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UFC plays hardball with Arlovski
By Zach Arnold | August 27, 2007
By Zach Arnold
Most hardcore MMA fans online generally understand how Zuffa LLC, the parent company of UFC, does business — especially when fighters have one fight left remaining on their contract. So, it should be of no surprise that UFC matchmaker Joe Silva indicated to Steve Sievert of The Houston Chronicle that Andrei Arlovski will not be booked again in a high-profile UFC fight unless he signs a new multi-fight contract.
What is different for UFC, however, is that they are publicly admitting what most insiders already knew and assumed… the assumption that UFC knows they are the only major game in town and that fighters have nowhere else to go in order to create leverage at the negotiating table.
While the UFC matchmaker stopped short of saying the organization doesn’t need the former heavyweight champ, comments such as “where else is he going to go” and the contract “has to make sense for us” send a clear message as to who has the upper hand in the ongoing negotiations. The UFC won’t book Arlovski until the contract issue is resolved.
On paper, UFC’s calculation makes complete and total sense. It’s the same song-and-dance that we are currently seeing in the American pro-wrestling scene with WWE. The main rivals for UFC are undergoing major problems (HEROs is completely disorganized, IFL is bleeding massive amounts of money, and Pro-Elite admitted that they don’t even have their accounting practices in order according to their latest 10Q report) and fighters have little-or-no negotiating leverage. That was certainly cemented when PRIDE died earlier this year.
However, the MMA scene is about to likely change — and you can thank UFC’s stupidity in dealing with PRIDE for it.
I have railed against UFC for their PRIDE asset purchase with Dream Stage Entertainment Inc. The move made little sense on paper (the contracts were not assignable, UFC had no chance of running legitimate shows in Japan without yakuza interference, the VTR library has little value in America, etc.) and it eerily resembled WWE’s buyout of the WCW assets from Time Warner in 2001. WWE tried to do an ‘invasion’ angle with WCW and it flopped so badly that it has gone down as one of the biggest blunders in the history of the professional wrestling business. With Dana White all but declaring any attempts to revive PRIDE as dead, he essentially created the MMA equivalent of WWE’s botched attempt with WCW.
One element of the PRIDE asset sale deal that will forever haunt both Zuffa LLC and DSE Inc. is the lawsuit by Ed Fishman. Once Fishman’s legal team started getting the approval for witness deposition of key players in the MMA industry (including the Fertitta Brothers and Kirk Hendrick), everyone started resisting and the revival of PRIDE by Zuffa was effectively squashed. Fishman Companies and DSE Inc. settled their lawsuit and a lot of the money that Lorenzo Fertitta paid DSE Inc. to buy the PRIDE assets unwittingly went to Ed Fishman.
As in Ed Fishman, the guy who promoted two PRIDE USA events in Las Vegas and showed big interest in the MMA industry. In essence, Zuffa LLC has given Ed Fishman a freeroll to get into the MMA scene full-time due to his lawsuit and settlement with DSE Inc.
In other words, UFC’s greed in buying the PRIDE assets has indirectly given a potential power player a bankroll to fund his own MMA operation and get into the game.
Make no mistake about it, the landscape of the MMA scene is about to change. I have been told that Fishman has met or is about to meet with several big-name, high-profile fighters and is preparing to lay the groundwork for launching a big MMA project. Unlike the IFL or Pro Elite Inc., Fishman has a long-established track record in both Las Vegas and the US entertainment scene as someone who has been extremely successful. Fishman at this point is a total wildcard, but he’s the only wildcard that UFC has to worry about and take seriously because at any point he could declare ‘war’ on UFC and cause some headaches in Las Vegas, Macau, and other foreign markets that UFC has shown little-or-no business acumen in (like Japan).
Right now, UFC can feel confident in playing hardball with their top talent because nobody else who currently exists has any sort of power or organization to compete with Zuffa LLC. Ed Fishman, however, has the resources. In a round-about way, he can thank UFC for some of his new potential MMA bankroll.
Topics: Media, MMA, PRIDE, UFC, Zach Arnold | 38 Comments » | Permalink | Trackback |
So what is Arlovski’s management doing? They realize they have nowhere else to go. He’s losing money every time a UFC goes by and he’s not scheduled. I’m not sure well see him by the end of this year unless they put him on the December card.
If it’s true that he made half-a-million USD this year or came close to it, I don’t know if he’s really in much of a rush.
Great article. Fishman could definitely shake things up. Not sure if it would be positive or negative, but it will definitely be interesting.
Great article.
What puzzles me the most is how no one is trying to fill the huge void left in Japan by Pride.
K-1 has already a free TV deal and a lot of money. Why don’t they sign-up all the talent left (Fedor, Barnett, Gomi, Soko etc) and do a super show? Everyone is saying they are really disorganized. What does it actually mean?
Also, what is going to happen to the awesome Japanese talent such as Aoki, Imanari etc. who don’t really have a market in the USA?
One would think that with the Japanese fans enthusiasm for MMA there would be a line to provide a service…
Also, what is Zuffa going to do with the tainted brand? I can’t believe they will not use it at all. It was a really bad deal.
Makes me laugh to think about the original press conference where Lorenzo Fertitta was saying that Zuffa would not have anything to do with the running of the new Pride Worldwide company…
With or without the lawsuit, Fishman already had the money, and the Vegas niche to ‘declare war’ on UFC, so why is this such a big deal? Fishman could’ve decided to bankroll an MMA project without the the PRIDE deal.
First of all, you’re absolutely right with what you’re saying about fighter contracts, monopolies, and fighter pay.
“Where else are they going to go?” is the reality behind the line that is usually given publicly (“We don’t like to talk about money”), and it makes it all the more ridiculous for anyone to suggest that it doesn’t affect fighter pay when one company has 90% market share of an industry.
But on the subject of Ed Fishman in particular, I’m not particularly excited about the possibility of Fishman starting up a new MMA company. The two Pride USA shows that he promoted were great shows from a quality standpoint but they also lost a lot of money.
Didn’t Fishman say something to the effect that if you are starting up an MMA org nowadays, you must have a TV contract form the beginnign or you will fail. I recall something like that being said. It is 100% accurate imo. There is a lot of talent out there he can grab, but without a good TV on a solid network for exposure and money, you are going nowhere. He better think this through.
Andre Arlovski is being greedy. Nothing more, nothing less. He is already make very good money and now he wants a huge pay raise. He isn’t worth it after his pitiful performances against Sylvia and then Werdum.
If the UFC had a yellow card rule Arvloski would owe them money!
The problem with K-1 hero’s is its booked in a way which means people do not feel emotionally attached to the fights/fighters like the did in Pride. The promotion doesn’t even have titles. Its not as simple as just putting on a supershow as people need to care about what they are watching. Hero’s just run shows every now and then and a lot of the fights have no meaning behind them.
K-1 have missed the boat and not taken advantage of Pride going under. Personally I hope Puroresu fills the void and New Japan climbs back to the ‘King of Sports’ in Japan.
The two Pride USA shows that he promoted were great shows from a quality standpoint but they also lost a lot of money.
PRIDE lost money. Ed Fishmans company made both times. The casino partner for the event, Caesars made a LOT of money based on a few Asian gamblers. It is a misleading statement that the events lost money. They bought the local show from PRIDE and made money.
The same Ed Fishman who said he was definitely going to let his lawsuit go to trial so that he could get everything out in the open about PRIDE? That Ed Fishman? He’s the one we should be trusting?
you keep talking about ed fishman like hes got the whole mma game figured out and hes the solution to all our problems.
i cant see the future – but im 98.5% sure that is wrong. from previous comments he has made, and his current mma track record (2 disaster US shows that proved to be the straw that broke pride’s back) im pretty sure any mma project he is involved in will flop.
i dont have the exact quotes but ive heard him admit several times he knows absolutely nothing about mma but is “looking to learn”. thats not even what worries me, what does is that he keeps repeating that his mma ventures will attract asians into las vegas casinos because asians like the fighting. .. … … that is so stupid on so many levels i cant begin to understand why you would think this man is capable of running a successful mma show. no chance in hell. ZERO.
talented insiders cant make it in the mma business, theres no way ed fishman who only sees mma as a sideshow to attract people into casinos can make it. he should stick to the elvis impersonators and the white ligers.
also what does previous business success have to do with anything? to me it proves nothing.
vince mcmahon makes some good business decisions and thats why he is filthy rich, and he also makes some very stupid ones (xfl) which lose him tons of money.
the ifl owners and hugely successful as well and that hasnt translated into anything positive for the ifl.
then theres also this calvin ayre fellow, who ive heard does pretty well for himself and operates a failed mma promotion.
He’s a wildcard, not a lock — which is why I call him a wildcard, because you don’t know what to expect from him.
With that stated, once he gets into the game he’s suddenly and immediately a more serious threat than the IFL or Pro Elite.
You know when you go to Vegas or a casino and you use a player’s club card for points and bonuses? He invented that system.
He knows a thing or two about gambling. Fishman’s the only guy with enough juice to even compete with the Fertittas on a local level in Las Vegas, no one else has enough power to be a threat.
well thats your opinion. i personally think showtime has more money than ed fishman – regardless of how nice a chunk of 44 million dollars he won in his settlement.
im not saying gary shaw is a genius but at least he has the boxing promotion credentials.
i see your point, i do. like i said – i just dont believe an owners previous business success necessarily translates into the success of his/her mma promotion.
i didnt know he had invented that system, but i have no doubt the man is a genius, disciplined and also lucky. theres no other way he could be where he is right now.
we will see, i hope your right, the way things are now with zuffa being the only real promotion is not sustainable. for me the current viable alternative is exc, at least until ed fishman shows he can intelligently delegate mma related decisions to the right people – because i dont believe he personally is able to make those decisions.
If you had to ask me who is a more serious threat to UFC, the IFL or Pro Elite, the answer is easy – PE is.
The problem for Pro Elite is that Showtime isn’t paying much at all this year for the TV fees, although that increases next year (as will Pro Elite’s # of PPVs). Pro Elite’s dilemma is that they are in a race against the clock as far as staying afloat before they reach certain benchmarks where Showtime money can propel their operation.
Fishman doesn’t need to raise money through a stock play. He has his own money, he has casino money, and now he has the ‘freeroll’ money from the lawsuit against DSE that was partly paid for by UFC. He has a much larger ability to run bigger-scale shows than Shaw because of the casino connections.
Zach, you were clearly right about the fighter contracts and Zuffa’s inability to make PRIDE work in Japan, but the Fishman lawsuit was hardly what “squashed” a revival of PRIDE.
Also, his lawsuit was for what, $10 million? That means his payoff was probably much less. I guess you could say this is “freeroll” money, but it’s his personal net worth and casino money that makes him interesting, not the lawsuit payoff. I’d guess that “freeroll” money is just a drop in the bucket compared to the rest of his investable assets.
Whatever Fishman got from that settlement wouldn’t be enough to fund one major event. It’s not like he needed any money to do so either, Fishman is loaded.
Zuffa buying PRIDE also kept it out of the hands of competitors, Ed included. For a while they were the only ones talking to the fighters, and today they’ve snagged most of them. From the begining many thought they had no intention to run shows in Japan and that buying PRIDE was a play to kill the company and snatch up choice fighters.
Fishman made more money doing 2 pride shows off Zuffa then Randy, Shamrock, Liddell, and Ortiz made, Combined. He obviouly is doing something right.
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“Andre Arlovski is being greedy. Nothing more, nothing less. He is already make very good money and now he wants a huge pay raise. He isn’t worth it after his pitiful performances against Sylvia and then Werdum.”
Do you think the “Where else is he going to go?” management mentality is only applied to fighters whose last fight was boring?
Hearing some interviews with Fishman it seemed like he had some really good business ideas about how to run his own company. I was wondering what had happened to all of that as his status has been off the radar for the last little while.
It would be nice to see someone with some experience, business accumen and connections make a run with a rival promotion and see what that does to the business landscape. He seems to have a decent knowledge of the sport and be humble/intelligent enough to surround himself with the right people to run the parts of the company he’s not an expert on. The promoting ability, business expertise and big connections in the right markets seem to be on his side and that’s a really good start.
Interesting to see if it goes anywhere, nice write-up Zach.
“…his current mma track record (2 disaster US shows that proved to be the straw that broke pride’s back) im pretty sure any mma project he is involved in will flop.”
That statement is incorrect on SO MANY levels.
Mayhap he’ll go to bodog and so Fedor can get his first real fight in a while
“Fishman made more money doing 2 pride shows off Zuffa”
Say what?
Quote: John
“K-1 has already a free TV deal and a lot of money. Why don’t they sign-up all the talent left (Fedor, Barnett, Gomi, Soko etc) and do a super show? Everyone is saying they are really disorganized. What does it actually mean?”
I’ve been wondering the same thing. I would assume the fact that they haven’t yet filled in that void is what makes them “disorganized”, but it also seems like if they decided to put the money into it, they could quickly make a statement with their Sept. 17th card, stacked with Japanese fighters, and the NYE show which looks like it may be even bigger.
So Zach, what do you mean when you say they are disorganized? The next HERO’S card has Sakuraba, Kid Yamamoto, Minowa, and Uno fighting already, it seems to me like they are making a major play to fill that void.
Isn’t Fishman the natural enemy of one of the guys behind ProElite?
If so, then he may find that he’s going to have an uphill battle establishing a new promotion because his past pattern (hooking up with an established promotion that has fighters, then setting up local shows and media) is going to be really hard to reproduce since ProElite is honeying up to everyone except UFC and IFL.
His only other option would be to hook up with Pancrase, and they’re already sewn to bodogfight, and they really don’t do the same kind of huge production shows that Pride did. Personally I PREFER the lower-key Pancrase stuff to Pride, but that’s neither here nor there.
I suppose that if Ayres gets tired of the fight game, then he could take that over, but I don’t think that bodog enters into long-term fighter contracts. ProElite would definitely bid against Fishman to get that remaining top talent.
Things are really very cutthroat right now in the US scene. That’s why smaller promotions are more and more happy to sell or ally themselves with one of the remaining key players.
So you’re left with a small number of much smaller scale overseas promotions that are rapidly being snapped up by or aligning themselves with ProElite.
I’m just not seeing an in for this guy.
“Isn’t Fishman the natural enemy of one of the guys behind ProElite?”
I hadn’t heard that. Who are you referring to?
“Natural” as in, by virtue of their respective places in the scene, i.e. vying for 2nd place in an industry dominated by UFC.
Zach,
What is Fishman’s relationship with HBO? Are other promotions in talks with HBO? This is the wildcard TV deal that could really hurt UFC. That is why Dana White is still after the deal in my opinion.
If Fishman had been able to get the Fertittas, Dana, Hendrick, and others under deposition, it would have opened a whole new can of worms. He would have attempted to prove that somehow Zuffa undercut him and his contract with DSE Inc. For UFC, why bother putting up with that headache? They already got most of the guys they wanted, so just end the PRIDE project and end the headache with Fishman. The problem is that they paid DSE Inc. for the PRIDE assets and they probably didn’t imagine that their money would be going into Fishman’s pockets.
HEROs is disorganized from a matchmaking standpoint and also from a total business standpoint. Right now, the purpose those MMA shows serve is basically for K-1 to fulfill their lucrative TV contracts with Tokyo Broadcasting System. Outside of the MMA events being “contents,” there’s really no creative direction or purpose to the shows.
I would imagine Fishman is going to run alone and will hire his own employees from other promotions. Unless, of course, someone like Scott Coker can get his foot in the door.
I’m also not convinced that Fishman is solely an American-only play. He has a lot of interests in Russia, HK, Macau, and other Asian countries.
klown, no, I think they hate each other.
I’m trying to figure out now where I got that sense. If I find the reference I’ll post it.
After some digging, I THINK it was the No Holds Barred interview with Gary Shaw in January, but they take down the older shows, so it’s no longer in the archive.
“If Fishman had been able to get the Fertittas, Dana, Hendrick, and others under deposition, it would have opened a whole new can of worms. He would have attempted to prove that somehow Zuffa undercut him and his contract with DSE Inc. For UFC, why bother putting up with that headache?”
What headache? They already paid him off a long time ago.
With all this argument, did anyone ask if Arlovski is actually worth what he’s asking for? The HW division is stacked and Arlovski fights like a scared little girl (no, I wouldn’t say that to his face).
Arlovski has lost his luster. The “Pitbull” is a myth. He dominanted a UFC division that was weak and pathetic. The new UFC division is too stacked. He had his chance to prove something in the fight with Werdum and he didn’t. He lost his bargaining power when he showed up not to lose.
Zach-
Why are you so sure that Ed Fishman is going to create an MMA organization? Because he has so much money? And secondly, why do you think it will be able to rival the UFC? What are your exact opinions on the matter?
The reason why I ask is that the Ed Fishman thing sounds very similar to Calvin Ayre’s foray into MMA with the exciting BodogFight. He has, I believe, alot more money than Ed Fishman, and he has operated globally. What makes you think that Ed Fishman can do what he cannot?
Calvin Ayre runs BodogFight events to put himself and his brand over. That’s really the only purpose to his shows.
It was clear from the start when Fishman brought PRIDE shows to Las Vegas that he not only wanted in the business, he thought the business was very conducive to the casino world and was a perfect match. From what I understand, he is quickly learning a lot of things about the business and is a legitimate fan of it. How much that translates over into whatever he ends up doing MMA-wise, we’ll see.
Didn’t Fishman actually confirm that he did intend to start an MMA organization before suggesting that Zach and Jeff were angling for jobs in one of the FO shows?