Some fans like to think that just because every other national promotion that has emerged alongside the UFC in the past few years has died a quick death that Strikeforce will inevitably follow suit. Perhaps that will be the case one day, but I wouldn’t count on that happening anytime soon, if ever. 2010 may have been a disappointing year for Strikeforce in terms of plan execution, but it doesn’t appear to be in terms of revenue growth. In 2006, Strikeforce earned $4 million in revenue. In the current fiscal year ending this June, the Silicon Valley / San Jose Business Journal (via MMA Payout) reports Strikeforce is on track to earn $30 million.
Scott Coker and San Jose Sharks owner Silicon Valley Sports & Entertainment are on pace to rake in up to $30 million this year from Strikeforce fights at HP Pavilion and other venues.
Here’s a few other notes from MMA Payout on the article.
-There are current plans to release DVD’s from older events and also launch an online catalog within the upcoming quarters, which would add another great revenue stream which they have not fully utilized yet.
– Strikeforce was founded in 1992, back when they used to promote kickboxing events. Amazingly, they only employ 13 workers. Their philosophy has always been to never over expend and reach, something that has plagued other promotions who could not last in the MMA market along the UFC.
– Main source of income are ticket sales, sponsorships, and most importantly, television licensing. Back in 2009, Strikeforce signed a TV deal with Showtime, which MMA insiders said the promotion would make $25 million in licensing fees over the course of the three-year deal, which runs into 2012. The deal was made after Strikeforce purchased assets from Showtime’s previous MMA partner, ProElite for $3 million, which included roughly 42 fighter contracts and a video library of 20 live events to name a few.
Of course, it’s important to note that we’re talking about revenue here, not profit. We really have no way of actually knowing if Strikeforce is turning a profit, taking a loss or breaking even with the information that’s been given to us.
If I had to guess though, I imagine they’re turning a small profit at this point. Unlike Affliction, they’re not paying fighters obscene amounts of money, and unlike ProElite/EliteXC, they haven’t plunged themselves into deep debt by acquiring a handful of irrelevant regional promotions, sinking millions into a useless website and setting up an oversized staff in a luxurious office building with plasma televisions in each room. Instead, they run a lean operation with a small staff in a modest location and typically cover their disclosed fighter payrolls with ticket sales. I understand there’s a lot more pieces to the puzzle, but maybe with the exception of their mysterious deal with M-1 Global, there really aren’t any red flags I see that should cause any concern about their financial health. In fact, they may have a bright future if they execute their plans this year and gain more traction with the fans.