Bellator MMA Debuts on Paramount Network, Starts 8-Man Heavyweight Tournament

Bellator

Bellator MMA will debut tomorrow night on the newly rebranded Paramount Network (9p EST), opposite UFC 220 (PPV). Chael Sonnen and Quinton “Rampage” Jackson will headline Bellator 192. The fight will kick off the promotion’s Heavyweight Grand Prix (to span 2018), an 8-man single-elimination tournament that also includes Fedor Emelianenko, Frank Mir and Matt Mitrione. The card will also include a welterweight title fight between Rory MacDonald and Douglas Lima, as well as the professional debut of Khonry Gracie; the son of Royce Gracie, winner of UFC 1, who will be in his corner.

Howie Long-Short: Viacom (VIAB) owns a majority stake in the Bellator promotion, so it’s understandable that fights have resided on VIAB owned SpikeTV for a decade; but, I’m not sure why they’re bringing them over to the Paramount Network (other than the built-in audience). The company rebranded to draw on the cache of Paramount Pictures. It wants to be a home for “premium, original storytelling” (think: Netflix). I fail to see how mixed martial arts fits in with that image.

Fan Marino: The heavyweights will draw the casual fan, but MacDonald/Lima should be the best fight of the night (on this card). MacDonald, who lost in the 5th round to Robbie Lawler at UFC 189 and owns career wins over Tyrone Woodley and Nate Diaz, is in the prime of his career; while Lima, a 2x Bellator Welterweight Champion, has the most knockouts in the promotion’s history (8).

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Coca-Cola Extends Long-Standing Partnerships with NASCAR, International Speedway Corporation

Coke

Coca-Cola (KO) has extended partnerships with NASCAR and International Speedway Corporation (ISCA) through 2023, extending a 50-year association that has made the brand one of the “most recognized sponsors” in the sport. The integrated agreement means that KO will remain the “Official Soft Drink of NASCAR” and be the leading (non-alcoholic) pour of 21 NASCAR sanctioned race tracks (ISCA owns 12) for the 2018 season. In addition to pouring rights, KO’s immersive NASCAR marketing approach includes race entitlements (Coca-Cola 600, Coca-Cola 400) and the Coca-Cola Racing Family; a group of top drivers that make appearances and are featured in advertising, promotions and packaging.

Howie Long-Short: Back in early October, ISCA reported revenue for the quarter ending August 31st rose 2.2% (to $131.9 million), despite race attendance continuing to decline; with the hosting of non-traditional events, food, beverage & merchandise sales offsetting sagging ticket sales. The company has set 2017 revenue guidance at $660-$670 million; for comparison purposes, ISCA generated $661 million in 2016. The race track owner/manager will report 2017 full year earnings on January 25th.

Fan Marino: The Coca-Cola Racing Family includes 3 of the Top 11 in the Monster Energy NASCAR Cup Series standings; Denny Hamlin (6), Kyle Larson (8) and Austin Dillon (11). Prior to last season’s playoffs, I had a chance to sit down with Austin Dillon (a market buff) and talk to him about the personal stock portfolio he manages (i.e. not his retirement account). I asked him, if there was a trade you could take back; what would it be?

Dillon: I messed up on Tesla (TSLA), badly. I had it at $44. One of my engineers was like ‘it’s not going anywhere’ and I sold it (currently at $344). I had around 200 shares.

Fun Fact: Dillon played for the South-East team in the 2002 Little League World Series.

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UFC Heavyweight Champ on His Day Job, New Ad Campaign and a Fight with Joshua/Wilder

Modelo Stipe_19937+39.JPG

UFC heavyweight champion Stipe Miocic will defend his title tomorrow night (Jan. 20) against Francis Ngannou at UFC 220 (PPV). With a win, Miocic would break the UFC’s record for most successful heavyweight title defenses; becoming the most successful heavyweight of all time. Official UFC sponsor Modelo Especial recently announced a partnership with Miocic (the brand’s first with a UFC fighter) that will include a TV commercial airing later this year. JohnWallStreet got the opportunity to ask the champ a few questions about his day job, the new ad campaign and the title of “baddest man on the planet”, just days before the fight.

JWS: You work during the day as a part-time fire fighter. Is that a paying job?  Do you ever wonder if your time would be better spent training?

Stipe: It is a paying job, but I do it because I love helping people out and giving back to my community. I love Cleveland. That was a big reason why I partnered with Modelo; we share a strong sense of community and both value the fighting spirit in and outside of the Octagon. 

JWS: New UFC Sponsor Modelo highlights you in a new ad campaign. The campaign focuses on “blue-collar minded” individuals. Does that mean you aren’t in to all the cars, jewels, furs etc. that we see guys like McGregor or Tyson with?

Stipe: You could say that. Being able to partner with a brand that shares the same values in terms of hard work and giving back to the community was one of the big things that attracted me to working with Modelo. I get to tell my story as a firefighter, and more than just an athlete, and that’s an opportunity that doesn’t come around too often. 

JWS: You were an accomplished boxer growing up a part of the Golden Gloves program. I saw you challenged Anthony Joshua for title of “baddest man on planet.” Are you serious about pursuing a fight in the boxing ring with him or was that simply a fun idea trying to capitalize on the money Mayweather/McGregor got for their fight?

Stipe: Boxing was a big part of my upbringing. I would love to fight the winner of Joshua and Wilder, but all that matters to me right now is fighting this Saturday; after that, let’s talk. 

Howie Long-Short: Constellation Brands (STZ) acquired Grupo Modelo’s U.S. business from Anheuser-Busch InBev (BUD), back in 2013. Earlier this month, STZ reported Q3 ’17 profits increased 21% YOY (to $491.1 million), despite revenue falling .6% (to $1.8 billion). It wasn’t Modelo’s fault though, beer sales increased during the quarter; wine & spirits experienced revenue decline. Something to watch, the company recently acquired 9.9% of the marijuana company Canopy Growth (TSE: WEED).

Fan Marino: LeBron gets all the credit for bringing the Cleveland its first title since 1964, but Stipe beat him to it winning the UFC heavyweight title at UFC 198. I asked him if that bothered him (it would bother me, I’m petty).

Stipe: Not at all. The Cavs had me at a few of their playoff games and even at their victory parade back in 2016. I also met up with a bunch of those guys to cheer on the Indians in the World Series together. What Lebron has done for Cleveland, on and off the court, has been awesome to see and we’re both just trying to represent for our city. We share a mutual vision – for those to see the work we do in our community and inspire them to do better.

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New F1 Logo Likely Infringing on 3M Trademark

F1

The new F1 (FWONK) logo, created by Wieden & Kennedy (created Just Do It for NKE), may be infringing on a pan-European trademark (and potentially trademarks in 10 other countries) registered to 3M (MMM). The new logo representing a “race track”, looks eerily like the logo used by Futuro (compression tights) to represent a “stylized knee joint”. The purpose of the FWONK rebrand, which cost an estimated $1 million, was to create a logo that would be optimized for digital platforms and merchandising; with the intention of launching the new clothing line at the season opener in March, a plan that may now need to be altered. 3M has not yet opposed FWONK’s trademark registration, but is “looking in to this matter further.”

Howie Long-Short: 3M (formerly Minnesota Mining & Manufacturing Company) owns Scotch tape, Scotch-Brite and Post-It Notes (among others); and sells more than 55,000 products. In 2016, the company generated $30.1 billion in revenue; 17x what FWONK brought in. FWONK could pay MMM for the rights to continue using the logo, but that decision would likely draw pushback from the teams; as the expense would reduce their prize pool. Alternatively, FWONK could choose to use one of the other 2 logos it applied for trademarks on; or simply revert to the old logo (the fan choice).

Fan Marino: F1 fans may not love the new logo, but they should be excited about David Hill participating in the production of F1 race broadcasts. Hill “will oversee the graphics package and the way the race is televised”. Fans may not recognize Hill’s name, but if they watch the NFL on Fox they’ll recognize some of his work; including the score bug and first-down graphics. He’s also credited with launching Fox Sports, building the Fox Sports network of RSNs (recently sold to DIS) and won an Emmy for producing the 2011 World Series. Great hire!

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Marquee MLB Free-Agents Remain on Market, Whispers of Collusion

MLB2

Pitchers and catchers report in less than a month, but marquee free agents remain unsigned (see: Arrieta, Moustakas and Hosmer); and with just 51 players (includes just 13 position players) signed thus far this offseason, for a total of $655 million, whispers of collusion exist. Last week, executives from MLB and the MLBPA met to discuss the concerns; with MLB issuing the statement “there are a variety of factors that could explain the operation of the market. We can say that without a doubt collusion is not one of them.” That’s unlikely to sway the opinion of the MLBPA, which believes there is a template (which goes against the concept of free agency) for superstar player contracts; 3 years or $20 million plus annually, but not both.

Howie Long-Short: Franchise values have increased from $18.1 billion to $46.1 billion over the last 5 years and MLB will generate $10 billion in revenue this year, so it’s not like there isn’t money to pay the players; teams have just come to the realization that the money is better spent on younger, cheaper ones. As one league executive put it, “we pay players the minimum for three years and arbitration for three or four years, and then they get paid more in free agency for their decline?” Team’s wisely aren’t looking to reward past performance, they’re paying for future production. Is it collusion if everyone comes to the same intelligent decision?

Fan Marino: Sure, it’s likely that a handful of teams are saving for next off-season when Harper/Kershaw hit the market, and it’s true that star young players are signing under-market long-term deals (to guarantee their big payday); but, the rest of the proposed excuses for the cold-stove are nonsense. Teams aren’t waiting on Boras’ guys to sign, Ohtani and Stanton weren’t stalling the market, teams like the Yankees and Dodgers aren’t concerned about the luxury tax threshold and there isn’t a team owner in the league that doesn’t want to win (in the name of profits). The cold stove is a product of baseballs fundamentally flawed economic system (i.e. no floor on team spending). I suspect a strike is on the horizon; the current CBA expires following the 2021 season.

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Verizon Aims to Be the 1st Screen Consumers Go to Find Live Sports

Verizon

Verizon (VZ) and the NBA have announced a 2-year extension that will enable NBA “League Pass” subscribers to live-stream games on Yahoo (AABA) platforms and mobile devices. The new deal enables VZ to produce original NBA content (and distribute across Oath properties), gives VZ users (around the world) access to Yahoo’s NBA fantasy sports game and requires VZ to establish a technology fund that will experiment with new formats (i.e. augmented reality, virtual reality). The move comes just a month after VZ agreed to pay $2.25 billion (for 5 years) for non-exclusive rights to stream NFL games on Yahoo Sports, AOL and go90 (among Oath assets); following prior deals that give them rights to broadcast Liga MX and National Women’s Soccer League games across Yahoo platforms. VZ Chief Content Officer Brian Angiolet has said the company intends on being “the first screen consumers go to find live sports”.

Howie Long-Short: VZ acquired Yahoo last year with the intention of building its programming around sports. Why? “Sports is the best aggregator of an audience”; among the last television programs that viewers watch live. On the NBA side, this deal gives them access to a younger demographic (the mobile audience) and should help to drive engagement (if not viewership); VZ users spend 30 billion minutes on fantasy games/annually and theoretically would want to see how their roster performs. If DraftKings is making the pivot from DFS to sports betting, could other outlets with large fantasy player databases (see: Yahoo, ESPN) be far behind?

Fan Marino: “League Pass” offers NBA fans the ability to watch 1,100+ live out-of-market games for $99/season. You can try it out for free, as VZ is giving registered users 8 complimentary “League Pass” games; tremendous news for those of us outside of Houston and L.A. that don’t want to miss the next Clippers/Rockets game (Feb. 28). The one Monday night ended with several Rockets players (Paul, Ariza, Harden) storming the Clippers locker room in search of a fight with Blake Griffin and Austin Rivers; a welcomed change from the superstar kumbaya (or banana boat rides) that we’ve grown accustomed to in the age of super-teams.

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Historically Low Snowfall Totals Hurting Ski Mountain Operators

Vail Resorts 2.0

Historically low snowfall totals across the Western U.S. has reduced visits to Vail Resorts (MTN) properties, by 10.8% this year. Vail, Park City and Beaver Creek (CO based resorts) received their lowest snowfall totals in 30 years (50% less than the next lowest winter season), while their 3 California based properties received 69% less snow than the 20-year average. Despite the lack of fresh powder, MTN reports that lift ticket revenue is up 1.6% YOY; with season pass sales (+14% YOY to 740,000) helping to offset the decline in single day visits (and lift ticket sales). Revenue declines from ski school (4.5%), dining (8.7%) and retail/rental property (11.5%), more accurately reflect the impact the weather has had on the company’s bottom line.

Howie Long-Short: MTN CEO Rob Katz has told investors the “challenging conditions” will cause the company to miss earlier earnings projections, but said the guaranteed revenue from season pass sales (+20% YOY) and investments the company has made in off-slope amenities (i.e. Park City got a $50 million renovation in ’15) would prevent further declines; even if the lack of snowfall continues. The disappointing fiscal Q1 comes on the heels of a typically slow summer for the company, reporting a loss of $28.4 million for the quarter that ended October 31st; though that figure is down from $63 million in Q1 ’17, the improvement comes as a result of a non-recurring tax benefit.

Fan Marino: The Western U.S. hasn’t had much powder, but that isn’t the case on the East Coast or in British Columbia. MTN reported that their newest acquisitions, both Stowe (Vermont) and Whistler Blackcomb (B.C.) have had strong winters thus far. Whistler’s snow conditions (96%-97% of the terrain was open Christmas Week) even abled the resort to open a week early this season!

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