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Article: Is Pride really finished?

I just noticed a post on Zach Arnold’s FightOpinion.com where he talks about an online Japanese blog that reveals some very telling facts about the current state of the Pride Fighting Championships. 

The blog apparently said: 

1. Employees that had worked for Dream Stage Entertainment have been laid off. This is a bit surprising considering that on March 27, Lorenzo Fertitta and Dana White had said they would continue to run Pride as a separate entity from the UFC and that all the employees in the Japanese office would retain their jobs. 

2. The lightweight GP has been postponed with no new date re-scheduled. Most fighters believe there will be no lightweight GP this year. 

3. Pride fighters that have exclusive contracts with DSE are normally paid monthly in return for not fighting for promotions outside of the company. Those fighters are no longer being paid, according to the blog. 

4. A press conference regarding the current state of Pride is expected within the next few days. 

The speculation is that Zuffa has abandoned plans to continue running Pride. Due to the way the Japanese do business, Zuffa couldn’t get DSE to open their books until an agreement was made to purchase the company. Basically, when the announcement that Pride had been sold on March 27, nothing had been really signed. It was just a verbal agreement. I think it was similiar to how things worked last fall when we all thought Wanderlei Silva and Chuck Liddell were going to fight. An agreement to negotiate in good faith was reached and they made a premature announcement. When it came time to finalize everything and cross the t’s and dot the i’s, the whole thing unraveled. 

I know from having sold a company on my own that in the States, you don’t need to come to an agreement of sale to get a company to open their books so that you can do your due-dilligence. There’s something called a “non-disclosure” agreement. The party that’s interested in acquiring you signs it, agreeing not to share any confidential information you make available to them. After you open your books, an offer is made. If the offer is accepted, there are still a few hoops to jump through before the deal is finalized. But it’s more like closing on a house. You basically just produce documents proving that you’re the rightful owner of what the company is buying. 

In the case of Zuffa and DSE, it looks like a whole can of worms was opened and Zuffa began learning about the inner-workings of DSE from the ground floor. Apparently there was a lot they didn’t like, such as the true financial standing of the company. Also, another major issue reportedly was how Pride fighter contracts are structured. As Zach Arnold has said in the past, it was his understanding that most Pride fighter contracts were nothing more than personal services contracts that could not be transferred to new ownership. The fact that MMAWeekly.com is reporting several fighters are considering legal action in order to have their contracts voided and the fact that Dana White spent several weeks before UFC 71 traveling around the world signing Pride fighters to new contracts supports Zach’s initial reports. The fact that they are no longer disputing Fedor’s claim that he’s a free agent and instead trying to ink him to a new deal is also a major sign that the old Pride contracts aren’t worth the paper they’re printed on. 

While it’s speculation on my part, it really sounds like Pride as we know it is done. In fact, I’m not even sure we’re going to see a “new” Pride. Again, nothing is official and White did say during a pre-UFC 71 conference call that they would be figuring out in the next few weeks what they’re going to do with Pride. If I was a wagering man, I think they’ll sign a decent amount of Pride fighters to new deals and assign some to the UFC and some to the WEC. Once they do that, I think Pride will be disolved. There are just too many obstacles in trying to re-establish Pride in Japan. And trying to run a full-time promotion in Japan could become a real money pit. The fact that Japanese fight fans might not be willing to accept an American-owned promotion running full-time in Japan could be the biggest obstacle of all. And without a TV contract in Japan, Zuffa will run into many of the same problems with Pride that DSE had encountered. 

Not having Pride in Japan is really strange. There is a huge MMA market in Japan (and in Korea and potentially in China) and the only promotion out there meeting the demand right now is K-1’s Hero’s MMA promotion. But they have had their issues as well and if how they’ve put together Dynamite USA!! is a true indication of their business accumen, then there is a major hole to be filled in Japan when it comes to MMA. It seems to me that there is a huge opening for a new promotion with strong financial backing to go into Japan and become an immediate player. 

The talk that many former Pride fighters could be signing with the WEC is quite interesting. Apparently, Paulo Filho is the first of several Pride fighters that will be coming to the WEC (however, the WEC has yet to make any official announcement, so nothing is for certain). A lot of people are speculating that Zuffa is solely behind the decision to put Filho in the WEC but from what I’m hearing he may have requested it. Filho and current UFC middleweight champion Anderson Silva have trained together in the past and they do not want to fight each other. By fighting in the WEC, Filho can contend for a middleweight title right away and build up his name value here in the States. If Silva loses his title, Filho can easily jump to the UFC. Or, he can stay in the WEC and eventually fight the UFC middleweight title holder in a champion vs. champion match. What I do know is that I have spoken to people from the WEC and was told to expect big things in the near future. They are really going to bolster their talent roster and hold true to the initial promise that the WEC will be on par talent-wise with the UFC. 

I don’t think Zuffa is completely giving up on Japan, though. Setting up shop again in Japan will take time and you have a lot of Pride fighters who aren’t getting paid. If Zuffa doesn’t sign them soon to the UFC or WEC, a lot of talent might wind up in the hands of competing promotions like Bodog or EliteXC. By signing these fighters now, Zuffa can lock them up and buy themselves some time. While I don’t think you’ll see Zuffa running a full-time office in Japan anytime soon, it wouldn’t surprise me if they eventually open a satellite office similiar to what they are doing in England. They could also follow their business plan for England by traveling to Japan and holding cards 3-4 times a year. Now that they own the Pride name and will have many of their most prominent names under contract, they would be in a position to build their business operations in the Far East from the ground up. To try and do business any other way in Japan right now could cause major financial losses to the company’s bottom line. 

We should know more concrete info in the coming weeks, but in my opinion, all signs point to Pride being dead. And that’s a real shame but Zuffa isn’t to blame. It wasn’t a hostile takeover. The people “behind” the DSE ownership ran that once mighty company into the ground. 

One thing I’d love to know is what the final purchase price was. The AP reported in the States at the time of the original announcement that it was anywhere between $57-60 million. But with all the problems that were uncovered once Zuffa was able to look at the guts of the company, I have little reason to believe that they didn’t use all the bad news as ammunition to drive the originally agreed purchase price down. 

One final note before I end this diatribe that was written in a total stream of conscious (I apologize if this comes off as rambling, remember, this is a blog entry, not an actual article), I read a lot of posts asking why other sites aside from FightOpinion.com aren’t reporting more about the Pride situation. Well, the simple reality is that Zach Arnold has sources that most sites don’t have. Not to mention he’s been covering the Japanese pro wrestling and MMA scene for years and has an expertise few in this industry possess. So it’s not a case of people ignoring the story, reporters (like myself) simply don’t have the resources he has and a good reporter doesn’t report on things he doesn’t know about.

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