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IFL 10Q report for Q3 2007

By Zach Arnold | November 19, 2007

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By Zach Arnold

Update: The archived audio of today’s conference call.

Here is the new SEC filing that the IFL processed on Monday afternoon after the end of the trading session.

There will be a conference call tomorrow at 10 AM EST to discuss the financials. Audio of that conference call should be available here.

The obvious line that will stand out for casual readers is that the company right now has an accumulated deficit of $27.13 million USD, which is a significant increase over the $9.65 million USD figure (for accumulated deficit) as of 12/31/2006. The company claims that they have $9.34 million USD cash and cash equivalents on hand.

Based upon management’s current forecast of future revenues and expenses, the Company believes its cash resources will likely be sufficient to fund operations into the third quarter of 2008.

As of the end of the September, the IFL has generated $4.36 million USD in revenues. The total cost of those revenues was $15.28 million USD, with an operating loss of $17.8 million USD for the year so far (resulting a net loss of $0.30 USD/per stock share).

The statement claims that the IFL has made $1.56 million USD in TV rights fees from MyNetwork TV. The company has made $400,000 in international TV rights fees so far. Fox Sports Net is not paying the IFL any rights fees.

If you delve further into the filing, you can read all about the IFL’s buyout of Salvatore Bucci from the company.

The company has generated $337,000 USD in sponsorship revenue in 2007, $196,000 USD of which was generated in the last three months.

The eye-opener in the filing is the IFL claiming that they spent $3.1 million USD in the last three months for live events and $15.1 million USD for live events in 2007 altogether. The cost of fighters for 2007 is $4.3 million USD, with an additional $3.1 million USD in travel and other event costs, along with $1.3 million USD in marketing and advertising expenses.

The IFL claims that they have fired 20% of their employees to reduce overhead and is considering a move to get out of their current office space (with an estimated lease in the $13,000-$14,000 USD/month price range).

Regarding the IFL’s TV situation:

Given our arrangements with FSN and MNTV, we are prohibited from acquiring any additional third-party television coverage in the U.S. and its territories for our regular season, playoff and championship events. If MNTV decides to discontinue broadcasting our programming, we will have only a limited commitment from FSN to broadcast our league programming. In addition, under the current letter of intent, FSN will require in any definitive documents the unilateral option to extend the proposed three-year distribution agreement for two additional three-year terms. If we do execute definitive agreements with FSN and MNTV, and FSN exercises each of these options and the MNTV contract is terminated or not renewed, we may be unable to obtain other television coverage in the United States for our league regular season and playoff events.

Topics: IFL, Media, MMA, Zach Arnold | 4 Comments » | Permalink | Trackback |

4 Responses to “IFL 10Q report for Q3 2007”

  1. Jeff says:

    tick tick tick…

  2. Ivan Trembow says:

    This part was also very interesting regarding the TV situation:

    ” Our mixed martial arts (“MMA”) content is being televised in the United States under a letter of intent with Fox Sports Net (“FSN”) and MyNetworkTV, Inc. (“MNTV”), which could be terminated at any time. If we do enter into a definitive agreement, FSN and MNTV will require exclusive rights to telecast our MMA content in the U.S.
    We are currently televising our MMA content in the U.S. pursuant to a letter of intent with Fox Cable Networks, Inc. (“Fox”) and MNTV (Fox, together with MNTV, the “Fox Entities”). The letter of intent obligated both parties to negotiate definitive agreements in good faith and restricted us from discussing a television distribution arrangement with other parties. These obligations expired on May 31, 2007, and have not been renewed. However, we continue to produce shows for telecasting by FSN and MNTV, FSN and MNTV are continuing to broadcast our shows and have indicated they plan to continue to telecast them in the future, and MNTV has been paying us telecasting fees in accordance with the letter of intent. However, either the Fox Entities or we can terminate this arrangement at anytime. Accordingly, we cannot be certain the FSN or MNTV will continue to air our shows.”

    so basically as long as they’re only working under this letter of intent, the “Fox Entities” (FSN and MyNetworkTV) have the right to terminate the deal at any time, and at the same time, the IFL has the right to negotiate with other TV networks and sign with them if desired (although that would require the termination of the deal with the “Fox Entities”)

  3. […] the IFL’s financial status and their current SEC 10Q filing, it really comes as no surprise that they are changing leadership. NEW YORK, November 20, 2007 – […]

  4. […] Michael Keefe did his best to put over improvements in revenues from this year versus last year, with “strong” increases in TV revenue. Ticket sales increased “60%” on a per-event basis. Read our summary of the 10Q Q3 2007 report here. […]

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