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FEG’s Future Looks Bleak Without NYE TV Deal & Investment Capital (Update)

DREAM Event Producer Keiichi Sasahara & FEG President Sadaharu Tanikawa

For several months now, there have been serious questions about FEG/K-1/DREAM’s future, and every time the topic is brought up, the situation appears to be worse than it was before. This time is no different.

The most pressing issue is securing a television contract for FEG’s NYE Dynamite!! event. It’s something that’s typically done in November, but a deal has yet to be announced with December less than a day away. Fight Opinion’s Zach Arnold explains the severity of the situation.

If TBS does not offer substantial money to K-1 to produce a NYE event, the question is not whether the Dynamite show will lose money… but just how much will be lost.

There are multiple scenarios on the table. The worst of all worlds would involve K-1 paying TBS for television time. Another bad outcome would be K-1 receiving little or no money (bartering), which would prohibit the promotion from being able to spend the kind of money needed to book big-name talent to pop a big TV rating. If a deal between K-1 and TBS falls apart, K-1 could very well find themselves in a scenario where they run a DREAM-type no-TV event.

The stress is enormous right now on K-1’s staff. They have their 12/11 Ariake Colosseum event for Fuji TV that they need to sell tickets for. So far, the primary focus for promotional operations this week has been for the Ariake show. It’s going to be tough for K-1 to sell out that event. Now, combine that with the fact that they are in a terrible position going into the Dynamite show with little or no momentum and something has to give.

The long-term survival prospects for K-1 will be largely determined by how well the 12/11 Ariake Colosseum and 12/31 Saitama Super Arena shows do business-wise. If they are money losers, the promotion will be on its last legs. If the shows can somehow break even or make a little money, then life goes on.

If that news isn’t bad enough, Fighter’s Only is hearing that the PUJI Capital deal that was supposed to raise $200 million and save the company is already beginning to fall through.

According to our agent source, PUJI has discovered that the Japanese fight-sport market is worth less than initially estimated (or than it was initially told) and $200 million has proved to be a hopelessly unrealistic figure.

PUJI also found that investors who expressed an interest in FEG were nevertheless not willing to part with cash unless some management restructuring was put in place. When this met with resistance at FEG, the parties in question lost interest.

The company hopes for, and badly needs, big ratings for its Dynamite! show on New Year’s Eve, mainly because it needs good numbers to show to potential investors and it also needs to keep the TV deal it has. The hunt for cash continues but our source, who has operated in the Japanese market for some years, is pessimistic about FEG’s ability to sustain itself and predicts a buy-out or the company’s demise towards the end of 2011.

And if that isn’t bad enough, FO’s source is also claiming that FEG has been forced to go to the “black market” for loans to pay their fighters. It wasn’t specified who’s behind these supposed “black market” loans, but naturally, speculation is quickly gravitating towards the Yakuza, the same Japanese mafia organization that brought down PRIDE FC.

No one knows how it’s all going to play out, but if things continue in this same downward spiral, the company may very well go up for sale. Word is there are several interested parties if that’s where it ends up. Either way, it sounds like FEG’s fate will be decided sooner rather than later.

Update: Head Kick Legend has an update on the FEG situation, and like every preceding report it’s pretty crappy news. Two key points: 1) a television deal was not struck with TBS or any other network for that matter, and 2) FEG is looking for buyers.

Head Kick Legend has been alerted over the past few days that the situation within FEG is possibly dire, as we’ve seen over the past few weeks, there are massive problems with Dynamite!! 2010. Dynamite!! will happen, that much is clear. It looks like at the K-1World Grand Prix on December 11 we’ll start hearing more information as to what will happen with the show. All reports have been that PPV will most likely be the Japanese home for Dynamite!! and HDnet will air it live as well, other than that, nothing. Consider this a blackout, as Japanese PPV is hardly widespread and this event has a long history of being free on New Year’s Eve.

What we have been alerted to is that FEG is looking for buyers. This comes from a reliable source within the company who wished to remain anonymous due to loyalty to the company, but even then, this employee is extremely frustrated and concerned about their future. Ishii has always stated that DREAM would be the first to go if need be, but this source explicitly mentioned K-1.

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