EliteXC in Trouble?
EliteXC in Trouble?
There is concern that ProElite, Inc (PELE.PK) is in danger of folding. ProElite is a public company that owns EliteXC, Cage Rage, ICON, ShoXC, King of the Cage, and is a part owner of the Korean-based SpiritMC. As a public company, ProElite is regulated by the SEC and must file mandatory reports. Today, the company issued its required SEC 10-Q report, which echoes industry concerns that ProElite is in financial trouble.
Highlights of the report include:
• A net loss of $24 million for the first six months of 2008.
• Writing down the value of its Cage Rage, ICON, and KOTC fight promotions
• TV License fees for their May EXC Kimbo card from CBS of $900,000 but a $500,000 payment to CBS for production of the card.
• “The CBS distribution agreement had no future value as the likelihood of realizing gross profit on the CBS events was remote”
This follows a string of negative press for ProElite over the past few months including:
• Canceling the Cage Rage Contenders 11 card 24 hours prior to the event last week.
• Canceling the EXC show scheduled for Sept. 20 in Albuquerque, New Mexico. Strangely, this event was questionably booked into a huge 18,000 seat arena with the show to be headlined by Joey Villasenor. UFC 87 in Minneapolis only drew 15,000.
• EXC July 26 in Nick Diaz’s hometown of Stockton, California only drawing approximately 1,500 paid spectators and viewership of this event on CBS dropped over 40% from the May show that Kimbo headlined.
• The ousting of EXC front man, Gary Shaw, from the company.
• The dropping of the ProElite stock from $15.00 to $2.40 low in the past year.
The road to MMA profitability is strewn with skeletons of hopeful organizations (WFA, Pride, YAMMA, etc..) Hopefully, ProElite gets back on track because more promotions mean more fights for viewers like me and more money for the people who really deserve it – the fighters.
ProElite, Inc. 10-Q form – http://www.sec.gov/Archives/edgar/data/1015789/000114420408048653/v124241_10q.htm