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IFL 10Q report (8/27/08)
By Zach Arnold | August 27, 2008
No real surprises in today’s filing. The main reason I was interested in reading the document was to see if the IFL had indeed sold its assets to Zuffa LLC. I saw no mention of this at all in the filing.
Basic financial stats at hand from the filing:
- Accumulated deficit as of 6/30/08: $35.7 million USD (deficit was $30.9 million USD on 12/31/07), $1 million USD in cash available
- First six months of 2008: $1.2 million USD in revenue, cost of revenue was $2.7 million USD, net loss of $4.75 million USD
- The company is down to four employees.
- IFL ended up with $20,000 per show on FSN, $140,000 TV rights revenue so far this year for the deal
And then there is this:
As of June 30, 2008, the Company’s operating subsidiary, IFL Corp., was a party to seven coach agreements or team manager agreements. The Company reached an agreement with one of these coaches to terminate his agreement subsequent to June 30, 2008, pursuant to which IFL Corp. paid $10,000 and all parties were granted releases of further obligations to each other. The six remaining agreements have termination dates ranging from December 31, 2008 to January 2, 2013. The total remaining payment obligation of IFL Corp. under these agreements is $1,208,000. These agreements provide for semi-monthly payments, and IFL Corp. has not made payments on these agreements since June 15, 2008 as a result of the cancellation of its MMA events and its financial situation. IFL Corp. has been in discussions with the coaches about a termination and settlement of these agreements but has not yet been able to reach an agreement with the coaches. The financial statements reflect an accrual of payments due under these contracts through June 30, 2008.
Put the IFL implosion into perspective. They have an accumulated deficit of $35.7 million USD. Pro Elite, in comparison, has a $55 million USD deficit and was in business for less time than the IFL. One company gets lampooned while the other company gets somewhat lampooned but also occasional reprieves from the media in coverage of the company’s finances.
Topics: IFL, MMA, Media, Pro Elite, Zach Arnold | 6 Comments » | Permalink | Trackback | Share This
At the Q & A at UFC 87, Dana said they had had discussions, but that the deal fell through.
$20,000 a show isn’t even horrible. Its pretty close to ESPN Friday Night Fights money.
Debt, in and of itself, does not signify the financial health of any company (positively or negatively). The UFC has $350 million in debt.
You have to compare many other metrics like debt ratios, cash flow, earnings, etc., to get a true picture. Pure balance sheet numbers with no context usually are very misleading when comparing two companies like the IFL or EXC.
You’re right. Debt doesn’t mean anything. It’s the cash flow that tells the story. In short, they had none. All debt and no revenue.
They slashed their net loss more than half this year, but alas, they still had no inflow of cash.
IFL, dead because they didn’t have a business model that worked.
It’s hard to convince Zuffa to buy you out when it would require paying off all your debts and getting nothing in return (non-exclusive contracts? a brand that’s been burned to the ground already? the names of a bunch of teams that are no longer used?)
There’s nearly zero chance of IFL ever running another show, so I suspect Zuffa is happy to let it die on the vine.
Bad timing. If they this was all happening a year ago, they probably could have persuaded EliteXC to buy them out during that farm league splurge.