By Jesse Holland
Not since the formation of the Nortenos has anyone in California seen this much red.
Once considered a viable threat to the UFC programming empire, EliteXC (operating under its parent company ProElite) has posted a net loss of 11.9 million dollars over a six-month period starting from January 1st and ending June 30th of 2007.
Operating in the loss column is not unusual for a start-up company, but ProElite’s revenue was a disappointing 2.2 million dollars during that same time period.
Anyone confident in the relationship with Showtime Networks as it pertains to financial rescue should also be aware that Showtime isn’t required to pay any licensing fees until 2008.
John Donne once said that no man is an island, yet I can’t help but wonder if Gary Shaw is feeling a little like Chuck Noland.
In addition, SEC Form 10QSB of ProElite’s quarterly report is surprisingly grim. Particularly its outlook for the next twelve months:
Our cash and cash equivalents are expected to be sufficient to execute the next 18 months of our three year business plan. As such, we continue to seek additional financing. If we are unable to raise sufficient additional financing, our growth may be limited. There can be no assurances that we will be able to raise sufficient financing on favorable terms and conditions. Management believes that we currently have sufficient cash and cash equivalents to finance our current operations for the next twelve months.
EliteXC is not dead yet. They have experience in Gary Shaw, a marquee name in Frank Shamrock, and a juggernaut of a producer in Mark Burnett.
What they don’t have is a pay-per-view (PPV) that can make you stand up and cheer. And they need one in a hurry. I know it’s easier said than done, but after this financial report it’s pretty obvious that time is of the essence.
Yet with such a limited number of fighters on the free market and a couple of missed opportunities (Vera, Sokoudjou), I’m not sure if it’s possible for EliteXC to pull it off.
I believe that competition breeds success, so I’ll keep ordering their PPV’s in the hopes that they can.
I’m sure some UFC fighters of past and present will be doing likewise.
31 Comments »
I’m a big UFC fan (or else I wouldn’t hang out on a gossip board) but I would really like to see viable competition emerge. The key is television exposure. Bodog televises some things. IFL’s time slot seems to keep moving around which is a bad sign. K-1 and some others are still on PPV. But… looking smarter and smarter everyday, Zuffa has UFC Unleashed, Ultimate Fighter, PPV events, Ultimate Fight Night, WEC on the Versus network and Best of Pride (which I see on Comcast network). They are already shoveling content out there. Even if they were losing money (don’t know whether they are or not) on WEC and Pride, those shows are satisfying demand and choking out competitors.
It’d be nice for some competition to emerge that doesn’t contain the words “Elite” or “Extreme”
/lame
I hate Frank Shamrock! thats all i got to say
Of course you’re going to have financial problems when you pay Frank Shamrock $2.5 million per fight!
Man, with IFL and them having trouble White has got to be smiling while he reads his morning paper.
Frank Shamrock is a fag, who says he ios the best in the world, but hasnt fought a top 10 fighter in who knows how long. Frank, stop telling everyone that u r the greatest MMA fighter in the world, when in reality u fight second teir fighters. He uses the fact that he hates Dana to not fight in the UFC, were he would be exposed as the fraud that he is. I loved seeing Bas Rutten slap him around in Pancrease. Frank u wanna be the best? then get in a ring wit wanderlei, shogun, hendo, anderson, rampage, chuck, and then maybe ill show u a lil respect.
Please tell me that Frank being paid 2.5 mil to fight baroni is a joke?
[quote comment="126994"]Man, with IFL and them having trouble White has got to be smiling while he reads his morning paper.[/quote]
Yep, he will be able to screw the fighters over even harder.
I dont think Dana White is going to screw his fighters over if EliteXC or IFL doesn’t make it. I think once the HBO deal takes off, you will see a boom in pay increase. I’m actually not at all surprised by this. Shamrock made 2.5 M for his fight against Baroni. I think the UFC and EliteXC have their payrolls mixed up, but I believe it will change soon.
[quote comment="127027"]I dont think Dana White is going to screw his fighters over if EliteXC or IFL doesn’t make it. I think once the HBO deal takes off, you will see a boom in pay increase. I’m actually not at all surprised by this. Shamrock made 2.5 M for his fight against Baroni. I think the UFC and EliteXC have their payrolls mixed up, but I believe it will change soon.[/quote]
Based on the staggering amount of pay per view dollars there is no exucuse to pay a fighter as low as they do know. Heck didn’t UFC do more PPV than WWE last year?
typo mania in that post!
[quote comment="127044"]typo mania in that post![/quote]
Where?
[quote comment="127049"][quote comment="127044"]typo mania in that post![/quote]
Where?[/quote]
In my post, it was only a couple though.
This is bad news for mma. No viable competitors, thus monopoly of market etc. Perhaps if they had Soko on the books and a few others. They need a decent stable of fighters to expand upon but that doesn’t look like it’s going to happen now, too bad.
I wouldt worry about a monopoly, which pretty much seems inevitable. The NFL, NBA, MLB, NHL and even the MLS pretty much have monopolies over their respective sports. This is countered and balanced out by players’ unions. This (the formation of a union) is almost an inevitable fact for MMA, especially as things get consolidated.
I also wouldnt be surprised if the MMA camps out there start acting more like teams and start paying fighters themselves. WIth a growing number of them starting to sell all sorts of parafonalia, they are becoming money earning entities, just like a regular sports team. Plus, they are trying to get amatuers to pay for classes and camps with them. That is not to say that I think the IFL format is going to go anywhere, but I expect to see the individual camps build more clout.
Lastly, if the UFC buys ProElite, they could definitely do some good to showcase some female fights. I would pay to see a decent card with the bonus of Gina Carano fighting pretty much anyone, or anything.
i hope the wcl goes under…
Well, the UFC had how many years of major losses when Zuffa took over? I think they were up to 40million in the toilet until TUF1 hit. With the growing popularity of this sport, and the GREAT idea EliteXC had to join forces with Strikeforce for shows, EliteXC will be around for a bit. Add on Dana’s great insite on fighters like Nick Diaz, and the constant toilet flushing of pushing talent away, any company that wants to spend money will get their head up. Its just gonna take time, and some great PPV cards. Also need to get the advertising out to get your foot in the door of the american public.
[quote comment="127027"]I dont think Dana White is going to screw his fighters over if EliteXC or IFL doesn’t make it. I think once the HBO deal takes off, you will see a boom in pay increase. I’m actually not at all surprised by this. Shamrock made 2.5 M for his fight against Baroni. I think the UFC and EliteXC have their payrolls mixed up, but I believe it will change soon.[/quote]
Just out of the kindness of Dana White’s black heart? Do you put an extra 20 in the envelope with your cable bill? I hope not. It’s not smart business to just toss money around. If Dana starts throwing cash around the Fertita’s know somebody who knows somebody who’ll dump Dana’s body out in the desert somewhere… and bring the head back.
[quote comment="127082"]I wouldt worry about a monopoly, which pretty much seems inevitable. The NFL, NBA, MLB, NHL and even the MLS pretty much have monopolies over their respective sports. This is countered and balanced out by players’ unions. This (the formation of a union) is almost an inevitable fact for MMA, especially as things get consolidated.
I also wouldnt be surprised if the MMA camps out there start acting more like teams and start paying fighters themselves. WIth a growing number of them starting to sell all sorts of parafonalia, they are becoming money earning entities, just like a regular sports team. Plus, they are trying to get amatuers to pay for classes and camps with them. That is not to say that I think the IFL format is going to go anywhere, but I expect to see the individual camps build more clout.
Lastly, if the UFC buys ProElite, they could definitely do some good to showcase some female fights. I would pay to see a decent card with the bonus of Gina Carano fighting pretty much anyone, or anything.[/quote]
However, one difference between the monopolies you name above and the UFC is those are associations/leagues of teams where you have many owners bidding against each other for talent. The IFL has a comparable structure (but nowhere near the money). UFC makes contracts with all the individual fighters and there’s no real price competition right now. Take it or leave it.
I agree there should be some sort of union providing some minimal protections for the fighters. Thing is for every Matt Hughes there is making 250K per fight, you have 1,000 nobodies fighting for $1,500 at small venues all around the country. You have to draw a line as to who gets in this union.
But there should definitely be something in place to assure fairness in wages and address safety concerns.
[quote]Lastly, if the UFC buys ProElite, they could definitely do some good to showcase some female fights. I would pay to see a decent card with the bonus of Gina Carano fighting pretty much anyone, or anything[/quote]
I missed that last bit. Yeah definitely! UFC and their puppet organzations are pretty much the only places women are not allowed to compete. I can’t blame them for not doing it right away in the early days of Zuffa UFC. They were trying to get regulated and allowing women to fight is controversial. But now that the UFC is the shizzle, they should consider exhibitions featuring some of these established female fighters.
Just FYI to all you financial analysts, especially you Jesse… to say that the company is not viable because of an 11 million dollar deficit is ill advised and ignorant. EVERY start up posts losses. 11 million is nothing for a public company. NOTHING! The company is less than 1 year old and already THE top competitor to your beloved Dana White. just watch what you put in writing…
Jesse, your a great writer, but I’ve got to side with Chris.
If you’ve not seen the Elite business plan (to see if they off track), you shouldn’t jump to those conclusions.
[quote comment="127143"]Just FYI to all you financial analysts, especially you Jesse… to say that the company is not viable because of an 11 million dollar deficit is ill advised and ignorant. EVERY start up posts losses. 11 million is nothing for a public company. NOTHING! The company is less than 1 year old and already THE top competitor to your beloved Dana White. just watch what you put in writing…[/quote]
I agree to an extent, but Im not sure if ProElite is a public company. If they are, then that could be one thing, but I think you missed the point of the $11 million loss. They only brought in 2.2 million. That leaves them with a profit margin of -500%. Not so good. Especially when you add that they just lost some top prospects and the UFCs continued growth. I highly doubt that was in their business plan.
[quote comment="127143"]Just FYI to all you financial analysts, especially you Jesse… to say that the company is not viable because of an 11 million dollar deficit is ill advised and ignorant. EVERY start up posts losses. 11 million is nothing for a public company. NOTHING! The company is less than 1 year old and already THE top competitor to your beloved Dana White. just watch what you put in writing…[/quote]
EliteXC is going down Chris. If it makes you feel any better the IFL is in the same boat. And that boat is the Titanic.
http://www.marketwatch.com/news/story/10-q-international-fight-league-inc/story.aspx?guid=%7B9357B9D2%2D1F48%2D451F%2DAACA%2D238EE3E1DD11%7D
[quote comment="127147"]Jesse, your a great writer, but I’ve got to side with Chris.
If you’ve not seen the Elite business plan (to see if they off track), you shouldn’t jump to those conclusions.[/quote]
Yes, I’ve seen their business plan. But more importantly, I’ve seen their PPV’s. No amount of planning can change that.
I bet Vera is happy he didn’t decide on jumping ship
[quote comment="127161"]EliteXC is going down Chris. If it makes you feel any better the IFL is in the same boat. And that boat is the Titanic.
http://www.marketwatch.com/news/story/10-q-international-fight-league-inc/story.aspx?guid={9357B9D2-1F48-451F-AACA-238EE3E1DD11}[/quote]
[quote comment="127165"]Yes, I’ve seen their business plan. But more importantly, I’ve seen their PPV’s. No amount of planning can change that.[/quote]
I really do agree that EliteXC and IFL’s production team sucks teh fat anus gasket. I can honestly sit here and say that Bodog does a better job of presenting fights then the IFL, EliteXC is just inconsistant. Stupid rap songs with fighters in it, dumb ass fighters that interveiw like lead bricks… All the areas that the ‘other’ guys fall short in, is where the UFC really excels in. UFC/WEC production is second to none.
Ill go back to the point I made a long time ago… IFL’s debut on MYTV, they were endorsing the final fight as someone leaving on a stretcher… In the UFC, the camera is almost perminently off someone (Radev-McFeddries) after they are injured.
No offense, Elite XC started offby making the one mistake you should never do. Allow fighters to dictate the wages. MMA is a growing sport, but does not generate anywhere near the income of other professional sports like NFL, NBA, MLB or even the NHL. The minute you start throwing hundreds of thousands to guys like Brock Lesnar(who NEVER fought in an MMA match) and you realize you have a problem. Then of course you have idiots like Frank Shamrock dictating millions per fight and you have wages escalating to unreasonable amounts of money.
Does MMA fighters deserve to make good money? Of course. I’m not saying the UFC pays their fighters well (I for one believe the avaerage main card fighter should be earing 25k at the gate and another 25k from the PPV and dvd revenuesalong with any merchandise sales they have), but don’t srtart chucking hundreds of thousands to unproven guys in a sad attempt to sign them. You think if EliteXC folds and Brock lesnar is unemployed again, he won’t sign a contract with the UFC to pay his bills? He’ll do so in a heartbeat.
I like the way the UFC pays their elite talent, but I hope Dana would look after the little guys a little more. On the otherside of the coin, if EliteXC continues to pay fighters like they are, you’ll soon get to the problem where all the revenues goes to the fighters and the promoters with nothing going back to the sport. Thats’ how Boxing has fallen to the sorry state that it is.
The UFC is going the right direction in termsof building up the sport to the general public and promoting young athletes to pursue it as a career with proper training programs like TUF. I wish the sport will grow a little more and pay the low end fighters enough so they can purse the sport as a career with bigger but justifiable pay days. If a guy like Joe Aluzon can fight 3 times per year and earn 50k per fight, he wouldn’t have to worry about money issues like he was debating himself over.
Face facts a low tier fighter can get by by being paid 100k per year, hell most people don’t see that kind of money annually. This is where MMA should be going, but not stupid like EliteXC.
Elite level UFC fighters should be making a million plus a fight.
[quote comment="127118"][quote comment="127082"]I wouldt worry about a monopoly, which pretty much seems inevitable. The NFL, NBA, MLB, NHL and even the MLS pretty much have monopolies over their respective sports. This is countered and balanced out by players’ unions. This (the formation of a union) is almost an inevitable fact for MMA, especially as things get consolidated.
I also wouldnt be surprised if the MMA camps out there start acting more like teams and start paying fighters themselves. WIth a growing number of them starting to sell all sorts of parafonalia, they are becoming money earning entities, just like a regular sports team. Plus, they are trying to get amatuers to pay for classes and camps with them. That is not to say that I think the IFL format is going to go anywhere, but I expect to see the individual camps build more clout.
Lastly, if the UFC buys ProElite, they could definitely do some good to showcase some female fights. I would pay to see a decent card with the bonus of Gina Carano fighting pretty much anyone, or anything.[/quote]
However, one difference between the monopolies you name above and the UFC is those are associations/leagues of teams where you have many owners bidding against each other for talent. The IFL has a comparable structure (but nowhere near the money). UFC makes contracts with all the individual fighters and there’s no real price competition right now. Take it or leave it.
I agree there should be some sort of union providing some minimal protections for the fighters. Thing is for every Matt Hughes there is making 250K per fight, you have 1,000 nobodies fighting for $1,500 at small venues all around the country. You have to draw a line as to who gets in this union.
But there should definitely be something in place to assure fairness in wages and address safety concerns.[/quote]
Yeah well said. Very good points there. Plus they’re all american as far as I’m aware. That’s all well and good if the sport is only played in america and watched by americans (NFL, MLB etc). But an american company to have a monopoly on a global sport, I don’t know about that. For example look at the state of mma in Japan now, man they got shafted there. I know there’s Shooto and K-1 but their premier promotion now no longer exists. Competition is always healthy. Well in market terms certainly for the consumer. Man those guys need a union too.
Support fighters not organisations.
[quote comment="127355"]Elite level UFC fighters should be making a million plus a fight.[/quote]
They Do