The Business of MMA: Jon Jones splits with management team, UFC 261 delivers on PPV and Endeavor banks on UFC for IPO
Former light heavyweight champion Jon Jones remains in negotiations for his next fight in the UFC but he will be moving forward without his longtime management team.
On Monday, First Round Management— a company run by brothers Malki and Abe Kawa — announced a split with Jones after spending the last 11 years representing him.
“After an 11 year journey as Jon Jones’ management team, First Round Management and ‘Bones’ have amicably decided to part ways. We are proud of him and the work we’ve done. We wish him the best going forward,” First Round Management said in a statement released on social media.
Just after that was announced, Jones took to Instagram to offer his thanks to the Kawas for all the work they’ve done on his behalf over the years.
“It’s been an absolutely amazing journey,” Jones wrote. “Thank you so much for all the memories and business ventures. Wishing the Kawa family and everyone over at First Round Management many blessings moving forward. Glad to be able to call you guys friends for life.”
Of course as soon as news broke that Jones had split with his management team, speculation started that this must have something to do with a recent war of words between the former champion and UFC president Dana White over his alleged demands for a fight against reigning heavyweight king Francis Ngannou.
Ahead of UFC 261 last week, White said that Jones had asked for $30 million in order to make the fight happen but the 33-year-old New York native quickly fired back and refuted that statement while adding “I never discussed wanting $30 million … is someone speaking with you on my behalf or…”
To squash those rumors immediately, Malki Kawa took to Instagram to answer the charge that the breakup with “Bones” was over negotiations for the Ngannou fight.
“Sometimes it’s best to just walk away,” Kawa wrote. “Glad to have repped the [pound-for-pound] best fighter in Jon Jones for the last 11 years. No this had nothing to do with his Ngannou negotiations. Jon has been handling that negotiation on his own and has been as he wanted to speak for himself when it came to the last few fights.
“So no, sorry fans, you can’t blame me. We all agreed it was just best to start over. Abraham and I are working on a lot of major things at [First Round Management] and sometimes you just have to know when to say when.”
In a separate response on Jones’ own post on Instagram, Kawa once again confirmed First Round Management had not been involved in the negotiations for the fight with Ngannou.
“We never asked for anything,” Kawa wrote. “Jon was handling his own negotiations.”
Jones had been with the same management team since early in his UFC career and he remained with the Kawa brothers all the way through multiple title reigns as well as numerous personal issues over the years. Malki Kawa was front and center with Jones at UFC 200 when he was removed from the main event against Daniel Cormier when he was flagged for a potential doping violation following a failed drug test.
The same could be said during his ordeal with the anti-doping agency after Jones was flagged for a second failed test in 2017 following a knockout win over Daniel Cormier.
Jones was also with First Round Management when he became the first fighter in UFC history to ink an endorsement deal with Nike, which also included the release of his own exclusive shoe. Jones was later dropped by the shoe company after he was involved in a hit-and-run accident in 2015 that also cost him the light heavyweight title.
Behind the scenes, Jones has always had an active hand in negotiations with the UFC but it appears he took more ownership over that issue in recent years.
While Jones has been preparing for a move to heavyweight for the better part of the last year, he’s remained at odds with the UFC over his contract terms. It was initially expected that Jones would return later this year to face Ngannou in his first title defense after becoming heavyweight champion but it appears those plans have now been scrapped.
Ngannou is currently expected to face former foe Derrick Lewis instead.
As for Jones’ next move, he didn’t offer any details on signing with a different management team or potentially remaining self-managed as he continues to deal with the UFC on his next fight.
UFC 261 Delivers on Pay-Per-View
Stacking a card with three title fights is definitely a way to generate interest in an event but that never guarantees the pay-per-view sales will follow.
Fortunately, UFC 261 delivered in every metric possible from a main card that featured dramatic endings in all three title affairs to the raucous crowd in Jacksonville that ratcheted up the excitement for the show as the promotion welcomed back a sold out audience for the first time in over a year.
Now the company can definitely celebrate the success of UFC 261 after the card reportedly sold over 700,000 buys on pay-per-view through ESPN+. That’s according to a report from the Sports Business Journal with domestic sales topping 700,000 with international sales still not reported yet.
Overall, that would make UFC 261 a massive success for the company as the promotion once again banked on the heated rivalry between welterweight champion Kamaru Usman and Jorge Masvidal, who competed in the main event. Unlike the first fight between them, Usman put a stamp on this performance by demolishing Masvidal in the second round with a brutal right hand that brought an end to the contest and put an exclamation point on the entire card.
While the previous meeting between Usman and Masvidal actually did better on pay-per-view with 1.3 million sales reported at the time, that event also benefited from a huge amount of attention being paid to the first ever card happening on Fight Island in Abu Dhabi. Usman closed that show with a lopsided decision over Masvidal but then returned with a knockout for the rematch.
The global pandemic has definitely crushed more than a few businesses over the past year, but the UFC is one of the few sports entities to not only survive but the promotion has truly thrived during these troubled times. In fact, eight per-view cards in the past 12 months have broken over 500,000 buys, which is truly an incredible number.
Endeavor Banking on UFC Success
Endeavor — the parent company to the UFC — recently filed paperwork with the Securities Exchange Commission for an initial public offering (IPO) to take the company public for the first time in history. Once a powerhouse talent agency, Endeavor has transformed into a multi-faceted conglomerate while operating businesses such as Professional Bull Riders, the Miss Universe pageant, a live events company and obviously the UFC.
Back in 2019, Endeavor was actually just days away from going public on the stock exchange but the company pulled the plug when realizing that the set starting price was not likely going to gain the kind of interest needed to raise funds to pay down significant debts incurred by overall growth. Now two years later, Endeavor is once again ready to take the company public with starting stock prices ranging between $23 and $24, which is estimated to raise more than $500 million during the IPO.
While investors have been sheepish on Endeavor in the past, mostly due to the volatile nature of the company’s primary business as a talent agency, the addition of the UFC to the portfolio has changed many opinions.
Proof of the UFC’s worth to Endeavor came just as the company prepared to file with the SEC to go public as they raised $437 million just to buy out the remaining ownership shares that were still outstanding for the mixed martial arts promotion. Now with 100 percent controlling interest, Endeavor is leveraging the UFC’s profitability when enticing investors to buy stock during the IPO.
In the prospectus filed by Endeavor with the SEC, the company says that the UFC experienced huge growth during a pandemic plagued 2020 with UFC Fight Pass subscriptions up 40 percent for the year as well as “the most global pay-per-view buys in its history.”
Of course the UFC also boasts a sizable seven-year broadcast deal with ESPN worth over $1.5 billion that also includes exclusivity for pay-per-views, which as previously mentioned has always been a huge source of revenue for the promotion. Now the UFC and ESPN share an even larger share of the profits because pay-per-view events are only available for purchase through the ESPN+ subscription service, which means the promotion no longer splits money with cable and satellite providers.
During a year where Endeavor was forced to undergo dozens of layoffs while revenue plummeted with movie and television productions largely shutting down due to the pandemic, company president Mark Shapiro referred to the UFC as their “saving grace.”
Now once again, Endeavor is banking on the UFC to drive interest in the stock as the IPO looms large for later this year.
Conor Punches His Way To Becoming a Pub Owner
To borrow a famous Jay-Z lyric — Conor McGregor isn’t a businessman. He’s a business, man!
The wealthiest fighter in UFC history makes a ton of cash every time he fights but then he also reinvests that money into numerous businesses as he sets himself up for the future when he’s thrown his last punch.
One of his most recent purchases raised a few eyebrows across Ireland when McGregor reportedly plunked down £2 million — approximately $2.4 million in U.S. dollars — to purchase the Marble Arch pub in Drimnagh, Dublin.
Now the purchase itself isn’t all that strange considering McGregor has bought another establishment just like this one near his hometown of Crumlin but this particular pub involves an infamous moment from his not too distant past.
Back in 2019, McGregor was caught on camera punching a man in the Marble Arch after the patron reportedly refused a drink of his Proper No. 12 Irish whiskey. McGregor eventually apologized for the incident and he paid a fine as ordered by the Dublin District Court.
It appears McGregor will be ready to serve patrons nothing but his choice in drinks moving forward after purchasing the pub.
Of course an interesting twist to this whole story — McGregor also recently had controlling interest in his whiskey company purchased by the owners behind Jose Cuervo tequila, which reportedly netted him a hefty payday of more than $100 million.