Did Strikeforce's Deal With Fedor Emelianenko Force the UFC Sale?

When Scott Coker first signed Fedor Emelianenko, he had to know he was making a huge gamble. Now we know it was a losing bet.

UFC President Dana White shocked the MMA world Saturday morning when he announced the purchase of Strikeforce in an informal online video. Since then fans have been chewing over every nugget of information trying to figure out what this means for the future of the sport. We still don't know much, but after yesterday's official press conference with White, UFC co-owner Lorenzo Fertitta and Strikeforce CEO Scott Coker we know much more than before. 

Now that we've had a couple of days we can also begin to piece together a picture of what forced the sale.

  1. Scott Coker didn't want to sell, but his partners, Silicon Valley Sports & Entertainment, did.
    Per MMA Junkie:
    The fight promotion had been looking to raise capital in recent months, sources said, though it's unclear whether the search was motivated by imminent financial troubles.
    According to the "San Jose Business Journal," Strikeforce generated $30 million in revenue for the 2010-2011 fiscal year.
    "Silicon Valley was relatively happy with the returns but didn't want to take it to the next level," one source said.
    Josh Gross reported that Coker went to some lengths to stop the sale:
    Sources confirmed Coker, the current Strikeforce CEO, attempted to wrest control of the brand, but in the end was unsuccessful. Instead, an agreement to sell Strikeforce's licensing rights, fighter contracts and video library closed with the UFC on Thursday or Friday.
  2. Strikeforce had been an extremely profitable regional promotion, but its deal with Showtime forced it to compete with the UFC for expensive, top-tier talent, in particular Fedor Emelianenko. 
    It's one thing to put on big live events in San Jose with local stars like Frank Shamrock and Cung Le, it's a whole 'nother thing to put together cards that will draw good ratings on CBS or sell pay per views. Once Strikeforce took the Showtime/CBS deal, they had to take big risks. Unfortunately nothing went right. 

  3. The failure to put together a Pay Per View in 2010 meant Strikeforce couldn't afford the Fedor deal.
    Dave Meltzer has asserted that it was the Fedor contract that forced Strikeforce to seek outside financing on his radio show.

    Fedor's original three fight deal included a third fight on Pay Per View, but his loss to Fabricio Werdum last year killed that prospect. The original plan was for Fedor to fight twice on CBS and then fight his final fight on PPV. For whatever reason after doing quite well on CBS against Brett Rogers, Fedor held out and skipped Strikeforce's April 2010 CBS show. I've seen speculation that Fedor was injured and his management at M-1 Global chose to extort Strikeforce for more contractual concessions rather than just sitting out until Fedor recovered. Fedor's absence from the April CBS show not only doomed that event to terrible ratings, but his subsequent loss to Fabricio Werdum on a June 2010 Showtime card meant that a Fedor vs Alistair Overeem heavyweight championship bout on PPV would not happen.
    Fedor's subsequent loss to Antonio Silva in the opening round of Strikeforce's heavyweight tournament in February would seem to have been the last straw, pushing Strikeforce's entry into PPV back even further. 

It's not an air-tight case, but there is no doubt that Emelianenko was by far the biggest expense on the Strikeforce books and it's also clear that there is no way the promotion could have made a profit on that deal from the fees it gained from CBS and Showtime alone. The plan was to feature Fedor on CBS twice then go straight to PPV. Instead they did CBS, and then Showtime twice. 

It was a noble attempt, but it failed and now the UFC has once again stepped in to pick up the pieces. 

HT Fightlinker for putting together the clues. 

Zuffa_purchases_strikeforce_medium

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