The sharks are circling on PRIDE, the international MMA league giant, and the rumor mill is in a flurry. Rumor are that DSE, PRIDE’s parent company, has put the company up for sale in a quiet manner.
Both the Wrestling Observer and MMAWeekly are stoking the fires and have great takes on the possibility of a sale to UFC or WWE. I have my own ideas, ignoring the possibility of PRIDE being sold, and they are in for a long troubling financial haul despite their stellar stable of quality fighters.
Without a public TV contract in their biggest market (Japan), PRIDE is in a precarious financial situation. The only place they have to gain new revenue streams are in new markets, like the U.S. and Brazil. To expand in these new markets, it takes capital (i.e. money, mula, dinero).
Fans are where the primary revenue stream comes from through merchandising, public TV contracts and the accompanying viewership with their associated commercial dollars, and PPV buys. PRIDE needs Fans in these new markets but it takes time to reach the masses and build your brand name. Sure you can cater to the hardcore, but in markets where there are already established brand names, the hardcore dollar can only be spread so far and the real money comes when you hit mainstream and the masses believe in your product. We have already established that PRIDE desperately needs a serious revenue stream and therefore absolutely needs groundswells in any market they penetrate with no time to wait for a gradual build-up.
Also, How do you pay the big prices to the expecting fighters without the ready-made fan-base or another revenue stream? Established PRIDE fighters are already locked into contracts which have money figures attached to them that were made when PRIDE had the Fuji TV contract. New fighters will need to be paid as much as established PRIDE fighters to lure them away from other associations and to guarantee that they are quality now, not later. Remember, PRIDE needs the revenue stream quickly and can't wait to develop a whole new stable of fighters. All this equates into big expenditures.
Another question that remains: How do you put on a spectacular show without a ready-made revenue source? Remember, PRIDE is used to high quality production values (They usually spend around 10-20 million dollars on one production) and their fans expect it so you can't skimp there.
If they had their Japanese TV contract, they could offset some of these costs, but they don't. So they have to write it off as "loss leaders". Cash spent without any hope of short term re-coup. That's fine for companies that are new. Investors expect expenditures such as this and are willing to wait the requisite time before a return on their investment happens. With already established companies, this is harder. People expect returns on their investments in a short time manner. They already had to wait their time and they want their money now.
All of these unanswered questions pose a hard financial problem for PRIDE and DSE that will need to be resolved in a satisfactory manner to remain solvent. Don't get me wrong. I hope that PRIDE does answer all these questions. Competition is good for both the fans AND the fighters. But the quality of the talent in an organization doesn't always save said company from financial disaster.