A Balrog might have been able to physically challenge Sauron, since they were both Maiar, but when it came to intelligence and strategy, Sauron would have taken the field. Ultimately, it is strategy and tactics that win a war, although physical strength does help.
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But Melkor also was there, and he came to the house of Fëanor, and there he slew Finwë King of the Noldor before his doors, and spilled the first blood in the Blessed Realm; for Finwë alone had not fled from the horror of the Dark.
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