Pro Elite License Suspension, Pending Auction Muddy Fighters’ Futures
The California State Athletic Commission on Wednesday suspended
promoter licenses for both Pro Elite and King of the Cage in its
jurisdiction, sounding yet another strike against the
all-but-expired organization that went into a tailspin on Oct. 20
after a deal for its purchase by Showtime fell through.
“The primary reason that Pro Elite/Elite XC's and King of the
Cage's licenses have been placed on suspension is because of their
financial states and the fact that Pro Elite, the owner of King of
the Cage, has suspended operations and their tangible and
intangible assets are being auctioned on November 17,” wrote CSAC
Executive Officer Armando Garcia in an email to Sherdog.com on
Garcia wrote that the CSAC’s decision was based on “a review of the
facts” and was not stimulated by any outside influence.
Pro Elite’s suspension wouldn’t seem to have much impact on a
company over $55 million in debt that was recently forced to close
down its operations. However, it could serve to bolster breach of
contract claims filed after Oct. 20 with Pro Elite by numerous
EliteXC-contracted fighters who are looking to exit the failed
promotion as quickly as possible to take assignments with rival
Fighters like EliteXC middleweight champion Robbie
Lawler and welterweight champion Jake Shields
have given Pro Elite 30 days to provide proof that they can honor
the fighters’ contracts per their agreements. Though Pro Elite
released replies to select fighters last week stating they were
still in business and planning an event in early 2009, the company
has now lost its ability to host events in the state that houses
its headquarters. Pro Elite held 7 of its 17 EliteXC and ShoXC
events in California during its 22-month run.
“If they can show me proof within the 30 days that they can provide
me two more fights, then I’ll happily fulfill the two fights and my
end of the bargain,” Shields said Wednesday. “But if they can’t
fulfill what they claim in the contract, then I consider them in a
breach. If they’re willing to offer me fights, I’ll definitely do
it per the contract, but at this point, this doesn’t seem
In the meantime, Shields was one of handful of fighters whose
contract has been listed up for grabs at a public auction sale
organized by Showtime on Nov. 17 at a law office in Los
Showtime, a subsidiary of CBS, has claimed all “tangible and
intangible” assets of Pro Elite, which it said defaulted on two
promissory notes totaling $4 million that it lent to the promotion
on June 18 and Sept. 10. In addition to airing EliteXC and ShoXC
events on its channel, Showtime also had a 20% stake in the company
prior to the promotion’s recent demise.
According to recent Securities and Exchange Commission filings,
Showtime 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 $550,0000 with a nationally recognized
financial institution. Pro Elite has an outstanding balance of $6.3
million with the cable channel, and any default on the loans would
give Showtime the ability to sell or assign the promotion’s
collateral at its discretion, according to the filings.
Advertisements placed Tuesday on Sherdog.com announced the sale of
fight contracts for Kevin “Kimbo
Slice” Ferguson, Gina Carano,
Shields, Lawler, Frank
Rogers, Dave Herman,
Smith, Nick Diaz,
Alvarez and others, along with Pro Elite’s video library, still
photographs and home videos also listed for purchase.
(Sherdog.com’s advertising, including its assignments and revenue
intake, are under the sole ownership of Crave Online.)
Attempts to obtain a complete list of items up for auction were
unsuccessful, though EliteXC champion Shields believes any sales
made will not be enforceable.
“To see us on sale online is ridiculous,” said Shields. “We already
sent them a breach of contract letter. They don’t respond to that.
Instead they put this up. It’s just completely ridiculous how
they’re handling this situation and completely unprofessional. They
should be in contact with us fighters and letting us know what’s
going on instead of just putting things online and not responding
to our faxes, emails, and phone calls.”
Both Pro Elite CEO Chuck Champion and Showtime representative Chris
DeBlasio have not returned calls from Sherdog.com for comment.
However, an SEC filing made by Pro Elite on Thursday stated that,
“The Company plans to take all appropriate measures to prevent the
sale from occurring” by “raising additional financing, filing a
lawsuit enjoining the sale, filing a bankruptcy petition or
negotiating a settlement with Showtime.”
Monte Cox, who manages two fighters listed on the auction block in
Lawler and Alvarez, said he wasn’t sure Showtime had a right to the
contracts and has taken a “buyer beware” attitude with the
“I find it interesting,” said Cox. “Nobody knows what they’re
getting, so I’d be kind of surprised if any contracts get bought.
You don’t know what you’re getting.”
As an example, Cox said Alvarez’s contract is set up to where a
potential buyer will have to rotate the popular fighter’s bouts
over two year’s time with three other promotions -- Japan’s Dream,
Adrenaline MMA and Extreme Challenge. The latter two promotions are
owned by Cox.
Thompson, who sold his Icon Sport promotion to Pro Elite last
year, said he might attend the auction to try and purchase back his
company. Originally operating under the Superbrawl name, Thompson
grew Icon Sport into the leading entity in Hawaii over 13
“Who would want to buy [Icon Sport]? asked Thompson. “Without me,
the Icon name isn’t really of value. So anyone that wanted to buy
it would have to find me anyway.”
Cox, who has managed over 60 fighters over the last 11 years, said
the 15-year-old sport has entered new territory with Showtime’s
intentions to auction off his client’s contracts. Cox and others
have their doubts that the sale of a personal services contract
will be upheld in a court of law.
“I’ve never been in this situation before, so I just don’t have an
idea what can or can’t be done,” said Cox.
After meeting with multiple lawyers, Shields is more certain of his
stance. Believing the breach of his contract takes precedence over
Showtime’s claims for it, Shields said he will give Pro Elite the
full 30 days to provide proof they can honor his contract, or then
make the rounds to other promotions in two weeks.
“Getting worked up over it isn’t going to do any good,” he said.
“I’m just going to let it go its course and I’m pretty sure
something is going to work out.”
Whether other promotions will be willing to court the EliteXC
contingent of fighters after the Showtime auction and Pro Elite’s
30-day response period expires remains a question.
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