EliteXC in Focus: Business Outlook & (Belated) Renegade Review

November 27, 2007

On Saturday November 10 EliteXC presented their eigth event (including co-promotions) on the Showtime network with Renegade live from Corpus Christi Texas. Dave Meltzer reports that the show produced a live gate of $259,124 on a paid attendance of 4,539. The broadcast was a mixed bag, ranging from bizarrely terrible (male dancers in the opening sequence) to well produced an entertaining (specifically the Kimbo vignettes).

The company is at an important crossroads in its development. The stock is now trading at $8, down from a high of $15 as reality begins to set in that the company is losing money hand over fist with profitability nowhere in sight. Time will tell whether the PR splash that the spree of acquisitions bought was a prudent business decision. For now the moves look foolish for a company that has very little in the way of revenue and little prospect to change that much in the near to intermediate term.

At the end of the day the only person, or in this case entity, that the company has to answer to is Showtime. Showtime invested heavily in the promotion after being used by the UFC in its negotiations with HBO. That’s a positive and a negative. On the one hand they get the exposure and legitimacy that comes with Showtime, but ultimately they have to find a way to gain traction in a crowded market place, one that has proven to be very tough for everyone who has entered it that isn’t named the UFC.

Ultimately, Showtime will decide EliteXC’s fate. Viacom, Showtime’s parent company, is the second largest holder of Pro Elite stock. The company’s future depends on Showtime’s commitment to the MMA space and willingness to eat major losses in growing the brand. As Meltzer noted, the lack of a promotional special and major push for the Renegade show is probably not an encouraging sign. With the UFC on HBO out of the picture for now, one wonders how long Showtime’s appetite for MMA will endure without seeing tangible returns.

Generating revenue is going to be hard for the group given the current environment. Without a strong television clearance the prospects of doing any significant business on pay-per-view is virtually non-existent. Frank v. Ken Shamrock is only fight this company, or any other outside of the UFC, can make which would have a chance at doing business on pay-per-view. And even that fight, without strong television is unlikely to do anything remotely approaching the UFC’s numbers. From a purely academic standpoint the fight would do a great service to the industry by setting a bench mark for non-UFC pay-per-view events.

The company’s great white hope might be found in a network TV deal with NBC, but even that would be something of a shot in the dark at this point with little in the way of established talent and nothing in the way of brand power. Short of catching lightning in a bottle, ala Griffin v. Bonnar on the Ultimate Fighter I Season Finale, it is hard to imagine the company being able to capitalize on such exposure. (More details and analysis on MMA’s looming move to network TV later this week).

Renegade featured several fighters who the company could successfully build around. Antonio Silva looked like a star at 265, as did Kimbo Slice and KJ Noons. Slice projects a strong persona with a great look, complete with strategically shaved chest and back hair as well as a gold grill, and a good promo.

However, on the whole the show looked minor league. I don’t like the ring bell or Jimmy Lennon Jr. as the announcer because they make me think boxing. Brand differentiation is key, and just like the IFL using the ring makes it look like a bad boxing knockoff, so too does using boxing’s signature elements. I think one of the most under appreciated keys to the UFC’s success is how far the company goes out of its way to differentiate its product from boxing.

The arena setup also made the show look smaller as they had the cage set up off center creating a short entrance ramp that in close shots made it look like they were in a small television studio. Maybe they were going for an intimate setting and maybe you can make the case that the company will lose every time if it tries to compete with the UFC’s spectacle style production, but it didn’t work for me.

Those complaints about the production aside, I thought the product inside the case was pretty good. Diaz and Noons looked like a good UFC under card fight coming in, but was well promoted on the show. The fight looked like it was going to be a barn burner until a nasty cut ended Diaz’s night. That disappointing ending, along with the fiasco that was Kimbo’s debut, put a damper on what was otherwise a somewhat promising event.

Hughes v. St. Pierre Added to UFC 79

November 25, 2007

The UFC officially announced Georges St. Pierre as Matt Serra’s replacement verses Matt Hughes on 12/29. The bout will be five rounds for the interim UFC Welterweight Title. The company didn’t even consider St. Pierre a possibility as a replacement, but he asked for the spot himself.

All things considered, this is the best possible scenario for the UFC as it was in the company’s best interest to reload the 12/29 card and keep the Welterweight division rolling. Hughes-St. Pierre for the Interim Welterweight Title is the perfect solution, perhaps it was the only solution, since it made no sense to risk either against anybody other than each other while waiting on Serra.

The only negative is that the company will be playing catch up in promoting the fight with the ads already out and runs the risk of burning what was guaranteed to be a hot match to debut in Montreal. The move could be viewed as an attempt to hot shot near term business, especially in light of indications that business has slowed down or at least leveled off from last year, and even from earlier this year. In the past the company has shown a willingness to wait to make big fights, but perhaps this was more of a result of that policy (i.e. already having waited on Serra-Hughes all this year they were forced to move on) rather than a change.

However, the incentive to do a big show on 12/29 should not be underestimated. The company has lost a lot of momentum the last few months, while boxing and even professional wrestling have gained ground. The perception of explosive growth has been instrumental in the company’s ascent and while the mainstream media still perceives MMA as hot, that could change quickly if the company stagnates.

At first glance, it’s hard to understand why St. Pierre would ask for the fight from a strictly business point of view. He was guaranteed a shot at the title next year, but instead asked for a fight on short notice against an opponent who will have the benefit on a full training camp. However, the moves makes a lot more sense when you consider that St. Pierre last fought in August and wouldn’t be risked again until his title shot. Therefore, best case scenario, even before the Serra injury, he was looking at a six month layoff. With Serra out indefinitely he was looking at the possibility of an even more significant layoff.

Putting aside the ring rust issue, St. Pierre doesn’t get paid unless he fights which is a strong incentive to get in the octagon sooner rather than later. St. Pierre also has every reason to be confident based on his dismantling of Hughes in their last fight.

UFC Notes

November 24, 2007

  • There have been cutbacks across the board at the corporate office. The company was apparently expecting similar growth to the last year and instead things have leveled off. To make matters worse they’ve been promoting more shows despite money being tighter.
  • Andrei Arlovski was offered a new contract which his management turned down. The company is apparently waiting on a counter offer from Arlovski.
  • The UFC was left completely in the dark about Tito Ortiz’s appearance on the Apprentice.
  • Dana White recently stated that the company plans to run a pay-per-view event in Florida in 2008.

SOURCE: Dave Meltzer – The Wrestling Observer Newsletter

Serra Out of UFC 79

November 23, 2007

Today the UFC announced that Matt Serra has pulled out of his 12/29 Welterweight Title fight against Matt Hughes with a herniated disc. No replacement was named. The announcement is the latest disappointment in what has been an unlucky year for the company with injuries and upsets spoiling several marque matchups.

The Welterweight division has been on hold for Serra-Hughes since Serra won the title in April. The postponement of the fight also pushes back another highly anticipated rematch, Hughes-St. Pierre III which was expected to take place next Spring, possibly in Montreal.

Happy Thanksgiving!

November 22, 2007

E.P. Powell said, “Thanksgiving Day is a jewel, to set in the hearts of honest men; but be careful that you do not take the day, and leave out the gratitude.” So in the spirit of those words and this holiday, thanks to everyone who has supported this site and myself over the last two plus months. It’s been a remarkable ride that wouldn’t have been possible without the support of people like you and for that I am truly grateful.

As Melody Beattie once said, “Gratitude unlocks the fullness of life. It turns what we have into enough, and more. It turns denial into acceptance, chaos to order, confusion to clarity. It can turn a meal into a feast, a house into a home, a stranger into a friend. Gratitude makes sense of our past, brings peace for today and creates a vision for tomorrow.”

Happy Thanksgiving to you and yours,

God Bless,

Adam Swift

Mayweather/Hatton 24/7

November 22, 2007

Mayweather/Hatton 24/7 premiered this week. The first episode lives up to the hype and the standard set by De La Hoya/Mayweather 24/7. The replay schedule for the first episode can be found here. You can also view the first episode online here. The second episode premiers Sunday at 10PM on HBO.

Larkin Named IFL CEO as League Losses Down

November 21, 2007

I have a new piece up at Sherdog.com covering the IFL’s announcement of Jay Larkin as CEO and the company’s third quarter results. The piece includes exclusive comments from Larkin regarding the company’s future direction.

FULL STORY: Larkin Named IFL CEO as League Losses Down

TUF Rating – Week 8

November 20, 2007

Dave Meltzer reports that the 11/7 episode of the Ultimate Fighter did a 1.01 rating with 1.3 million viewers. The key demographics were a 1.59 in Males 18-34 and a 0.79 in Males 35-49.

Season five is averaging a 1.15 rating through eight episodes.

Zuffa Plays Politics

November 20, 2007

The New York Daily News ran a story this week on Republican Presidential candidate Rudy Giuliani’s corporate backers. The headline read, “Rudy Giuliani jets to campaign stops using casino kingpin’s plane,” in reference to Giuliani’s use of corporate jets owned by Sheldon Adelson, the owner of the Las Vegas Sands Casinos and third richest man in America. However, the piece also noted several other corporate contributors including, “Zuffa LLC, a company whose creations include ‘Ultimate Fighting Championship,’ a particularly brutal hybrid of boxing and martial arts that critics have dubbed ‘human cockfighting.'”

It is not clear why the company would support Giuliani, however, a couple of potential explanations immediately come to mind. With the UFC expected to make a strong push for sanctioning in New York next year, Giuliani represents a powerful political friend to enlist in persuading the state government to embrace MMA. It is also possible that the Fertitta brothers might have chosen to support Giuliani on the basis of their gambling interests (presumably for the same reasons as Adelson) and simply choose to make the contributions through Zuffa in an attempt remain low key (notice that the article does not make the connection of Zuffa to the Fertittas and Station Casinos).

Sports Marketing and PR Roundup Blog

November 20, 2007

Joe Favorito, Senior VP of Communications at the IFL, has started a new best practices blog called: Sports Marketing and PR Roundup: Sports Publicity, Marketing and Brand Building in a New Age. Joe has over twenty years of experience in strategic communications and marketing, working for some of the top sports brands in the world such as the NBA’s New York Knicks and Philadelphia 76ers, the WTA, and the US Open, before joining the IFL. In addition he is the author of “Sports Publicity: A Practical Perspective,” the first and only textbook dedicated to sports publicity.

Joe is well respected throughout the MMA media for his tireless work on behalf of the IFL and has been a great friend of this site. If you’re as interested in sports marketing and PR as I am then his new site should become a must read.

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