The organization, whose last show featured a 14-second fight, calls it quits after losing $55 million.It looks like Elite XC, the upstart mixed martial arts organization featuring Kimbo Slice, is down for the count.
ProElite, Inc., Elite XC's Los Angeles-based parent company, plans to file for bankruptcy, said T. Jay Thompson, an Elite XC executive consultant, whose Hawaii-based MMA organization was purchased by ProElite last year.
Elite XC has also informed fighters, office staff and others of immediate layoffs and has canceled fight dates, including a Nov. 8 card in Reno, Thompson said.
In an SEC filing Tuesday, ProElite said that Showtime Networks said it was in violation of a debt covenant because the MMA firm doesn't have enough cash on hand. ProElite has reported $55 million in net losses since January 2007, according to SEC filings.
Several ProElite executives declined to comment Tuesday.
"If I had to point fingers why this thing went bad, I'd have trouble, because I only have two hands," said Thompson.
ProElite, which opened two years ago, appointed boxing promoter Gary Shaw as president and he designated his son, Jared Shaw -- known by the nickname "$kala" -- a key executive with matchmaking powers.
Gary Shaw, who saw his role change from president to consultant this year, said Tuesday he "wasn't even a consultant anymore. I have no comment. I don't know anything about it. I don't know if they're done."
In another SEC filing, Pro- Elite acknowledged significant deficiencies in how it was operated, including wasteful spending by management and a finding that contracts it entered into were not adequately reviewed.
Thompson said he believes the company's fate was sealed when Slice, its biggest star, was knocked out in 14 seconds of the main event of a CBS show Oct. 4.
Slice was supposed to fight MMA veteran Ken Shamrock. Instead, a late injury replacement, Seth Petruzelli, was put into the cage. Petruzelli alleged in a later radio interview that Elite XC promoters told him he'd earn extra money by fighting a stand-up style that favored Slice's strength as a street fighter. A Florida commission is now investigating that claim.
Meanwhile, instead of gaining an investment by Showtime Networks that ProElite officials had said was vital for its survival, Showtime sent ProElite a default notice for $6.3 million last week, according to an SEC filing. "ProElite officials have advised us that they will not be able to put on the EliteXC event scheduled for exhibition on Showtime on Nov. 8," Showtime spokesman Chris DiBlasio said in a statement. "In view of Showtime's leadership role in sports programming, including boxing and mixed martial arts, we intend to explore other opportunities."
Thompson railed at what he called a cycle of wasted money by ProElite officials. Pro Elite would over-staff its fight cards with employees, bringing in "35 people who were running around, quite comically" at shows, he said. "It was mind boggling."
Earlier this year, in San Jose, a Pro Elite card generated a live gate of $1.2 million. Thompson, with 15 years of fight-promotion experience, said he advised ProElite officials to bring only a few employees north to maximize profits. Instead, he said, 23 employees worked the event.
A few Elite XC fighters, including champion Jake Shields, Robbie Lawler and Nick Diaz, may land at the top MMA organization, Ultimate Fighting Championship.
But Elite XC stars Slice and female fighter Gina Carano probably will have to look for fights elsewhere.
UFC President Dana White was not available for comment. But White's spokeswoman said he has previously insisted he wasn't interested in adding Slice to his stable of fighters because he didn't want to diminish the sport as "a freak show."
Carano's publicist did not return messages left for her, but the unbeaten female fighter, who has also performed as "Crush" on NBC's "American Gladiators," appears headed for a second-tier organization if she continues in MMA.
UFC's White has said that there isn't enough of a talent pool to start a women's fight league.
From day one of Elite XC's existence, White predicted a doomed effort.
"No one in that business has a clue how to do MMA," he said in December 2006. "These guys don't know the difference between MMA and thumb wrestling."
Taken from: http://www.latimes.com/sports/printedition/la-sp-mma22-2008oct22,0,2976847.story
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