EliteXC: We Know Who's Out, But Who Is In?

July 30, 2008

Who is in, as in who is in control over at EliteXC Headquarters?

The moves within ProElite to shed itself from the management of Gary Shaw, Doug DeLuca, and Dave Marshall can be laid at the feet of a couple of parties, one obvious and one not so obvious. As was reported by MMAPayout.com earlier, CBS/Showtime, believed to be the company’s second biggest shareholder, has had a growing role in how ProElite has been run since the initiation of their TV deal with the company . While CBS isn’t a holder of an overwhelming amount of stock, they are integral to the success of the company through their broadcasting deal. One need only look at Carl Icahn and his recent dealings with the Yahoo/Microsoft imbroglio to see how an influential investor can exert heavy influence over the company.

Without the recent infusion of cash from CBS/Showtime with the issuance of various warrants for stock and notes payable, the ProElite stock would more than likely be lumbering towards insolvency. CBS/Showtime recently infused the company with a $3.0 million dollar loan in June. Prior to that, when the EliteXC-CBS TV Deal closed, Showtime exercised warrants that provided ProElite with another $4 million in proceeds. In short, CBS/Showtime are providing the gas that is keeping this engine running. Controlling the purse strings as well as the future of the company through their TV deal indicates that CBS/Showtime are the only ones with the power to make a move against the three men who formed the company in DeLuca, Marshall, and Shaw.

Also exerting influence has been Santa Monica Capital Partners. The largest shareholder in the company, it is believed they have taken a more active role in the company of late. With a significant interest in the company and recognizing the necessity of CBS for the company’s success, SMCP seems to have gone along with these moves so as to protect their investment.

MMAPayout.com Editor Adam Swift gives a quick synopsis of CBS’s influence in this clip from Inside MMA:

With Shaw, DeLuca, and Marshall out of the company, the question now is who will step into the power void. ProElite seems to have been checking around for the availability of experienced upper management for the company prior to the announcement of DeLuca and Shaw’s departure.

Previously, sources told MMAPayout.com ProElite had shown significant interest in acquiring the IFL and that Jay Larkin was considered the company’s top asset. Larkin has a long history with Ken Hirschman at Showtime. With a sale of the the IFL’s assets to UFC being rumored, EliteXC looks to have moved on to other options.

Other prominent names mentioned at the time of Shaw’s demotion in late June as possibly moving up the corporate ladder were Jeremy Lappen and Terry Trebilcock (KOTC promoter). Lappen looks to have definitely taken a step up as far as his profile to the general public, since Shaw’s move to “consulting” for the company. Lappen’s past in the MMA business includes stints as manager of Randy Couture and also as CEO of the WFA before joining EliteXC.

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