From PRIDE – Secret Files

PHOTO – November 2003, UFC owner Lorenzo Fertitta (left) and UFC president
Dana White (center) and Randy Couture came to Japan to observe the PRIDE
Tokyo Dome event. You can see Lorenzo’s infatuation with PRIDE from his
PRIDE GP t-shirt.

March 2007, Lorenzo Fertitta purchased PRIDE and took over its management rights. Also the owner of the UFC, he announced at the press conference, “The UFC is like my baby, and now I have another and I love both just the same,” but in the end without even having held a single “new PRIDE” event, they closed up the Japanese office in October of the same year. This was the real death knell of PRIDE.

Was the real reason Lorenzo bought PRIDE to kill it off or did something occur that became a reason that it had to be shut down? As for Lorenzo’s real aim, let us first go deeper.

Lorenzo and the original PRIDE owner, Nobuyuki Sakakibara, are in the middle of a dispute. On the first of February, 2008, PRIDE FC Worldwide Holdings LLC, which the brothers Lorenzo and Frank Fertitta had established, sued Nobuyuki Sakakibara and Dream Stage Entertainment. According to the complaint made at the Clark County court in Nevada, “the formers owners of PRIDE did not make effort to adhere to the conditions in the contractual agreement that bound the purchase” (in the complaint, the strongest point of contention is the matter of a background check). Lorenzo’s side is claiming for return of the money already spent in the purchase, rejection of any further payment, and “exemption from the responsibility for maintaining PRIDE,” contending that the other party’s behavior constitutes fraud. Against this, Sakakibara’s side has countersued, claiming that the contractual obligation to continue PRIDE has been breached. The start of this buy-and-sell drama came in July 2006, just after Fuji TV dropped PRIDE from its live broadcasting. That year in October, PRIDE made its first move into America, holding their Las Vegas event. As PRIDE’s CEO at that time, Sakakibara left for America to make arrangements for the event. On that occasion, he met with the Fertitta brothers, Lorenzo and Frank, and UFC president Dana White for a discussion.

That is when Lorenzo first came to Sakakibara with talk about purchasing PRIDE. The captivation Lorenzo felt seeing the match PRIDE had put on between Kazushi Sakuraba and Royce Gracie is what got him into the MMA business in the first place (at that time, he purchased the UFC from SEG who was running it then).

He wanted to make PRIDE, the organization that captured his yearning, into his own, he wanted to make it bigger than it already was. According to the rumors, he presented some billions of yen [some tens of millions of US dollars], but at that time, Sakakibara, deep down the road of self-sufficiency, refused. And not just Lorenzo, Sakakibara had received offers from a number of investors in the US for outright purchase or simple investing in PRIDE, but having ended in failure in trying to reacquire television broadcasting for the organization, it came to be that he finally made the sale to Lorenzo. He likely figured that Lorenzo, as the owner of the UFC, and as a fellow companion in the promotion business, could avoid any needless trouble and would have the power to help to secure MMA in its own right.

The announcement of the official transfer of the company happened on March 27, 2007, at the Roppongi Hills arena’s event space, with them renting that space from morning until evening, basically en entire half-day renting out a severely competitive and sought after event space at the most competitive time of day. Adding in the travel expenses for the American side of the show, it likely came out to be a 300-million-yen [$3.3M USD] press conference, all of which Lorenzo paid himself.

Lorenzo’s vision of a “new PRIDE” certainly spread, but the dark cloud from the previous television problems still hovered above. Dana explained, “For PRIDE, which costs about 1.2 billion yen [$12M USD] to put on a single show,” running it without backup from a television station would be impossible. So, one could suppose that is how PRIDE ended up never getting back to its feet. That is Dana’s explanation.

However, for PRIDE, for the UFC, you cannot just simply walk in and get a television show. For a television station, there is the content section that handles arranging the timeslots, there is the sales section to amass sponsors. A television programme is made through coordinated work extended over a mass of different sections. And for that to happen, there has to be a lot of speculating.

In connection with being able to get your show broadcast on television, probably the most major matter is the background check. The 100 million yen [$1M USD] paid for that was worthless. Lorenzo, paying that much of a fee, was turned down in the background check due to the management transparency requirements in the casino business he runs. If you look at it from the point of view of the Fertittas, to have to drop their core business by losing their casino license in order to run PRIDE, which was basically just an investment for them, is really a nightmare situation. As well, according to their explanation, it is clear from the court documents that it was not just the background check but also the asset assessment that had brought about problems.

“From April 2007 (the time of purchase), the information on the deposits, payments, records of money collection, client/customer information, transaction reports, bank balance statements, etc. has not been furnished, and further, physical obstruction has occurred.”

Because of that, it is explained that operations became extremely difficult. However, it is not possible at all to be satisfied by this explanation. If you are running a casino business, giving priority to the background check is all the more expected, it is a matter of common sense and of routine. As for the asset assessment as well, paying a rather enormous amount of money to purchase PRIDE, one could also point out the question of why they did not carry it out before the purchase.

On this matter, Dana White’s words are backtracking. The background check comes into view as the reason for suing. The story of, “Did Lorenzo really plan to continue PRIDE?” comes as well.

Most people in the business and in the media believe “PRIDE hadn’t been sold to Lorenzo, but in the end, to the UFC,” but if that is really the case, no matter in what form, the possibility for PRIDE’s return would have been high. That is because if Dana White and Zuffa, inc. financed PRIDE FC Worldwide, the “new PRIDE,” as its executives, they could not but work out positive, proactive corrective measures.

Shortly after, Lorenzo and his people started to hire PRIDE’s athletes to fly the flag in the UFC. And on October 4 at 10 a.m., a meeting was held at the main Japanese office for PRIDE FC Worldwide, where they received an international call from president Jamie Pollack stating that the main Japanese office of PRIDE FC Worldwide would be locked shut and all of its 20 employees are dismissed.

And for the employees who were given that notice, dumbfounded, withno time at all, with president Pollack’s representation and lawyers present, he told them they had 20 minutes to vacate the premises. And there was no contact made from America to any of the fighters under contract with PRIDE.

Failing in trying to get television broadcasting, the asset assessment, background check, transfer of the fighters, rewriting and transfer of the contracts…… Just one reason why PRIDE vanished cannot possibly be picked, but maybe it is because Lorenzo was captivated by the strongest MMA brand in history, PRIDE, and rushed into the deal without tying up all the loose ends beforehand. But afterward, the blaring errors, miscalculation of the Japanesemarket, misunderstanding of the television industry’s interests, and the absorption into the UFC…… PRIDE has lost the Japanese market’s support, andin America, just the UFC alone is fine.

PRIDE lost its place in the gulf between the US and Japan. After all is said and done, it had become too big for itself. It became a monster uncontrollable by any hand.

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