DREAM featherweight champion Bibiano Fernandes is the latest in a long list of fighters (Japanese magazine Kamipro recently revealed that it has been both foreign and Japanese fighters) that have encountered issues being paid. FEG's response to this situation was, "Please wait for the official statement" but no date for the statement has been given.
HDNet commentator Michael Schiavello revealed via twitter (http://twitter.com/schiavellovoice) that the K-1 Max 70 kg Finals are on Oct. 25 but the 70 kg Final 16 hasn't even been completed yet. Three of the eight fights needed for the Final 16 took place back in July and the remaining five bouts were to be held on a European event later in the year. No European K-1 MAX Final 16 event has been announced.
FEG is disorganized, under significant financial stress and appears to be running in survival mode.
The lack of organization mostly stems from the sudden resignation of a key staff member immediately prior to DREAM.14 in May.
This staff member worked on both K-1 and DREAM events and was responsible for most of the management behind the scenes in addition to being one of the few staff that spoke English and Japanese. Several fighters, most notably Nick Diaz, have since expressed frustration in the lack of organization and English-speaking staff and this was highlighted by Diaz's late attendance to the DREAM.14 weigh-ins. Although a replacement for this key staff member was planned, it never eventuated.
FEG is an extremely private company so we can never be truly sure of of the source of their financial woes but rumors are circulating that the problems are mainly due to increasing fight purses and problems finding replacement sponsors since Heiwa and Olympia left.
However the financial problems started, the end results are fighters not getting paid and fewer events.
In the past fighters complaining of slow payment were, according to FEG USA's Mike Kogan, simply not aware that FEG has it written in their contracts that it takes two months to pay fighters. That excuse can't be used here as Bibiano Fernandes hasn't been paid for a fight that was almost five months ago. Fernandes is its champion and has publicly said that he refuses to fight if it doesn't pay him. FEG has promised a response "soon," but it has been 10 days now since Fernandes went public and both fighters and fans are fast losing confidence in the company.
The fact that FEG are decreasing the amount of events that they are holding in these tough times is worrying. It indicates that DREAM and K-1 are not turning a profit. If their events were profitable, they would obviously be continuing to hold as many events as possible.
With these staffing problems, payment delays and lack of events, one gets the feeling that FEG is just trying to survive and hold out for the light that is coming at the end of this dark year.
Chinese financial group PUJI Captial recently promised $230 million to FEG over five years starting in January 2011. With the announcement of the financial support of PUJI Captial, FEG announced plans of global expansion and declared "war on the UFC and WWE", but the business plan that it revealed seemed to be a larger version of the failing one that it is currently employing.
PUJI's money is going to disappear quickly if FEG does not realize that the way towards profitability and financial security is not to throw more money at the problem, but to fix the existing problems and restructure the company.