The UFC acquisition of Strikeforce was offically announced this morning after Saturday’s surprising announcement.
Via Zuffa press release:
Forza, LLC, a subsidiary of Zuffa, LLC, which owns the Ultimate Fighting Championship® brand, announced today that it has purchased the assets of Explosion Entertainment, LLC dba Strikeforce®. Under the terms of the deal, all Strikeforce fighter contracts will be honored, as will its broadcast agreement with Showtime® Networks, Inc. Strikeforce will continue to operate as a separate business and current Strikeforce CEO Scott Coker has signed a long-term employment agreement with the company.
“We have worked hard to make mixed martial arts the fastest growing sport in the world,” UFC President Dana White said. “We’ve spent countless hours getting this sport regulated and taking the Octagon® all over the world. Acquiring the Strikeforce assets allows us to continue to develop this sport into a global force.”
“We intend to operate Strikeforce as a separate business much like we did with the WEC for many years,” Lorenzo Fertitta, Chairman and CEO of Zuffa, said. “We look forward to working with Scott Coker, and the entire Strikeforce and Showtime teams to continue to provide quality content for mixed martial arts fans.
“We’ve long admired Scott Coker and the Strikeforce business he launched and developed,” Fertitta continued. “We feel that together with Scott, we can continue to build both Strikeforce and the UFC.”
Currently, Strikeforce holds 16 events annually across the United States. The organization will continue to do so under new ownership and fans can look forward to exciting fights featuring their favorite Strikeforce athletes. While there are currently no plans to bring Strikeforce fighters to the UFC, a new strategy to strengthen Strikeforce’s talented roster is being developed.
“This is an important day for the sport of mixed martial arts,” Strikeforce CEO Scott Coker said. “We are excited to work with Lorenzo Fertitta, Frank Fertitta, Dana White and everyone at the UFC on the quest to make MMA the biggest sport in the world. Fans can continue to expect quality Strikeforce shows and we look forward to giving our athletes an even broader platform on which to perform.”
Strikeforce was represented in the transaction by Evolution Media Capital, a media and sports investment bank affiliated with Creative Artists Agency.
Payout Perspective:
A good discussion of the acquisition in our Main Event section. How long will UFC-Strikeforce operate as “business as usual”? In today’s conference call, Lorenzo Fertitta stated that Showtime will continue production of Strikeforce shows, but they will offer input. (H/t: Bloody Elbow) It will be interesting to see how much input they will offer? There seems to be a lot of things that UFC could make better immediately.
It also seems that Strikeforce fighters (except Paul Daley) are toeing their new company line by stating that the merger is a good thing. MMA Junkie reports that many Strikeforce fighters are excited about the monetary benefits of the merger: fight purses, sponsorships and performance bonuses.
Are there any details on the new ownership structure? Did Coker sell his share or was it just his partners who sold?
Typo of paul daley
Fixed it Mike. Thanks
From what I’ve read, Silicon Valley Sports and Entertainment (SVSE), the previous majority owners of Strikeforce, wanted to sell the company since there were so few events running at their HP Pavilion anymore, which had been a big part of why they invested in the company in the first place. Coker, who founded the company but was not majority owner after selling the majority portion to SVSE, opposed the sale, but as stated he did not have majority ownership so it was up to SVSE in the end. In other words, they both sold their stakes, so Zuffa purchased 100% of the company’s assets, also inheriting the TV contract with Showtime, which they must honor. Coker still has a job (for now), and SVSE has backed out entirely, opening up the possibility for the UFC to run shows at the HP Pavilion in San Jose.
I think that SVSE and Coker just didn’t have the same vision for Strikeforce, with Coker wanting it to be a national-level promotion, and SVSE satisfied to have it run as a regional promotion in the San Jose area that ran most of their shows at the HP Pavilion. Hope that helps.
So in regards to ownership structure, Zuffa owns the brand, the video library, and the fighter contracts. The TV deal with Showtime is the only thing they can’t control, at least it seems that way for now.