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The UFC’s Strikeforce Acquisition, Through the Lens of History

Saturday’s stunning revelation that Zuffa had purchased Strikeforce sent shockwaves through the MMA community.  And rightly so, as a landscape comprised of grand prix tournaments, broadcast deals and hundreds of fighters under contract had suddenly – and irrevocably – changed.  But such a union between two fight promotions is not unheard of in the sport’s relatively short history.  In fact, if one wanted to gauge what the future might hold for Fedor Emelianenko, Dan Henderson, the Strikeforce ring card girls and Scott Coker himself, one need only look to the past.  This may be uncharted waters in many respects.  We have, however, traveled this river before.

In 2004, the Mixed Fighting Championship was an East Coast-based promotion that featured sub-UFC talent at UFC prices – which, as we know, is a business model doomed to failure (see: Affliction, the World Fighting Alliance, et al.).  But things took a turn for the better when the organization shaved off some of its more unwieldy contracts and focused on local fighters taking on international talent.  For themed events such as “USA vs. Japan” and “USA vs. Russia”, fans took notice.  Not long after, the MFC’s success attracted the attention of online gambling maven Calvin Ayre, who saw the promotion’s functioning apparatus as the perfect means to enter into the burgeoning sport of mixed martial arts.  Thus, from Ayre’s Bodog merging with the Mixed Fighting Championship, BodogFIGHT was born.  Of course BodogFIGHT died two years later, the victim of mismanagement and non-existent revenue streams.  But while it lived, those fighters in its employ – such as Eddie Alvarez, Tara LaRosa and others – never had to worry about their paychecks bouncing.

There are similarities between the MFC/Bodog marriage and what happened last week with the world’s two top promotions, but they lie mainly in the finances.  Specifically, the coffers of the UFC compared to what Scott Coker has had access to.  Which isn’t to say that those on Strikeforce’s roster have had to worry about being paid.  However, with Zuffa, and its seemingly deep, limitless pockets acting as underwriter, it would appear that whatever debt Strikeforce was operating under may no longer be a concern.  As with the MFC when Bodog affixed their name on the ring apron, expense accounts and operational wiggle-room have undoubtedly increased – and will remain so as long as Strikeforce’s broadcast contracts are in place and the organization maintains its viability.

Viability, unfortunately, was what ultimately led to the demise of the Pride Fighting Championship.  From 1997 to 2007, Pride FC was the UFC’s main competitor, a giant in the industry that packed thousands into stadiums in Japan and birthed the careers of a multitude of the sport’s icons (Fedor, Wanderlei Silva, Mirko “CroCop” Filipovic – the list goes on).  Sadly, by its twilight years, Pride FC was crumbling, and in the last year of its existence it was purchased by Zuffa in what should have been a masterstroke of international expansion.  Thanks to chaotic finances and less-than-savory entanglements, though, the re-born Pride FC – which Zuffa had promised to keep alive and run concurrently with the UFC – died on the vine.  Keeping the Pride FC machine functioning turned out to be a far-from-viable option.

The comparison between the titans of 2007 and the titans of 2011 is any easy one to make, but the differences between Pride FC and Strikeforce are much more pronounced.  First, Pride FC was already in its terminal stages when the UFC bought it; Scott Coker’s baby, with its heavyweight tournament and potential shows on CBS and pay-per-view, was (and is) at the top of its game.  More important, however, is the fact that Strikeforce as a company works and works well.  Its death was far from imminent.  In October of 2007, Zuffa closed down Pride FC’s offices for good and picked over the Japanese entity’s fighter contracts like a midnight snacker would a turkey the day after Thanksgiving.  But because the brand can still make money, it is highly doubtful Strikeforce will meet such a fate anytime soon.

In the same year that Pride FC died, ProElite – with its links to Showtime and its EliteXC and ShoXC events – rose to prominence as the UFC’s next main competitor.  Yet for all its contributions to the sport (Kimbo Slice, Gina Carano and MMA’s first live broadcast television event on CBS), the “House of Gary Shaw” was not without its inexplicable moves within the market.  Case in point: the purchase of regional promotions King of the Cage, Icon Sport and Cage Rage.  Why did they absorb a long-running grassroots event, a Hawaiian event and a British event?  We may never know, as ProElite imploded by late 2008, and one of the three members of that failed conglomerate returned to doing what they did best, i.e., putting out quality shows.

This example of an acquisition bears little resemblance to the UFC’s purchase of Strikeforce.  It does, however, illustrate a worst-case scenario.  Is Strikeforce in danger of under-utilization while the UFC flickers and burns out?  Not at all.  But implausibility notwithstanding, it’s happened in the past, albeit with much different players.

In terms of bearing fruit, the UFC’s 2006 acquisition of the World Extreme Cagefighting organization was in the end the union most beneficial for both parties (setting aside the fact that the WEC is no longer around).  At the time of its acquisition, the WEC was a California-based promotion with a strong local following and a penchant for utilizing the lighter weight classes.  As UFC competitors go, it really didn’t fit the bill as being a direct threat.  Still, the WEC was obviously a thing of value, and after being bought by the UFC, the organization saw its roster of higher-weight fighters whittled down while its exposure increased and its brand strengthened.  The end came after what many cited to be a moderately-successful foray into pay-per-view, and presently, those who held belts at the time of the WEC’s demise are now UFC champs or title contenders.

If consensus rules, then this is what’s in store for Strikeforce, regardless of whatever Dana White says about keeping the organization alive.  For like the WEC before it, Strikeforce possesses value – value to fans, value to investors, value to networks hungry for MMA programming – and while there are Showtime and CBS contracts to be honored, it behooves Zuffa to maximize that value while taking the best the company has to offer for its own.

The possibility exists that a new path down the river of mergers and acquisitions might be blazed.  Perhaps in two years we’ll still be able to rent a UFC on pay-per-view one weekend and DVR a Strikeforce on Showtime the next.  And sure, we all know that the first known MMA acquisition – when Zuffa purchased the UFC from Semaphore Entertainment Group in 2001 – turned out pretty well for all parties involved.  But gazing through the lens of history tells us that things might not work out as hoped.  Truly, though, only time will tell.

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