Aug
30
2008
3

EliteXC and the Terrible, Horrible, No Good Very Bad Day

By Nicholas Bailey (nbailey@mmaratings.net)
EliteXC is in trouble. I don’t like seeing any MMA promotion in trouble, even if I don’t like the way they promote. Less success for MMA promotions means less power for fighters when they negotiate, and that means the fighters end up worse off. Furthermore, vigorous competition forces promotions to be more attuned to the demands of fans, putting on the shows and fights that will draw viewers away from their competitors. Nevertheless, the parlous state of Pro Elite as a company and EliteXC as a promotion demands comment.

“If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours.”
John Maynard Keynes

The overarching frame for all EliteXC’s other concerns is the fact that the company is losing money hand over fist, and has been for quite a while, placing it deeply in debt. There is a lot to be gleaned from the company’s audited financial statements.

Pro Elite now owns ICON in Hawaii, Cage Rage in the UK, and King of the Cage in the United States. In the case of ICON, Pro Elite paid over 2 million dollars for little more than a brand name. All of these promotions are struggling, with Pro Elite blaming poor economic conditions as well as increasing fighter purses. Pro Elite recently wrote down the book values of these promotions by over 10 million dollars, recognizing that the brands and goodwill associated with them are no longer as valuable as Pro Elite once thought. While owning these organizations gives Pro Elite vast penetration into lower-end markets and access to fighters under contract to those organizations, each promotion is currently a losing proposition, compounding the company’s financial woes.

Pro Elite also owns a non-controlling, but large, stake in the Korean SpiritMC promotion, which is also losing money for the company.

EliteXC itself is the biggest money loser. Despite the extremely high profile of the network TV shows, they have so far been an unprofitable proposition for the company. In the quarter ending June 30, EliteXC made under a million dollars in fees from Showtime and CBS combined, and just over two million from the ticket sales and sponsorships. Add in pay per view fees and internet advertising revenue, and the company brought in three and a half million dollars. The cost of putting on these events was almost seven million dollars. The costs of operating Pro Elite, above and beyond simple event costs, were over five million, plus the ten million dollar writedown in the value of Pro Elite’s other promotions.

Pro Elite is currently trying to borrow several million more to continue operations. Even if it gets this additional financing and drastically cut down on operations and expenses, by Pro Elite’s own calculations it will have no more money by year-end, and need to borrow more. The auditor for the financial statements “expresses significant doubts” they will be able to “continue as a going concern.” EliteXC has already cut back to some degree, canceling its September show in order to focus entirely on the upcoming October show.

There are a few totally unpredictable factors as well.

Wallid Ismail (yes, that Wallid Ismail) has a lawsuit against Pro Elite for various claims related to his promotional relationship with the company and the severing of that relationship. He is suing for roughly 25% of the company’s stock, as well as 10 million dollars in punitive damages. I am in absolutely no position to assess this lawsuit other than to say that paying those claims would be very bad for the company’s financial health.

Furthermore, EliteXC has filmed a pilot episode of a MMA reality show. There’s no way to say it will even be picked up for production, let alone broadcast, let alone be successful. Still, that is the sort of thing that could completely transform the company’s financial outlook.
None of this is to say that Pro Elite’s fate has been sealed.. Zuffa and the UFC operated at a loss for years before they found success, although they likely never lost this much money. Bodog died from smaller losses. It is simply important to remember going forward that Pro Elite is in a extremely precarious financial position, and basically needs everything to go right for them in the near future if they are going to continue to operate. Unfortunately, not everything is going swimmingly.

“A champion needs a motivation above and beyond winning.”
Pat Riley

What motivates KJ Noons these days is certainly open for anyone’s guess, be it respect, revenge, cowardice, or greed. According to KJ, after losing the first fight on his contract (to the predictably unpredictable Charles Bennett), EliteXC had him over a barrel and made use of the situation to force him to take a pay cut that wasn’t in his contract. Now KJ seems to be returning the favor, by demanding a pay raise that was not in his contract and holding his title hostage. He has beaten EliteXC’s preferred poster boy Nick Diaz, as well as most of the other legitimate challengers in the division, leaving him the one with some power.

Now, if Noons really was forced to take a pay cut, EliteXC is in no position to play the victim or disparage him now that he is the one with the bigger stick. I’m sure few will argue that promoters often take advantage of fighters or that fighters should try to support themselves. However, Noons has also, on occasion, volunteered that he doesn’t feel Diaz is the most worthy challenger to his title, demanding an unlikely fight with Dream wunderkind Eddie Alvarez. Noons may be correct that Alvarez has a more legitimate claim than Diaz, however the job of a champion extends beyond fighting who he personally deems to be the best. Earning the right to call yourself champion of an organization also means fighting whoever the organization puts into the cage with you. For better or worse, the petulant antics of Diaz make him a bigger draw than the relatively unknown Noons, and if the fight were to take place in Stockton, Diaz would be the one paying for Noons’ additional purse.

However, Jared Shaw, noisy Elite XC nepotism beneficiary, has taken it upon himself to try to imitate the egomania of Dana White and publicly attack the character of his organization’s champion. This is beyond stupid, on a number of levels. First of all, no manager in his right mind is going to negotiate based on the premise that his client is a coward if he doesn’t reach a deal. The posturing from Shaw is futile. Secondly, Noons still wears the EliteXC belt and has beat up several EliteXC fighters. Publicly attacking his character and manhood not only hurts his worth as a champion, but damages all the fighters in your organization that have already been beat up by the supposed coward. Thirdly, getting into a pissing contest with someone that fights in a cage for a living is just plain dumb; professional fighters are not likely the kind of people that give in to some aggressive bluster.

As it stands, Noons will likely be leaving the organization without beating up Nick Diaz for a second time. Which, come to think of it, may be what EliteXC wants, given how jealously protective the company has been of its few marketable stars. However, delegitimizing and losing a champion, as well as forgoing the potential interest in a Noons/Diaz rematch, will hurt EliteXC.

“In this business, until you’re known as a monster you’re not a star.”
Bette Davis

Make no mistake, Antonio Silva is a monster. The tumor on his pituitary that forced the production of excess growth hormone has made the man a hulking, near-300-pound behemoth. He brings spectacle to the ring every time he enters it, combining his size and strength with a speed and athleticism that can only be described as shocking. However, now that he has tested positive for steroids, all of that will work against him.

What many fans previously regarded as a miracle of nature will now be regarded as a twistedapplication of science. His stature and muscles, formerly a proud birthright that came at high price to his health, will now mark him out to many fans as nothing more than an egregious cheater.

And in all likelihood, Silva did cheat. Two different samples, sent to two different labs, both tested positive for Boldenone. The only reasonable conclusion to draw from this is that Silva used the steroid. Silva is filing an appeal, and has proclaimed his innocence, so many are suggesting that observers should “wait until all the facts are in.” I say that plenty of facts are in. A positive test indicates use. Two positive tests from two different labs very strongly indicate use. Until something else comes to light, it’s quite reasonable to assume the man was using the drug.

Silva’s case is interesting because of his acromelagy. In technical terms, his hormone levels are already “all screwed up.” However, I’ve seen nothing to indicate that this could lead to a false positive test (or two) for metabolites of a horse steroid. Furthermore, if it were, I would expect Silva to have had false positives all over the place, and he has not. Silva had his problematic tumor removed in 2007, and has since appeared much slimmer and leaner. Perhaps this is the result of improving his diet and changing his training. Perhaps it’s because he no longer has unusually high levels of hormones flooding his body. Perhaps out of concern that this would affect his performance, he turned to unnatural hormones to replace them. Silva’s manager has claimed “He can’t take stuff like that because he has acromegaly…All of his hormone levels are a problem regularly, so he wouldn’t be able to for risk of his life.” Even if this is true, it would do nothing to exonerate Silva from the accusations of performance enhancing drug usage; time and time again we have seen that athletes will put themselves at extreme risks to their health in order to compete. Whether it be heart failure from EPO, kidney or liver failure from various steroids, or brain disorders from contaminated HGH, athletes have died from commonly used drugs, and athletes will continue to use them.

Silva wasn’t a huge draw for the organization, but with his skills he was one of their best fighters, and now EliteXC have a champion who is going to be on the shelf for at least six months, and more likely the full year of his suspension.

“A man who pays his bills on time is soon forgotten”
Oscar Wilde

Two men who have definitely been paying their bills for EliteXC are its forgotten, drama-free champions—Robbie Lawler and Jake Shields. Those two are probably the best fighters the organization has, and they have been regularly putting on quality fights. Lawler is an aggressive knockout artist, and Shields has finally started finishing his opponents.

Yet neither man has been promoted by EliteXC, and neither could carry a fight card as the main event. EliteXC does primarily target the casual fan demographic, so I can see why the often decision-happy Jake Shields would get the Tim Sylvia treatment, but I cannot understand why they have left Robbie Lawler behind. In my opinion, it is a missed opportunity not to promtoe these two, especially for an organization with as thin a roster as EliteXC has. This may not harm the organization directly, but it plays into the problems they have with their marketable stars.

“You can’t fake quality any more than you can fake a good meal.”
William S. Burroughs

The biggest asset EliteXC has is also its biggest liability and goes by the unlikely name of Kimbo Slice. Kimbo’s drawing power is enormous. Kimbo’s charisma, presence, and mystique are so strong that it doesn’t matter who else steps into the ring with him, the proverbial butts will be in the seats, making him a promoter’s dream.

However, the man is also very new to the cagefighting business, and much of his appeal would evaporate were he to fail to live up to his murderous looks. This means that in order to keep EliteXC’s star attraction from being seen as illegitimate, Kimbo must fight hand-picked opponents, robbing him of some degree of legitimacy. Granted, the ‘casual fan’ takes a while to make these sorts of judgements, but they’re slow, not stupid. Eventually it will trickle down to every last Kimbo fan that he is just one badass among many, and he’s been doing it professionally for less time than most. Brett Rogers is certainly not helping anyone but himself with his vocal profession of these truths. The question is, will the casual fans learn the truth about Kimbo suddenly, as he suffers a crushing and embarassing defeat, or will it happen gradually, with Kimbo himself improving over time and “meeting them halfway” as it were. And lastly, will EliteXC be ready for it when it happens?

Many hardcore fans have attacked the legitimacy of the Ken Shamrock matchup. They want to see Mr. Slice forced into the extremely deep waters his fame and reputation would merit, if not his skills and achievements. This is unfair to the bearded wonder. Kimbo may be capitalizing on his undeserved fame, but it’s not his fault that he has it. Underneath all the glitz and aura of thuggery, Kimbo is an athlete in his 30’s that has been training for two years and has 3 professional fights. He’s a deeply flawed, one dimensional fighter, who cannot possibly live up to his fame and reputation at this point in his career. So is Ken Shamrock.

Shamrock’s career is quickly becoming an embarrassment, but he still has more fame than he deserves, and brings a wealth of experience to the ring. Outmatched physically, Ken has the technical acumen to represent a hypothetical danger to the king of the boatyard, but that danger is known and can be contained. With the company in such dire straits, it is unreasonable to demand that EliteXC cleave to the purity of the sport and demonstrate to its audience that their main draw isn’t much of a fighter compared to less well-known heavyweights like Brett Rogers. This matchup is reasonable and should sell very well. Hardcores will have to settle with the satisfaction of seeing the Ken Shamrock myth busted.

Gina Carano’s legitimacy is also in question for much the same reasons, although to a lesser degree. Gina is unquestionably the real deal. The woman can scrap; she has proven that beyond a reasonable doubt. However, she’s still more known for her breasts than her beatings, and has fought mainly overmatched or grossly outsized opposition. In addition to being hurt by her weight problems, the tease of the Cris Cyborg fight being promoted and then fading into the mists of 2009 has dropped Gina’s stock in the eyes of many fans. Like Kimbo, Gina is being treated with velvet gloves in the matchmaking department.

To be clear, I think women have a place in MMA and should be accorded the same respect and held to the same standards as male fighters. However, sad as it may be, I think, even if Gina were to quit training seriously and be exposed as a poor fighter by losses, it wouldn’t hurt her drawing power too much. Fair or unfair, I do not think most of the people that tune in to her fights are purely interested in the level of competition, so much as the spectacle of a foxy young woman throwing down with another female. What this says about gender roles in our society is a topic for another time. Provided her face and cleavage don’t take excessive disfigurement, Gina will likely continue to draw well, despite any weigh-in problems or warmed-over opponents. Of course, the hardcores and the forum denizens will raise a stink, but EliteXC will live or die by the casual fan.

So where does all this leave EliteXC?

“Those who dare to fail miserably can achieve greatly.”
John Fitzgerald Kennedy

As outlined above, EliteXC has a very difficult hole to climb out of, and have every chance of failing the way most other MMA promotions have. Their success or failure rides almost entirely on Kimbo and Gina, as well as their ability to sell those fighters. EliteXC, despite its current lack of financing for anything beyond December 31st, is aiming for a blockbuster pay-per-view in early 2009. Cyborg vs. Carano is being pushed for that card, and it’s guaranteed that Kimbo will headline it. Provided they are able to get the financing to make it to that point, a huge success with that pay-per-view would make financing continued operations much easier, while a flop would almost certainly be the death of EliteXC as we know it. However, should the company manage to weather the storm, is perfectly positioned to become a viable competitor to the UFC in many respects. So until EliteXC is dead and buried, lets root for Kimbo.

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