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Meltzer: Sakakibara tells PRIDE staff the company is sold
By Zach Arnold | March 22, 2007
–Nobuyuki Sakakibara yesterday told several members of the U.S. Pride staff that the company is in the proces of being sold to Lorenzo & Frank Fertitta. He said the agreement in principal is done but there are still some minor points to be worked out and the contract is not signed. Sakakibara said he would be leaving the company but that everyone would be keeping their jobs. The company would be operated separately from UFC, but obviously UFC could use any Pride fighter for a big match that it needed.
Key phrases — “agreement in principal” = likely a heads of agreement, “some minor points to be worked out” = likely due diligence. Read my Thursday news update to stay ahead of the curve on where this story really is likely going.
Now, the last sentence by Meltzer… more than likely, the fighter contracts with PRIDE are personal service deals and could have real problems being transferred to UFC. Therefore, the only guaranteed way to enforce the contracts is if The Fertitta Brothers bought shares into Dream Stage Entertainment Inc. If that’s the case, the risk factor just went up exponentially on a lot of levels with a lot of important authorities.
In the case of a money transaction to Japan, you’re talking about raising the awareness of the Tokyo tax bureau (along with the Kanagawa Police and perhaps Tokyo Metropolitian Police). In America, certainly there will be awareness raised by the Nevada Gaming Commission and by the Fishman Companies legal team. This is far from over as far as a business transaction.
Topics: All Topics, Japan, Media, MMA, PRIDE, UFC, Zach Arnold | 52 Comments » | Permalink | Trackback |
“This is far from over as far as a business transaction.”
I think may or may not be is the correct term to use considering everything you put forth is after all simply speculation and we know nothing about what has and has not been dealt with so far in terms of sorting out the obstacles.
Zach:
I assume the “problems” you constantly warn about would be things like tax evasion, possible criminal enterprise involvement using PRIDE as some sort of money laundering conduit correct? And thus once the books are open etc. there will be a great deal of scrutiny over the books and business practices of the company…
Because what I’m not understanding in some aspects is that…even if there are (and likely there are) some shady individuals involved at some levels of the PRIDE hierarchy – so long as business was conducted in a legal manner, it doesnt really mean BFD if there’s some unsavoury characters involved that are going to be on their way out.
Maybe I’m missing something…
You can do a heads of agreement and come out publicly and say, “We sold the company.” And then once lawyers do due diligence and look at it, they can totally put a stop to a deal. I fully expect that to happen if the Fertitta lawyers do proper due diligence (which takes 30 days or more), which they probably will perform.
Zach’s right – “agreement in principle” really means nothing in the grand scheme of things. Until the actual final deal is signed, sealed and delivered I wouldn’t say this is for sure a DONE deal.
Zuffa could walk away at the first sniff of trouble or they could walk away at the 11th hour. Things like that happen all the time where parties agree “in principle” that yes we’ll sell you the company for “$X + terms”…but once company lawyers and accountants get in there and terms and conditions start changing – there’s no guarantees.
We know that Ed Fishman tried to buy PRIDE, and according to his version of the story he never was allowed to do due diligence to find mystery owners or outstanding debts, bad contracts, etc. So if the Fertittas actually buy shares into DSE itself, they would assume any liabilities in that company in Japan and elsewhere. The responsibilities of being a owner of DSE versus an asset purchase are apples and oranges.
And yes, money laundering and/or tax evasion is certainly a potential issue that could arise (it will be interesting to see if it comes up in the Fishman Companies lawsuit against DSE) because we’re dealing with a foreign company here. Plus, what if some fighters didn’t get paid on those US shows? You go from a clear asset sale to suddenly having ownership in a troubled company that is being sued by Fishman Companies.
Again, my take is that the Fertitta lawyers won’t let an asset purchase pass the sniff test because of the validity of the contracts (the lawyers will either recommend a sharp decrease in the price of the sale or cancel it altogether). And I 100% believe that if the Fertittas have to buy shares in DSE that their lawyers will halt it immediately in the due diligence process.
The reason the Japanese authorities (police and tax) will be interested is to see where the money goes in a transaction into Japan (companies are trying to clear or end their books around 3/30). Why would the authorities care? To see where the money can be traced and transferred to.
Fishman probably never saw the books because they were being examined by “other parties” already.
He was probably fired to remove him from the picture during the sales negotiations from the current ownership or at the request of the Ferttita bros.
I think Japanese law enforcement or tax agencies will be happy that the organization is moving into the hands of a legitimate enterprise and facilitate a smooth transition.
A lot of speculation man, just wait to see what happens.
Zach: You are basing all of this on the ASSUMPTION that the Fertittas have not yet looked into any of those matters. Rumors of this deal have been going on for months, and for all we know the Fertitta lawyers may already have cleared all that needs to be cleared. As I already said, we do not know this. Neither do we know if the Fertittas would potentially even want to do any business in Japan(or the US for that matter) at all with the PRIDE company.
Sakakibara saying it’s not signed yet could mean anything from there being no chance in hell of the deal realistically going through to everything being wrapped up as we speak. We didn’t hear anything about him talking about a sale when Fishman was interested, so one assumption that is logical to make is that the Fertittas have come a lot further in negotiations than Fishman ever did.
I guess the one real question I have is: Why are you so certain that Pride’s contracts are not transferable?
Those of the WFA were, why do you think these are different?
How could PRIDE ‘fire’ Ed Fishman? They signed a 3-year contract with him with a two-year extension on top of it at his end. It’s a legally binding deal. Unless PRIDE can successfully prove that he breached the deal, they can’t ‘fire’ him at all.
They will care about where the money is going to in Japan (and perhaps elsewhere) and where they can trace it.
What happened when UFC bought the contracts out for WFA fighters? Well, take a look at what Zuffa did with Quinton Jackson. They had him renegotiate and sign a 2-fight deal. His second fight is coming up against Chuck Liddell in May.
The comparison of WFA contracts to PRIDE contracts may or may not (my take) be applicable. First, PRIDE contracts may contain many more loopholes. Second, you’re dealing with a Japanese fight company and not a straight purchase of an American company buying out another American operation.
Actually, the latest reports(Meltzer last month or so) on Jackson were that he had NOT renegotiated a deal with UFC, and that news of him having done so were false. Herring and Eastman were also direct transfers – I think LYOTO too. For another comparison, Pro Elite took over the actual fight contract for Shamrock vs. Gracie from World Fight.
Transfering of contracts from Japan would probably involve more hurdles, but then again they may not have an intention to ‘transfer’ those deals to the US or even out of Japan at all.
Here we go (re: Jackson): UFC Junkie
“A lot of speculation man, just wait to see what happens.”
What fun is that?
I wonder why the focus is so much on the “Fertitta Brothers” buying Pride and not the UFC. Does anyone here think that they will be separate?
Zach, that thing is dated December 23rd. And you never acknowledging points made that shoot down your own is becoming ridiculously blatant. Humility is a nice thing that would probably save you from a lot of the(unfair) personal attacks here now and then. Now, from the Wrestling Observer Newsletter February 19th 2007:
“Even though there are rumors regarding Jackson only having one fight left under contract(which Jackson himself said), that isn’t the case as he’s under a long term deal. The funny thing is Jeremy Lappen, who is now in the EXC office, was Jackson’s agent as well as WFA booker so he negotiated a big money long-term deal with Jackson to be the face of the promotion. But when WFA folded, UFC bought the contracts, so Jackson has the great base($120.000 base and $50.000 bonus, although if he fights Liddell he’ll probably wind up with half a million or more for being a main eventer on PPV) but he’s also locked up.”
Thank you for the clarification.
Jonathan: WEC and UFC are seperate, and PRIDE is a big name brand across the world, so it is conceivable that they would want to keep it at least a semi-seperate company from the UFC. Also, the Fertittas are the names that have been mentioned, not Zuffa, so it’s a stating what is known kinda-thing.
regarding Jackson:
Meltzer has repeatedly said that Jackson’s new deal is a longterm one, not just for two bouts.
Do you really think he would be fighting for the title in his last bout?
Do you honestly think that due diligence has not been done yet?
If not then you are a complete idiot.
FAR FROM OVER!! Wait and see unless you really want to say I told you so more than anything else!
Aaahhh…I gotcha.
I was confused in that you were saying that if the Fertitta’s bought DSE that they’d be getting heat or something b/c of the people they’re buying PRIDE from. In reality it wouldnt effect them once the sale was finalized, but I see your point in that they’d be able to see who was going to be receiving the proceeds of said sale.
I just was having a hard time b/c I thought you inferred that a buyer of PRIDE would be “in trouble” b/c they bought it off of somehwhat unsavoury characters. Outside of the obvious concerns as we’ve discussed before re: wages, contracts, taxes etc. etc.
Zach how do you think the japanese Puro/MMA fans will react too this news? Will the Pride fans turn there back on the company now Sakakibara is planning on selling Pride too Gajin owners?
For people like Body_Shots… speculation just is not for some people ya know… if you don’t like it, don’t participate, but I am with The Gaijin and Zach til da mufuckin casket drop!
Ahhh, Gaijin means non-Japanese…. i knew that word sounded familiar ahha! yeah, The Japanese are clones man, they will follow whatever is hot, you can put poop on a shirt and if genkid sudomoto wears it they will buy it so i think it won’t affect their market much; (im a sociologist) however, if the brothers who buy PRIDE don’t keep the shows going in the Japan then K-1 is gonan grow bigger and make take a world stage by ’10
The Japanese fans follow the fighters than the organizations. If the main Japanese stars (Gomi, Sakurai, Ishida, etc.) are free agents and scooped up by K-1, then I don’t see PRIDE lasting very long.
People tend to forget that the Japanese have a different way of doing business and I wouldn’t be surprised to see a lot of high profile names becoming free agents.
Remember that Cro Cop and PRIDE used HANDSHAKE DEALS and that they were always one fight contracts (Confirmed by Josh Gross).
As we speak both Fedor and Wanderlei have still not re-signed with PRIDE and are currently free agents.
Even if the Fertittas complete the PRIDE sale, it’ll still be a rocky road ahead for them.
Yeah it will be very interesting to see how K-1 react to all this and whether they make moves to sign guys up. Then there is always Inoki who somehow has manged to convince money marks to back him again and is talking of a new promotion. If he starts throwing money about he could look to sign some guys as well.
Looks like Mr Sakuraba getting out of Pride when he did was one wise move.
Fedor on Bodog… for how long I wonder??? LMAO.. maybe they will duke it out at the end of ’07 like a lot speculated… just in an Octagon. I hope they duke it in an Octagon cuz that Ring just doesn’t cut it for sprawls and bullshit
“How could PRIDE ‘fire’ Ed Fishman? They signed a 3-year contract with him with a two-year extension on top of it at his end. It’s a legally binding deal. Unless PRIDE can successfully prove that he breached the deal, they can’t ‘fire’ him at all”
Well they seem to have told him his services would no longer be required and haven’t paid him, so contract or not, he’s been fired/removed from the picture.
“They will care about where the money is going to in Japan (and perhaps elsewhere) and where they can trace it.”
It does not seem to have been an issue with any agency up until this point and I don’t imagine that changing.
Fisherman obviously feels he has a stong case against DSE in there mistreatment to him. The thing I find interesting will be the names he mentions in his lawsuit.
I hope in the end, all the promotions get purchased by UFC.
Then every single MMA fight can be contested in a cage and have no soccer kicks, no knees to the head, and best of all, nearly every fight can end with a wrestler lying in someone’s guard trying to land elbows.
THAT is entertainment.
PS: Five years from now when MMA is one of the most boring sports on the planet (for real MMA fans, anyway), we’ll look back on this day as ‘black Friday’.
R.I.P.: PRIDE. It was a fantastic run while it lasted.
PRIDE’s done as of 3/27. They’re going to hold a press conference on that date to make a “grave” announcement.
So real MMA fans enjoy watching someone’s head get stomped into the canvas? Not the most sporting of techniques — MMA isn’t a street fight. (And I’m as big of a PRIDE fan as anyone — I’d just rather see the sport without kicks to the head of a downed opponent. Knees, now that’s another story…)
I think real fans enjoy stomps more than guys throwing lame duck elbows trying to open up a cut.
Have you seen Shogun use his stomps as a way to pass-guard, or using it as an alternative to ground-and-pound? I would call his stomps a technique of the higher class.
How many Pride fighters have employed stomps? Two, Silva and Shogun, maybe Sergei. Almost every fighter in the UFC has thrown an elbow.
You guys are making a mountain out of a molehill, as though stomps and soccer kicks are commonplace.
“In the case of a money transaction to Japan, you’re talking about raising the awareness of the Tokyo tax bureau (along with the Kanagawa Police and perhaps Tokyo Metropolitian Police). In America, certainly there will be awareness raised by the Nevada Gaming Commission and by the Fishman Companies legal team. This is far from over as far as a business transaction.”
LOL. Like any Japanese police department gives a flying f*ck whether PRIDE is sold. If they were going to investigate anything, it would have been done when the alleged Yakuza links were first revealed.
The only potential hold up here will be PRIDE’s alleged ties to organized crime and the risk of the Nevada Gaming Commission revoking Station Casinos’ gaming licenses. Period.
“LOL. Like any Japanese police department gives a flying f*ck whether PRIDE is sold. If they were going to investigate anything, it would have been done when the alleged Yakuza links were first revealed.”
They have been investigating things. However, tracing things like Yakuza connections is a hard task and $65 Million dollars makes it damn easy to trace where that money is going.
I hope this goes through just so annoying Pride morons will stop watching and commenting on MMA, ruining the sport online for the rest of us.
Please die. Real MMA fans for life.
“Then every single MMA fight can be contested in a cage and have no soccer kicks, no knees to the head, and best of all, nearly every fight can end with a wrestler lying in someone’s guard trying to land elbows.”
I could care less about stomps to the head, but soccer kicks and knees to the head force wrestlers to fight more intelligently.
Imagine if Anderson Silva v. Travis Lutter was under PRIDE, then you wouldn’t see Travis work for sloppy shots like he did. There were points where he was just crawling on the floor and trying to grab an ankle for his dear life.
The PRIDE ruleset have forced grapplers like Arona and Filho to work harder and more intelligently for their takedowns and subsequently they have become way better fighters than their UFC counterparts.
The ruleset is the reason why PRIDE has been able to give us great fights and it’s the Unified Rules in America that keeps the sport back. Just look at how people start booing in UFC events when it hits the ground.
Yeah god forbid someone would have a opinion that differs from yours. So you would only like to have a bunch of yes men agreeing with everything you say?
Even IF Fertitta’s did indeed purchased PRIDE, they will run it as a separate orginazation..
“How many Pride fighters have employed stomps? Two, Silva and Shogun, maybe Sergei.”
Are you serious? Well for one, Sakuraba jumping over the guard would’ve never been legal. Cro Cop has finished dudes by booting them in the head a handfull of times. Baroni/Minowa 1 comes to mind as a recent fight that was finished decisively due to stomps. There are a ton.
“They have been investigating things. However, tracing things like Yakuza connections is a hard task and $65 Million dollars makes it damn easy to trace where that money is going.”
I still don’t see how investigating the possibly-soon-to-be-former owners of PRIDE can have any bearing on a legitimate business transaction, unless they’re breaking laws in the process of the transaction.
If Japanese authorities use the cash to trace back to Yakuza, that means the sale would have already taken place.
The ruleset is the reason why PRIDE has been able to give us great fights and it’s the Unified Rules in America that keeps the sport back. Just look at how people start booing in UFC events when it hits the ground.
Really? So having stomps would make people enjoy watching someone work from the bottom more? How exactly does that work? Boy, that crowd sure hated watching Couture and Monson lay on Sylvia, or when Penn work rubber guard against Hughes. If you listen closely enough, those absolutely molten cheers are really jeers directed at Penn’s effort towards an omoplata.
Regarding stomps:
I think stomps/soccer kicks to the head of a downed opponent does have the potential to make a fight more exciting and definitely gives the fighters more options. That said, I could do without them. Having them there does detract from the “sporting” element to MMA. As someone noted earlier, it’s not a street fight.
One thing that always disturbed me about this rule was the double knee drop Hunt attempted on Nishijima. Can you imagine the carnage that would have been done to Nishijima’s face had Hunt actually connected?
“I still don’t see how investigating the possibly-soon-to-be-former owners of PRIDE can have any bearing on a legitimate business transaction, unless they’re breaking laws in the process of the transaction.
If Japanese authorities use the cash to trace back to Yakuza, that means the sale would have already taken place. ”
It depends on how the purchase goes through. If it is an asset purchase then it is no different than buying physical property and it is no big deal. However if Zuffa buys Pride as a company (in other words becomes a DSE shareholder) then with Pride comes any liabilities associated with it.
I agree with the “stomps/soccerkicks” – the US MMA unified rules are really holding back some exciting fights.
Case in point: Silva vs. Hendo II.
Hendo went in for a shot in the 3rd round when he’d taken some solid shots. It was a lazy shoot and Silva caught him with a great sprawl. He then had him in perfect position to deliver some vicious knees from the clinch. But since Henderson was in the 4-point stance…he couldnt do anything. And the worst part was Henderson took advantage of the rule even more by purposely maintaining the 4-point stance. Why bother trying to stand back up? You’re safer there. In a PRIDE fight, under PRIDE rules I’d say that could very well have effected the outcome of the fight.
The “Unified Rules” penalize strikers and are skewed to grapplers/wrestlers. If you got for a takedown here’s what happens: (a) you get him down are on top – adv. grappler; (b) you shoot and don’t get the takedown – AT WORST – its a neutral position as he cannot kick and knee you. So you’re free to flail on the ground hoping to trip them up.
There should be something in place that penalizes the grappler for making a lazy shoot. He shouldnt be able to go for a move that puts him in (a) advantageous position or (b) neutral position – there needs to be that (c) disadvantaged position…otherwise why wouldnt you continually attempt something that in no way hurts your position?
I realize im generalizing it to the extreme – but I feel the point still holds significant weight.
“However if Zuffa buys Pride as a company (in other words becomes a DSE shareholder) then with Pride comes any liabilities associated with it.”
Well, sure, but we were talking about reasons that would prevent the sale from taking place. A police investigation into the owners of DSE has nothing to do with selling PRIDE. What happens to Microsoft of Bill Gates turns out to be in the mafia? Nothing.
In regards to knees in four point/soccer kicks: There’s a lot of rules that affect certain guys. If headbutts, biting, and eye gouging were legal, perhaps fights would be more entertaining and Gilbert Yvel would be the greatest of all time. The reason those methods are outlawed in the US is because there is the obvious fear that stomping someone’s head can cause crippling injury and/or death in ways punching someone in the head or getting a double leg takedown can’t. While I’m not necessarily adverse to knees in four point, the fact is that this is a sport, not professional wrestling where stomps are a transitional move, and we’re many years past the point where a point needs to be made about trying to lay on the ground in a fight or something along those lines. Let’s try to keep that in mind, please.