MMA Payout used to be a must-read site for MMA news written from a business perspective, but over the past year or so it’s gotten kinda meh. That doesn’t mean it can’t still deliver the goods, as it does in this article on the Strikeforce / UFC sale.
It starts off by saying the UFC’s ironclad monopoly on top tier MMA may not be as ironclad as it seems. The under new ownership ProElite wasn’t the only organization looking to buy Strikeforce:
The other bidder for Strikeforce was from a group headed by Shelly Finkel, who is Mike Tyson’s manager and has been one of the most powerful managers in boxing for the past 30-plus years. Finkel officially announced that he was leaving the sport of boxing back in June of 2010, citing politics of the sport as the reason he was driven away to where he got his start, music promotion under Empire Sports and Entertainment.
Although Finkel left boxing, he continued to act as an advisor to heavyweight champions Wladimir Klitschko and Vitali Klitschko, with whom he has worked for several years. Empire Sports and Entertainment’s mission was said to become a leading media and entertainment company known for promoting the best events in concerts, music festivals, pay-per-view specials and sporting events around the world.
And back to ProElite, their stock has gone from a penny to as high as 24 cents over the past week. MMA Payout says this implies investors seeing an opportunity for a new #2 to come in and make some money. Ironically enough, the way said money may be made is through being a thorn in the UFC’s side:
If we look back at some of those figures, it took an investment of $3 million dollars from SVSE and Explosion entertainment back in February of 2009 to cash out on March of 2011, span of 2 years, to be bought by Zuffa for above $40 million dollars. Being the #2 promotion or the “next competitor to the UFC” paid off for Strikeforce, and I think many other promotion are looking at their model to try and accomplish the same.
So in killing it’s top competition the UFC may only be fanning the flames for more organizations to try and come in – if only because Zuffa has shown such a willingness to buy out competition once it becomes big and bothersome enough. If not the UFC, then some other Johnny-come-latelies who wouldn’t start from scratch but would be happy to buy something with some hot stars and a half decent TV deal. All of a sudden, there’s a business model to look at that doesn’t involve putting millions of dollars in a big pile and setting it on fire. Well, maybe it still does, but that fire then attracts other morons and you get to cash out.