Showtime 'Adjourns' ProElite Auction
Sherdog.com Staff Nov 14, 2008
Showtime Networks Inc. on Friday put the brakes on plans for the
“public sale of personal property of Pro Elite Inc. and certain
subsidiaries” that was scheduled for Monday in Los Angeles. Among
the assets that were to have been auctioned were the contracts of
more than 80 mixed martial artists still signed to the capsized
company.
Chris DeBlasio, Director for Sports Communication at Showtime, declined to comment on why the auction was “adjourned” and about whether or not it would proceed at a later date. Remaining Pro Elite management and agents representing fighters under contract moved last week to block the fire sale.
“Showtime reserves all of its rights, including the right to
further adjourn or cancel the public sale and thereafter dispose of
such property in a public or private sale or in any other manner
provided under its agreements with Pro Elite and by applicable
law,” Showtime representatives announced in a released
statement.
Showtime Networks filed public notice with the U.S. Securities and Exchange Commission on Sept. 17, announcing its intention to enter preliminary negotiations for Pro Elite’s purchase. Discussions regarding the purchase reportedly went well, and a deal looked imminent in early October, when Pro Elite promoted its next-to-last event, EliteXC “Heat,” in Sunrise, Fla. The Oct. 4 show, which was funded entirely by Showtime, drew 4.56 million viewers on CBS and almost matched EliteXC’s debut on network television in May.
However, negative press surrounding questionable conduct prior to the Seth Petruzelli-Kevin “Kimbo Slice” Ferguson main event at “Heat” overshadowed the ratings success. Petruzelli -- an injury replacement who took the bout on an hour’s notice -- stopped Ferguson on strikes in just 14 seconds. He intimated during a subsequent morning talk show that promoters had given him a financial bonus to keep the fight with Slice standing.
Pro Elite officials denied any wrongdoing, calling the pre-fight locker room offer a “knockout bonus” offer, but public outcry led the Florida State Boxing Commission to open an investigation into the matter. The commission later cleared Pro Elite of wrongdoing.
According to more recent SEC filings, Showtime – which owned a 20 percent stake in the company -- gave notice to Pro Elite on Oct. 16 that the promotion violated a term of its agreement requiring it to maintain a minimum bank balance of at least $550,000 with a nationally recognized financial institution. At the time, Pro Elite had an outstanding balance of $6.3 million with the cable channel, and any default on the loans would have given Showtime the ability to sell or assign the promotion’s collateral at its discretion, according to the filings.
Chris DeBlasio, Director for Sports Communication at Showtime, declined to comment on why the auction was “adjourned” and about whether or not it would proceed at a later date. Remaining Pro Elite management and agents representing fighters under contract moved last week to block the fire sale.
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Showtime Networks filed public notice with the U.S. Securities and Exchange Commission on Sept. 17, announcing its intention to enter preliminary negotiations for Pro Elite’s purchase. Discussions regarding the purchase reportedly went well, and a deal looked imminent in early October, when Pro Elite promoted its next-to-last event, EliteXC “Heat,” in Sunrise, Fla. The Oct. 4 show, which was funded entirely by Showtime, drew 4.56 million viewers on CBS and almost matched EliteXC’s debut on network television in May.
However, negative press surrounding questionable conduct prior to the Seth Petruzelli-Kevin “Kimbo Slice” Ferguson main event at “Heat” overshadowed the ratings success. Petruzelli -- an injury replacement who took the bout on an hour’s notice -- stopped Ferguson on strikes in just 14 seconds. He intimated during a subsequent morning talk show that promoters had given him a financial bonus to keep the fight with Slice standing.
Pro Elite officials denied any wrongdoing, calling the pre-fight locker room offer a “knockout bonus” offer, but public outcry led the Florida State Boxing Commission to open an investigation into the matter. The commission later cleared Pro Elite of wrongdoing.
According to more recent SEC filings, Showtime – which owned a 20 percent stake in the company -- gave notice to Pro Elite on Oct. 16 that the promotion violated a term of its agreement requiring it to maintain a minimum bank balance of at least $550,000 with a nationally recognized financial institution. At the time, Pro Elite had an outstanding balance of $6.3 million with the cable channel, and any default on the loans would have given Showtime the ability to sell or assign the promotion’s collateral at its discretion, according to the filings.
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