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IFL 2007 First Quarter report

By Zach Arnold | May 15, 2007

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By Zach Arnold

The numbers are in on the IFL’s 2007 First Quarter report and the verdict is not good. The IFL’s first quarter saw the company have a net loss of $7 million USD. They claimed $1.6 million USD in revenues, but the cost to obtain that revenue was $6.4 million USD – $5.6 million USD of it alone for live event costs. In short, the house shows (and the way they are poorly promoting events) are killing the company and the IFL is bleeding cash very quickly. The quarterly report states that the IFL has $9.2 million USD left in cash and cash equivalents. Also, IFL Chief Marketing Officer Joel Ehrlich announced his resignation (effective June 30th).

The IFL stock price closed at $3.00 USD/share on Tuesday afternoon. I don’t expect it to stay at $3.00/share. Just based on the 10k report and today’s filing, the IFL has had a net loss of $16.6 million USD since the promotion started in 2006. Related post at Sprawl ‘n Brawl.

Topics: IFL, MMA, Media, Zach Arnold | 10 Comments » | Permalink | Trackback |

10 Responses to “IFL 2007 First Quarter report”

  1. 45 Huddle says:

    This was the most important quarter for them. They could have either slowed down the bleeding, or sped it up. It looks like they are gushing right now. They are on pace to be out of business before the end of the season. Hopefully we can at least get Grand Prix Champions before they go bust.

  2. Grape Knee High says:


  3. Wow this is really bad news. I’ll wait till she drops around $0.20 and still NOT BUY!! muahahaha

  4. Tomer Chen says:

    There are 2 key things to take out of the 10-Q for the IFL

    1) The $9,200,000 in cash & cash equivalents is theoretically enough to cover most anticipated expenses until the fourth quarter (but they may run dry in that quarter). However, this assumes (based on the ‘Future Capital Requirements’ section) that (i) expenses overall will fall due to economies of scale (‘production efficencies’) in the rest of the year and (ii) that additional cash is made from any combination of DVD sales, international distribution fees, the FSN agreement (which is really an equal offset transaction) and an increase in sponsorships for the organization. Personally, I think they are wishing more than being realistic in any of these regards.

    They do say, however, that if the two above conditions don’t happen, it’s more than likely that they will not make it through the 3rd quarter without losing their cash and will could either discontinue operations (close the business) or they will have to issue shares with ’superior rights’ (likely in terms of debt seniority and maybe ‘Supervoting’ status) in order to attract interest in equity. They don’t discuss how they will issue debt in the notes.

    2) The IFL claims that they have a seasonal increase in costs for the first half of the corporate year due to more events run during the period than the second half (under the ‘Seasonality’ section at the bottom).

  5. They shouldn’t have tried to go so big so fast. Fatal mistake for every single company trying to break into the big leagues of mma.

  6. [...] that? Quarterly statements say we may not last past fall? Quick let’s make a ‘rapping’ video to appeal to the ‘fresh crew’ [...]

  7. 45 Huddle says:

    If the stock price hits less than 50 cents per share, I could easily see the UFC buying it up (if possible) in order to secure first rights to the fighters they want. Then again, it is all younger fighters, so it would probably still be a waste of money.

  8. David coolshaps says:

    With all this fucking money they should host the super fights, im sure they could pay off the UFC with a million dollars, they’d make enough from a pay per view ya know?

  9. Tomer Chen says:

    With all this fucking money they should host the super fights, im sure they could pay off the UFC with a million dollars, they’d make enough from a pay per view ya know?

    What ’superfights’ would the UFC be smart in giving the IFL the fighters for just a million dollars? That’s the equivalent of 250,000 buys (at about $40 for the regular PPV) or 200,000 buys (at about $50 for the HD TV PPV). UFC PPVs are (apparently) outdrawing those numbers by a good amount today, so I don’t think the UFC would be wise in selling any real superfight for a relatively paltry amount. Plus, wouldn’t the IFL also have to pay the fighter’s purses in that case to the UFC as well (since the UFC would be the party obligated to pay the fighters)?

  10. Tomer Chen says:

    Actually, it should be 25,000 and 20,000 buys. My bad. :)


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