Exec: Mismanagement Caused Elite Collapse
Though it had a platform that rivaled all others in mixed martial
arts, EliteXC and its parent company, Pro Elite, couldn’t stop
themselves from falling off the ledge.
Launched in December 2006, Pro Elite entered a booming market and
quickly established a place behind perennial leader, the UFC, with
the sheer magnitude of its size and scope. However, it was a
combination of mismanagement, runaway personalities and frivolous
spending that led to its demise, said one of its consulting
executives, T. Jay Thompson.
“Mismanagement, it was mismanaged by people that didn’t know MMA,
that didn’t have the proper years of experience,” said Thompson of
the company’s cease of operations Monday after only 22 months in
business. “It’s not an exact science. There’s not a book that you
can write to learn how to promote shows.”
Thompson, who promoted 55 events under the Icon Sport and
Superbrawl brands over 13 years, was one of the more experienced
individuals brought into the Pro Elite fold, but he said he was
under-utilized from the start.
Pro Elite paid Thompson $350,000 in cash, hundreds of thousands of
shares in stock and signed him to a five-year consultant’s position
in return for his Icon Sport promotion and all its assets, which
included a 50-plus event tape library.
Thompson’s Icon Sport was not the only bold purchase made in that
first year of operation.
Pro Elite also paid $3.75 million for longtime promoter Terry
Trebilock’s regional juggernaut, King of the Cage, $5 million for
the UK’s Cage Rage outlet and invested $1 million cash in South
Korea’s SpiritMC –- all hefty price tags to ensure the fledgling
promotion gained unfettered access into each respective region and
had a healthy stable of farmed talent from which to pull.
Instead, SEC reports listed losses from all four acquired companies
totaling over $20 million.
“They didn’t use it,” said Thompson of Pro Elite’s ill-fated farm
system. “They bought too much too fast. To be in second place in
five years, we needed to [still] be here in five years. First and
foremost, we needed to find a way to make money.”
But instead of raking in the dollars, Thompson saw them fly out the
doors of the company’s overpriced Wilshire Blvd. rental offices in
“It had to be $100,000 in rent [a month],” said Thompson. “It’s a
beautiful place to bring someone up and hold a meeting and try and
impress someone, but who we trying to impress? It’s MMA.”
Thompson said the warning signs were apparent from his initial
negotiations with Pro Elite in late 2007. A deal that was supposed
to be signed a month before EliteXC’s inaugural event in Hawaii
turned into a verbal tug-of-war between himself and former EliteXC
Live Events President Gary Shaw a day before the announcement of
Icon’s purchase was made. Once onboard, Thompson found he didn’t
mesh with the outspoken Shaw, an import from the boxing world.
“I think Gary Shaw has a lot of positive traits as a promoter,”
said Thompson. “I didn’t necessarily see him as someone morally or
ethically that I wanted to learn from though.”
A frustrated Thompson found himself on the outside looking in,
absent from the initial meetings with CBS that Shaw spearheaded and
the company’s day-to-day decision making led by the Los Angeles
With the company showing signs of internal dissention, Shaw was
downgraded to a consultant’s position in late July. Thompson does
not believe Shaw’s pay was reduced in the demotion.
Shaw’s son, Jared, stayed on with the company as a vice president,
though his role with the organization was never clear.
“It was my understanding that to get Gary out, they had to keep
Jared in,” said Thompson.
Like his father, the novice Shaw seemed to have issues fitting in
with Pro Elite and the sport in general.
“I think Jared Shaw is a passionate kid,” said Thompson. “I don’t
think he knows MMA. I don’t think he should be making decisions in
an organization of that size. I believe Jared Shaw’s heart was in
the right place. I think Jared Shaw wanted badly to succeed and for
what reasons I don’t know, whether to be in the front, to be the
star himself. I think he tried his hardest and just did a rotten
Nowhere was Shaw’s struggle more apparent than Oct. 4, when EliteXC
made its second trip to Florida to promote its third card for CBS.
Shaw, who didn’t hide his affinity for the promotion’s biggest
star, Kevin "Kimbo
Slice" Ferguson, caused more commotion outside the cage then
Petruzelli’s 14-second decimation of Slice inside it.
“When you have a high-level representative of our company in Jared
Shaw on national television jumping up and screaming, it’s
extremely embarrassing,” said Thompson. “To have people like that
calling the shots, I’m not all that surprised that the company’s
where it’s at right now, and I’m not surprised that CBS doesn’t
necessarily want to put their eggs in that basket.”
Just who called the shots Oct. 4 -- which unknowingly became
EliteXC’s swan song -- will remain a hot topic as the promotion’s
death is dissected from every angle. The loss of Ken Shamrock
just a couple of hours before his main event bout with Slice was a
brutal blow, and the decisions that came afterward proved crucial
to the company’s survival.
“It was a scarily run show from what I saw,” said Thompson, who
said his attempts to assist the company in its most desperate hour
were disregarded. “It’s really easy to be a promoter when your
star’s winning fights, when everything’s going well. Crisis
management is really what makes a good promoter.”
Thompson said he flew down to Florida on his own dime and was
sitting cageside when he got word that Shamrock had sliced the skin
above his eye and would not be cleared to fight. Unable to get
clearance to head backstage, Thompson said he tried to relay
suggestions to upper management through assistants and unanswered
“Number one, they picked the wrong opponent,” said Thompson, who
confirmed that light heavyweights Aaron Rosa
and Petruzelli were considered for the opening. “Do I want my star
getting his ass kicked by the unknown guy that’s a dropout from the
UFC, or do I want his ass kicked by a guy that I can call Tito Ortiz’s
number one student protégé and the next big thing in MMA?”
The second mistake proved poisonous, said Thompson, and pertained
to alleged talks between Petruzelli and the promotion for the
fighter to stay on his feet and in Slice’s comfort zone.
“I have no proof [but] I’d be amazed if he wasn’t paid to stand
up,” said Thompson, who was absent from the last-minute
negotiations but claims co-employees intimated to him their
confidence in an arrangement that had been made prior to the bout.
“I sent [Pro Elite CEO] Chuck Champion an e-mail basically telling
him my concerns the day after, and after talking to him, he made it
clear to me that isn’t what happened, and I had to go with his
Once keen on purchasing and bailing out the EliteXC brand,
Showtime, a subsidiary of CBS, terminated the nearly negotiated
agreement with Pro Elite last week. Thompson doesn’t blame
“Watching the company from the inside out for this long, I don’t
want them running my show if I’m CBS,” he said. “I don’t want that
group running my show.”
Thompson believes the Icon Sport brand will be returned to him, but
fears it, and many of the fighter’s contracts, could be held up in
bankruptcy court for an extended period of time.
And as Affliction Entertainment and possibly others swoop in on the
still-warm spot once held by the first promotion to score a live
broadcast TV deal, Thompson hopes someone will succeed where his
company has failed.
“I think CBS is deciding whether or not they want to be in the MMA
game at all, and I think they’re leaning away from it to be honest
with you,” he said. “If they do it, they’re going to go into
business for themselves and bring a couple of key people on. I
would love to be involved with that.”
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