Showtime putting Elite XC assets on the auction block
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Showtime Networks, which has invested millions of dollars in Elite XC and its Los Angeles-based parent company ProElite, Inc., plans to sell the financially troubled mixed martial arts company’s assets on Nov. 17, according to a federal Securities and Exchange Commission filing.
The planned sale apparently would include the company’s contracts with fighters as well as the various second-tier MMA organizations ProElite has acquired.
ProElite executives were unavailable to comment on the upcoming auction. But others with an interest in the company that boasted such talent as Kimbo Slice and Gina Carano described the sale as yet another confusing chapter in the company’s dramatic, downward slide.
Fight manager Monte Cox, who represents Elite XC fighters Robbie Lawler and Eddie Alvarez, said that ProElite, in a recent letter, said it did not want to release fighters to free agency because the company hopes to avoid bankruptcy and return to staging fights early in 2009.
Cox said ProElite linked its financial woes on the fact that it didn’t receive funds promised for the October show in Florida during which Kimbo was upset by Seth Petruzelli. ProElite said the funding shortfall caused it to break loan covenants, which led to Showtime demanding repayment of a $6 million loan. That financing dispute prompted the cancellation of Elite XC’s card
this weekend in Reno.
Fighter agents ‘have banded together’ to demand that ProElite promptly prove that it is financially capable of avoiding bankruptcy, Cox said. Otherwise, Cox added, ProElite would be in breach of contract. ‘We have funds to fight them legally,’ Cox said.
Cox said that Lawler, who was poised to earn a minimum of $195,000 during three planned Elite XC fights, has been approached by rival MMA organizations UFC, Affliction and Strikeforce.
‘Free agency is the cleanest way to proceed,’ Cox said. ‘If Pro Elite is unable to fulfill its duty, the fight managers feel the contracts are null and void.’
How fighter contracts would be auctioned off remains a mystery to fighter agents and former ProElite executive consultant T. Jay Thompson, who has expressed interest in buying back the Hawaii-based Icon Sport organization he’d earlier sold to ProElite. Other organizations on the block could include King of the Cage, which has staged events in Southern California, England’s Cage Rage, Spirit MC of Korea and Hawaii’s Rumble on the Rock.
Thompson wonders whether potential buyers would have to ‘pay off a fighter’s contract just to pay him to fight.’ Cox said he’s heard rumors that about 100 fighter contracts are to be sold as part of a package, rather than individually.
Cox said that some fighters would be reluctant to join an organization that does not televise its fights nationally as Elite XC did.
Slice’s contract will prove too expensive for another company to buy, Cox predicted: ‘Nobody wants him, he was exposed. He’s not a good fighter. His best bet is to go to Japan.’
Meanwhile, Thompson said, fighters and their agents are engaged in a waiting game.
‘No one knows what to do,’ he said.
In earlier SEC filings, ProElite reported that it had generated $55 million in net losses since January 2007.
-- Lance Pugmire and Greg Johnson
