MMA Trickles Down To The Grassroots

July 30, 2008

The Yakima Herald-Republic published an article that serves to illustrate how far MMA has come in the consciousness of the average person. MMA has gone from the combat sport that dare not speak it’s name to one that is drawing in folks in droves:

But the closer-to-home changes in how the sport is viewed really prove its place in the mainstream.

As recently as six months ago, Matt Hughes would tell people his Yakima gym, Focus Martial Arts, didn’t teach mixed martial arts; he taught tae kwon do, jiujitsu and karate.

Things have changed since then, as MMA has continued to grow in popularity.

The sport has cemented itself at the mom and pop level, with local entrepreneurs being able to open multiple dojos within the same market. The article discusses at some length the popularity of MMA training not for competition, but rather for “trying to get into shape with “combat cardio,” or they’re trying to test themselves physically during training.”

Probably the most encouraging thing mentioned in the article is the diversity of ages, and income levels. What was once seen as the dominion of the young, aggressive and overly tattooed, has evolved and spread to other demographics:

“What prompted me to open a business is having so many people say, ‘I really want to learn,'” said the 37-year-old Guerin, who operates the gym with his wife, Julie Guerin. “I have doctors, lawyers. I have police officers, teenagers. I have a lady in her 60s who’s been with me for three years now.”

Busting out of the normal demographic niches is key to the long term viability of the sport as well as determining the ceiling for growth of MMA. One thing not mentioned in the article is ethnicity, which is an area the sport should look at for improvement.

Robert Thompson, Syracuse University Professor and pop culture expert, closed with this:

“For this sport to really have a chance of making its way into the central parts of the culture, like football and soccer and NASCAR have, it needed to be in many ways spruced up,” Thompson said. “It’s feeling out those parameters.”

The New Republic on McCain, Boxing, and MMA

July 30, 2008

The New Republic has an excellent article up on Senator John McCain and his noted love of boxing, with his lack of love for MMA receiving much play. MMA stalwart Eddie Goldman makes an early appearance in the article:

John McCain has made plenty of political enemies in his day, but among the most surprising is Eddie Goldman. The New York resident doesn’t fixate on McCain’s position on campaign finance, or his religious views, or his support for the Iraq war. What upsets Goldman is the way John McCain treated ultimate fighting.

Yes, ultimate fighting–that no-holds-barred hybrid of boxing, wrestling, and martial arts immortalized in the hit movie Fight Club. Ultimate fighting sprang up in the early 1990s with a flurry of neck chops, spleen blows, and roundhouses to the face. Goldman, a longtime sports commentator, was an early fan and evangelist; McCain was an early and vociferous critic. He condemned the sport as “human cockfighting,” leaned on cable companies not to televise it, and sought to ban it nationwide. “It’s an abuse of power story!” fumes Goldman. “The vehemence of McCain’s position had no rational explanation.”

The article goes own to put forth McCain’s love of boxing and disdain of MMA at the time into a broader personal context for the politico. The article puts forth boxing and MMA in a more philosophical terms as it relates to McCain’s beliefs and ideals, though MMA fans may disagree with the characterizations of our sport:

Far more likely, ultimate fighting offended McCain’s core sensibility: that there is such a thing as a good fight–one that is both clean and fair. Ultimate fighting had blown up the traditional rules and etiquette of boxing. It appeared to McCain lawless and wild and utterly without the supposedly dignified “honor” of an old-school heavyweight fight.

Boxing, in other words, represents McCain’s belief in the honorable war, one in which both sides follow a mutually agreed-upon code of organized violence. George Will has even suggested that McCain, as a former POW and torture victim, believed ultimate fighting violated the boundaries of “appropriate manliness.” Or, as Goldman puts it, “From just an ideological standpoint, [boxing] is the pure, noble, manly art of fighting. And anything else–fighting on the ground, kicking–you just don’t do!”

Republican or Democrat, Agree or Disagree, the article is a good read.

Somewhere, Wallid Ismail is Smiling

July 30, 2008

If you remember some of our earlier posts on the dubious beginnings of the ProElite group , the bloodletting that hit the news yesterday may be giving you a feeling of chickens coming home to roost in some respects as it relates to Shaw, DeLuca and Dave Marshall.

Doug DeLuca, who was an executive producer of the ABC talk show Jimmy Kimmel Live, was looking to get into the fight game. He was introduced by a mutual friend to Wallid Ismail, who had visions of expanding his JungelFight promotion into the United States. Dave Marshall founded UBET the online horse-race betting site and headed up a group of investors that met with Doug DeLuca and Wallid Ismail. Marshall and DeLuca would merge their two investment groups and then proceeded to cut Ismail out of the picture, instead bringing in noted boxing promoter Gary Shaw. The case is still in litigation.

Also out is Kurt Brendlinger, who joined ProElite in October 2006. Brendlinger has a past work history in deal sourcing, capital raising, venture capital and private equity investments and asset management. He wa key in the initial capital raises for the company.

Shaw and DeLuca Out of ProElite Board

July 29, 2008

From Elite XC’s most recent SEC filings:

On July 23, 2008, the Board of Directors of the Company accepted the resignations of the following four directors: Gary Shaw, Kurt Brendlinger, David Marshall and Douglas DeLuca, each of whom tendered his resignation on such date except for Mr. Shaw, whose resignation was received by the Company on July 22, 2008 but accepted on July 23, 2008. Mr. DeLuca and Mr. Shaw also resigned their respective management positions as Chief Strategy Officer of the Company and President of the Company’s EliteXC division. All resignations were effective as of July 23, 2008.

Prior to the resignations noted above in item 5.02(b), the following individuals were elected by the Board to serve as directors, effective as of July 23, 2008, filling previously existing vacancies on the Board: Edward C. Hannah, Edward Corey and Robert E. Brierley. In addition, Mr. Charles F. Champion, the Company’s Chief Executive Officer and a director, was elected Chairman of the Board.

MMAPayout.com was the first to report Gary Shaw’s imminent departure and EliteXC had been putting forth the story of Shaw being in a reduced role, but MMAPayout.com is vindicated in their initial report.

Both Shaw and Deluca will be kept on the payroll in a consulting position but have no effective power. :

Agreement with Mr. Gary Shaw and Gary Shaw Productions

On July 23, 2008, ProElite, Inc. (the “Company”) entered into an Amended and Restated Consulting Agreement, dated July 15, 2003, with Mr. Gary Shaw (“Shaw”), previously a director of the Company and President of its EliteXC division, and Gary Shaw Productions MMA, LLC (“GSP”), an affiliate of Mr. Shaw (the “Amended Shaw Agreement”), which amended and restated that certain Consulting Agreement among Mr. Shaw, GSP and a subsidiary of the Company dated as of October 3, 2006 (the “Prior Shaw Agreement”).

Pursuant to the Amended Shaw Agreement, GSP and Shaw have agreed to continue to provide consulting services to the Company through September 30, 2009, with Mr. Shaw to no longer serve as a director of the Company or officer of one of the Company’s subsidiaries. In consideration for the consulting services of Mr. Shaw and GSP, the Amended Shaw Agreement provides for a total payment to GSP and Shaw of $250,000 per year plus any unpaid portion of a 5% raise, retroactive to October 2007, which payment is due on the earlier of the date of a change in control of the Company or September 30, 2009. The Amended Shaw Agreement also provides for a maximum monthly housing allowance to GSP and Shaw of $9,900 through October 31, 2008, and reimbursement for reasonable business expenses upon presentation of proper receipts and supporting information. The parties also agreed that the 2,500,000 shares of the Company’s common stock Mr. Shaw received as part of the initial financing of the Company would no longer be subject to the forfeiture previously applicable in the Prior Shaw Agreement.

Agreement with Legacy of Life Entertainment

Additionally, on July 23, 2008, the Company entered into the Second Amended and Restated Services Loanout Agreement, dated July 22, 2008, with Legacy of Life Entertainment (“Legacy”), an affiliate of Mr. Douglas DeLuca (“DeLuca”), previously the Company’s Chief Strategy Officer and Executive Chairman of its Board of Directors (the “Amended DeLuca Agreement”), amending and restating that certain Amended and Restated Services Loanout Agreement dated March 3, 2008 among Legacy, Mr. DeLuca and a subsidiary of the Company (the “Prior DeLuca Agreement”).

Pursuant to the Amended DeLuca Agreement, Mr. DeLuca has agreed to provide consulting services through Legacy to the Company through September 30, 2009, but will no longer serve as the Chief Strategy Officer or Executive Chairman of the Board of Directors of the Company. The Amended DeLuca Agreement provides for payment to DeLuca by the Company of $210,000 per year. The Amended DeLuca Agreement also provides for a payment to DeLuca of $50,000 upon execution of the agreement and resignation of his positions noted above. The parties also agreed that upon execution of the Amended DeLuca Agreement, any unvested shares of the 4,5000,000 shares of the Company’s common stock Mr. DeLuca received as part of the initial financing of the Company would become fully vested.

The foregoing descriptions of the Amended Shaw Agreement and Amended DeLuca Agreement do not purport to be complete and each is qualified in its entirety by reference to the Amended Shaw Agreement and Amended DeLuca Agreement, copies of which are filed herewith as Exhibits and incorporated herein by reference.

More Ratings Info on EliteXC

July 29, 2008

Dave Meltzer is reporting a 1.7 for EliteXC 7/26 show on the final national number. That is odd, as the numbers usually bump up a bit when markets outside of the majors report in.

This would indicate the number probably cratered outside the metropolitan areas. Jordan Breen of Sherdog is one observer who spoke on this subject:

While some major market dwellers in New York and Los Angeles said they had been hit with commercials, billboards and the like, those outside of the US’s major metropolises had seen virtually nothing, although a few fans told me that they had seen a curious amount of commercials during the Price is Right. Unfortunately for CBS and EliteXC, people outside NYC and LA have television sets (a lot of them, in fact), and the sorts who dote on Bob Barker and Drew Carey are not a demographic priority.

Spike Ratings For UFC 84

July 29, 2008

These numbers are just brutal for EXC, representing UFC taking their lunch. In our Affliction vs UFC piece for mixedmartialarts.com we put forward the idea that EliteXC was the show that needed to be programmed against with a live show, but from the looks of it a two month old PPV will do the job just fine.

SPIKE TV’S RE-BROADCAST OF UFC 84 DRAWS MORE YOUNG MEN THAN A LIVE PRO ELITEXC CHAMPIONSHIP FIGHT ON CBS

Need proof the UFC is the preeminent mixed martial arts brand in the world? On Saturday, July 26, more men 18-34 watched a repeat…a repeat…of a UFC event on Spike TV than a LIVE telecast of a Pro EliteXC championship card on CBS. Despite being available in over 17 million more homes, Spike TV drew 27% more Men 18-34 for a re-broadcast of “UFC 84: Penn vs. Sherk” from (9:00-12:00am ET/PT) than CBS’s live show (9:00-11:00pm). Spike TV’s telecast tallied 433,000 Men 18-34 to CBS’s 341,000.

Overall, “UFC 84: Penn vs. Sherk” drew higher ratings than Pro EliteXC in Men 18-49 (1.5 to 1.3) and Men 18-34 (1.5 and 1.0).

Reminiscent of the XFL’s rating collapse years ago, the CBS telecast was 69% lower in Men 18-34 and 57% lower with Men 18-49 than its initial broadcast on CBS in May featuring the “He Hate Me” of MMA, Kimbo Slice.

Compared to last week’s live Spike TV UFC telecast featuring arguably the best pound for pound fighter in the world, Anderson Silva, the UFC outdrew CBS by 165% with Men 18-34, 82% with Men 18-49, and 21% with total viewers.

USA Today Talks To TapouT

July 29, 2008

Sergio Non of USA Today Sits down with the guys from TapouT for an Interview. This is an interesting read. I’m a fan of Non’s work, he doesn’t hesitate to ask the tough questions in his interviews. Too often, access is exchanged for a nice line of questions that really doesn’t challenge anyone or inform the reader. Non isn’t the case, for example:

Non: There are people who allege that Zuffa or UFC owns a piece of your company. What’s your relationship with Zuffa at this point? Do they have an equity stake in your company?

Lewis: As of right now, we have — Punkass puts that into better words than me, he has those business words a little better off his tongue with me — but we’ve had talks about a bunch of different companies that want to invest or buy a part. As of right now, we have, how you say it, one…?

Caldwell: We have one equity partner right now and they’re a minority shareholder.

Lewis: The real story about (our relationship) with Dana White — we do work with (Zuffa). They really have a lot of respect for our ability to find up and coming fighters. We signed on through 2012 to be exclusive clothing sponsor of The Ultimate Fighter. … and we have a 2-year contract to be the exclusive clothing sponsor of the WEC, so in that respect we work (together). We have a lot of financial…

Caldwell: We have the same producer.

Lewis: Yeah and the same producer that produces The Ultimate Fighter for the UFC is the same producer — Pilgrim Films’ Craig Piligian — that produces our show for our channel, Versus. So there’s some ties in there and that’s where a lot of times where people are getting confused and thinking that they own Tapout or something.

Overall, a very good interview and worth a read.

Fight Biz Quote: Kahl Talks EliteXC

July 29, 2008

“We didn’t have our ‘A-plus’ draws on the card, so we weren’t surprised, but we got incredible exposure for our others stars like Robbie Lawler (Pictures) and Scott Smith (Pictures), Nick Diaz (Pictures) and Jake Shields (Pictures), not to mention ‘Bigfoot’ Silva and Cristiane ‘Cyborg,’” said Kahl.

“We weren’t able to throw quite the same promotion at it. Because of the short turnaround, we weren’t able to put quite as an aggressive plan together,” he said. “Summer viewing numbers tend to be down a little. We still got a few million people to an MMA event and we kept EliteXC and ‘Saturday Night Fights’ in the public eye which was really the whole goal of coming back so quickly.”

“We’ve already heard from a lot of the video game advertisers who will be pushing holiday titles that they want back in [on Oct. 4],” said Kahl. “The feedback we’re getting back from all of our advertisers is terrific.”

“People seem to really recognize that we did a much better show than the first one,” he said. “The pace was better. Production values were better and we had better fights. We have a much improved product.”

“When we come back in October, we’ll have the benefit of college football, pro football, and greater circulation throughout the week, so we’re expecting a much greater performance in October,” he said.

Kelly Kahl, Senior Executive Vice President for CBS Primetime, speaking with Sherdog about the EliteXC 7/26 card

UFC 90 To Chicago Made Official, Silva Re-launch Continues

July 29, 2008

Las Vegas, NV ( USA ) – Sports fans in Chicago unite! The UFC® is coming to town and it is bringing the world’s greatest pound for pound fighter, Anderson “The Spider” Silva, for a middleweight title fight against his number one contender, Patrick “The Predator” Cote. The UFC will make its historic first trip to Chicago this fall when it presents UFC 90: SILVA vs. COTE live from Allstate Arena on Saturday, Oct. 25, 2008.

This will be step two in the re-launch of Anderson Silva, as discussed earlier. The first step seemed to be an overwhelming success, with Anderson drawing excellent ratings in his Fight Night 14 bout against James Irvin. The next step seemed to be an undercard spot vs Yushin Okami on the Chuck Liddell vs Rashad Evans card from Atlanta. Liddell’s fights generally do larger than normal PPV Buys, so the plan was to have Silva share some of th spotlight with Chuck in hopes of jumpstarting his attractiveness as a headliner. Fate intervened, though, as Okami had to bow out due to injury.

The change in opponents also lead to Silva’s next fight be moved back to October. Silva has been placed back in the headlining spot, with Thiago Alves vs Diego Sanchez scheduled for the semi-main. Anderson would have been better served by the spot on the Chuck bill, as it would give him a further chance to solidify his drawing power. His demolition of James Irvin drew well on cable television, but without most folks seeing Patrick Cote as a credible opponent that will give Silva much of a challenge, it may be hard to get the boost in PPV buys that UFC is looking for. Dan Henderson was seen as much more credible and as a threat to Silva and their fight only drew 325k to 350k buys.

Never underestimate the power of free TV, though. Anderson was the beneficiary of a marketing campaign leading up to Fight Night that hailed him as the best fighter on the planet, which may transfer over to some incremental increase in PPV sales.

Diversification: Miletich Looking Beyond MMA

July 29, 2008

Greg Norman may have choked yet again at the British Open last week, but there is no denying his success as one of the great sports “brands” of all time. With a net worth reportedly near about $400 million, and numerous successful ventures including a clothing line, his career is a blueprint for any professional athlete looking to turn sports success into business success. It’s too early to say when MMA will produce its first Greg Norman but there is no shortage of aspirants.

Randy Couture, The Gracies, Wanderlei Silva and Matt Serra, to name a few, have established themselves as forces in the business of MMA through successful schools, fight promotions and endorsement deals. Another is Pat Miletich, who spoke with MMAPayout.com about his plans, in areas ranging from personal fitness to entertainment.

While the two-time UFC champ prides himself on not talking business with his fighters, “I don’t talk money with people, I talk training,” there’s no denying his ambition outside the ring. While Monte Cox remains his manager, Miletich recently signed with Arizona-based Gaylord Sports, whose client list includes Phil Mickelson, Bronson Arroyo, Jennie Finch and Mark Mulder. His hope is that Gaylord will give him access to the type of national endorsement deals typical of mainstream sports. Miletich has also signed on with World Alliance of Mixed Martial Arts and has served as its VP of Fighter & Promoter Relations for the past six months.

WAMMA’s goal, among others, is to establish true “pound for pound” champions through independent rankings and by certifying fights between fighters from different organizations. Last week’s Affliction matchup was WAMMA’s inaugural event and Fedor Emelianenko is now its heavyweight champion. While WAMMA is still very much in “startup mode”, Miletich told us the company’s business model aims for revenues from sponsors as opposed to fight promoters. In theory at least, this will allow the organization to remain independent and objective. In addition to Affliction, Adrenaline, Pro Elite and Strikeforce have all signed on. WAMMA has also met with the UFC, which according to Miletich, “wants to sit back and watch how things develop,” but has not dismissed the idea.

On the training front, Miletich has also built an affiliate network of ten fighting schools, both in the U.S. and overseas. He conducts about 12 seminars a year, though by his own admission he’s “pulled back a bit” to focus on his other business ventures. He continues to be heavily involved in working with fighters at his 20,000 square foot training facility in Bettendorf, Iowa. Typically, 30-40 athletes are training there at any given time. Fighters can apply via his mfselite.com website, and are eligible based on a background check and blood tests. Fees are determined based on length of stay. He’s also developed a fitness program that combines his own Fighting System with the fitness training methods of the U.S. Special Forces. The program can be customized depending on sport and fitness level. So far, Miletich has trained athletes in sports ranging from wrestling to BMX. He envisions the program being offered through a national fitness chain and is currently in discussions with potential partners.

As if all of this weren’t enough, Miletich is branching out into entertainment and even the telecom business. He choreographed fight sequences in the Paul Walker straight-to-DVD movie “Bobby Z,” and is in discussions with a major network for a reality show for which he’d serve as executive producer. He also co-founded the text marketing company CellAsap (cellasap.com).

With this highly varied – some would say scattershot – approach, what does Miletich hope to accomplish at the end of the day besides profits? “I don’t need a 150 foot yacht with a butler,” he said. “I want to take care of my family, send my kids to school and make a positive impact on the sport. I want to make more of an impact as a person in the background than a person in the ring.” There’s no denying he’s been a success already on all of those fronts. Whether he becomes MMA’s first “Shark”, however, remains to be seen.

____________

Steve Curtis has been writing about the MMA industry in both the U.S. and Japan since 2004. A regular contributor to Sherdog.com, Curtis holds a BA (with honors) in Communications and Political Science from the University of Notre Dame and an MBA in Finance and Media Management from Fordham University. He works as a communications and marketing executive at a Fortune 500 company.

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