We’ve heard all the details of the ProElite-Strikeforce deal, but how much did it cost?
Well, according to ProElite’s latest SEC filing, Strikeforce paid $3 million for the select ProElite assets they acquired. That’s not the whole story though.
The company also disclosed it would receive a “contingent consideration” of a portion of licensing fees earned by the San Jose-based promotion’s new deal with Showtime Networks. Fees would be paid to ProElite until Feb. 28, 2012, and could be extended. The portion of the fee was not disclosed.
Strikeforce will assume “certain liabilities” of the assets purchased, likely the specific deals within fighter contracts purchased.
Pro Elite’s debt to CBS – the network was an investor in company and funded its last show – was eliminated as part of the agreement with Strikeforce. According to a report on SI.com, Strikeforce paid off all or a portion of the debt.
Basically, Strikeforce will be paying ProElite a “contingent consideration” of a portion of what Showtime pays them until at least 2012, Strikeforce will be responsible for paying the fighter’s purses and whatever else is in their contracts, and they also paid all or part of ProElite’s debt to CBS.
The part that puzzles me, however, is ProElite CEO Chuck Champion is claiming that the organization is now basically debt free, yet they were just $55 million in the hole. I’m 99.9% sure that ProElite didn’t owe Showtime and CBS $52 million combined, so how exactly are they debt free?
In all of college, the class I loathed more than any other was finance, so my understanding of high corporate finance is right up there with grasping where the freakin’ universe ends (yeah, try thinking about that one). However, I did actually go to class enough to know this shit’s incredibly complicated, so erasing $30-$40-$50 million of debt into thin air can probably be accomplished. If anyone has any insight into that, please share in the comments.
That said, $3 million? That sounds like a pretty fair deal. Hell, Affliction’s last main event cost that much.
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the universe question was money
haha, hurts your head to think about doesn’t it?
Well since you were in finance…If you think that debt could somehow be erased..you might want to check this out…
ProElites stock price is currently at .013 a share..down from like 13$ a share about 2years ago,,and down from 2$ a share just months ago…If this debt is infact gone…have you been watching the Bully Beatdown show on MTV..if you read those SEC filings..you will see where they also retained rights to a Reality show they were working on with Mark Burnett..Well I believe the show in the Filing is BUlly Beatdown,,the new Hit on MTV with Mayhem Miller..Watch the end credits after the show,,at the very end you will see the big MarkBurnett banner,,and then ProELite….Not only that,,if they are focusing on King of the Cage..that Brand is profitable from what they say…Hell they do shows all over the place…and they also helped launch the careers of alot of Very well known UFC fighters…Maybe KOTC lands a TV deal themselves..and stops serving as a fighter farm for other orgnanizations..I mean of course they dont’ consider themselves a fighter farm…but the big names do eventually leave there in search of the bigger payday…with them bringing up fighters from Amatuer ranks and helping them become stars…what if they are able to start keeping this talent as opposed to loosing it??…Anyway,,might want to check it out…I believe the filings also said that CBS/Showtime still will hold their shares,,which was like 7,000,000 if i’m not mistaken…Not to mention the liscense money from strikforce from showtime…Could be some crazy things happening at pro elite in 2009…keep your eyes open..
take a look
pele.pk