M1 global closes head office, in panic after fedor lost?

http://www.mmafighting.com/2010/07/06/m-1-global-closes-head-office-panicking-after-fedors-loss/

Ten days after Fedor Emelianenko lost to Fabricio Werdum, Fedor's promotional organization M-1 Global is in disarray as it attempts to adjust to a world in which Fedor is no longer considered the best fighter in MMA.

Specifically, sources with knowledge of the situation say M-1 Global has closed its head office in the Netherlands, that some of M-1's investors have already cut ties with the organization, that officials within M-1 know they've lost most of their negotiating power, and that overall, according to one source, the people at M-1 are "panicking."

Some details:

Netherlands office: Although M-1 Global was widely perceived in the United States as a Russian company because of its close ties to Fedor, it actually considered its office in the Netherlands to be the global headquarters. But that's not the case anymore, as the Netherlands office has ceased to exist. M-1 Global knows it can't count on as much income from Fedor in the future as it could in the past, and closing the Netherlands office was a cost-cutting move. As mixfight.nl first reported, the employees of M -1 Netherlands no longer work with the organization, although it's not clear what will happen to Dutch fighters with M-1 contracts.

Losing investors: During Fedor's reign as the sport's heavyweight king, M-1 Global had some wealthy businessmen it could count on when it needed an infusion of cash. Basically, these were businessmen who were willing to lose money on an investment in M-1 just because they liked being associated with the toughest man in the world. But Fedor no longer has that allure, and as a result those investors have signaled to M-1 that they won't be infusing any more cash in the promotion.

Contract negotiations: For the last couple of years, M-1's negotiating stance has been, essentially, "We've got Fedor, and the only way you can get him is to give in to all of our demands. Take it or leave it." That worked with both Affliction and Strikeforce, because both desperately wanted the man who was generally recognized as the heavyweight champion of mixed martial arts. But now that Fedor isn't at the top of the sport anymore, the "take it or leave it" stance simply won't work. M-1 Global and Fedor had a three-fight contract with Strikeforce, and after the first fight, against Brett Rogers, M-1 went to Strikeforce and demanded some additional concessions before booking the second fight. If Fedor had beaten Werdum, you can bet more concessions would have been made to get Fedor into the third fight of his deal. Now, if anything, it's going to be Strikeforce demanding that M-1 make concessions before a third fight can get booked.

Panic: Fedor never viewed himself as unbeatable, but the people around him were banking on him continuing to win every single fight for years to come -- and they didn't have much of a backup plan in case he lost. Now that he has lost, the people around Fedor are panicking. Fedor himself wants to get back to the business of fighting, but the rest of the people at M-1 Global don't know if they have a business to get back to.

yea yea i know, another fedor thread

by Luke Thomas @bloodyelbow

M-1s' Evgeni Kogan issued this comment to me minutes ago:

Eh, that article is 100% made up. There is not an ounce of truth to it.

There is no panic, Fedor retains his status in the sport (financially and in terms of perspective). To believe any different is to be out of touch with the business reality of MMA (or any other sport for that matter).

The head office in Holland is here and isn't going anywhere anytime soon. As are the offices in Russia, Ukraine, US and the affiliates in Asia.

M-1 remains healthy and has the same leadership and investors as it has had since 1997 (making it pretty much the longest running promotion out there).

We're looking forward to promoting the Selection finals in Moscow on the 22nd and the Semis in AC on August the 7th. Challenge will take place in the fall.

I guess we will see. If Pryme has sources and he is right good. If he is Bullshitting, so long. the bad part of a possible M-1 shutdown is they do promote the sport in Eastern Europe/West Asia, I think that would be disappointing for the sport.

Ack, what I was posted was from Luke Thomas at Bloody Elbow. Hmmm that part didn't transfer over when I posted it.

M-1 mismanages the sport in Russia too. I try and try to support them but they're a circus and they've ruined Fedor's legacy by letting Dana White write the narrative and not his victories and skill.

This saga takes another spin, Bloody elbow is also now reporting:

We then posted M-1's rebuttal to that report. Now MDS has a follow-up report where Evgeni Kogan spins the situation as restructuring. To wit:

Kogan acknowledged that four employees of the promotion's Netherlands office have been "made redundant" in a "restructuring" of the company that took place over the last 10 days, but Kogan claims it's pure coincidence that M-1 chose to restructure after Emelianenko's loss. He said he himself is still at the Netherlands office, but he refused to name any other employees who remain there.

Despite Kogan's denials, one of the original sources has reiterated that in the days following Fedor's loss, Kogan told multiple employees of M-1's Netherlands office that they are losing their jobs because the office is closing. Told that Kogan had denied the original story, the source said Kogan was "lying."

Kogan declined to answer any questions about the status of the office, such as whether M-1 owns or leases the office space and whether the promotion has given a landlord notice of intent to move out or taken any steps toward selling the office. Kogan said he couldn't provide any details because it would be unfair to the employees who were recently let go.

"It's an internal matter," Kogan said. "The same thing as I wouldn't ask you what's going on in your office."

Kogan says M-1 Global cutting jobs in the wake of its highest-profile fighter losing his status as the sport's top heavyweight should not be construed as a sign that Fedor's loss hurt M-1's bottom line.

"We've restructured," he said. "It has nothing to do with Fedor's loss. ... What happened on June 26 doesn't affect M-1 as an organization."

I'm hearing from other sources that much, if not all, of what MDS is reporting is accurate. I haven't been able to independently verify it myself, but MDS is a first-rate journalist. I take his reporting very seriously.

From afar, I won't say that this reporting sounds remarkably different than the slow atrophy of WAMMA. And after losing such a great deal of leveraging power (it's also become increasingly clear that, say, relative to the cost of Gina Carano and the ratings she delivers, Fedor's ROI is dubious), I can't say a "restructuring" isn't unnecessary.

Why fire 4? Salaries. Oh well it looks like it slowly but surely coming apart for them. Now that they are pushing for a rematch with Werdum, claiming all the fans want to see it. How about just Pride Fanboys want to see it? After Carwin/Lesnar I have better fights to watch than a bald doughboy and JDS's punching bag fighting again.