Showtime Buying EliteXC?

by Kid Nate on Sep 18, 2008 8:03 PM EDT in News Comment 39 comments

MMA Convert has the scoop, and it ain't pretty:

We all know how serious of financial trouble ProElite is in. They’re $55 million in the hole and according to their last SEC filing, they need $3.5 million in financing in the near future to stay afloat. Considering how screwed up our economy is right now, it would seem like a miracle that anybody would be investing anymore money into the fledgling promotion.

Well, according to ProElite’s latest SEC filings, it looks like Showtime has stepped up to the plate once again by investing $1 million into ProElite, far short of the $3.5 million needed. There’s a catch too. Should ProElite fail to repay the loan including interest by June 18, 2009, Showtime will have “first priority interest on the assets of the Company.”

Zack Arnold says:

In other words, the financial end game is very near here for Elite XC. Will Showtime/CBS pull the trigger and purchase the assets of Pro Elite if the company financially fails soon? If CBS network executives do buy the assets and run their own MMA organization, it will be fascinating to see who they hire and who they would keep on-board to run the operations.

During the Japanese MMA boom period a few years ago, it was the TV network executives and chief producers (think: Kunio Kiyohara of Fuji TV) who controlled a lot of the shots for PRIDE & K-1’s matchmaking. How would the landscape look with an American TV executive calling the shots in terms of booking?

There have already been ugly (and since denied) rumors about CBS attempting to force Gina Carano to fight on their July card but I can only imagine the kind of freak shows we'll see if CBS gets complete control. Kimbo Slice vs Ken Shamrock could be just the beginning....wonder if Giant Silva is available?

UPDATE: Loretta Hunt at Sherdog has this:

Showtime Networks filed public notice with the U.S. Securities and Exchange Commission Thursday announcing its intention to enter preliminary negotiations for the purchase of Pro Elite Inc.

Showtime, a subsidiary of the parent conglomerate CBS Corporation, already enjoys broadcasting deals with the Los Angeles-based company on both its premium cable channel and CBS. Showtime also has a 20% ownership stake in Pro Elite.

The potential acquisition could not come at a more opportune time for the fledging company, as Pro Elite faces a $55 million deficit accrued during its two years of operation.

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Comments

The potential acquisition could not come at a more opportune time for the fledging company…

55 million in the hole is so opportune.

by Eugene Schelfaut on Sep 18, 2008 6:16 PM EDT reply actions 0 recs

So they’re pumping 1 million in to keep it alive through October 4?

by Michael Rome on Sep 18, 2008 6:21 PM EDT up reply actions 0 recs

Yes, I wouldn’t expect any more shows after that…

You’re looking at a forced bankruptcy here folks…

Then Showtime will either sell the assets or utilize it in some other way.

by mmalogic on Sep 18, 2008 7:09 PM EDT up reply actions 0 recs

Ouch.

by Eugene Schelfaut on Sep 18, 2008 7:13 PM EDT up reply actions 0 recs

actually they may have one more show after the 4th,,, doubtful though as I am sure the exec’s will want to get paid more so than paying fighters.

by mmalogic on Sep 18, 2008 7:12 PM EDT up reply actions 0 recs

Hey mmalogic, is Zuffa buying/trying to buy Strikeforce?

Josh Thomson was mentioned last night as being a Strikeforce champion, and Cung Le was discussed extensively during the Lauzon fight, which was put on UFC.com. That, plus Dana having good words about Coker and Strikeforce in an interview recently, sets off all sorts of alarms in my head.

by Michaelthebox on Sep 18, 2008 9:52 PM EDT up reply actions 0 recs

right now the best “solution” is being worked on for strikeforce.

and in the end it’s up to coker what he wants to do… does he want to cash in his chips? Does he want to continue doing what he loves under a bigger umbrella with more resources?

either way there is a working relationship being put in place…

Strikeforce by no means is making lots of money… however they aren’t losing much and he has a good formula for someone to do what they love and make a decent living at it.

by mmalogic on Sep 18, 2008 10:05 PM EDT up reply actions 0 recs

Its opportune because some one is taking over your debt, obviously, and you get to make some money. I can see this as a positive for EliteXC. Atleast they are not folding.

by MMASuPreMaCy on Sep 18, 2008 7:07 PM EDT reply actions 0 recs

nobody will be taking over their debt… they will just purchase the assets (which they already have with all the loans made).

by mmalogic on Sep 18, 2008 7:10 PM EDT up reply actions 0 recs

Just to further the point, couldn’t this be a preemptive move by Showtime to protect their rights to show fight footage is such things. Wouldn’t they have wasted a whole bunch of money and effort if someone like the UFC picked them up after bankruptcy and all of the sudden had no rights to the fight archive? I don’t the specifics of how these TV deals work and who owns the rights, but that’s all this could be. I doubt Showtime is going to keep the status quo and continue to lose money.

by LiuLang on Sep 18, 2008 8:38 PM EDT up reply actions 0 recs

this is great news for some fighters since it would give them somewhere to go if affliction folds besides ufc especially guys like barnett or lindland who would never go back to ufc

ps maybe tito was talking about signing with elitexc if he knew this was happening maybe they are going to invest in some big names

by keith133 on Sep 18, 2008 7:14 PM EDT reply actions 0 recs

I read Tito being rumored with the mysterious AFL.

by Eugene Schelfaut on Sep 18, 2008 7:16 PM EDT up reply actions 0 recs

Don’t be surprised if Zuffa ends up with the desired assets and cbs and or showtime ends up with zuffa programming.

by mmalogic on Sep 18, 2008 7:22 PM EDT reply actions 0 recs

I would be surprised because it DOESNT MAKE SENSE.

Showtime and CBS already OWN part of Pro Elite.

by MMASuPreMaCy on Sep 18, 2008 7:26 PM EDT up reply actions 0 recs

so what? Money means Money

by banter on Sep 18, 2008 7:36 PM EDT up reply actions 0 recs

Exactly, money means money, and I am sure they don’t want their investment to fail.
Having UFC on CBS will basically throw their investment down the drain. Plus, without knowing the deal that the UFC wants, you don’t know how profitable it would be for CBS.

by MMASuPreMaCy on Sep 18, 2008 7:49 PM EDT up reply actions 0 recs

cutting losses

$$$$$$$$$$$$$$$ – recoup what you can.

by banter on Sep 18, 2008 8:11 PM EDT up reply actions 0 recs

Their investment has done nothing except hemorrhage money.

Intentional Blog on Balls

by Richard Wade on Sep 18, 2008 8:13 PM EDT up reply actions 0 recs

“and I am sure they don’t want their investment to fail.
Having UFC on CBS will basically throw their investment down the drain”

Read up on sunk costs.

by Michaelthebox on Sep 18, 2008 9:40 PM EDT up reply actions 0 recs

it will all make sense when it’s over…

right now if showtime were to buy pro elite they would need to invest millions in buying stock…

or they can issue a note for 1m and if proelite deafaults they can take over the assets…

That’s only part of the reason for keeping them in the red.

The other part will be apparent soon enough

by mmalogic on Sep 18, 2008 8:27 PM EDT up reply actions 0 recs

I love surprises.

by Eugene Schelfaut on Sep 18, 2008 8:28 PM EDT up reply actions 0 recs

and what exactly is the other part

by banter on Sep 18, 2008 8:38 PM EDT up reply actions 0 recs

So, would Showtime’s goal would be to continue running the promotion?

by The Bronzeville Bully on Sep 18, 2008 9:32 PM EDT up reply actions 0 recs

Yes

And the best part of it. Showtime would be off the hook for much of the 55 million debt. I’m not sure how Icon sport,cage rage, etc. would factor it. But imagine if showtime could take over Proelite and their subsidiaries. And start with all their assets from ground zero? The groundwork for a successful promotion is in there somewhere. Maybe they can learn from past mistakes and thrive?

" Tell me something Steve, How does a guy from Puerto Rico loose a ball in the Sun? "

by aaronb on Sep 19, 2008 10:19 AM EDT up reply actions 0 recs

This stuff gives me headaches. All I know is less promotions out there mean less power to the fighters :(

by Benicio on Sep 18, 2008 8:46 PM EDT reply actions 0 recs

Not necessarily true...

If the UFC were to gain a true monopoly on all of the talent, which they are pretty damn close to. It would only be a matter of time before the fighters would unionize. Think NFLPA.

by nitro on Sep 18, 2008 9:08 PM EDT up reply actions 0 recs

It’s different for all kinds of reasons. There hasn’t even been a whiff of unionization. It could happen eventually, but the best possible opportunity for it (an Xtreme Couture lead movement) has passed.

by Michael Rome on Sep 18, 2008 9:31 PM EDT up reply actions 0 recs

I believe it will happen sooner or later. There hasn’t been a whiff of it because its still a free economy right now, as long as upstart promotions are willing to make competitive offers. As soon as Zuffa gets an actual monopoly on top level competition, the noise will start.

I think a lot of it will also depend on when the UFC truly becomes mainstream. Media circuses would certainly create an incentive for the UFC to implement some sort of standardized payment system with oversight.

by Michaelthebox on Sep 18, 2008 9:46 PM EDT up reply actions 0 recs

My point exactly...

How long do you think fighters will stand for Dan Henderson pulling in 250K, when Rousimar Palhares pulled in a fraction of that. They fought the same fight, in the same ring, on the same show. Purses shouldn’t be so lopsided. Also see Rich Franklin v Matt Hamill.

by nitro on Sep 18, 2008 9:57 PM EDT up reply actions 0 recs

Wooh, I don’t think thats the case at all. The elite fighters are always going to get enormous purses compared to the entry level fighters, which is basically what Palhares is.

by Michaelthebox on Sep 18, 2008 10:04 PM EDT up reply actions 0 recs

I have to think that any major unionization is a long way off. MMA going mainstream is not a given at this point. There are still some key states where it’s not even legal. If MMA continues to grow, it’s hard to believe that would-be competitors to Zuffa won’t continue to try their hand at MMA promotion. Fight promotion doesn’t have that high of a financial barrier for many investors.

I’m still of the opinion that promotions that are struggling, and don’t have a refined product, aren’t necessarily good for the sport in the long-term. Desperation breeds ill-advised matchups that could hinder MMA’s progression into the mainstream. Speaking of desperation, I can’t see CBS/Showtime pouring a bunch more cash into EXC.

by Cannon Jacques on Sep 18, 2008 10:04 PM EDT up reply actions 0 recs

What do you mean by a long way off? I think the first steps are about ten years away, but I don’t think thats far off, relatively speaking.

by Michaelthebox on Sep 18, 2008 10:09 PM EDT up reply actions 0 recs

I think of ten years as a long way off since MMA in North America was pretty much born in the last decade. My point was that there are other significant hurdles to clear before unionization is feasible.

by Cannon Jacques on Sep 18, 2008 10:18 PM EDT up reply actions 0 recs

Oh, I agree with that, but I also think its inevitable, barring some massive, unpredictable shift in Zuffa’s fortunes or the overall MMA landscape.

by Michaelthebox on Sep 18, 2008 10:22 PM EDT up reply actions 0 recs

It’s not the media that will force it… It wont be the fighters as they can’t agree on anything.

If it happens it will be the camps. if you count up the top 10 fighters in each weight class and plot them into their respective camps its a dangerous number… and it’s consolidating further as time goes on (you can count them on one hand).

If the day comes where the top camps come together then there is a possibility… but the probability is unlikely.

The top guys would have make a big sacrifice to help the low end… and their the ones who carry the leverage in this situation.

If they really cared wouldnt you think ortiz would fight for free for elite xc to give them a better chance at competing with zuffa?

Everybody wants the quan and their in lays the reasoning on why it will probably never happen.

by mmalogic on Sep 18, 2008 10:19 PM EDT up reply actions 0 recs

I actually don’t think it’ll start over money. It’ll begin with something that benefits the fighters equally, like standardized health care or something of the sort.

Eventually there will be an enormous public dispute where a Tito figure bitches about the money. Zuffa will threaten him, Tito will go to the press, there will be a media hooplah, a general call for reform to the payment system, the existing fighter organization will step in, and so forth.

It ain’t gonna be the fighters working together. It’ll happen when a general shift in the MMA landscape gets set off by some major event.

by Michaelthebox on Sep 18, 2008 10:25 PM EDT up reply actions 0 recs

Someone correct me if I am wrong, CBS owns Spike TV, right? So if, CBS were to turn to the UFC for their mma programming after EXC crumbles – what would really be wrong with that? I don’t see anything wrong with that – if the UFC gets to do what they want – what they know works and CBS keeps their hands off.

"My job is a decision-making job, and as a result, I make a lot of decisions." --George W. Bush, The Decider, Lancaster, Pa., Oct. 3, 2007

by lovingmma25 on Sep 19, 2008 10:42 AM EDT reply actions 0 recs

Viacom owns SpikeTV

CBS is no longer Viacom

by cyph on Sep 19, 2008 11:51 AM EDT up reply actions 0 recs

The problem is that the UFC will not give them the creative control they seek. However if they let EXC go under. Then aquire the assets from bankruptcy. They get their own promotion. Complete with feeder orgs already in tact. That they can run any way they like.

" Tell me something Steve, How does a guy from Puerto Rico loose a ball in the Sun? "

by aaronb on Sep 19, 2008 11:07 AM EDT reply actions 0 recs

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