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Wednesday, December 06, 2006
Mixed Martial Arts--- Will DSE Really Sell Pride to the UFC or WWE?
by Ivan Trembow
Originally Published on MMAWeekly
Dream Stage Entertainment is taking part in ongoing negotiations with several different companies based in several different countries to sell Pride, according to a report in the Wrestling Observer Newsletter.
Among the companies with which DSE has had talks are the Ultimate Fighting Championship, World Wrestling Entertainment, and multiple companies in both the United States and South Korea that were not named in the article, which further stated that the majority of the interest that has been shown in purchasing Pride has come from outside of Japan.
The crux of the Observer article is that it is necessary for DSE to eventually sell the company because while the company can continue to put on mega-shows like the December 31st show in the short term, Pride at its current level is simply not a sustainable business model over the long run without the all-important Japanese TV deal.
Fuji TV cancelled its contract and removed Pride from its network earlier this year due to company scandals, even though Pride's 2005 New Year's Eve show won the head-to-head ratings battle with the K-1 New Year's Eve show for the first time.
Fuji TV was much more than just a TV outlet for Pride, as Fuji also paid the company millions of dollars and provided it with valuable promotional exposure. Pride has been unable to secure a new TV deal with any other major network in Japan.
The DSE-owned Pride will continue to aggressively expand into the U.S. marketplace, add big-name fighters to its roster if given the opportunity, and continue to run shows in Japan. While it remains possible that a huge explosion in popularity or a Japanese TV deal could change the situation, neither of those two things are particularly likely to occur, and this would likely make it necessary for DSE to sell the company to new ownership if things don't turn around in the next year or so.
If Pride were to be purchased by World Wrestling Entertainment, it is not a stretch to say that it would be unlikely to succeed. Putting aside any fears that WWE would be tempted to fix fights, there's also the well-documented fact that WWE Chairman Vince McMahon has never displayed competence in any business outside of his core business of pro wrestling, with unsuccessful business ventures in nutritional supplements (IcoPro), a bodybuilding league (WBF), the movie industry (WWE Films), reality television production (Manhunt, Tough Enough, WWE Diva Search), a professional football league (XFL), the book industry (WWE's self-published novels in which McMahon solves crimes), and yes, even promoting legitimate shoot-fights on national television (Brawl for All).
The Observer article noted that Zuffa is faced with a strategic choice. If the UFC bought Pride and inherited what the Observer referred to as Pride's "very high contracts," Zuffa would acquire lots of world-class MMA fighters, but the move would raise the UFC's salary structure and "up the ante greatly" in terms of the amount of money that the company spends on fighter contracts.
If, on the other hand, Zuffa were to sit back and take a different kind of risk by letting the situation play itself out, the ideal scenario for Zuffa would be that Pride would eventually go out of business (or whoever buys Pride would fail with it and go under), thus making all of Pride's fighters free agents.
This would enable Zuffa to pay a lot less for the fighters than they would otherwise have to, because at that point there would be a very large amount of free agent fighters and only two stable, big-money options available for those fighters (UFC and K-1), although upstarts like BodogFight have managed to lure Fedor Emelianenko away, at least for one fight.
As the Observer reported, in the latter scenario Zuffa would be able to "work at signing only the people they want with the ability to negotiate more favorable terms [for Zuffa] due to the only other option [for the fighters] being K-1, which generally doesn't pay at Pride's level." In this scenario, with Pride's entire roster as free agents, the top-level fighters would likely end up split primarily between the UFC and K-1.
In the face of all the speculation, Pride broadcaster Frank Trigg appeared on MMAWeekly Radio's SoundOff and denied outright that Pride was for sale. Trigg said, "Two major organizations offered to buy Pride and both answers were no. They were both very substantial offers." Trigg was adamant as he said, "[DSE President] Sakakibara does not want to sell Pride. Pride is not up for sale. I spoke with him earlier today. Are we trying to do cross-promotions with other people? Absolutely... [but] Pride is not up for sale."
The Observer reported in its initial article that DSE's senior management will continue to act like "everything is status quo" and will continue to tell company employees that the company is not going to be sold.
Regardless of how the situation with Pride plays out, the Observer reports that Zuffa is planning on getting "very aggressive" when it comes to signing top talent.
The only thing for certain is that in the ever-changing landscape of MMA, only time will tell.