; these executives and companies are innocent until proven guilty.
The sponsors that the Mixed Martial Arts industry have been talking about are actually not the sites that have been taken down. The sponsor of the Mixed Martial Arts industry that is the most prominent is FullTiltPoker.net. The site that has been banned by the US Government is Fulltiltpoker.com. The difference is the .NET site is for entertainment and learning purposes and the .COM is the pay-for-play site. You would think that agent would know who his “number 2” sponsor is. That is, unless he did his deals with FullTiltPoker.com.
It is actually feasible to assume that the Full Tilt corporation will spend more in the US on its .NET presence since that is all they will be allowed to do. Many of the sites that are reporting on this story also earn income from the online gaming industry. I am not sure why or how they could misreport the information.
The Television lineup is still full of various cash poker games and anyone that can go to an Indian Reservation Casino or most of the Casinos in Las Vegas offer both electronic and live cash games. Many states have “poker rooms” that allow cash games and in houses across the US family and friends come together for friendly cash poker games. Poker is a game that dates back to the earliest settlers of this country. Poker is a part of America’s history and future.
Full Tilt Poker is on record saying:
“Dublin Ireland (April 15, 2011) – Full Tilt Poker is saddened by today’s charges against its CEO Raymond Bitar and offers its full support to Mr. Bitar and Nelson Burtnick.
Online poker is a game of skill enjoyed by tens of millions of people in the United States and across the world. And, Full Tilt Poker remains as committed as ever to preserving the rights of those players to play the game they love online.
Mr. Bitar and Full Tilt Poker believe online poker is legal – a position also taken by some of the best legal minds in the United States. Full Tilt Poker is, and has always been committed to preserving the integrity of the game and abiding by the law.
“I am surprised and disappointed by the government’s decision to bring these charges. I look forward to Mr. Burtnick’s and my exoneration”, said Mr. Bitar.
Unfortunately, as a result of this action, Full Tilt Poker has decided that it must suspend “real money” play in the United States until this case is resolved. However, Full Tilt Poker will continue to provide peer-to-peer online poker services outside of the United States.”
We tend to agree with Mr. Bitar’s claims. While we cannot reasonably or responsibly talk about the legal issues these 11 executives are facing, as we said they are innocent until proven guilty. What we do know is that many of the greatest legal minds contend that poker is a game of skill not chance and therefore not technically gambling. I love the game of poker myself. I have played on FullTiltPoker.net and we have a family tradition where we all gather over Thanksgiving and have a Texas Hold Em Tournament.
Online gambling and online poker just got a lot less convenient in the US. The courts are going to be forced to determine if online gambling and poker should be legal and if legal, who regulates the industry.
If you’re in the U.S., when you point your browser to any of those three gambling sites, you see a scary message: The U.S. government has seized the domain names of the three sites, preventing gambling transactions and anything else:
The Government claims that these businesses manipulated the banks in order to process these transactions (almost all of them conducted electronically) using wire transfers, credit cards and other means of commerce.
The problem gets a bit dicey when you realize that these three online gambling organizations are not based in the U.S. For instance, PokerStars’ headquarters is on the Isle of Man, a self-governed British Crown Dependency located in the Irish Sea between Great Britain and Ireland. Here is an image of their headquarters.
Even if the US Government wins the judgement there is no guarantee that the Isle of Man or the other host countries where these business’ operate and are based will comply with the US extradition request or asset seizure request. There is huge disagreement about the legality of online gambling. Not to mention the economic impact these small countries would feel if these large industries ceased to exist.
Are we supposed to believe the banks and credit card companies did not notice billions of dollars of transactions coming and going out of very small countries? Bank of America calls me if I use my card in a store that is outside of my normal shopping habits but they could not detect the billions heading to Ilse of Man or Costa Rica?
Since we are talking about US law and online gambling being illegal in the US, some questions obviously arise. The US Government is for the people, by the people, right? A recent poll of US citizens with over 3100 responses indicates the people are siding with the poker companies. 52% of those asked said online gambling should be legal and that it is a victimless crime, 33% said as long as it was regulated and only 15% said no. So 85% of the people polled feel as if online gambling should be legal and if we were asking them about poker only the percentage would be in the mid to high 90’s.
Last but surely not least, Full Tilt Poker specifically is just a platform. The laws that are being violated if online poker is illegal are being broken by the users of Full Tilt Poker, not the company itself. If the Government prevails in it’s case against Full Tilt and others, are the Internet providers who connect the users responsible? Or how about the poker table manufacturer? Full Tilt is not a wagering company or betting company. They are the virtual version of a Card Room; they merely provide a service to those who wish to test their skills against others for fun, prizes or money. It is duly regulated and licensed by the Alderney Gambling Control Commission.
The residents of the US seem to want to be able to play poker and gamble online and poker seems to be at its all time high in popularity. The few in opposition of the game and its legality should be reminded of Las Vegas. It was a relatively unregulated home to the Mob who handled and profited from the gambling industry. The US Government did not shut down Las Vegas, they cleaned it up and regulated it. The Mob was servicing millions of tourists (the voting public) and the Government found a way to keep them playing. Now Vegas represents a billion dollar industry.
For a company that has always found a way to brand itself (NSFW) in a industry valued in the billions we think the fight has just begun.
Or look at China. Some of Las Vegas’s biggest “whales” came from Asia and specifically China. China took a small island that had historically been plagued with prostitution and some of the lowest numbers trade jobs in the region. It has been transformed to a Chinese Las Vegas. Many of the same casinos located in Las Vegas have locations there. It has become extremely successful and transformed the economy of the region.
The law makers and media do not need to worry about the MMA athletes who are sponsored by websites still operating and very much in need of promotion. We need to ask our Senate and Congress to try to find a way to do what the majority of the people want and legalize poker and online gambling. Virtual gaming will help our economy and could create jobs here in the US if we found a way to embrace rather than erase this business.
We have been blessed to work with some amazing athletes and sponsors over the past few years. They both shared one thing in common, they gain exposure when they perform, and in that performance they have a 50% or greater chance to loose. Throughout this time in the sport of MMA, fighters complain that they do not earn enough and the sponsors claim to not be able to identify the return on investment (ROI) involved.
One of the big issues is that the athletes are usually too busy to market themselves correctly and do not have the right representation helping them find the time and tools to build their own fame outside of the events. The sponsors rarely activate the sponsorship and roll the dice on the event. Yet the athlete they are paying has little to no control over the event, if they show the sponsors logos or the very important walkout. Some brands have paid mid five-figures per fight to have their shirt worn during the walkout and post-fight coverage.
Many opportunities to engage the consumer and potential consumers are often missed or ignored and the activation is almost non-existent. The major promotions like the UFC regulate and restrict which sponsors are allowed and even charge the Brands a sponsorship participation fee. This fees can sometimes be in the mid to high five figures per year. They are not given anything that any other brand is given. You would think that this “tax” would increase the sponsors desire to get more for their investment. Instead it appears to have only reduced the amount the sponsors are willing to pay, made the sponsors focus more on if the event will be televised, and at the same time weeded out the small to medium apparel companies from the mix and removed their ability to support athletes. That is at least what they will have you believe. The fact is, many have just used this “tax” as a reason to leave the sport because they never developed an ROI.
We have brought in many non-endemic sponsors that are focused on the athletes and are willing to look at the events as “bonus” exposure while working with the athlete in a true endorsement fashion. One of the UFC’s major sponsors, Bud Light and it’s parent company, is arguably one of the largest Sports Marketing agencies in the world. They are also one of the most successful.
There is no missing the event involvement Bud Light has in place with the UFC. Their approach to their MMA Fight Team is less about big in-event placement on the athlete and instead more focused on outside the event endorsement. They use their athletes in their retail point of sale advertisements, use the athletes image and likeness in their bar and restaurant advertising, produce webisode series promoting the athletes and more. They make sure they ingrain their brand and athletes at every possible outlet and event. It may be argued that they provide equal or greater promotion of these athletes than the UFC does.
So what are some of the solutions? The first step is for the Brands to realize they are sponsoring and endorsing an athlete. They need to have a plan in place on how they are going to extract value from the sponsorship and utilize these athletes. Instead of looking at it as a billboard type logo placement it must instead be viewed as a relationship. They have to get beyond being a fan of the athlete because that will only lead to the most expensive Facebook photo in the world. Second, they need to activate around the athlete and his or her platform. Use the events these athlete’s participate in as spikes in exposure and capitalize on the ability the events have to engage the target consumer but do not make this the be all, end all effort. The athletes and their team need to make sure they have a platform to offer. The brands need to try to coordinate and cross promote whenever possible.
As you can see Wrangler does a great job with this. They offer a wide array of their shirts with various PRCA and PBR sponsor logos on the shirt along with their Wrangler logo. I know MMA has to get away from having seven competing fight brands on one tee shirt and shorts before they can offer this type of merchandise. As you will see in the slide show below it is not just Rodeo either, many sports employ this model. You are also not tied to using all of the brands as you see with the Wrangler shirt above.
Here is the Official NASCAR Team DuPont Jersey.
And here is a NASCAR fan wearing the same jersey.
Obviously there are no competing brands on this jersey but you see various brands showcased and the primary brand DuPont is prominent. The fans buy these jerseys for the same reason they buy NFL, NBA and MLB apparel because it is authentic looking.
I recently moved to the Central Coast of California and on any given day you see a slew of Cyclists riding through the hills, coast line, and throughout town. I started to notice the majority of them are wearing authentic team apparel. Either Radio Shack has started sponsoring every cyclist in the world or once again we are seeing fans and practitioners of the sport seeking authentic apparel. Here are some examples –
Here is the Team Radio Shack cycling uniform.
Here is the Team using the uniform
And once again here is a fan who has sought, purchased, and is proudly representing the brand in the exact same gear.
This is not really a sport specific phenomenon. The fact is NASCAR, NBA, Soccer, MLB, NFL, PBR, PRCA, Motocross, Indy Car and more derive a considerable amount of revenue from this type of merchandise. The brands exposure is extended beyond the athlete, the event, and the athlete’s platform and the marketing provided by the Brand. The exposure alone is a tangible return on the sponsors investment and having your brand worn by your target consumer or applied to your target consumers personal property becomes an extremely valuable proposition for the brands supporting these athletes and Teams.
The majority of the MMA industry is missing this market and opportunity. From the athletes to the brands no one seems to be making any replica merchandise. There is no doubt that there is a demand for these types of products. There is no doubt that in these tough economic times we need the sponsors to be more successful then ever before and at the same time find a way to extend the engagement beyond the events.
The managers and agents in the sport of MMA need to get out of the patch business and get into the brand building business. They need to build the brands of the athletes they represent and help guide the brands that support those athletes to successful and controllable engagements. If you are merely trading logos for dollars based on exposure you did not create you are on the path to failure for you and your clients.
The athletes need to look for ways to connect with the fans and extract value for the sacrifices made. Depending on events and televised exposure you can not and do not control is a recipe for disaster. You need to yourself or have other people helping you build your brand and increase your exposure even when you are not fighting.
Brock Lesnar’s sponsor Death Clutch has offered replica walk out tees in the past. They seem to be one of the few brands or athletes offering such items. In the past you used to be able to buy the Overeem Replica Fight shorts. The issue with fight shorts is that unless you can kick ass like The Reem you probably should not be wearing his shorts. It is kind of like showing up to your first BJJ class with 20 sponsors on your gi.
Here is the Death Clutch UFC 116 walk out tee:
We have had one client that fought 9 times and 3 of which were in the UFC and he had earned just under $100,000 for 3 years of work and 9 fights that he won, his MMA earnings were predicated on when or if he fought. The same client is now a millionaire based on competing 3 times over two years. He has months where he makes $50,000 and has consistently has earned a monthly income from his endeavors in and out of the Octagon. The difference has been focusing on building his brand and finding ways for his sponsors to earn their ROI. He has both endemic and non-endemic sponsors alike.
The authentic and replica tee shirts are a great opportunity to increase your brand, your sponsors branding, and your income as an athlete. You can go to any size event and you will see merchandise similar to what you see here and in our slide show. If the athletes do not create these then the brands should. Even the video games strive to ingrain authentic sponsors on the in-game characters on both the THQ and EA Sports MMA games.
This should not be ignored and it very well may be the lowest hanging fruit in the entire MMA market. If you trained would you wear replicas of your favorite fighters shorts or rash guard?
I am sure just about everyone in the US has seen that NASCAR fan who has their personal possessions or vehicles with logos from the brands that support their favorite athlete.
Here is a slide show that shows various sport jerseys and tee shirts and the fans that wear them. It is easy to see the potential market that is out there. A lot of these fans are cross over fans and are fans of many sports.
I what we would call a stroke of genius Kraft Foods decided to build a Social Network for the Cracker brand Triscuit. Right about now you are probably thinking who in the world would join a Cracker brand on a Social Network?
Home Based Farmers is who. Kraft research showed that there is a growing focus on eating better and organic and home gardening tends to be earning a lot of shelf space at the grocery stores today. The Cracker industry is no no longer just a battle between Ritz, Saltines and Triscuit. The Triscuit brad alone has at least 6 different varieties available at most grocery stores.
They also discovered that a lot of home based farmers are the same people responsible for going tot he grocery store and make the food purchases for the household. They wanted to engage with this consumer.
Kraft quietly launched homefarming.com, homefarming.com currently claims about 14,000 members. The site features information about recipes related to farming, as well as information on the “home farming movement,” which will be celebrated on April 12 a.k.a. Home Farming Day. The site contains some branding but is really focused on home farmers.
How do you sell a box of Crackers on a farming website? According to a rep for Kraft, Triscuit has sought over the past year to align itself with the “real food” concept. “The effort taps into the trend of people getting back to basics in a tough economic environment and wanting to grow their own food,” the rep says, adding that “it’s a perfect fit for Triscuit.”
Other brands are focusing on “healthier” foods and snacks all the way to Frito-Lay’s healthier potato chips. Triscuit is using it’s in store packaging to promote the social network. They recently rolled out over 4 million “home farming” Triscuit boxes. The brand intends to double that number this year.
We commend Triscuit for going against the grain and building their own social community. Many brands set up a Facebook account and call themselves socially integrated. Tricuit is connecting and engaging with 14,000 potential consumers who see Triscuit as providing them a useful toll. This same consumer likes rapidly flips past the Triscuit magazine ad and likely pay’s $5.00 a month for DVR functions that allow them to skip the Triscuit commercial that paid for the production of the magazine and television show.
Triscuit has always been my personal favorite cracker and now that I know about homefarming.com I have them in my top 10 of Brands that get Social Media. To put things in perspective when Wal-Mart (the worlds biggest retailer) attempted to do something similar it failed to even get over 5000 members. Our biggest niche social community is at 45,882 members, 33,727 blogs, 9,159 videos and 452,966 photos in just over 2 years time. Holy Unique Content Batman.
What this tells blog should tell you is that if you are listening to your target consumer you can engage them . You can effectively communicate with your potential consumers without some third party social platform in between you and your consumer.
We have seen fight after fight go the the wrong way. The Judges still use old fashioned score cards and need to tally the scores after the fight. This seems like an archaic approach to judging the fastest growing sport.
So it begs to question what is the solution? A lot of times a fighter may feel he is ahead on the score cards and try to fight conservatively in the final round. Could a solution like Rob Dyrdek’s Street League’s real-time scoring be the solution? The fighters know where they stand on the judges score cards as the fight progresses.
What about just using retired fighters or having a “certified” MMA judging program. The program would make sure that judges understood all aspects of Mixed Martial Arts and they all use the same judging criteria. This allows fighters and trainers to know exactly what is going to be scored.
MMA is such a unique sport where winning is a very important part of the sport. Forget about the fair weather nature of the typical MMA fan just take a look at the economics of the sport.
The typical MMA gym charges $80-$150 a month. This fee is merely the entry fee. You will need private lessons that can cost as much as $100 per session. You will need your supplement and meal program, your personal trainer, equipment and likely a standard gym membership to do your strength training These are all up front expenses.
THen you have find the time to train. This can consist of several training sessions a day at various locations. The average MMA athlete trains 4-6 hours a day 4-5 times a week.
All of the above is really just a small part of what it takes to get to the fight you agreed to take. You are only going to be paid if the fight happens. Most promoters pay a “show” and “win” bonus. So loosing a fight based on a bad judges call can affect 50% of the money the athlete earns.
In the NFL or Baseballt he bad calls by referees don’t cost the players 50% of their wages. They are paid to train and compete. MMA Athletes are independent athletes and the judges are costing them more then a win with these bad calls.