"I think with the right opportunity, for the right thing, he'll come out," Melendez said. "Whether it's boxing, whether it's kickboxing, whether it's whatever, some sort of challenge would be great."
With 36 career fights under his belt, Diaz has been at the game awhile. And after losing to UFC welterweight champion Georges St-Pierre in the main event of UFC 158, Diaz likely would have had to take a step down in competition next time out. Melendez feels Diaz would rather hold out that allow his name to be used to build someone else.
"I don't think he has the desire to be a stepping stone or he doesn't want to play that role," Melendez said. "Sometimes you have to come back up the ladder in your career and I don't think he wants that. I think he wants to fight top-level competition. He doesn't need to fight just to take it."
In the meantime, Diaz kept himself busy by putting on the WAR MMA show in June in his hometown of Stockton, Calif. According to Melendez, Diaz didn't put on the show to bring publicity to himself, but rather simply to be able to put on a show in his hometown.
"Nick's goal is always to do something good for the sport and his community, believe it or not," Melendez said. "He just wanted to put on a show in his hometown and get his boys some fights. He had some money to do it and it's a write-off for him, but he's under a microscope, and people get wind of it, and they start critiquing it and they start saying the show's going to suck. I feel for the guy, he's under a microscope the whole time. ...
"[Diaz said] 'I didn't want to say it was my show,'" Melendez continued. "'The people behind me wanted to, in order for the show to be successful.' You know, he did the right thing and put his name behind it. He did the right thing. I don't think his goal is to be the next big promoter, I think he just wanted to do something good for the MMA community in his hometown."
Either way, Melendez feels if Diaz wanted to come out of his self-imposed retirement, he could do so at pretty much any moment.
"Nick is forever ready. He's always in shape, he's always sparring, he's always grappling. He does triathlons, he's in better shape than most guys who are relevant now in the game."