Pro Elite attempts to stop CBS and Showtime public auction

by James Iannotti on Nov 7, 2008 4:38 PM EST Comment 13 comments

We reported earlier this week about the intentions of Showtime Networks Inc. to host a public auction on November 17 with whatever remains of Pro Elite Inc., including the video library, fighter contracts and other items.

Pro Elite Inc. was indebted to the premium cable network to the tune of 6.3 million dollars, which was accumulated through various loans. Showtime is apparently under the impression that because Pro Elite defaulted on the loans that the company has the right to take possession of its most valuable assets moving forward.

Pro Elite, however, sees it differently. In fact, according to the Media Daily News the organization plans to take legal action to try and stop the auction from happening.

Here's a snip:

"With Showtime primed to sell its assets, a mixed martial arts promoter isn’t going down without a fight. ProElite, which has aired MMA matches on the pay cable network, said Thursday that it plans to block the public auction."

Clearly, there's some behind the scenes work for the two parties legal teams to sort through before we hear anything definitive on this matter.

Since the demise of the Elite XC, the fighters who were under contract with them have been left scratching their heads trying to figure out what to do next. Several of them, including Nick Diaz, have filed a breach of contract complaint in attempts to become free agents after 30 days.

Pro Elite, on the other hand, has denied filing for bankruptcy and claims it will continue on with business as usual in 2009, meaning its fighters would still be responsible for fulfilling their contracts.

The relationship between CBS/Showtime and Pro Elite Inc. does not appear to be so rosy these days. And yesterday there were reports that the California State Athletic Commission had suspended the company's promotional license.

Therefore, if the organization does indeed want to move forward with operations, those are at least two major hurdles standing in their way.

Clearly all this chaos doesn't appear to be leading toward a happy ending for anybody. These two sides could be in store for a long drawn out legal mess.

0 recs | Comment 13 comments

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Comments

Sad and Pathetic. Elite just wants to sell everything themselves and get some money at least. On a side note, It was confirmed that Gina and Cyborg will sign with the same promotion whoever that may be to make that fight happen. Not affliction, though coz of Handy.

by NameNotRequired on Nov 7, 2008 4:44 PM EST reply actions 0 recs

Why wont Elite XC just GO AWAY?!?!?!

by 1-0 via Arm Triangle on Nov 7, 2008 5:18 PM EST up reply actions 0 recs

BORING!!!!!

by RedDog on Nov 8, 2008 4:09 AM EST up reply actions 0 recs

Agreed!

njfrogman.blogspot.com/2008/11/why-did-kimbo-slice-go-down.html

by Dana on Nov 9, 2008 4:14 PM EST up reply actions 0 recs

Its funny how the ELITE XC’s association with Showtime and CBS seemed to be what was going to put them on the map as a contender to the UFC and now its coming back to hunt them. I can start to see why the UFC was cautious in getting these types of deals with network and premium access channels who seem to want major control to save themselves in the first sign of trouble.

by Diablo on Nov 7, 2008 4:57 PM EST reply actions 0 recs

That had nothing to do with it.

It was because Showtime was lending EliteXC money to keep the shows going, and when it came time to collect, Pro Elite didn’t have it. Has nothing to do with the TV Deal.

by Joseph on Nov 7, 2008 5:16 PM EST up reply actions 0 recs

Actually, a bit more complicated. Showtime had financing agreements with Elite. paart of the agreement was that Elite would maintain a set amount of cash on hand or liquidity. Showtime saw that Elite was going to dro p below the agreed amount (I believe that it was set at $500,000.00). Showtime warned Elite that they were mainting and using too many people to staff their fights. Mind you not fighters, but behind the curtain people. Elite ignored Showtimes warnings and dropped below the agreed upon amount of liquidity. This in turn sent Elite’s loans from Showtime into default.

Coming from Elite, this move is not all that much of a suprise. Here in lies the problem, Elite wants to take legal action against Showtime and ABC? He with the most money usually has the best attorney. Good luck Elite, but the attorneys for Showtime and ABC are not one’s to be messed with. This move is not very good. ABC and Showtime with file a counter claim against Elite and tack on attorney fees etc. In effect this lawsuite can and will cost Elite in the millions.

by Jeff on Nov 7, 2008 10:00 PM EST up reply actions 0 recs

Jeff: I always appreciate your legal analysis. THanks buddy!

by john on Nov 8, 2008 12:40 PM EST up reply actions 0 recs

yeah, I agree, from a legal standpoint, jeff is the #1 mmamaniac!

by kevin on Nov 8, 2008 2:38 PM EST up reply actions 0 recs

Thanks, guys.

by Jeff on Nov 9, 2008 7:31 AM EST up reply actions 0 recs

They are very serious about scheduling another show and/or holding up the half dozen or so fighters worthy and ready to go to the UFC. I read an article this morning on sherdog that Jale Shields and Monty Cox doesn’t think if contracts are bought at auction that they’ll be valid or able to be used. On top of that, Shields says as long as elite can pay him, he’s more than willing to fight on a card if they schedule it. Class act even with the possibility of getting screwed!

by kevin on Nov 7, 2008 5:07 PM EST reply actions 0 recs