IFL Axes August Show to Stay Afloat ... For Now
Jason Probst Jun 10, 2008
The cash-strapped International Fight League has canceled its Aug.
15 show, and company CEO Jay Larkin said the organization's future
is still up in the air, mainly due to the lack of a viable
financial partner, along with a host of other impediments.
Larkin, who joined the IFL in March, said that despite recent changes in the IFL's format -- which included scrapping the team-vs.-team concept and the scheduled addition of a hexagonal ring for the next show -- the organization has canceled the Aug. 15 event in New Jersey. After a long process of attempting to court a financial backer/partner to keep the IFL afloat, Larkin stopped short of pronouncing the IFL dead.
But with the company's latest May SEC filings showing $32 million
in debt, the combination of a partner with the funds, platform and
leveraging capabilities to make the IFL a success remain an elusive
combination, explain Larkin.
"We've tried to change many things here over the last few months, and to do it on the fly," Larkin said on a Tuesday media conference call. "And that's while we had fully functional events going on. It's kind of like open heart surgery, while the heart's beating, while you're trying to work on it."
After going public in November 2006, the company's stock peaked at $17 per share in January 2007, then began plummeting downward, sliding below the $1 per-share mark in June 2007. As of Monday, its share price was .05.
"When I came on [here] I came upon a company that was unique, taking chances. But it was also a company that was in trouble. We haven't been able to turn that around into a viable product that people want to see," he said. "[But] the company is running much better than it's ever run before."
When he joined the IFL in March, Larkin, a longtime executive with Showtime's boxing programming, viewed mixed martial arts as a fresh industry, ripe with possibilities. He pointed to a number of factors that have since dampened that enthusiasm, including CBS' May 31 broadcast of Elite XC and the public reaction to it, a slowing economy, and major networks' wariness of televising the sport despite its potential upside.
According to Larkin, despite the hard-core fan base, it's still a hard prospect to connect the tangible upside of bringing MMA to a mainstream audience with a viable, large-audience broadcast partner. Larkin would not give a firm date as to when the IFL might officially go out of business if a turnaround cannot be achieved, but was frank about the need for something to happen, and soon.
"If the IFL believes the best thing would be to close down, that would be a very bad statement," Larkin said, adding that in a three-month period recently, ten MMA promotions had gone out of business. "When you see a number of companies fold up overnight, it really makes you wonder about the fan base. I've been here a few months now, we've had some successful events, and I base that on the quality of the fighting, However the current business climate has shown transition will need more time. And our current cash position will not support us going forward."
The uncertain future, however, will not prevent the IFL from allowing fighters to compete in other organizations, given a few caveats, Larkin added. It's a Catch-22 situation, he said, because they don't want to hold fighters back if the IFL goes under, while at the same time, don't want to give away potential stars to other organizations, as those fighters are who fans will want to see compete in the IFL.
If an IFL fighter gets an offer from a rival promotion, Larkin said the company is "open to that discussion" and will treat such situations "on a case-by-case basis."
However, selling them outright to free them of existing contractual obligations is not a first choice, he added.
"We consider our fighters our primary asset. If we start letting those fighters get cherry picked, there won't be much left here," he said. "Selling off the pieces bit by bit, I think would be a last gasp effort on our part. Shannon Knapp and Bas [Rutten] will try and place them in different promotions. We are working with other organizations that are very interested in our top guys. Many will remain under the IFL contract. If we can complete a transaction that will enable us to continue our business, then they will be able to have their fights under us."
Larkin also acknowledged the differences between hard-core and casual fans, drawing a clear line in the different ways both constituencies follow MMA. Reaching the casual ones, he said, isn't easy, and he viewed the CBS May 31 broadcast as further confirmation of the difficulty in satisfying both fan bases.
"I couldn't believe some of the comments on the CBS show, everybody who wears an Affliction t-shirt and drinks an energy drink is suddenly a television producer," he said, citing fan criticism of the production values of the show, as well as IFL fans being unhappy with the team concept, then complaining when it was eliminated. "My assessment is that there is still a great deal of caution about really embracing MMA in a non-restrictive broadcast manner, meaning broadcast television, ABC, CBS, possibly ESPN and Fox. There still seems to be tremendous reluctance at the top. It's interesting that UFC still does not have a major broadcast. But at this moment, for all their years, they still don't have a major television deal for live fights, though that may change [soon]. As I understand it there was a lot of outcry against the [CBS] show, and as I understand it CBS [executives] heard it."
Recognizing the UFC dominance as a branded entity, Larkin added that some casual fans may be tough to win over with new promotions, given UFC's potent advantages in exposure and name recognition.
"I have my theories, and some may not be the kind of thing people want to hear. I think that there is a halo effect over the UFC, and there are fans of the UFC who are not necessarily fans of MMA," he said. "But they appreciate the UFC product, and not necessarily the quality of the fights. They have good nights and bad nights like everyone else. I believe there is an element of the fan base that believes if it's not the UFC, it's crap. And that makes it very difficult to operate in a business environment."
Larkin, who joined the IFL in March, said that despite recent changes in the IFL's format -- which included scrapping the team-vs.-team concept and the scheduled addition of a hexagonal ring for the next show -- the organization has canceled the Aug. 15 event in New Jersey. After a long process of attempting to court a financial backer/partner to keep the IFL afloat, Larkin stopped short of pronouncing the IFL dead.
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"We've tried to change many things here over the last few months, and to do it on the fly," Larkin said on a Tuesday media conference call. "And that's while we had fully functional events going on. It's kind of like open heart surgery, while the heart's beating, while you're trying to work on it."
The August show was canceled largely to prevent further loss of
funds, he added, citing that the show would've used up existing
financial reserves. The organization has courted numerous partners,
but thus far, haven't found one with sufficient interest -- and
organizational mojo, such as a major network or deep-pocketed
player -- to help turn the company around.
After going public in November 2006, the company's stock peaked at $17 per share in January 2007, then began plummeting downward, sliding below the $1 per-share mark in June 2007. As of Monday, its share price was .05.
"When I came on [here] I came upon a company that was unique, taking chances. But it was also a company that was in trouble. We haven't been able to turn that around into a viable product that people want to see," he said. "[But] the company is running much better than it's ever run before."
When he joined the IFL in March, Larkin, a longtime executive with Showtime's boxing programming, viewed mixed martial arts as a fresh industry, ripe with possibilities. He pointed to a number of factors that have since dampened that enthusiasm, including CBS' May 31 broadcast of Elite XC and the public reaction to it, a slowing economy, and major networks' wariness of televising the sport despite its potential upside.
According to Larkin, despite the hard-core fan base, it's still a hard prospect to connect the tangible upside of bringing MMA to a mainstream audience with a viable, large-audience broadcast partner. Larkin would not give a firm date as to when the IFL might officially go out of business if a turnaround cannot be achieved, but was frank about the need for something to happen, and soon.
"If the IFL believes the best thing would be to close down, that would be a very bad statement," Larkin said, adding that in a three-month period recently, ten MMA promotions had gone out of business. "When you see a number of companies fold up overnight, it really makes you wonder about the fan base. I've been here a few months now, we've had some successful events, and I base that on the quality of the fighting, However the current business climate has shown transition will need more time. And our current cash position will not support us going forward."
The uncertain future, however, will not prevent the IFL from allowing fighters to compete in other organizations, given a few caveats, Larkin added. It's a Catch-22 situation, he said, because they don't want to hold fighters back if the IFL goes under, while at the same time, don't want to give away potential stars to other organizations, as those fighters are who fans will want to see compete in the IFL.
If an IFL fighter gets an offer from a rival promotion, Larkin said the company is "open to that discussion" and will treat such situations "on a case-by-case basis."
However, selling them outright to free them of existing contractual obligations is not a first choice, he added.
"We consider our fighters our primary asset. If we start letting those fighters get cherry picked, there won't be much left here," he said. "Selling off the pieces bit by bit, I think would be a last gasp effort on our part. Shannon Knapp and Bas [Rutten] will try and place them in different promotions. We are working with other organizations that are very interested in our top guys. Many will remain under the IFL contract. If we can complete a transaction that will enable us to continue our business, then they will be able to have their fights under us."
Larkin also acknowledged the differences between hard-core and casual fans, drawing a clear line in the different ways both constituencies follow MMA. Reaching the casual ones, he said, isn't easy, and he viewed the CBS May 31 broadcast as further confirmation of the difficulty in satisfying both fan bases.
"I couldn't believe some of the comments on the CBS show, everybody who wears an Affliction t-shirt and drinks an energy drink is suddenly a television producer," he said, citing fan criticism of the production values of the show, as well as IFL fans being unhappy with the team concept, then complaining when it was eliminated. "My assessment is that there is still a great deal of caution about really embracing MMA in a non-restrictive broadcast manner, meaning broadcast television, ABC, CBS, possibly ESPN and Fox. There still seems to be tremendous reluctance at the top. It's interesting that UFC still does not have a major broadcast. But at this moment, for all their years, they still don't have a major television deal for live fights, though that may change [soon]. As I understand it there was a lot of outcry against the [CBS] show, and as I understand it CBS [executives] heard it."
Recognizing the UFC dominance as a branded entity, Larkin added that some casual fans may be tough to win over with new promotions, given UFC's potent advantages in exposure and name recognition.
"I have my theories, and some may not be the kind of thing people want to hear. I think that there is a halo effect over the UFC, and there are fans of the UFC who are not necessarily fans of MMA," he said. "But they appreciate the UFC product, and not necessarily the quality of the fights. They have good nights and bad nights like everyone else. I believe there is an element of the fan base that believes if it's not the UFC, it's crap. And that makes it very difficult to operate in a business environment."
