About two weeks ago, former Strikeforce director of communications Mike Afromowitz did an interview with Jack Encarnacao on Sherdog’s “Beatdown” radio show. The transcript of the interview is a highly interesting read; it offers a rare glimpse into the feelings and thoughts of somebody on the “inside” of the business of MMA. One particularly interesting answer from Afromowitz concerned Strikeforce spending a lot of money to push its brand, and that spending, on fighters like Fedor Emelianenko, apparently leading to the sale of Strikeforce by its parent company, Silicon Valley Sports Entertainment.
You know, what’s funny is somebody said to me not too long ago, ‘You are never going to make money with Fedor.’ He said that to me because he thought that he understood the mentality behind Fedor’s management. He said, ‘You are never going to make money with them.’ [He] said that straight out to me. There’s a lot of different thoughts out there, and I think maybe it wasn’t the right move, but everybody wanted it at the time. And when we did it, it sure felt good. But it could have been part of the undoing.
The value of an athlete, generally speaking, is determined by two things. The first is the athlete himself, and the second is the company or team the athlete competes for. The reason that so many free agent baseball players sign with the New York Yankees or Boston Red Sox is because the revenue those players generate is greater with those teams than with, for instance, the Florida Marlins. Sure, a player’s theoretical value may be determined by how good a player he is, but his real-world value is determined by the amount of revenue that’s generated by his playing for his team. If Alex Rodriguez played for the Marlins instead of the Yankees, he might have been exactly as good, but the amount of revenue generated by Rodriguez for the Marlins would have been greatly reduced. This is because the Yankees have a massively larger fan base, appear on national TV broadcasts much more often, etc.
The same principle applies to MMA. Fedor Emelianenko’s real-world value would have been much, much higher in the UFC than it would have been anywhere else. Make no mistake: Fedor Emelianenko’s fights were some of the biggest fights in Strikeforce history. Having Fedor Emelianenko under contract grew Strikeforce’s brand a great deal. But compare this to the impact of, for example, Emelianenko fighting Brock Lesnar in the UFC when they were the top two heavyweights in the world. There was no fight Strikeforce could put together that would come close to matching the revenue an Emelianenko-Lesnar title fight would have generated.
And so it is that Emelianenko’s value was significantly lower in Strikeforce than it would have been in the UFC. Strikeforce didn’t need to match the UFC’s offer for it to be a poor investment. I don’t know exactly how much the UFC offered, and I don’t know exactly how much Strikeforce paid, but it’s quite possible that Strikeforce could have paid half of what the UFC offered, and it still would have been a bad business decision.
Strikeforce almost definitely lost money by having Emelianenko under contract, and potentially lost boatloads of money. I’m not saying that Emelianenko alone caused Silicon Valley Sports Entertainment to wave the white flag on funding Strikeforce, but it was an awfully big straw to put on the proverbial camel’s back. You won’t see the Marlins getting into a bidding war with other baseball teams for Albert Pujols this offseason, and MMA organizations shouldn’t compete with the UFC for fighting talent.