Pro Elite's SEC Filing

by Michael Rome on Apr 15, 2008 11:41 PM EDT in News Comment 1 comment

This was just released today (tax day!), and there is just a TON of interesting stuff in here for those of us interested in the business side of MMA.

Check out the filing here.

Many people are going to run with the 27 million dollar loss figure and act like the company is doomed. Realistically, it takes some losses to make it big. However, no company can take those kind of losses forever, the CBS deal is indeed crucial to Elite XC's survival in the business. Someone from the Underground boards took some stats and put them in a more readable form, so I'll put them here. Just know that they are only part of the story, and to get everything you'll have to go through the whole document. Most of the information on ownership and salaries is in pages 36-40, while a lot of the information on revenues and costs is in the index on pages F1-F4:

Accounting:
revenue from live events: $4,560,917
revenue from PPVs: $477,679 (including $240,133 earned from Showtime)
revnue from website: $68,782
other revenue (e.g. DVDs): $184,192
Total revenue: $5,291,570
cost of live events: $9,619,606
cost of television production: $2,855,723
Total loss: $27,584,500
Executive Base Salaries:
Charles Champion (CEO) : $240,000
Gary Shaw (President of EliteXC): $270,000
Kelly Perdew (President of Proelite.com): $221,875

Ownership:
Officers and Directors: 24.2%
Santa Monica Capital Partners: 16.7%
Showtime: 13.0%
Contract With CBS (most material terms are redacted for confidentiality):

4 live, 2-hr events within 1 year and up to 2 additional events upon notice.
CBS has an option to renew the term for 4 additional years (4 additional events per year).
CBS will pay Pro Elite a flat licensing fee (amount is redacted)
Production will be controlled by CBS and Showtime
There is a "Talent Exclusivity" clause which is redacted. Most likely it means certain fighters can only fight on CBS

Update [2008-4-16 8:45:19 by Luke Thomas]:: I feel like I should add this quote from Yahoo's summary, which is where the poster at the underground got those stats:

Although the Company had approximately $4 million of cash at December 31, 2007 and received $4 million from warrant exercises in February 2008, additional financing is needed to continue to grow the operations to their desired levels over the next 12 months. We are currently seeking additional financing. However, there can be no assurances that we will be able to raise sufficient financings on favorable terms and conditions. If we are unable to raise sufficient financing, we will be required to reduce our expansion programs, dramatically reduce costs and growth may be limited. If sufficient additional financing cannot be obtained, the Company may have to curtail or reduce operations. There is no guarantee that we will succeed in accomplishing our objectives. The auditor's opinion states there is substantial doubt exists about our ability to continue as a going concern. These financial statements do not contain any adjustments that may be required should we be unable to continue as an on-going concern.

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Comments

Re: Pro Elite's SEC Filing

Disappointing.
It's unfortunate the new, hopeful promotions are rabid for notoriety and profit when a restrained approach is obviously more successful.

by Simco on Apr 16, 2008 1:54 AM EDT reply actions 0 recs