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« | Home | »

Pro Elite pays big for KOTC & Cage Rage

By Zach Arnold | September 17, 2007

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MMA Predictions talks about consolidation in the industry.

So, what did it take for Pro Elite to buy out King of the Cage? Now we know.

Pursuant to an agreement dated September 12, 2007 (the “Purchase Agreement”) among King of the Cage, Inc. (“KOTC”), Terry Trebilcock (“Trebilcock”) and Juliemae Trebilcock, the shareholders of KOTC (the “Sellers”), and ProElite, Inc. (the “Company”), the Sellers agreed to sell to the Company all of the share capital (the “Shares”) of KOTC. The consideration for the Shares is the payment to the Sellers of $3,250,000 cash at closing; 178,571 restricted shares of the Company’s Common Stock (the “PE Shares”) to be delivered on January 2, 2008 to the Sellers and/or their designees; and $500,000 in cash to be paid sixty days from closing subject to any offset for any indemnity claims by the Company. Additionally, the Company has agreed to make Contingent Payments (the “Contingent Payments”) over a five-year period of up to an additional $5,000,000 (payable in part in cash and in part in shares of the Company’s Common Stock, as provided in the Purchase Agreement) in accordance with a schedule based on the number of events produced under the supervision of Trebilcock under the KOTC name and earnings before interest, taxes, depreciation and amortization (“EBITDA”) for KOTC’s operations during such period.

Next, the price tag for buying Cage Rage:

Pursuant to an agreement dated September 11, 2007 (the “Purchase Agreement”) among Belgravia Entertainment International Limited (“Seller”), John Faraday and ProElite, Inc. (the “Company”), Seller agreed to sell to the Company all of the share capital (the “Shares”) of Mixed Martial Arts Promotions Limited, an English company (“MMAP”), and the Mixed Martial Arts Productions Limited, an English company (“MMAD”) (together, the “Target Companies”). The consideration for the Shares is the payment to Seller of $1,219,000, the issuance of 500,000 restricted shares of the Common Stock of the Company (the “PE Shares”) and the payment of an additional $1,000,000 within three business days of the first anniversary of the Closing (subject to any offset for breach of warranty). Additionally, ProElite will arrange for the repayment at Closing of (a) a loan by Integrated Technologies and Systems Limited in the amount of $2,600,000 and (b) a loan by Andrew Gear of $181,000, each made to MMAP.

If math and intrepretation serve me right, KOTC is going to get paid $3.75 million USD cash plus 178,571 restricted shares of Pro Elite stock and an additional $5 million USD in cash and stock. As for Cage Rage, $2,219,000 USD ($2.2 million USD) in cash, 500,000 restricted shares of Pro Elite, and paying off $2.8 million USD in debt (loans that Cage Rage had to pay back).

Plus… a legitimate news report about UFC? Zuffa ratings outlook cut to negative on weak operating results.

Topics: MMA, Media, Pro Elite, UK, Zach Arnold | 46 Comments » | Permalink | Trackback |

46 Responses to “Pro Elite pays big for KOTC & Cage Rage”

  1. Jeff Comstock says:

    Nice little spending spree. William Kelly (COO) announced that Pro Elite’s initial investment into Spirit MC was $4,000,000 USD in mostly cash with some stock.

  2. PizzaChef says:

    I’m kind of hoping Pro Elite fails. Never liked it…I just see it as some money-mark trying to make a quick buck off MMA.

    I want to support DEEP now….

  3. schz says:

    well, those 5 million are obviously not a lock. not even close. just think about it for a second, if you were buying a brand like KOTC that survives mostly the promoting efforts of its owners, you want to make sure after ownership is transferred they keep working just as hard.

    otherwise, you bought nothing.

    the obvious solution is to offer a monetary incentive to the previous owners. i dont have the contract, but i guarantee you in order for the Trebilcocks to make those extra 5million theyre going to have to work their butts off and produce some AMAZING gates. I doubt Gary Shaw is in the business of just giving away 5 million dollars for nothing in return.

  4. schz says:

    just for giggles let me add, this is a perfect example of one of your negative spins.

  5. Jeremy (not that Jeremy) says:

    $15 mil in cash, debt assumption, and shares for two actual operating, and more or less profitable MMA organizations that run dozens of events at the grassroots level, along with their respective video libraries (KOTC must sell those monster 10 event boxes pretty briskly, particularly at the low prices they’re asking. The license fees can’t be too bad).

    Compare and contrast with the reported $40 million for the video library of Pride, the belts, and the ability to unlock a couple dozen fighters from their exclusive contracts with a rival organization and likely continuing association therewith, and the potential ability to revive that organization at a later date since you own the brand.

    The 2nd isn’t as stupid a move as some would claim, but the first is nearly a master stroke by comparison, at least as of this point in time.

  6. Lynchman says:

    Jeremy,

    Unless everything I have heard is wrong, the price for Pride was much less than 40 million.

  7. Grape Knee High says:

    Huh, I never realized the rating agencies issued credit ratings on private companies that never issued debt. Or has Zuffa issued debt in the past? Not like these ratings mean anything if the rating agencies somehow see fit to rating any tranche in a subprime CDO as investment grade.

    Zach, I’m surprised you didn’t link to that article with “Zuffa rating is ‘Junk’”.

  8. schz says:

    lynchman : everything you heard is wrong.

    ive heard lower than 40, but not *MUCH* lower. dana white even had a slip where he said the number, honestly i dont remember it, but it was in the high 30s. 40 is a good guesstimate.

  9. Pontus says:

    When UFC bought Pride and WEC we heard all these doomsday prophecies that they had gotten so big that they would just buy up anyone if they wanted to..

    And alot of people whined and threw a fit about it saying that the fighters were getting fewer options and fewer chances to bargain etc.

    But now with Pro Elite buying up alot of promotions I havent heard one complain and I hardly read any reports on it.. (This page is the exception).

    Maybe I missed it but you would think that Sherdog, mmaweekly or someone else would find it intressering enough to report on it and do some indepth coverage.

    Even the hardcores on the forums doesn’t seem to care or even notice it and they have often have an opinion on anything related to mma…

    FFS Even Gina Caranos period is getting alot of discussion there.. I guess thats why I dont post.

    Had to get that off my chest sorry if I rambled.

  10. Zack says:

    “if you were buying a brand like KOTC that survives mostly the promoting efforts of its owners”

    Actually, KOTC is almost more of a franchise name than an actual promotion along the lines of UFC, Cage Rage, WEC, Elite XC, etc etc

  11. schz says:

    “Actually, KOTC is almost more of a franchise name than an actual promotion along the lines of UFC, Cage Rage, WEC, Elite XC, etc etc”

    you cant be serious. you mean to tell me the KOTC brand sells tickets on its own like the UFC brand? if that were the case, then buying it for 7 million would be the deal of the century.

    no, they work hard. icon, kotc, rumble on the rock, they work hard and promote local, and proelite is trying to make sure that they keep doing this. if they were to cash their checks and quit exc would be in trouble.

  12. Grape Knee High says:

    schz, what Zack was trying to say is that local promoters rent the KOTC brand. KOTC is not a single promoter model the way the UFC is.

  13. Zack says:

    Exactly. Last night there could’ve been a KOTC card in Wyoming AND Australia for all we know.

    Best thing about purchasing Icon/Superbrawl & KOTC/Gladiator Challenge is the tape libraries. I’m really surprised Zuffa didn’t make a play for the KOTC/GC tape libraries since so many of their stars got their starts there.

  14. schz says:

    oh. misunderstood that. thanks.

    i guess, my point still is that im sure theres strings attached to those 5 million. if there werent the contract would read “5 million to be payed within bla bla” not “up to an additional 5 million”.

  15. Zack says:

    Can someone elaborate on what that UFC ratings article means? Thanks in advance.

  16. David says:

    I doubt Gary Shaw is in the business of just giving away 5 million dollars for nothing in return. … lol

  17. AS says:

    Zuffa bonds are currently rated BB which means that Zuffa is less vulnerable in the near term than other lower-rated obligors. However, it faces ongoing uncertainties and exposure to adverse business, financial, or economic conditions which could lead to obligor’s inadequate capacity to meet its financial committments.

    The article basically warns that Zuffa’s credit rating could fall. Even with their recent success, Zuffa bonds are already considered junk bonds (anything BB or below isn’t investment grade), so falling further would mean paying higher interest on future loans and make existing bonds less marketable for holders.

  18. Zack,

    From what I gleamed, the article was basically saying that Zuffa’s ratings predictions were wrong and they have adjusted the cost of ad time to suit the current ratings.

    I might be wrong though.

  19. Tomer Chen says:

    Zuffa bonds are currently rated BB which means that Zuffa is less vulnerable in the near term than other lower-rated obligors. However, it faces ongoing uncertainties and exposure to adverse business, financial, or economic conditions which could lead to obligor’s inadequate capacity to meet its financial committments.

    The article basically warns that Zuffa’s credit rating could fall. Even with their recent success, Zuffa bonds are already considered junk bonds (anything BB or below isn’t investment grade), so falling further would mean paying higher interest on future loans and make existing bonds less marketable for holders.

    To add a bit more, Zuffa is getting the negative outlook review by S&P due to the UK market operating losses that it suffered in the first half of this year reducing the profit margins below what was previously considered as acceptable for the debt rating level to be neutral (on the same level), thus presenting the risk of lowering the credit rating (raising the cost of issuing debt). S&P is basically saying that, given the damage that currently has been felt, they feel that there is a risk that the Zuffa may get stuck in the red, lowering the reliability of the firm in terms of bond payment, thus charging a higher premium to offset the default risk inherently shown in the credit ratings.

  20. AS says:

    The actual S&P release came out on 9/14. I’ve got a link to it on my blog:

    http://mmapayout.blogspot.com/

    Shameless plug aside, the release gives a the first detailed % breakdown of the UFC’s business model/revenue streams that I’ve seen. There are a variety of reports available at S&P if anyone has an account. I only have stock coverage myself.

  21. Jeremy (not that Jeremy) says:

    KOTC isn’t just US either. That brand name operates overseas as well (particularly Australia IIRC).

    Given that the original numbers being thrown around for Zuffa’s Pride purchase were something like 65mil, I wouldn’t be THAT surprised if the real final number was under 40mil either. I do doubt that it is significantly less though (10% or more).

    Zuffa LLC has some loans. Based on the company’s financial performance and the future expected performance of their industry, S&P analysts evaluate the riskiness of the types of loans that the company holds (they decide how likely it is that the company can pay the money back).

    In the specific case of Zuffa, they have a $25 million revolving line of credit (probably used for cash flow, most likely they write all their checks against the loan and pay down the loan with receipts, this isn’t unusual, particularly for companies with seasonal cash flow variations, retail especially). Their revolving loan expires at the end of 2012.

    They also have a $325 million “Term B” loan, that expires at the end of 2015.

    “Term B” is a way of describing a certain class of loans. Typically, these loans are given to companies that already have significant EBITDA (this means that when you take the company’s revenues and you subtract they expenses that they pay that are directly associable with those revenues, then you take out their normal administrative costs, you end up with cash at the end of the day…EBITDA means “Earnings Before Interest, Taxes, Depreciation, and Amortization” Depreciation and Amortization are accounting terms for slowly recognizing the cost of buying something over a number of years so that you can match that expense with the revenues that that expense is earning [for instance, you buy a machine. You're going to use the machine for 10 years, but you have to pay for it all at once, so you record an entry when you buy it with an asset on both sides (you traded cash for a machine), instead of recording an asset against an expense. Then in future periods, you record a portion of that price as an expense, and you decrease the dollar value of the asset with a contra-asset (accumulated depreciation)]. Depreciation is for physical assets, Amortization is for “intangible assets” like contracts, brands, the excess price of buying a company over the value of it’s assets etc. I suspect that everyone here is familiar with interest and taxes.)

    Term B loans typically have a higher interest rate than a “Term A” loan or a revolving line of credit. They also require that the entire principal amount of the loan be paid back at the end of the loan’s life, with interest due as of specified dates (instead of compounding interest).

    So, S&P rated Zuffa’s ability to pay back the revolving line of credit and the Term B loan at “BB”

    AAA, AA, and A ratings mean that a company is typically going to be able to pay back it’s debts under nearly any circumstances. Even if business goes south, they can still pay you back.

    BBB means that a company has enough money to pay it’s debts in both the short and long term, but that if macro conditions (the economy as a whole, or situations in their business sector) change, then their ability to pay back their debts may change for the worse.

    BB is the top rating in the next “group” of ratings. Basically, this entire group represents companies that may face major risks to their business in the future. Those risks could be economic, could be sector based, could be regulatory, any sorts of risks.

    B rated companies are like BB but more so.

    CCC, and CC rated companies not only might face uncertainties in the future, but have problems to deal with RIGHT NOW.

    S&P also rates companies R, SD, or D.

    R typically means that you have a court that is negotiating with your creditors to prevent a liquidating bankruptcy because you can’t pay your debts (this is known as a restructuring of debt, the terms such as duration or interest will change).

    SD means that you’ve defaulted on some kinds of debt, but not on others.

    D means that you can’t pay anyone.

    S&P also has a number attached to the ratings. The number evaluates what the chances are that you’ll be able to recover in the case that you default on the loan (if you miss a payment, or payments, what are the chances that you can still pay back the rest of the loan). Zuffa has 3 ratings for recovery on both of their loans. That’s a middle of the road rating, more on the good side than the bad side.

    Basically, as of now, S&P said that Zuffa’s creditworthiness has not changed at all (re-affirmed their current ratings). However, they have said that they might have to lower their rating in the future (negative outlook) because of current “weak” operating results.

    Weak probably just means that the company’s profits are on the low side of what S&P was expecting, instead of the high side (strong). They said that this was because of the expense of running events in Great Britain because UFC is trying to expand their market.

    Basically, all of this means very little right now. The company’s credit rating will matter when the company goes out to look for more loans in the future, whether they be additional loans to finance expansion, or new loans to replace their current loans.

    If the company was able to increase it’s rating to an A rating, then they would be able to get new loans at lower interest rates and with longer due dates than if they remained at BB. If they dropped down into the C ratings, then the reverse would be true.

  22. catch says:

    Thanks for the lesson Jeremy (yes, that Jeremy)

  23. Zack says:

    “Their revolving loan expires at the end of 2012.”

    No biggie in planning for anything after 2012 anyway, IMO.

    Thanks for the breakdown everyone.

  24. AS says:

    “No biggie in planning for anything after 2012 anyway, IMO.”

    Mayan calander?

  25. 45 Huddle says:

    All lines of credit have expiration dates. However, if there is outstanding debt, it is typically rolled over to the new deal within a year of the expiration…. with new terms and such.

    That rating seems about right. First, Zuffa isn’t a huge company in comparison to most other companies. Secondly, there is nothing to say MMA won’t just die off as a fad. That is really the biggest driver to their junk bond rating. it has nothing to do with profits.

    Moody’s has them as a Ba3, which is equivalent to a BB-. That is one rating below what S&P has them. And just because a company is on negative watch, doesn’t mean they are doing poorly. It just means their financials and company standing don’t match a certain criteria for that rating.

    The fact that they do have such a large credit facility is actually a positive sign. It means the banks have some faith in the company. They might also have the endorsement of the owners as well, but who knows.

  26. Dru Down says:

    “But now with Pro Elite buying up alot of promotions I havent heard one complain and I hardly read any reports on it.. (This page is the exception).”

    This is totally valid. When I saw that EXC was buying ICON and Cage Rage, my first thought was how much it raised the stakes- now, if Elite doesn’t survive, they’ll take all the second tier promotions with them as well. Cage Rage has been putting on fair cards for years, and it wasn’t so long ago that they were a solid third option to the UFC and PRIDE.

  27. 45 Huddle says:

    It also should be noted that a lot of uneducated fans look at the UFC and say: “They made $10 Million on UFC 89, and they only paid out $2.5 Million to the fighters. These fighters are getting RIPPED OFF!!!”

    When in reality, a mom & pop shop is run like that. It is simple book keeping. You need to make so much per product to turn a profit. With larger companies, especially one’s with credit facilities…. The fighter expenses are just another expense on the list. One WEC show might lose money. A UFC PPV might make a lot of money. A UFC event in the UK might lose money. But at the end of the year, it is about making so much profit. So the simplistic style of looking at this companies is about as inaccurate as somebody can get.

    On a side note…. EliteXC really spent a lot of money on nothing. They have no quality fighters. They have events that are 2nd or third tier. I don’t see those purchases as smart. They might not be bad, but they didn’t do much good either.

  28. The Gaijin says:

    I see this as EXC attempting to broaden their reach into what they see as profitable markets. They are scooping up companies that are running viable promotions and have established names and goodwill in those areas. EXC will likely piggyback off this and co-promote on the names of companies they’ve bought.

    Maybe they’re looking to establish themselves in markets that are being ignored by the UFC b/c they’re not “big” enough and EXC is willing to run smaller shows, making smaller profits.

    It’s possible they actually aren’t trying to make the “quickest and biggest” buck available.

  29. The Gaijin says:

    An alternate theory:

    EXC is trying to vertically integrate the fight game…they’re buying up what are largely the orgs that have been supplying fighters to the UFC over the years.

    Possibly they feel they can control all of the “feeder” organizations, build up loyalty with the fighters and have them ultimately make their way up to EXC. This is likely the sort of long term planning they aren’t using…but it would be interesting if they were…could be onto something.

  30. Jeremy (not that Jeremy) says:

    Well, you can also run your top quality guys through all the lower levels collecting belts. They get more exposure, and your organization gains cred by aggregating the collective credibility of several organizations that have been in business over a decade with well over a hundred events each.

    That’s basically what Bodog has been doing in Pancrase. I don’t know if they have similar relationships with other promotions.

    That’s why UFC isn’t bothered by “Pride” guys potentially or actually (Rampage) running the tables in UFC. They win, guess what, they fight for UFC now, so they’re UFC guys. If they lose, you get the cred for having quality fighters that can beat them, if they win, then you get the cred for bringing top quality fighters into your promotions. It’s win win :D

  31. 45 Huddle says:

    I don’t disagree with The Gaijin’s theories. I just don’t think that will work for EliteXC.

    As I have said before, a fighter will choose TUF over ShoXC 99 out of 100 times. Also, the UFC will still be able to cherry pick a lot of these fighters because they offer contracts to more big named fighters…. Have more shows to showcase them…. And when they want to, can offer more money. And a lot of the UFC talent doesn’t come from KOTC or Cage Rage. Some fighters have, but a lot of them came from multiple organizations. And there is no way EliteXC can contain 500 fighter contracts….. Which is what they would have to do with this plan.

  32. Jeremy (not that Jeremy) says:

    Yes, they’ll probably choose TUF over ShoXC, but I think there’s a legitimate question whether they would choose TUF over whatever ProElite’s reality show is, particularly if TUF is focusing on a specific weight class while ProElite is working another for a given season.

    In fact, depending on how those award contracts are structured, maybe they would prefer them. It’s been much discussed how low ball the “six figure contract” really is. I’ll be the first to point out that it’s supplemented in a lot of ways (bonuses, sponsorships etc), but it’s still not a lot of money. Although it IS enough for a guy to “go pro” and quit his day job to focus on training.

    EliteXC does not need to contain 500 contracts. Most of these smaller organizations use single event contracts when they don’t just hand the guy 500 dollars on a verbal agreement.

  33. 45 Huddle says:

    That reality show likely will never see the airwaves or will be on some second rate channel. Most shows in concept never get made. Most pilots never get picked up. That is the reality of television.

    1. The Contender already got pushed to cable. So there is no way one of the big 5 (CBS, NBC, FOX, ABC, or CW) are touching it. At least not if it contains even complete fights. That has to do with sponsors not wanting to be involved with such a “violent” sport.

    2. What cable station is available for it? ESPN already has the contender. SpikeTV has TUF. What other channel is really available with that demographic?

    3. Even if it does get on TV, there is no guarantee it will be a success.

    So the waiting for the reality series concept is a long shot at best.

    On top of that…. Zuffa already has inroads with most of the top teams in the world. Xtreme Couture, Miletich, Jackson, ATT, BTT, Chute Boxe, etc…. When those teams continue to churn out top level talent…. Who are their loyalties with? With the exception of Ceasar Gracie’s camp, EliteXC really doesn’t have major relationships with any big camps.

    So that Chute Boxe fighter might get a few wins underneith him in KOTC, but when it comes time to going from a small time fighter to climbing the ladder in the big organization… He is going to want to be with his friends in the UFC or WEC. Not to mention that EliteXC could put on 1,000 shows a year to build up talent, but they only have a select amount of broadcasting time on Showtime (15 Million Subcribers) to promote those fighters. The UFC will have PPV 12 imes a year, likely HBO 8 times a year, SpikeTV 8 times a year, along with TUF, Countdown Shows, and various other methods to getting their fighters across.

    The EliteXC method sounds good on paper…. Until it is actually thought through…. And then it falls flat on it’s face.

  34. The Gaijin says:

    I’m inclined to agree with 45 on most of this. Just saying that I could see that be their “reasoning” behind all of the purchases. As you pointed out, for the most part its a logistical nightmare/impossibility. I’m more of the line of thought that they are doing it to cash in on the goodwill and market penetration of the existing companies.

    The one area I might disagree with is that with ICON, ROTR, CR and KOTC what other “established” organizations are left as development/feeder orgs? WEC used to be one, but they seem to have set it up to establish lower weight classes.

    Though like you said:
    1.) anyone the UFC really wanted, they’ll just go and out bid for their services; and
    2.) TUF will be more than enticing than ShoXC to 99% of the fighters out there.

  35. AS says:

    From what I understand these purchases are about producing content (both for Showtime and internet). They can use the local fighters with the EXC guys on top for easy made cards. They invest very heavily in the EXC website and think the future of the business is internet ppv once you can wire your computer into your HD tv.

  36. Lynchman says:

    schz Says:

    September 18th, 2007 at 6:53 am
    lynchman : everything you heard is wrong.

    ive heard lower than 40, but not *MUCH* lower. dana white even had a slip where he said the number, honestly i dont remember it, but it was in the high 30s. 40 is a good guesstimate.
    ==================
    Maybe you are correct, but I have had a few different folk, inside Zuffa and out, all hit home at a little under 30 million, with part of that being the paying off of some debt.

    If Dana said a higher number, I would love to hear it. No reporter has ever come up with a quoted price from him. If he said it publicly, I am pretty sure it would be online.

  37. Jeremy (not that Jeremy) says:

    You’re forgetting a simple external factor here 45.

    The writer’s guild contract is about to come up again. The networks are greenlighting reality shows left and right to fill out their schedules because they’re afraid that the writers will strike.

  38. AS says:

    Jeremy,

    Interesting note on the writer’s guild. Here’s a list of 5 MMA reality shows in development:

    http://mmapayout.blogspot.com/2007/09/5-new-reality-shows-in-development.html

    Anybody know of others?

  39. Jeremy (not that Jeremy) says:

    AS:

    This is a good point, aside from the “once you can,” are you saying that you can’t yet? I mean, I’m already hooked up, get with the 21st century :D

    Hell, I’m typing this post on my home machine that’s hooked to a media server, both are hooked up to my home entertainment system. Oh, and I’m not at home, I’m actually in another country, using an encrypted tunnel to access my home system. I can’t be alone, surely there are some other technophiles around here.

    I don’t know which I would choose, but I think that another good option for ProElite would have been to hook up with Vivendi. You have Universal’s HD channel starting to get decent penetration in the market, you have USA Network for basic cable, and you have NBC for network material.

    USA Network would be the big one though, it’s probably the largest penetration basic cable network in the country. They already carry combat sports material, and they would be a good outlet for a later night hour long show containing highlights from ProElite’s now MASSIVE library of events.

    You could basically ape UFC’s approach at every level that way, but you’d still have to connect with someone for PPV.

    The problem of dealing with Showtime/CBS is that they don’t have much to speak of in terms of basic cable. They have CSTV, which I really don’t think has very good distribution anywhere, and which is already narrowly defined as college sports (although they’ve broken that already for Gold Cup replays etc related to their Telemundo content).

    Maybe if CBS wants to rebrand that network…

    I’ve been heavily revising this post, so if any of the names are screwed up, please forgive me, it’s a typo and I’m too busy at the moment to go back and reverify..

  40. AS says:

    USA Network could also offer the advantage of a WWE Raw lead-in, the same lead-in that I think is largely responsible for the UFC TUF bonanza (query whether McMahon still thinks MMA isn’t competition [still the official position] and would green light such a move). NBC has also shown an interest in the sport, witness the online coverage UFC is given.

    The problem is the way EXC and especially IFL are spending money, they’re never going to make it to the internet HDTV ppv era. The money the EXC is spending on that website is particularly insane. Fortunately they have the advantage of Showtime’s support, and so long as Showtime is happy with the content and believes in its ability to move subscriptions they can probably sustain losses for the forseeable future.

    I’m not an expert, but feel is we’re still atleast 5 years from any kind of pentration in that market, probably further. Jeremy, I’d be curious to hear your thoughts on the time frame we’re talking about here.

  41. D. Capitated says:

    I don’t know which I would choose, but I think that another good option for ProElite would have been to hook up with Vivendi. You have Universal’s HD channel starting to get decent penetration in the market, you have USA Network for basic cable, and you have NBC for network material.

    They can’t just leave. Showtime has invested tons of money into the project. They also stand the best chance of spending money in the long term to keep it. Showtime has a 2 decade history in boxing.

    The problem of dealing with Showtime/CBS is that they don’t have much to speak of in terms of basic cable. They have CSTV, which I really don’t think has very good distribution anywhere, and which is already narrowly defined as college sports (although they’ve broken that already for Gold Cup replays etc related to their Telemundo content).

    Maybe if CBS wants to rebrand that network…

    Not gonna happen anytime soon. College sports are a much bigger deal than MMA likely ever will be.

  42. Ian Dean says:

    “$2,219,000 USD ($2.2 million USD) in cash, 500,000 restricted shares of Pro Elite, and paying off $2.8 million USD in debt (loans that Cage Rage had to pay back).”

    So basically Proelite now own 100% of Cage Rage or just the investors share?

    Interesting to note as well that Andy Geer lent Cage Rage £90k

    A few things there raise my eyebrows a little

  43. Jeremy (not that Jeremy) says:

    Yeah, they own 100% (already). When they pay off the liabilities of the company, they’ll be the only ones with any claim on Cage Rage’s assets.

  44. Jeremy (not that Jeremy) says:

    Money on internet HDTV PPV?

    Well, UFC is already making money on that. I’m betting these other guys aren’t though. You should check out the Xbox Live Video Marketplace with your Xbox 360. You can buy UFC fights in high def online with it.

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