Q&A: Shamus on the State of the IFL

By Scott Holmes Jul 1, 2007
Consider what the International Fight League -- A 12-team league that allows competition for 50 or so fighters that are salaried, fully benefited and given exposure on network broadcast television in primetime -- has accomplished in little over a year's time.

In 2007, nine regular season dates were held in cities across the U.S., several of which broke mixed martial arts' attendance records in their respective state. Two playoff events, scheduled for August and September, are rapidly approaching, as is the IFL Grand Prix, which will be comprised of the league's top fighters.

The coaches of the IFL teams are some of the of the biggest names in MMA, and not only do they bark orders at their squads, they step into the ring and fight on occasion.

After two seasons, new faces have emerged and seasoned vets have fought to get their names back into the MMA zeitgeist. Even the most casual IFL fan perks up his or her ears when names like Rothwell, Horodecki, Wagnney, Whitehead and Matyushenko are mentioned.

Star power isn't just limited to between the ropes either. To round out the viewing experience they've got "El Guapo" and the "Fight Professor" back together -- Madden and Summerall if they popped amyl nitrate.

So the IFL has the talent area covered, what about marketing?

Enjoying domestic television deals as well as international, partnerships with brand names like Topps, Xbox, FOX and more, the IFL seems to have a strong chance to be a major player in the wild, wild that is today's MMA landscape. Add to the fact that the fights shown in primetime have been stellar, it's a pretty impressive list of accomplishments for a company that's barely been doing business for over a year.

This all begs the question: With everything the IFL has going for it, why isn't it making any money?

The league's biggest battle will take place on paper. Since it is publicly owned, where the investors go, the IFL will surely follow. This kind of arrangement is certainly unique in the fight world and while at times things have looked promising, they can also look all too bleak.

After a story on the IFL appeared on "60 Minutes" at the end of last year, the IFL stock price shot up to over $17 per share. Once it hit the $16 mark, many early investors bailed out happy as clams. Since that time the IFL has continued to operate at a loss, and their stock price now hovers around the $1 mark.

Detractors have pointed to the steadily falling stock, the lack of revenue, a still-too-novel-team concept, and live events such as the poorly attended regular season finale in Las Vegas as writing on the wall that the young company is headed for troubled waters.

It might be too soon to judge. Many publicly traded companies are able to survive such scenarios -- heck, if the IFL were a car company it would be right on track. With new partnerships seeming like they arrive daily as well as the league's upcoming DVD releases, the IFL might yet see some year-end cash flow come their way.

Recently I tracked down IFL founder and CEO Gareb Shamus, and asked him about the league's second season, the strides and stumbles they have made, and whether or not the sky was really falling:

Sherdog.com: How did this IFL season compare to last year?

Gareb Shamus: This season was incredible because it really showed that we could produce a full season of a professional sports league for mixed martial arts. It's the first time it's ever been done. People have told us that these are some of the most exciting events they have ever been to in their life. They've experienced some of the most exciting fights they have ever seen in their life. I think we've been able to show the level of talent in our organization is really unbelievable and we've been able to show that on television to over 2 million people a week. The world is also really recognizing how popular the IFL has become in just a short time.

Your coaches have legendary pedigrees but you've been making names out of guys like Horodecki and Ben Rothwell (Pictures), who have made their way into the common household through the IFL, which has to be exciting.

Right, well it's great and it also illustrates that there's no such thing as a monopoly on talent. You know there's just an incredible array of talent that's out there in the marketplace and the IFL is just a great place for that talent. Where else can these guys get that kind of exposure on not only just national television but broadcast network television on primetime? We have the widest distribution of television out there. We're in over a 100 million homes you know; it's pretty incredible the reach our guys are able to experience, unlike any other network running MMA.

Speaking of, are you guys going to stay with FSN and the groups you have now?

MyNetwork and FOX have been incredible to work with. They've been there since the start and have been major supporters of us and what we've been able to accomplish. And literally they've been there from day one so they've been incredible in terms of the support that we've gotten from them in building our organization.

You guys expanded to 12 teams this year and have had events in over 11 different cities -- pretty ambitious for your second year. Do you guys want to continue that expansion or perhaps scale back or stay with where you're at now?

Well, we're still working on our '08 plans and we're actually very, very excited by them. We are not ready to share what's going to be part of the season next year. If history is an example of the excitement we've been able to bring to the market, history will repeat history for us. We are going to continue to innovate and just create a lot of exciting and interesting new dimensions to the league for the future so you can definitely expect that, but we're not ready to say what "that" is just yet.

Ok, you guys recently moved the IFL Finals from the Forum in L.A. to the Hard Rock in Seminole, Fla. What was the reason for the move. Was it the California State Athletic Commission or did you just want to get over to Florida?

Yeah, we've been talking with the Hard Rock for a while. It's an amazing venue for MMA. The UFC has had a number of successful shows there. It's a very strong community for people who are interested in MMA. It's a new market that we haven't been to yet so it's someplace that we've wanted to go to. There's a lot of exciting reasons for us to be there. Luckily we were able to make that happen.

We get along great with the California commission as well as every athletic commission. We run a pretty tight ship for our athletes and working with the commissions on that stuff, which is actually a lot more complicated than what people think it is, there's a lot of people involved. There's a lot of testing that's involved, a lot of medical assurances that need to be made, so we work very closely with every single athletic commission.

When you go into a place like Florida that's new for you guys, is there also a possibility of adding teams there?

We are always investigating where the best opportunities or places are, not only for our venues to host events but also where to place teams. So you know that's why if you look at like exactly like you said, we've been to a lot of places this year and worked with a lot of athletes and coaches all over the place, so we're really starting to find out what works for us and we'll continue to do more of that.

A hot topic amongst your fighters is the Grand Prix event. Have you decided where and when that will take place this year?

We're working on finalizing the details for that. I think we are pretty close to putting out the list of all the guys that have qualified for that, so that's going to be a very, very exciting announcement. When that comes out, you guys will be the first to know.

With your company being publicly traded, your finances are on display. A lot of people have been worried about share prices dropping. On paper, things look kind of grim but the partnerships you're getting, to use a financial term, are "robust." What do they know that we don't and basically, will there be an IFL next year?

Absolutely. We've been doing a lot of great things with the company and, yes, we are public and certainly share price is one way of judging the company. However our intent has always been to just build a great organization. The structure of the business is just one aspect of the company, but you know really what we're doing with the company in our opinion is what people should be focused on. When you look at what we've been able to accomplish in a very short period of time, you know, like I said, if history is an indication of what we've been able to do you can kind of project out our future here. When you look at what other organizations have been able to accomplish in their first year -- they didn't have television; they weren't selling out arenas; they didn't have stars that people knew about -- and in one short year we have all of those things. For us it's really concentrating on our business over the long term as we build our business; the market value or the price of the stock will reflect where we are at that time.

In your quarterly earnings statements it says things like "seasonality" in terms of when you'll expect to see revenue. Is it fair to say that you'll really know where you stand financially at the end of the year?

The thing is being a public company in the age of the Enrons and the WorldComs and what they call the Sarbanes-Oxley Act (financial record-keeping legislation), it's really important for us to disclose every single possible risk to our business because we don't want to be in a position where somebody invests in the company and says, "You never told us this or you never told us that or we weren't aware." So we have to paint the riskiest picture for every investor out there because these are all risks of the business. We as a management team are building a company we think will lead to a really successful MMA sports league.

You've got a new partnership with Topps trading cards, the USO organization and others recently. Everyone understands a TV deal, but explain what these moves mean to the IFL?

If you look at all these kinds of relationships we are building, they're all really long-term relationships that also have a short-term benefit as well. But it's really aligning ourselves with companies that can add a lot of value to what we do and it adds a lot of people that are interested in what we do to kind of our roster of fans we've created.

So when you look at Topps, it's got the most incredible sports history in the trading card world, and that's the company that we're working with to do our sports trading cards. When people are kids and they are growing up and they are thinking of sports cards, what's the first name that comes to mind? Topps.

When you look at the governing body for the Olympics what's the one organization that comes to mind for being most closely aligned to MMA? USA Wrestling. They've got members all over the country and all over the world that participate in wrestling and the Olympics and it's just a phenomenal organization for us to align ourselves with especially because of their penetration into the wrestling world at both the high school and collegiate level all the way up to the Olympics.

We have this incredible military, not just stationed here but throughout the world, that's going to benefit from the kind of things that we can do. We had guys training with sailors on five ships coming into New York for Fleet Week and were the only television cameras allowed on the ships. We've got Pat Miletich (Pictures) and a few other guys going over to Afghanistan next week to see the troops over there. That's a relationship where we can give back; also if you think about who are most likely fans: it's guys that train for a living. So it's really building a lot of relationships that will over time create a real everlasting appeal for the IFL because we've been there for them and they've been there for us.

We also continue to expand those relationships, whether it's also with companies like Warner Home Video on a global basis. So again, when you look at these partners that we are bringing in like Warner Home Video, it's the largest home video distributor in the world, and when you add in all the movies that they distribute -- Major League Baseball the NBA and the NFL -- these companies are huge in terms of their reach to their fan base and they are the best at what they do.
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