Sifting through Affliction’s rubble
Affliction became the newest member on Friday of a group of which it wanted no part.
It joined Bodog Fight, the World Fighting Alliance, the International Fight League, Elite XC and others on the list of mixed martial arts promotions that were backed by big money, big hype and big dreams before ending up as financial nightmares and failing.
From Affliction’s start, the odds were greatly against success because of several major flaws in its business model.
The first was the outdated belief that heavyweight is fighting’s marquee division. This notion led Affliction to overspend in an effort to corner the market on those it judged to be the top heavyweights, all in the name of making the promotion a major player.
To the small percentage of hardcore MMA fans, the Affliction heavyweight roster of Fedor Emelianenko, Tim Sylvia, Josh Barnett, Andrei Arlovski, Paul Buentello, Ben Rothwell and others was stronger than the UFC.
But, as an example, they offered Sylvia $800,000 per fight with a $200,000 win bonus, and he was making $100,000/$100,000 in UFC, and UFC had already decided not to renew his contract. The UFC absolutely wanted Arlovski, and Affliction offered him a guaranteed contract that started at $500,000 for his first, and increased to $1.5 million for his third fight, plus a $250,000 win bonus. Even Rothwell, a solid fighter with no significant mainstream name value, had a $250,000 per fight guarantee.
The second flaw was the idea of promoting pay-per-view events without a strong television show to build up the events. Between buying the company in 2001, and the debut of The Ultimate Fighter television show in 2005, UFC only had one truly financially successful pay-per-view event, and that was based on getting the pro wrestling audience to purchase the first Ken Shamrock vs. Tito Ortiz fight in 2002.
While having television in no way guarantees success, the IFL, Bodog and Elite XC all had television deals and failed to make it in the U.S. market, not having television and trying to promote pay-per-view events is almost certain failure.
There was also the mistake of equating Fedor Emelianenko’s status as the top heavyweight fighter in the world (and many consider him the best overall fighter) with his marquee value. Bodog and Japan’s PRIDE had Emelianenko and had bombed on pay per view. Affliction did a better job than its predecessors at marketing Emelianenko, and MMA in general has gained popularity in recent years, but Emelianenko vs. Barnett, which some saw as No. 1 and No. 2 in the world, was going to be lucky to do six percent of the business that Brock Lesnar vs. Frank Mir did at UFC 100.
Affliction also made the classic mistake that almost everyone on the inside of the industry falls for: thinking Internet message boards and blogs reflect the opinions of the overall MMA fan base. Such sites actually reflect a tiny percentage of ticket and pay-per-view buying public, whose tastes are markedly different than the hardcore base. Promotion on television and the ability to garner a mainstream buzz are the key to financial success, not getting message board posters excited.
The death of the promotion was almost inevitable before the company ran its first show. The planned final show, and the promotion itself, unraveled after it was announced on July 21 that the California State Athletic Commission was not going to license Barnett for his match with Barnett due to a positive steroid test.
While dozens of name fighters were willing to step up on short notice to take the fight, largely because of the $500,000 purse, there was pressure from Showtime, which was marketing the pay-per-view, regarding not providing the advertised main event.
But if the promotion was healthy, the show would have gone on. It was only a few months back when Ken Shamrock failed a steroid test in California before a scheduled pay-per-view match with Bobby Lashley on a show promoted by Roy Jones Jr. They got a replacement fighter, Jason Guida, and the show went on.
Affliction’s troubles were far deeper than Barnett’s test failure, a fact confirmed hours later when Affliction announced a “collaboration” with UFC. Essentially, the Affliction promotion is done, and UFC will allow Affliction to sponsor fighters and be a sponsor for the promotion, as they were for years before getting into the promoting game themselves.
So what does all that mean going forward to the various major players? A look at how things are shaking out:
UFC: One would suspect the deal struck would give UFC first dibs on the Affliction contracts. But there are all kinds of problems, as Affliction’s contracts were not exclusive deals, and UFC isn’t going to use anyone who they don’t have on an exclusive deal. It’s questionable whether UFC would even want former champions Sylvia or Arlovski, between their huge contracts and coming off embarrassing one punch losses, Sylvia to Ray Mercer and Arlovski to Brett Rogers.
Dana White has publicly expressed interest in Vitor Belfort, a former UFC light heavyweight champion who has revived his career at middlweight. DREAM middleweight Grand Prix champion Gegard Mousasi is an interesting light heavyweight. Renato Sobral was fired by White two years ago for holding a choke after the match had ended against David Heath. Matt Lindland is also coming off a quick knockout loss, has a huge contract, plus has not been on good terms with UFC for years. There are quality fighters like Javier Vazquez and Chris Horodecki in the lighter weights whose deals are probably quite reasonable by UFC standards.
Belfort and Mousasi look to be the only potential acquisitions who look to make immediate noise in the upper ranks, and they would still have to negotiate new deals. UFC also has more fighters under contract even without signing anyone new than it has spots on shows to keep them all fighting the preferred three times per year. Unless they decide to add more events next year, there really is a finite number of people they can add to their ranks.
Affliction: This is a positive for the company’s core apparel business. It got rid of the huge contracts and the money-losing promotion. The Affliction T-shirt brand gets wider exposure.
But it is also in a business relationship largely controlled by a company they’ve had major blowups with in the past. They do lose face with a slew of fighters to whom they made promises, and who were in hard training when the plug got pulled and lost big-money paydays in the process.
Strikeforce: It’s hard to say. North America’s No. 2 promotion suffers from roster depth issues.
Strikeforce was in negotiations for an Affliction deal, believed to be similar to the deal UFC, until the 11th hour. Such a deal would have helped the company’s roster depth, but it may not have been cost effective for a smaller company being run on a budget.
There are a lot of Affliction fighters they could be interested in, but Strikeforce is running a successful business today where others have failed because they haven’t overpaid fighters. They may pick up some fighters that will help the depth on their shows. They already have a contract with Sobral, the company’s light heavyweight champion, and on Monday, they announced the addition of Sobral vs. Mousasi as a title fight on Aug, 15. Belfort would be the most interesting acquisition, but he’s also the one UFC is most likely to go aggressively pursue.
Fedor Emelianenko: Emelianenko remains the grand prize in the Affliction’s going out of business sweepstakes. From the UFC’s standpoint, money is not going to be an issue. With the UFC’s promotional muscle behind it, Emelianenko vs. Brock Lesnar would likely be the biggest money fight in the history of the sport.
The issue is going to be control. UFC and Emelianenko in previous negotiations have hit two major impasses: Emelianenko’s people don’t want him signing an exclusive deal, and UFC is not going to put itself in a position where someone has the potential of winning their championship and then leave with the mainstream credibility of being accepted as the real champion.
“This is the moment of truth that the UFC has talked about,” M-1 Global President Vadim Finkelchtein, who handles Emelianenko’s business, said on the company’s website. “Fedor and I are here in the States. If they want to come out and fly here, we are ready to conduct negotiations. Of course it still doesn’t imply we are ready to accept any conditions they’ll throw at us. We want to talk to the UFC about having Fedor compete against some of their fighters, but only within the framework of co-promotional efforts with M-1 Global.”
Josh Barnett: This was Barnett’s third steroid test failure. The first was in Nov. 2001, when testing was done by the Nevada State Athletic Commission strictly to determine whether there was an issue with steroids in the sport. Barnett was one of a few who failed. No suspensions were issued at the time. His second positive, also in Nevada, took place in 2002 after a match where he defeated Randy Couture to win the heavyweight title. He was suspended, stripped of the title, and continued his MMA career for the next several years in Japan, which has no testing. This third failure is unique, because there is a loophole involved. Barnett was not licensed in California, and thus, his license was denied, and he will not be allowed to re-apply for a year. However, without a license, California does not have the right to explicitly suspend him from competition. Without the suspension, other states are not obliged to follow suit.
Nevada State Athletic Commission executive director Keith Kizer said, “Anyone can apply, but I do know how the Commissioners would vote on any specific application.”
Barnett is scheduled for a pro wrestling match on Aug. 8 in Japan, and he’s been a regular for the Sengoku MMA promotion. Japanese MMA is in many ways a completely different sport, with no governmental regulation. Sengoku recently used former Elite XC heavyweight champion Antonio Silva during the period he was suspended after failing a steroid test in California.
Even if Barnett was successfully licensed in the states, his future remains murky. UFC would be a difficult fit given their past issues, but nothing is impossible. His price tag is high for Strikeforce, but the steroid stigma and licensing may be even greater barriers.