Matt Bishop of MMA for Real had Kevin Iole on his Lights Out Radio show and broke the news that Affliction will be returning to the UFC as a sponsor.

Iole has updated his earlier post that reported an Affliction - Strikeforce merger to remove any reference to that and update with this instead:

Later on Friday, Affliction opted to get out of the promoting business and, in a joint statement with the Ultimate Fighting Championship, announced it would become a sponsor of the UFC. The fate of the fighters under contract with Affliction is not known yet.

Here's what Iole originally posted only hours ago:

Affliction itself is fighting simply for survival. Several sources have said that Affliction and Strikeforce will have some type of merger with Strikeforce retaining its name. Affliction’s Tom Atencio denied any merger is imminent, and Strikeforce CEO Scott Coker is in Italy on vacation and couldn’t be reached for comment. However, two independent sources told Yahoo! Sports a deal is either completed or on the verge of completion. White said an Affliction attorney flew to Las Vegas only days after UFC 100 and offered to fold and turn its contracts over to the UFC if the UFC would remove its ban on its fighters wearing Affliction T-shirts. "I told him, ‘I hope you idiots stay in business,’ " White said. "We had a record year in 2007. We had a record year in 2008. And we’re going to have an even bigger record year in 2009. I said, ‘I hope you … stay around in 2010 and burn every dollar you have.’ What they do is of no concern to me."

This is a major major news shakeup. Only hours ago it appeared that Scott Coker and Strikeforce were on the verge of dramtically solidifying their position as the undisputed #2 MMA promotion in the U.S. and now it appears that the UFC is further ahead than ever. Strikeforce CEO Scott Coker picked the wrong week to go to Italy on vacation.

Iole is also teasing hard that Dana White will make a major announcement on ESPN radio 1100 Las Vegas tonight at 9pm EDT. Speculation is heavy that that announcement might relate to yesterday's Bloody Elbow exclusive news of ESPN officials attending UFC 100.

UPDATE Commentary by Michael Rome:

Fans have already started speculating as to what this will mean for the fighters under contract to Affliction. Make no mistake, this is a bad day for fighters that had an alternative promotion willing to overpay them for their services. One hopes the UFC will back off its draconian ban of any fighter that signed with EA Sports, though it's understandable that they don't want to promote anyone appearing in a rival company's game.

This quote may explain why the earlier Dana White quote was removed. In classic fashion, it looks like the UFC's stance changed in a number of hours. Is there a new deal that came about in the last few hours?

The collapse of Affliction represents a huge shakeup in the MMA industry, and could bring about a number of dream fights. However, any notion that a deal with Fedor Emelianenko is imminent has to be tempered by the reality that the UFC negotiated with his team while he was a free agent for over a year, and never got a deal done.