ProElite Fighting Showtime on Auction, Situation More FUBAR'd Than Ever

Wow, I posted last night on the CSAC pulling ProElite's promoter's license in California, but it looks like the epic clusterf**k is reaching even more epic proportions. This Media Post story reveals that ProElite's management team is fighting Showtime's efforts to auction off their assets, including fighter contracts:

With Showtime primed to sell its assets, a mixed martial arts promoter isn't going down without a fight. ProElite, which has aired MMA matches on the pay cable network, said Thursday that it plans to block the public auction.

Looking to resuscitate its business, the company said it would pursue all available options to retain its assets, which include the contract of Kimbo Slice (real name: Kevin Ferguson). Possible actions include trying to raise additional capital, filing for bankruptcy, negotiating a settlement with Showtime, or filing a lawsuit to prevent the sale from going forward, according to an SEC filing.

...

Showtime, whose parent is CBS Corp., notified ProElite on Oct. 31 that it will auction off the company's assets at a Los Angeles law firm on Nov. 17. The most valuable would appear to be the contract of one-time YouTube sensation Kimbo Slice. Also included are contracts with at least 13 other fighters, as well as a video library and the EliteXC and other brands.

Showtime, which aired EliteXC events through September, held unsuccessful discussions about acquiring ProElite before moving to conduct the auction. ProElite was unable to pay Showtime back loans totaling $6.3 million, and had less than $550,000 in the bank, according to an SEC document.

It's crystal clear at this point that Showtime/CBS want nothing more to do with MMA, they're just looking to get a little bit of the $6.3 million back and wash their hands of the whole fiasco. Sorry, Affliction, looks like you won't be announcing a new "partnership" with a network anytime soon.

The problem is, as Zack Arnold points out, the contracts might not be transferable:

What’s fascinating about this news item is the fact that Elite XC reportedly used personal service contracts with fighters. If you recall, PRIDE used the same type of agreements with its fighters. When DSE sold the PRIDE assets to UFC, I was screaming at the top of my lungs that fighters would be able to break away from those contracts if they were PSCs. UFC found itself having to renegotiate new contracts with PRIDE fighters because of it.

Now, we have (Monte) Cox claiming that the fighter contracts up for sale at the auction on November 17th are PSCs, meaning in theory that they are not transferrable to third parties. This is why Cox is questioning whether or not Showtime will be able to pull off what they are doing.

So let's sum this up, there are at least three sides to this fight:

1. Showtime -- They're the ones forcing the auction through. According to their loan agreements, they believe they're entitled to everything and can auction off the fighter contracts for cash. They're in let's-wash-our-hands of this mode. Of course they're a corporate behemoth, so any little people in their way better move or get crushed.
   
2. Zombie ProElite -- CEO Chuck Champion and company are fighting tooth and nail to avoid declaring bankruptcy and telling fighters they're going to be putting on events in 2009. They're in bunker mode. Not a lot of reality penetrating, will likely have to be dragged out kicking and screaming. Enjoy those lawsuits guys, looks like you'll be spending the next decade or so in court.
   
3. The Fighters and their management -- The home team. Run, baby, run! Apparently many of the fighters have clauses in their contracts that only give the promotion 30 days to prove that they're financially viable before the contracts expire. Go Monte Cox! Go Cesar Gracie! Even dumbass Mark Dion, go cat go! Get your fighters out of this tar pit so they can get back to work.

I'll let Jake Shields speak for truth and justice to close this piece:

“To see us on sale online is ridiculous,” said Shields. “We already sent them a breach of contract letter. They don’t respond to that. Instead they put this up. It’s just completely ridiculous how they’re handling this situation and completely unprofessional. They should be in contact with us fighters and letting us know what’s going on instead of just putting things online and not responding to our faxes, emails, and phone calls.”

UPDATE: Fightlinker adds his usual insight:

At this point, I can only guess at what the fuck ProElite is up to. Obviously, it would be in their best interest to hold onto and sell their own assets in order to recoup whatever money they can for themselves. There’s also that retarded idea that they think they can still limp into 2009 with another event, a concept so ludicrous it could only come from the brainiacs currently left in charge. Whatever the fuck they’re up to, it looks like things won’t be as open and shut as everyone was hoping it would be. While ProElite did a shite job of running an MMA company, I’ve got a bad feeling they’re gonna be somewhat more effective at dragging all this out as long as possible.