Strikeforce has announced that Fedor Emelianenko will return to the promotion on June 26th in order to take on Fabricio Werdum on a Strikeforce on Showtime card.
SAN JOSE, Calif. (May 4, 2010) – After months of anticipation, the world’s No. 1 heavyweight and pound-for-pound Mixed Martial Arts (MMA) fighter, Fedor “The Last Emperor” Emelianenko (31-1), will make his eagerly awaited return to the cage to face two-time Brazilian Jiu-Jitsu world champion and top-ranked superstar Fabricio “Vai Cavalo” Werdum (13-4) in a STRIKEFORCE and M-1 GLOBAL co-promoted event at HP Pavilion in San Jose, Calif. on Saturday, June 26, live on SHOWTIME® at 10 p.m. ET/PT (delayed on the West Coast).
The Fedor-Werdum match will headline an event which will feature up to five televised fights on SHOWTIME and several non-televised undercard bouts that will be announced in the coming weeks.
Payout Perspective:
Note the “STRIKEFORCE and M-1 GLOBAL co-promoted” event mention. It’ll be very interesting to see how this co-promotion plays out this time around, as M-1 wasn’t satisfied with the exposure it was given last time around on CBS.
YAY! Fedor if fighting! Now if I could just get to see him more than twice a year, that would be great.
Good to see Fedor fighting again, as a MMA fan that’s what I really want to see! It will be interesting to see if they extended a contract or this is still the 2nd fight on the 3 fight deal signed last year, also interesting that this is not on CBS since there were some rumors he had a CBS only contract.
This is a very confusing move on both Strikeforce and M-1 Global’s part. If the biggest issue of contention M-1 Global had with the previous event built around Fedor was lack of exposure for the M-1 brand on CBS, do they think they will get any more exposure from Showtime, regardless of how prominently the brand is featured? As for Strikeforce, how is it at all wise to show off their most prized asset (okay, I know, he’s really an M-1 Global asset) on anything but the largest possible platform? Having this fight ENSURES that Fedor will not be seen live be even a fifth of the people who tuned in to see him on CBS (many will no doubt see it on the internet after the live broadcast, but the impact is not the same). If you are going to invest a lot of money in a fighter such as Fedor, isn’t it just good business sense to get the biggest return you can from having him as the main attraction? Isn’t it just downright foolish not to?? Help me MMA Payout, I DON”T UNDERSTAND!
Could this be a signal that the CBS/Strikeforce deal is indeed dead? The meaning behind these stories are always so murky when they involve Fedor “The Media Fiasco” Emelianenko.
I’m not sure if this is a sign of anything with Strikeforce/CBS, there was about 5-6 months between shows on CBS, and at this point it would be holding Fedor out for about 10 months if the same schedule held and they waited for a CBS show. Also, it was noted that Fedor signed a 3 fight 1 year deal last August, now that could mean that his deal is up in August no matter what, 3 fights or not, that was never clear. Maybe M-1 and Strikeforce want to see how one more chance at co-promotion goes before approaching CBS or a PPV option.
This is why i am ussually against anyone who tries to compete with the UFC for industry leader of MMA. Everyone who tries makes a fool of themselves and MMA at every turn. Like mentioned above this could be a sign that CS has cut ties. BUt if so the blame still falls on SF for having a weak product, and lack of control of their product(Miller Brawl for example), poor vision and execution to take advantage of a Prime time platform like CBS.
If the CBS deal is still out there, then there is no reason for Fedor not to be on it. If the gap between events on CBS is to much thats a poor excuse. If SF hadnt given in to Fedors demands then he would have already fought by now. So the gap wouldnt be an issue. Also if SF didnt take a poor TV deal with CBS they would get on more than 2-3 times per year. They have no leverage because of the choices they have made. Now they are wasting Fedor/money by putting him on CBS.
This poor management reminds me of Affliction paying millions for a billboard in Time Square and advertising on a racecar for an event they ended up canciling. Fedor on Showtime is tantamount to the UFC not airring Brock Lesnar on PPV but telling everyone they can see the fight in 6 months on DVD. Like the comments above stated SF is pissing away their best asset. Their contract with Fedor is only so many fights. SF isnt sure how long they can hold on to him especially with his clause that allows him to fight over seas anytime he wants. So with limited use of him, why waste those fights on Showtime? Its bad enough they dont have anyone good for him to fight to begin with.
Smasher, Fedor is one of their best assets, I would say Gina, but no word on what her next move will be, but he isn’t a blockbuster asset. The ratings he did on CBS were better than what they did a few weeks ago, but they weren’t blow away ratings that CBS went crazy for. Overall I do agree with you though that they seem to be mismanaging the situation
From most of the material I’ve read, Fedor/M1’s contract is not restricted to fights just on CBS. This fight has been in the works for about a month or so since the contract dispute between the two promotions was getting close to resolution.
At this point, Strikeforce will need to build some momentum before they can get back on CBS. Setting up a Fedor vs Overeem match, if both fighters win their next fights in spectacular fashion, could lead to a return to CBS.
I believe the original intent by Coker was to put a Fedor vs Overeem on PPV, but based on the numbers we’ve seen from the WEC first foray onto PPV, it would be a mistake. Even with promotional muscle of the UFC behind the WEC, they were only able to garner a rumored 150K in buys. Strikeforce would not be able to get those types of numbers at this point.
Brian, just a note. From what we’ve heard from Coker, who seems to be relatively honest, they have only lost money on 2 events in their history. I don’t buy into the “demise of Strikeforce” rhetoric. Although Showtime is not Spike or CBS, it is at least a medium for Strikeforce to get their events aired and a venue for additional revenue stream outside of ticket sales.
I would put much weight into coker claiming to make money on all but 2 events. There are ways of misleading you. Imsure he may have not lost money on all but 2 events. But its very possible those “profitable” events didnt make much or broke even. Meaning they covered the cost of the event. But SF has highly paid employees that get paid year around. Not just during an event. Also the 2 events he claimed he lost money could have lost big time and more than took away any profit the others made. Overall i dont believe strikeforce as a company is in the black. There are to many people who have power in SF and all are highly paid and then you have Dream, M1, etc wanting a chunck of every penny made.
In short, you cant break event running a promotion. You have to be making money. Eventually fighters contract run out and you need to pay them. That includes Fedor. They paid the money to him to better themselves and they are wasting that opportunity. When his contract comes up again they wont be happy to toss millions to him knowing he didnt make them anything before.
Now we dont know if he has lost money or not. But i do know they have yet to run an event and make a good return. They get next to nothing from Showtime and CBS, no PPV, and split with 3 companies. Add to this over paying(out bidding the UFC) for talent. This isnt a recipe for success.
Brain,
Do you know how much SF is getting from Showtime and CBS per show? I haven’t seen any figures out there. If we had some it would be easier to determine if they are indeed making money. There are a lot of strong, certain opinions about different promotions, but I haven’t seen the evidence that would allow someone to formulate such a certain point of view.
I suspect that SF is making money on their Challenger Series (Friday nights on Showtime) and their Saturday night fights on Showtime. I think that’s their long term strategy. I know that both Showtime and HBO make good money from their boxing events and that boxing promoters are very interested in being a part of those events and MMA for Showtime is an extension of that. That suggests that SF as the MMA promotion on Showtime is also making money. There would be no point to the relationship if they weren’t. But again, I’m far from certain.
And as usual I disagree that SF are making fools of themselves and MMA. Contract negotiations with athletes are tough in every sport – even for the UFC.
Since Strikeforce is a private company we will not get any hardline figures. The best we can do as fans when it comes to thinking about Strikeforce’s probable financial situation is to work with what we have and then make some educated conjecture. Things to consider:
-Strikeforce is known to have modest gate returns from their events, not particularly large sums
-Showtime likely pays them a fair amount for content as Strikeforce garners Showtime pretty good ratings (good in terms of sports programming on Showtime), however CBS doesn’t need Strikeforce as much as vice versa, so it’s unlikely the deal is all that lucrative for Strikeforce in financial terms (tradeoff for the exposure of being on network TV)
-Strikeforce currently has two “big money” fighters in Dan Henderson and Fedor Emelianenko (it isn’t clear how much money Strikeforce has to pay in the “co-promotion” deal, maybe his fee (and the portion that goes to his cronies at M-1)comes from event revenue), as well as a few other fighters who have 6 figure per-fight contracts. The rest of the roster doesn’t seem to be paid large salaries, but they do add up.
-As pointed out above, Strikeforce has a large employee base who earn salaries year round, not just when an event is on the horizon
-While Strikeforce runs a lot of shows, the Challenger Series events can’t be bringing in much money. However they probably don;t cost much either.
-From what I can tell Strikeforce really has no revenue streams that aren’t live event driven, and they don’t seem to have a large sponsor base for the organization (Rockstar Energy Drink and ?)
-Strikeforce has poor brand recognition among casual fight fans and hasn’t been giving due diligence to correct this problem (I wouldn’t want to invest in their organization based on their lack of marketing efforts)
Strikeforce may be financially viable in the long run, or they may not. That is the bottom line in my opinion, so why even make a prediction? What seems obvious is that they have a lot of overhead coming from a lot of sources, and only a modest amount of revenue coming from a scant amount of sources. I hope they stay afloat, but I also really want them to get their marketing and promotion up to par. It is ridiculous that they continue to announce big fights without announcing even potential opponents (I’m sick of seeing “Robbie Lawler, Bobby Lashley on next event, but no opponents have been determined.” Why even announce it at that time?), promotional material not being released until near event time, the complete lack of ancillary programming, and the awful television production credits of the Showtime/CBS team. If I were Coker I would be begging to select my own commentators. I HATE Mauro Renallo and Gus Johnson’s commentary so, so, so much.
Good post Mr Van.
In response to Diego, i base my opinion of the Tv deal on info from Elite XCs tv deal which is basically the same arrangements. Showtime got Elite for next to nothing. The actual numbers are out there but im not looking for them. But it was so low that Elite lost money every time they ran an event. Elite got on CBS because CBS and Showtime are owned by the same company. So Elite didnt get “network tv” money. CBS basically got free programs from Elite.
Now with Elite gone and Showtime and CBS used to getting MMA for peanuts why would they want to give SF a good deal? Keep in mind the UFC is out there as a proven product so you cant be to demanding. More than likely SF took a similar offer but a little better than Elite, just to get on TV. Elite was paid peanuts by Showtime and also had to give up control of Elite to Showtime. This is why Shaw was release. He no longer had power. So i doubt Strikeforce was in position to give up NO control and also get good pay for their programs. I think SF is getting net to nothing from their tv deals in hope of getting ratings/leverage for when they set down at the tables to resign. Thats when Elite was hoping to cash in asn i believe the same with Strikeforce.
Just because SF is private and we dont know numbers dont mean we give them a free pass. The UFC is private but it dont keep people from demanding higher fighter pay when true UFC profits are not known.
I want SF to be around. But i do not want them or anyone else being in competition to the UFC. There needs to be 1 MMA leader. The UFC cant be fighting for credibility, legal issues, turning on new fans, breaking into new countries and states and have to worry about competing with a rival promotion. It slows the growth of the sport. For every fighter a rival has and the UFC dont the fans lose out on good fights. Fedor vs Any top UFC guy for example. UFC loses a name and big name fan friendly fights than furthers MMA. What has SF done with Fedor to better the sport? Nothing, noone sees him or cares about him. In the UFC he would have already been in blockbuster fights with at least Randy and Brock. This hasnt happen because of direct competion to the UFC. Only the fans are hurt. Add to that you have other promotions who have things happen that hurt the sport because they are irresponsible due to having nothing invested in the sport. Like Elite promoting Kimbo as a thug rather than a up and coming Martial Artist like the UFC is. The brawl at SF. The Biker riot at the Ultimate Athlete event. IFl promoting a blood sport and someone leaving on a stretcher. Add to this the constant rule changes and champs from Org to Org it makes it harder and harder to get new fans interested and for the UFC to take this sport where it should be.
Brain and everyone else who is curious,
The Strikeforce TV deal and EliteXC TV deal are not the same. Strikeforce has a much better TV deal, which is worth $25 million dollars in license fees over the course of its three-year deal with the broadcast network and its premium channel sibling.
#’s from Strikeforce Miami:
“The Florida State Boxing Commission also reported that Strikeforce received a $700,000 “Broadcast, Television, or Motion Picture” rights fee (Showtime/CBS).”
Keep in mind the UFC at one point signed a 3 year 100 million contract with Spike(years ago) Yet they are not running events for free with million dollar fighters like Fedor. 700K for a live show is nothing. According to Elite XC numbers they were losing about 1 million everytime they ran a live event. that shows what the costs of events are. SF and Elite deal are not the same. But it isnt much better.
Brain,
A couple of KEY differences make EliteXC and Strikeforce different. EliteXC had a HUGE # of personnel that were not cheap (Gary Shaw, $kala, Lappen, etc.) and unnecessary costs (ProElite website, buying up promotions, etc) + high costs of living (flying first class, paying high monthly payments for ProElite offices in Los Angeles, etc). Strikeforce only has a handful of employers, and through their arena partnerships due to their ownership who owns the HP Pavilion, their overhead is not much compared to other promotions.
This is the key to Strikeforce making profits, keeping their costs low: low # of employers and expenses (unlike EliteXC) and not overpaying (unlike Affliction). Running shows in San Jose’s HP Pavilion will always be profitable for them.
Brain, their deal is in fact much better. Not an incredible deal that would give them 100 million for 3 years, but a a really good deal compared to what EliteXC had before.
But they do have a lot of employees. Even recently there is a lot of talk about who is really in control because things dont get done in a timely manner. This means there are a lot of people with power and there is already signs a power struggle could rear its head one day. If these people have power comparable to Coker then you can bet they are payed well too.
All of their shows are not at the HP. They are talking their show on the road so any stake in HP is meaningless when running in Tn and Fl.
Their deal is of course better than Elite. But that dont make it very profitable. Elite lost over 1 mill for every single event they ran. Of course we know there were other expense they helped that. But that still shows the opperating cost of Live MMA. 25 million over 3 years is roughly 8 mill per year. Adding 3 CBS shows a year to say 5 Showtime events then how ever many Challanger shows they run. They are making WAY less than 1 million per event. Now im sure with Gate and other revenue they make a little profit on some events. But how much of that profit goes to M1 who they along with Fedor really contribute nothing to the Strikeforce bottom line? How much goes to Dream? See they are giving away all their profits to basicly barrow talent when that talent dont really bring in fans or viewers. Did Fedor bring in the 1-3 million it cost for him to fight not to mention possible split of revenue with M1? Did Aoki draw big ratings? He did not but yet SF is in debted to Dream because of him and other fighters who contribute nothing. Strikeforce should have went out and signed unknown prospects and UFC rejects and ran their own show and not had to answer to M-1 and Dream.
$25M over three years is not bad for a small company. Supposedly CBS and Showtime helped with the Fedor acquisition as well but I don’t remember seeing any details.
$700k is not much for a live show, but that was a challengers card, they cost very little to put on. They probably cleared a nice profit out of that one, especially since Showtime takes care of all the production (right?) and the gate probably covers the arena fees with a little left over. Run one of those a month and it starts to add up to some decent profit – it certainly pays for modest offices and staff. The big money is in PPV, but all the big boxing promotions do fights on live TV as well (Arum, King, Golden Boy) and make decent money doing it. SF is definitely not the UFC – I don’t think anyone is arguing that – but all the same I’m not hearing the bells tolling for SF quite yet.
And things not being done in a timely manner is usually a sign of too little staff, not too much. My guess is that since last year was the first year SF started doing lots of shows those guys are running around with their hair on fire trying to keep up with all their commitments. The problem of “who is in charge” is probably due to friction between Showtime, CBS and SF and not internal SF friction caused by having too many chiefs drawing big salaries. I have never heard that anyone other than Scott Coker calls the shots at SF.
Jose, thanks for the post. I knew I read somewhere they were getting 700K for a particular event and you confirmed that. Based on your number of 25 million over 3 years and reports they would put on 12 – 16 shows a year for Showtime (excluding the 3-4 for CBS) that number seems pretty reasonable.
There seems to be a lot of nonsense being written about Strikeforce and whether they are losing money. I take Coker on his word. Unlike Dana, he has yet to cry wolf so I think when he tells us something it’s basically the truth.
I for one believe Strikeforce will be around a year from now. I would not be that concerned about that if I were you guys. I think the real possibility here is that someone decides to purchase them. This in my opinion would be the only way we won’t be seeing Strikeforce in the long term. They generally keep their payroll under control and they have been adding additional streams of revenue over the last year or so with other TV deals, EA game, etc.
Brain: “But they do have a lot of employees. Even recently there is a lot of talk about who is really in control because things dont get done in a timely manner.”
Those are not employers, these are partnerships, where everyone needs to be agree and be on the same boat before moving on. It definitely complicates making quick decisions, but everyone has a stake in the success of MMA here that affects their bottom line. However, Strikeforce or their management group in San Jose does not directly pay anyone.
As an example, you keep bringing up Fedor fighting on CBS and SF losing money whenever that happens.
1) Fedor has only fought 1 time for SF so far.
2) Fedor will only fight 2-3 times a year MAX, like any other champ out there.
This is not Affliciton like, where they needed to have Fedor on their PPV’s to sell, which they lost money due to their high purses and costs. We are also not taking into consideration how big sponsors like EA, Rockstar, FullTilt, etc also affect the bottom line. BTW, CBS/Showtime said they were covering some of M-1’s/Fedor’s cost when he fights. Strikeforce gets extra money during these special events, and lets not forget that SF doesn’t have a PPV model. Their #1 goal is to keep Showtime happy, which they have with their growing ratings and subscriptions since showing MMA. CBS will always show a fight whenever they feel a fight is worthy, regardless of CBS long term deal or 1 event at a time strategy, which they have right now.
While it might be impossible to know for certain if Strikeforce is profitable or not, we have enough information to at least make an intelligent estimate.
1) Based on the four cards where the gate and purse was released (and that includes Miami, whose gate was an outlier – Probowl and a bunch of comped tickets given away to vendors) it appears that the average gate for a Strikeforce card is around $600,000, while the average payout is $525,000.
2) For Challenger cards the payout seems to hover around $75,000 and while the gate is around $95,000.
3) The TV license fee is $700,000 for a Showtime card, at least $1.2 mil for a CBS card, and $300,000 for a Challengers card.
Company overhead seems as if it would be low to me. They split television production costs with Showtime and CBS, who have there own production team, so they don’t have to worry about keeping a full-time production staff. They don’t seem to have a large infrastructure (which is a problem unto itself). They spend little on advertising, leaving it a large part of it in the hands of their partners. They have some decent sponsors in EA Sports and Rockstar. And 4 of their 10 shows have taken place at the HP Pavilion, who are part owners of the promotion.
It would my guess that they are at least breaking even. The only shows that look like that may be real money losers would be the Fedor card (which is being used as a loss leader anyways and seems as if CBS is helping to pick up some of his tab) and next weeks St. Louis card. Profitability will depend on other sources of revenue (I think the co-promotion with Dream can be extended where broadcasts and costs are split, which would also help introduce their product to knew markets) and getting on ppv.
people do not realixe that sf put fedor on cbs to grab ppl attention now he on showtime,to get showtine sum $$$$ now they move with ppv as sh0ow as the provider
John S.:
Great summary and input there.
Thanks for the numbers John S. That helps put things in perspective.