If you thought the aftermath of ProElite’s demise couldn’t get any worse, you may be wrong. Last we heard, Showtime had scheduled a public sale to auction off all of ProElite’s assets including the fighters’ contracts. Apparently that didn’t sit well with whoever’s left at ProElite though, as it appears they are fighting the sale.
With Showtime primed to sell its assets, a mixed martial arts promoter isn’t going down without a fight. ProElite, which has aired MMA matches on the pay cable network, said Thursday that it plans to block the public auction.
Looking to resuscitate its business, the company said it would pursue all available options to retain its assets, which include the contract of Kimbo Slice (real name: Kevin Ferguson). Possible actions include trying to raise additional capital, filing for bankruptcy, negotiating a settlement with Showtime, or filing a lawsuit to prevent the sale from going forward, according to an SEC filing.
Notice the first few words of that second paragraph, “looking to resuscitate its business.” Yep, ProElite is still telling everyone who will listen that they plan on moving forward with holding events in the future. Considering ProElite is knee deep in debt with no one willing to bail them out, that seems virtually impossible, right? It was basically concluded that it was nothing more than legal posturing to buy themselves more time.
Except maybe it wasn’t. According to Sam Caplan, the zombie crew at ProElite actually do have plans to resurrect the company.
The report of ProElite continuing as a company was initially met with great skepticism but FiveOuncesOfPain.com has spoken with several sources in recent days that have revealed that ProElite has formulated a plan to promote shows again as a restructured company. According to the sources, ProElite executives have even gone so far as to suggest that CBS has pledged millions of dollars in rights fees to the company should it resume shows.
Of course, in the very next paragraph of Sam’s report, he claims sources from Showtime and CBS say they have no intention of ever working with ProElite again. Oh, and not to mention the fact that ProElite’s promoters license has also been suspended. At least from this vantage point, it appears that whoever is captaining ProElite’s ship is absolutely determined to let it sink all the way to the ocean floor. Apparently, cutting your losses and moving on is a foreign concept.
Here’s the ironic part of this whole debacle though. Even if Showtime is able to move forward with the sale, there’s big questions of whether or not the fighters’ contracts would actually be transferable to the new owner. Sherdog.com’s Loretta Hunt explains.
Cox, who has managed over 60 fighters over the last 11 years, said the 15-year-old sport has entered new territory with Showtime’s intentions to auction off his client’s contracts. Cox and others have their doubts that the sale of a personal services contract will be upheld in a court of law.
If you look back at the sport’s history, there was a very high profile situation not too long ago where these personal service contracts caused their new owners all sorts of problems, eventually leading to the new owners signing the fighters to new contracts. If you guess Zuffa’s purchase of PRIDE you are correct. So if that’s the case, then who in their right mind is going to bid on “assets” that would essentially be worthless to them?
Basically, it’s one giant mess right now that doesn’t look to be ending in the next few weeks. What really amazes me though is that instead of it being a fight over what to do with a warehouse full of inventory, it’s a dispute over what to do with people’s livelihoods who seemingly have no say in the matter. It’s absolutely deplorable. How the ones responsible sleep at night is beyond me.
[UPDATE 11/08/08 10:27AM ET] – ProElite’s master plan on how to block the sale has now surfaced. No surprises, it’s a lawsuit. MMA Weekly has the details.
According to sources MMAWeekly.com spoke to with knowledge of the negotiations, ProElite’s first tactic may be to sue CBS Networks over gate revenue produced by its third show, “Heat.” The embattled company could argue the network forced them into default on a one million dollar loan from Showtime by misrouting the funds from the Sunrise, Fla., show.
“CBS took the gate revenue directly from Miami, and it was contracted to go through ProElite first,” a source said. “If that had happened at the time that (Showtime) called in the note, there would have been enough money that they couldn’t have called in the note. So there’s a legal argument there.
“ProElite’s claim would be that they could have raised the money in that time, but once Showtime called in that note, publicly, it ruined any chances of raising money.”
All that says to me is more time. More time that it’s going to take to resolve the situation and more time the fighters are going to have wait in legal limbo while two companies fight in court.