Former Strikeforce Official says Co-Promotion may have led to the Company's decline
Posted on August 31, 2011, 04:21 PM by Joey Santosus
"I think (co-promoting with M-1 Global to work with Fedor Emelianenko) was a deal that made it very difficult to be profitable from. So getting Fedor from a branding perspective was huge, and that was a risk that was, at the time, necessary to take. That was the biggest acquisition we had made as a company. Right away, signing Fedor put our company, put Strikeforce, in that many more households. Just the name Strikeforce - it got out there... You know, what's funny is somebody said to me not too long ago, ‘You are never going to make money with Fedor.' He said that to me because he thought that he understood the mentality behind Fedor's management. He said, ‘You are never going to make money with them.' (He) said that straight out to me. There's a lot of different thoughts out there, and I think maybe it wasn't the right move, but everybody wanted it at the time. And when we did it, it sure felt good. But it could have been part of the undoing." - For complete interview with Mike Afromowitz, visit Sherdog.com (via MMAMania)
The rise and fall of Strikeforce as legitimate competition for the UFC was nothing if not abrupt. From the signing of big name talents such as Fedor Emelianenko and Dan Henderson, to broadcast deals with CBS and the eventual announcement of the Heavyweight Grand Prix, the promotion had undoubtedly cemented its place as the number two MMA organization stateside and appeared to be on the verge of making major moves in the industry. However, just as quickly as it all seemed to be coming together, it all fell apart.
Though several key developments reportedly led to the sale of Strikeforce, namely Silicon Valley Sports & Entertainment's interest in pursuing an NBA franchise, former Strikeforce Director of Communications Mike Afromowitz believes working with "The Last Emperor" may have also played a major role. Afromowitz declined to provide details "for obvious reasons," but said co-promoting with Emelianenko's management team, M-1 Global, left little room for the San Jose based organization to make a profit. While it's not the first time the Russian Heavyweight has been the rumored cause of a failed MMA promotion, there has never been any evidence of this. So what do you think LowKick'ers? Is it feasible to believe that a single fighter could bring down an entire company or was ZUFFA's purchase of Strikeforce just business as usual in the MMA world?
Further Reading: Fedor Emelianenko: I want to continue fighting
Fedor Emelianenko before his fight against Tim Sylvia at Affliction's "Banned", a mixed martial arts fight at the Honda Center on July 19, 2008 in Anaheim, California. Francis Specker
Comments
I've always thought SF was crazy for paying Fedor and Hendo as much as they did in the first place.
No idea how they intended on making money with such huge payouts to just a handful of their fighters. On their payouts with their hyped fighters such as these, typically over 75-80% of the profit from the gates went to the fighters alone. And their payouts are only a fraction of the total costs. That's crazy.
I think you guys are both right. It's safe to say SF wouldn't be as popular without Fedor. However, that doesn't mean it was within their means, financially, to pay Fedor as much as they have.
It's as if the business model was built to sell the company sooner than later. Reminds of the Michael Scott Paper Company from that episode of The Office lol
I agree, Fedor is the reason, I mean you can't pay 1.5 mil to people on losing streaks and make money back that way. Well it's Zuffa's problem now.
How? Fedor is cut, hes gonna be fighting on M-1 events now or something
Wrong. Strikeforce was getting to be too big a competitor for Zuffa's comfort, so they bought them out and absorbed them. Strikeforce's days were pretty much up the moment that deal went down.
LOL... Before Fedor SF was a small San jose based promotion... once they got Fedor,.... you know the rest... also last year made 30 Mil...so yeah they werent doing SO bad...other wise Zuffa would have not bought it;....
If they were doing so good they would not have needed to sell....
Look outside the box bud, the main reason companies buy other companies is due to profitability, and competition.
Strikeforce was UFC's biggest competition, and the old saying goes "if you can't beat it join it." What better way to then just buy it out, and make more money, while other companies attempt to do the same thing.
All in all, Strikeforce may have made the moves it did with intentions of getting bought out and making themselves a decent pay cut in the process. BAMMA, Elite XC, and whatever other organizations that are out there are attempting to do the same thing. Either make money and become something legit, or something legit enough to turn over like a re-posessed house.
@Kevin
But the topic here is if co-promotion led to the companies decline. Sure, Zuffa purchased SF due to profitability, but as soon as they could they got rid of the co-promotion. The money they were paying M-1 was just rediculous. Fedor alone was making over a million per fight (win or lose), and that's not including the cut M-1 got from co-promotion. That's well over double any other MMA fighter.
Pre-Zuffa SF, sure Fedor did grant a huge boost in popularity, but payouts like that plus the undisclosed co-promotion payouts pretty much negate the gains. Especially considering they did not even have large sums of PPV income.
Take this example - Fedor vs Henderson profits from the live gates: $638K. Fedors payout: $1.5 mill. Hendersons payout: $400K. Can you honestly say that's a lucrative investment?
Correction - Looking it up elsewhere and Henderson was $800K
Curse that M1 Global ... i heard from a drunk guy at a bar that they are actually the ones behind world hunger and all the earthquakes as well.
pride,elite xc and now strikeforce is sold . m-1 global is poision!
Fedor has become nothing but a ****ing jinx. I used to be a fan of his but now I'm completely fed up with his bullsh**. Don't care if I ever see this guy fight again.
-former Fedor fan
Oh. Ye, now it is Fedor's fault. How easy! I don't like the way Fedor has been handling his fights, but saying that M-1 and Fedor was the reason that SF fail is just stupid. I cannot believe that some people say shit like that. Those who believe in this theory, use you brain for a change.
SF was doing very well because of Fedor and later Hendo. Why Cocker said that he wants Fedor fight again?
It is just STUPID! Why Zuffa wanted to purchase SF if it was going to fail anyway? It would so damn.
Atliest in SF fighters make some money they deserve in UFC only the bosses get the milion's. UFC Casino Bosses boght SF to destroy just like they did with PRIDE
An organism that can not survive on it's own. It uses and destroys other organism to survive.
I always thought the answer to that was a VIRUS... Now I know it is M1 global...
Fedor does suck he sucked Strikeforce dry and went on a losing streak in the process,what doesnt suck about that.He lost soon as he fought a top ten heavyweight..Before that has beens and cans are all he fought.His fans should be stoked he might win again now that hes fighting cans again..I hope m1 global the worst things in life they ruined Fedors career.With the right management and a drop to 205 he could have been one of greatest.With his list of wins in the last 5 years I just can't consider him that.
Looks like the "former Strikeforce Director of Communications Mike Afromowitz" might be looking for another job - with the UFC. That is exactly the kind of talk Dana White promotes and a PR agent knows how to sell himself.
So they wanted the greatest heavyweight of all time for a dime?
Did anyone force Strikeforce to have Fedor at the price they paid? No. They were glad to have him. This made the promotion known. Fedor is not running business for Strikeforce and has nothing to do with its owners' decision to sell to the UFC, so let's not blame him for their inability to take care of business or their inclination to pursuing other opportunities. They sold out, that's it.
All the greatest fighters, Ali included, started to lose at a certain point in their career, and the fact is both logical and irrelevant to judging their greatness.
Dana tried to persuade everyone that Brock was the greatest at one point, and now, looking at his record, it is really hard to say why. So let's keep the right perspective.