The bottom finally fell out for EliteXC this week, as the promotion became the latest casualty in a bloated MMA marketplace when it folded 19 months after staging its first event. The company canceled its Nov. 8 card, and thus announced its collapse after its parent company, Pro Elite Inc., ran up $55 million in deficit.
Pro Elite was in desperate need of capital to stay afloat through the end of the year, and negotiations with Showtime, a subsidiary of CBS, to buy the company did not bear fruit. CBS had to pay for the Oct. 4 event to go off as planned because Pro Elite was broke, and EliteXC ended up seeing no revenue from one of the biggest events to date. Pro Elite was expected to declare bankruptcy. A filing with the Securities Exchange Commission indicates that CBS and Showtime, because Pro Elite defaulted on loans they issued, could sell the company's assets or grant a license or franchise to a third party to use the company's assets. This seemingly opens the door for CBS to bring another MMA promotion into its fold.
Several sources reported this week that CBS and Showtime cooled on purchasing the company in light of the Florida State Boxing Commission's investigation into the circumstances surrounding Seth Petruzelli's TKO victory over Kimbo Slice, a 14-second sequence that will become the enduring symbol of the company's final days.
With the company out of business, several people stepped forward to talk about the investigation, which was closed this week with no wrongdoing found. Longtime promoter and EliteXC executive consultant T. Jay Thompson told Sherdog.com that he would be amazed if Petruzelli had not been paid to stand up.
The Florida investigation only involved conversations with Petruzelli, EliteXC officials, athletic commission officials that have worked with EliteXC and Tank Abbott, who lost to Slice last February in Miami.
The implications of Pro Elite’s folding are vast. Not only are an entire of stable of fighters without jobs, including several who are world class in their weight divisions, but companies around the world that Pro Elite spent millions of dollars purchasing or investing in - from ICON Sport in Hawaii to Cage Rage in England to King of the Cage in California to SpiritMC in South Korea - find themselves without operating capital.
King of the Cage, for its part, said in a statement that it still will hold events it has planned and evaluate the situation further after that. Also, the leading platform for female MMA fights has disappeared, leaving stars like Gina Carano without a national platform to ply their trade. Bankruptcy proceedings could hinder fighters' ability to get out of their contracts.
Kimbo Slice's manager, Mike Imber, told Sherdog.com that he plans to sit down with former EliteXC officials to feel out whether MMA events on CBS could still happen, and that Slice could look to Japan for future bookings as well.
MMA pundits had at it in pointing to the reasons Pro Elite went under, citing everything from pointless expenditures to spending money too fast to mismanagement. Investors’ attitude, however, still seems to be that MMA is on the rise. Dallas-based SUN Sports and Entertainment announced this week it has secured $5 million from a hedge fund to launch a new MMA promotion and website, with the parties involved saying they are "very confident that the sport is just starting to grow."