I'm concerned that it's a little too soon in his MMA career for Cung to fight Frank. This fight will come down to who can control the setpoint. Another factor could be how well Frank's knee has recovered from his injury prior to the Baroni fight (he tore his ACL among other things). If Frank is not effective at take downs due to the knee or if Cung can keep it standing, he would be hard to beat, though Frank is actually a very good kicker and has great hands (which was FAR from the case back in his UFC days).
If Frank manages to get it to a groundfight, it could get very ugly, very fast for Cung. What most people don't think about with Cung is his skill set includes not only unparalleled kicking in MMA and great stand up in general, but also some of the best throws and takedowns in the business. When he fought Tony Frykland, Frykland was very timid about engaging Cung and risking the throwing skill of Le to try to take him where he wanted the be. He seemed more content to allow Cung to use his body and head for a kicking exhibition than to risk facing Cung's takedowns.
I have worked out with Frank many, many times over the last several years, though not in the last year and a half. He trained 2-3x /week at my instructors school for about eight years and whenever I came out to train (usually 3-4 weeks out of the year), we'd often be in the same workouts. Rather than being on a "downward slope in his fighting carreer", at least when I was working out with him, he had greatly improved from when we first started playing back in '99. I can't say anything one way or the other about where he is at currently though.
I know a lot of people think he has slipped because of the fight with Gracie, but knowing him and how he fights, I really see his explanation of that fight as the truth (or at the very least of how Frank sees it.) In other words, he was trying to just "play it safe' and never considered Gracie ANY threat and just a warm up fight that it was going along pretty much as he intended until Frank hit him with a foul and got DQ'ed. Was it the best strategy? In retrospect, obviously not.
Another factor is that he refuses to fight for Dana White and the UFC. I can tell you first hand that he really thinks that Dana does not treat or pay the fighters well (Frank's not alone in this opinion obviously) and that in the long run, Strikeforce and Scott Coker will be better for the sport. I hope so, though I admit a bit of bias since Scott and I were team mates and friends since we were in our teens, but if he gets a few good openings (like this promotion), I could well see him and his company/org. as one of THE major players in the future of MMA. Also, odds are that Frank is making as much money with Scott and Strikeforce as he would with the UFC and Dana (though I have NO personal knowledge of their financial dealings). If I were Frank, I would not see anything wrong with getting on the ground floor with someone I liked and respected that I thought was really going to go somewhere than to fight for comparable money for Dana, espcially when Frank has already been a 5x UFC champ.