UFC buys rival Strikeforce

Updated: March 13, 2011, 1:40 PM ET
By Josh Gross | ESPN.com

NEW YORK -- Zuffa Inc., the parent company of the UFC, has purchased rival mixed martial arts promoter Strikeforce, though they will continue to operate as separate entities.

Financial terms of the sale were not available.

Strikeforce spokesman Mike Afromowitz confirmed the deal to The Associated Press on Saturday night.

"Right now the plan is to operate on our own," Afromowitz said. "Business as usual."

UFC president Dana White told MMAFighting.com and The Canadian Press that Zuffa had purchased Strikeforce.

An official announcement will come Monday in Las Vegas.

Negotiations between representatives for Zuffa and Silicon Valley Sports & Entertainment, which also runs the NHL's San Jose Sharks, have been in the making for months, various parties familiar with the deal said.

Three years ago Silicon Valley agreed to a partnership with Strikeforce's parent company, West Coast Entertainment, a San Jose-based promotion created by Scott Coker in 1985. A kickboxing-based organization, Coker did not move to promote MMA under the Strikeforce banner until 2006. Coker and Silicon Valley shared an even split of the company.

Coker did not respond to requests for comment regarding the deal with the UFC.

On March 1, Coker described rumors of a pending sale to the UFC as "crazy." He said Strikeforce was searching for "strategic partners" and that there were at least two options, but that "the UFC is not one of them."

Among those potential investors was ProElite, Inc., which was told it could buy out Coker's Silicon Valley partners for $20 million and another $20 million investment in capital, a source involved in the negotiations said. ProElite is a publicly traded company that promoted MMA on Showtime under the EliteXC banner until it sold its assets to Strikeforce and its partner Silicon Valley in February 2009. That 2009 sale created the opportunity for Strikeforce to strike a deal with Showtime.

Sources confirmed Coker, the current Strikeforce CEO, attempted to wrest control of the brand, but in the end was unsuccessful. Instead, an agreement to sell Strikeforce's licensing rights, fighter contracts and video library closed with the UFC on Thursday or Friday.

White told MMAFighting.com that Coker would remain in charge of Strikeforce and retain his staff of around 10 employees. The company would run separately from UFC and exhaust its contracts with Showtime television.

Ken Hershman, executive vice president and general manager of Showtime Sports, declined through a representative to comment. The network has a deal with Strikeforce that runs through early 2012, sources said.

As it did with WEC at the start of 2011, it is expected UFC will fold Strikeforce under its banner at the conclusion of the partnership with Showtime. The UFC attempted to create an under-one-roof competitor with its purchase of the Pride Fighting Championships in 2006, however it chose to dissolve the company months later. With the WEC, Zuffa hoped to build another relevant brand to take to pay-per-view, but again the decision was made to bring those fighters under the UFC banner.

Current contracts between fighters and Strikeforce are transferrable to Zuffa, sources with knowledge of the contracts' language said.

Strikeforce will feature two events beginning in April, notably a card on April 9 in San Diego.

Cesar Gracie, jujitsu coach for Strikeforce welterweight titleholder Nick Diaz and Strikeforce lightweight champion Gilbert Melendez, both of whom are set to defend their belts on the card, expressed concern over the impact one dominant MMA brand would have on top to mid-tier fighters.

"We're definitely concerned that it's going to impact their future contracts and their pay in future contracts," Gracie said.

UFC Hall of Fame fighter Randy Couture said the deal between UFC and Strikeforce "has the potential to be tougher for fighters who are free agents."

"The Strikeforce purchase strengthens and stabilizes the [UFC] brand," said the 47-year-old Couture, who fights Lyoto Machida on April 30 at the Rogers Centre in Toronto in front of an expected crowd of more than 50,000. "It solidifies Zuffa's monopoly on the sport of MMA.

"Overall it's too early to tell if it's positive or negative for the sport until we see what direction the new owners take with the brand."

Unless another organization with a strong television presence and deep pockets arrives on the scene, fighters' leverage will be determined by their talent, popularity and success. Currently, the UFC is reducing the size of its roster to create an average of 28 fighters per division, an overall decrease from 260 to around 200.

Couture famously challenged the UFC in court in 2008 over rights to his likeness as well as his earning potential. In the end, he failed to free himself and returned to the company. Long an advocate for some sort of safeguard system for the sport's athletes, Couture suggested the idea of a union or fighter association emerging as response to the UFC's firm grip over the sport is "wrought with hurdles and will be difficult to execute."

It will, however, remove the largest impediment in the way of the best fighters having the opportunity to fight one another. Prior to closing the deal with Strikeforce, UFC contracted roughly 70 percent of the top-10 ranked mixed martial artists from heavyweight through bantamweight, according to ESPN.com's MMA rankings. This move gives Zuffa a lock on talent that is considered to be the best in the sport.

Josh Gross covers mixed martial arts for ESPN.com. Information from The Associated Press contributed to this report.