Yesterday, we passed along news that Gary Shaw may be removed from his position with ProElite and EliteXC as soon as the end of this summer. Today brings news that CBS/Showtime Networks has infused more money into ProElite to the tune of $3 million. However, those funds don’t come without a price, and that price is a larger stake in the company, likely giving CBS and Showtime more control.
The latest SEC filings by ProElite indicate that the company recently received a cash infusion from CBS/Showtime Networks. Showtime funded a note payable by ProElite and ProElite in return issued warrants to Showtime. The note is payable for $3.5 million but ProElite looks to have received proceeds of $3 million.
CBS/Showtime were issued warrants to purchase 100,000 shares of common stock. The warrant has an exercise price of $0.01 per share. With Showtime taking an increasing role in the company, the issuance of the warrants is significant because it is another possible increase in CBS/Showtimes’s stake and a possible increase in their power over ProElite.
While this could be where the Gary Shaw rumor is coming from, it’s apparently not the only area CBS is trying to wield its power stick.
With their increasing financial stake in EliteXC, CBS are exerting their power in the board room, but word is that the Tiffany Network is also trying to influence match-making and booking decisions. Sources indicate to MMAPayout.com that there was significant internal pressure by the network to have Gina Carano appear on the July 26th card with just over a month’s notice.
Now this is where being on network television can be troubling. Network executives care about one thing and that’s ratings, and will often go to extreme lengths to get them. If CBS wants Gina Carano to fight with hardly a month’s notice, its obvious they care much more about the ratings and money than they do about the athletes who will be providing that for them. I know it wouldn’t be the first time a top name fighter has been asked to perform on short notice, but I think there’s a difference between asking them if they’re willing and telling them they have to.
If CBS and Showtime do in fact gain majority control over ProElite, I fear they will run EliteXC into the ground with that kind of decision making. I’m not the biggest fan of Gary Shaw, or any promoter for that matter, but he at least knows how to run a fight promotion. Network executives are good at being network executives, not promoters.
Unfortunately, I think the question now becomes whether CBS views mixed martial arts as a long-term sport or a short-term spectacle?
Dana White is looking smarter and smarter everyday for not cutting a “stupid deal.”
[UPDATE 6/25/08 9:50PM ET] – Jared Shaw has informed MMARated.com that CBS has not tried to influence the match-making.
AH: There have also been reports that CBS is trying to pressure EliteXC in having Gina Carano fight on the July 26th card. Any truth behind that?
JS: There’s no truth to the rumors of CBS bossing anybody around or demanding anything. They’re all great people, great to work and they are all letting us do our job.
AH: So, is Gina definitely not fighting on July 26th?
JS: Gina won’t be fighting until somewhere in the October/November range.
If this indeed the case, I stand corrected and apologize to CBS and Showtime. However, it is my sincere hope that the aforementioned networks treat MMA and its fighters in a responsible manner moving forward.