Five promotions could be gone in 18 months
Published by Staff on August 31st, 2008 in Current Events

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By Zach Arnold

What a depressing headline for an article this is. Sadly, the headline reflects the current situation that the MMA business is in right now.

Think about the climate of the industry at the start of the year and what the climate looks right now, nine months after the first of the year. There are five — count them — five promotions that could go belly-up in the timespan of 18 months. Elite XC, DREAM, Pancrase, Sengoku, and Affliction. The IFL is already finished, and more layoffs in the MMA industry amongst various promotions are expected to take place shortly. These trends indicate that the bottom is about to fall out of the business and that we will be stuck in 2009 with a top-heavy industry, much in a similar vein to professional wrestling.

There has been talk, since his release from jail, that convicted felon Kazuyoshi Ishii is trying to either consolidate or buy out the two smaller players in MMA (Sengoku and Pancrase). Ed Fishman was once approached about investing money into Pancrase, but the company reportedly had 7-figures in debt. The rumors at this time claim that World Victory Road, the parent company of Sengoku, has bought a stake or a controlling interest in Pancrase. If so, Pancrase will basically become a feeding system for Sengoku. However, Sengoku looks to be a money-losing proposition itself and it may get swallowed whole by K-1 if Ishii perceives that there is some value to consolidation in the business. All of this could be taking place while DREAM is on its last legs. I’ve long predicted that once Ishii got out of jail that DREAM would be finished and that K-1’s Godfather would create a new MMA project in 2009.

Simply put, there’s a lot of turmoil happening right now in Japan and the marketplace is stale. Too many things are unsettled behind-the-scenes for anyone to seriously want to consider putting money into the industry over there. UFC would be foolish to try to test the waters in Japan on a big scale for the next couple of years.

Affliction, which came out like a house of fire for their debut show on July 19th, is now as quiet as a mouse when it comes to their Thomas & Mack Center event on October 11th. There’s no real mainstream buzz for Andrei Arlovski vs. Josh Barnett and the undercard features talented, but unknown IFL fighters Chris Horodecki and Jay Hieron. It may be great for the hardcore fans to see these guys in action, but look at what appealing to hardcore fans did for the IFL at the end. Plus, we’ll get to be treated to Ozzy Osbourne at the event while Jay Glazer likely won’t work the show due to NFL commitments for Fox Sports.

You just get the sense that Affliction started out with a bang and the reaction from everyone afterwards has been, “What’s next?” There’s really nowhere to go but down considering the amount of money spent on the first show. Right now, not too many people inside and outside the MMA business envision Affliction as a long-term player. What happens if the October 11th show loses money like the first event did? It’s going to be very difficult to take Affliction as a serious, long-term player in the MMA business. They very well could be out of business after a few more shows.

However, the biggest money loser of them all is Elite XC. Anyone who reads the company’s 10Q filing must be mortified at the sheer amount of money this promotion has lost in under two years. $1.3 million dollars for six months to run a web site? For $1.3 million dollars, EXC could have bought and paid for every major MMA web site on the planet and still had over a million dollars left. Well, at least some web developer is living it up with the salary they’re getting paid for a dysfunctional MMA promotional web site.

It isn’t just the sheer absurdity of what Elite XC is spending money on, but the complete lack of structure and long-term planning that this company has right now. Booking PPVs for 2009 is not long-term planning. That’s a short-term money grab. Having shows on Fox Sports Net did nothing for PRIDE and nothing for the IFL. What’s it going to do for Elite XC? Again, another short-term idea.

Quick — name me all of Elite XC’s champions. There’s Antonio Silva, the heavyweight champion who just got busted in a CSAC drug test for taking boldenone (horse steroid). There’s Jake Shields, an extremely talented 170-pound champion who reportedly almost took a fight outside of the promotion for Affliction against Matt Lindland. There’s KJ Noons, the 160-pound champion who refuses to fight in Elite XC because of money issues. He claims that he is getting paid the equivalent of $300 a week. For as potentially misguided as Noons’ position is right now with Elite XC, you have to admit that no one in EXC can look at the guy with a straight face and raise money issues when they’re paying $1.3 million dollars in six months for a rinky dink web site while Noons may get $23,000 for a fight. This same company paid Scott Smith, who headlined their last CBS show, $14,000, while Silva (who got busted for steroids) got paid $200,000 to fight on the undercard.

None of these developments are positive, whatsoever. It’s depressing. It’s disheartening.

Let’s assume that the bottom does fall out for all of these promotions within the next year. Where do fighters go for work? There’s no farm system at this point (other than maybe Strikeforce). Japan’s dead as a doornail right now, so nobody can go overseas for big money. WEC is folding up their 185-pound and 205-pound divisions, which means that more fighters will be out of work. Elite XC bought out several B-level promotions and managed to lose a lot of money in the process.

Even if you are a UFC fan only, you cannot be rooting for bad business practices in MMA. What’s happening now will affect UFC long-term because sooner or later, the talent pool will dry out as less and less fighters can find work on minor shows. Once the money starts drying up, a lot of fighters are simply going to quit the business.

August served as a pretty good reminder as to what a UFC-only dominated industry looks like. For the most part, it was pretty boring. Staleness and boredom are not good long-term indicators of the health of this industry.