Rumor: Crisis in M-1 Global; Monte Cox wants Vadim Finkelstein out by the buyout

Mohammed Osman, the active reader and commenter of RussianMMA.com , has wrote me an e-mail giving some great information to ponder. Here is his message.

On today's Sherdog Radio, Savage Dog Show, they mentioned Monte Cox having difficulties working with the Russian managers and possibly looking to head a group to buy out the organization.

Have you guys heard of any trouble within the organization? M1's issues with Bodog are documented. On that note, why has Bodog decided to go after the Russian market?

What would a group wanting to buy out M1 get? What assets does this org have other than Fedor?

Wouldn't getting rid of the Russian element from management also mean letting go of Fedor too?

Thought this was an interesting comment to make on the air, especially when there hasn't been anything public to warrant it.

Emailing with MMAPayout's Adam Swift, he says that in fact there has been many problems between the Russian and American sides of management, 'the Russians do whatever they want.' Adam also has placed Monte Cox's group's offer at $15 million. He's very negative on M-1's business outlook and questions whether the organization will make it out of 2008.

This is my guess: $15 million is too high for an organization that has such few assets and no profits. I'd say a much smaller offer will be made to pay Vadim Finkelstein a severance package to leave as President, but stay on as Fedor's representative. This way Fedor stays on board but Monte Cox gets the bulk of the managerial power. If there really is problems in the organization, this makes sense to me.

Since I'm supposed to be some kind of expert here, you probably want to hear my take on this whole situation. :) I don't have any real information (about the alleged crisis), so my thoughts will not have solid (insider's info or similar) ground. But I still have them. :)

First of all about Bodog. Organizations usually make money from sponsors, PPV (and other TV deals) and from sold tickets. Bodog isn't a big promotion, so it doesn't have a solid and substantial fan base, who would buy PPVs (they managed to sell only 13,000 PPVs for the last year's April event with Lindland and Fedor!) and therefore drag some sponsors in. They aren't big and interesting enough to get enough money from American ticket sells either. Their decision? To make as many events in Russia, where you don't have a PPV culture, but where there are a lot of people willing to pay big money to see Russian against Americans/Europeans (look at the names of the Bodog's Russian shows: "BodogFIGHT - USA vs. Russia", "BodogFIGHT - Russia vs. The World"). And since MMA knowledge among the Russian people isn't exactly there, Bodog can bring some cheap fighters in and get some good money off it. I don't know what Bodog's long term strategy is: they may have been using Russia as a playing ground for their experiments, from where to start their expansion, or they may just want to treat Russia as a separate market and to rip as much money as possible. Regardless of the strategy, their current way of behaving seems to work. They behaved as jerks toward Vadim Finkelstein and Russian M-1 during and after the already mentioned April's event, which was largely organized by M-1 and Vadim, which means that Finkelstein won't help them anymore, but it doesn't seem to bother Bodog.

The thing about whole MMA business is that regular fans know nothing about it. Everything seems to be clean from the outside, but in reality there is a lot of politics, lies, false promises, illegal contracts and other signs of the competitive business with the money involved. An excellent demonstration of how little we really know, was given not a long ago by Bas Boon, a famous manager of Dutch Golden Glory club. We have to always remember that there is a lot of money involved and neither of the players are saints - nor Monte nor some hypothetical "Russian managers" (plural!). Another factor in the game is the original investor. There have been a lot of rumors circulating about the real investor (since tiny and suspicious firms like Garlin and Sibling are just not it), a secret is still not revealed...

If the amount of money is correct, then it means that... Well, it doesn't mean anything, actually. It might be a small sum, a huge or a realistic one, all depending on what Monte Cox and Co get in return. It's impossible to make any predictions (that is, even is the alleged story about the crisis and the $15M is correct). The only thing that the money can tell us is that the prediction of "whether the organization will make it out of 2008" can become true only if all players decide to leave the game. I can't see it happen otherwise.

I mean, Monte Cox has bragged about a "$200 million start-up budget", which will easily be enough for a few years (if they use the money and not simply steal it).

It's business, where everything is possible, but in any case I personally don't see how Monte Cox could get rid of Vadim Finkelstein (and Dutch managers like Apy Echteld) and not to suffer big time. The whole point of M-1 Global is to have a truly global organization, which would behave well and cooperate with other promotions. Finkelstein's team's expertise is vital for the success of M-1 Global. The same goes with Dutch managers. So the only way I see them leaving is if Monte desides that M-1 Global shouldn't be global, but it should instead concentrate on local American market. I don't see Monte Cox doing something like this, because it will make "new revised M-1 Global" lose all its advantages and become one of the American promotions among many.

The introduction (well, almost; at least the introduction of the promotion video) of the Fighting Fedor - new MMA reality TV show also seems to confirm my personal belief and tells us that everything is pretty much going like it is supposed to.

But at the end the time will tell who was right...