Undertones of MMA: The Flood Gates Are Not Open

June 15, 2008

When the IFL announced it was canceling its August show during a conference call last Tuesday, it really did come as a surprise. Sure, there have been rumblings that the league was in having financial troubles. But little more than a month ago, the struggling promotion held a conference call in which they announced their new fighting surface, “The Hex,” and that they were not only planning the August show in New Jersey, but were looking even further into the future and planned to do a show in Miami.

With the Jersey show dead on arrival, a show in sunny Miami seems to be implausible. So what happened in the course of that month, that the IFL could go from big announcements to big cancelations? It’s more a matter of what did not happen: The flood gates did not open.

Some well-informed speculation is that, financially, nothing changed for the IFL. Instead, IFL CEO Jay Larkin was hedging his bets that after EliteXC’s CBS debut all the competing networks would act on the “monkey-see, monkey-do” nature of network programming, and be compelled to add the IFL’s brand of mixed martial arts to its programming. But that didn’t happen.

According to Larkin, “We’ve had conversations with media companies, film studios, television networks, individuals, celebrities. Every time we have one of these conversations, the interest is very high, but they’re all being very cautious,” said Larkin.

As usual, the networks are playing it safe. They are waiting to see if the ratings from the EliteXC CBS show were a one-time fluke, with fans tuning in from morbid curiosity, or if the curious watchers became legit, car d-carrying MMA fans. On the bright side, negative reaction and backlash to the event seemed to be minimal. Of course, Billy O’Reilly and his minions had something to say about it. But even O’Reilly admitted he “didn’t hear any complaints from anybody about the show.”

But in order for the sport to grow the next live network show needs to be on the up-and-up:

1. MMA information is all over the net. All those new fans from the CBS EliteXC show who logged into read the MMA media’s account of the CBS broadcast now feel a little slighted by an overblown main event. Kimbo Slice has been thoroughly debunked by fans and writers across the web. Fans, both new and old, are going to be looking for a legit main event from EliteXC’s next network show, or they may go elsewhere.

2. Or, the UFC could land a network deal. Given the UFC’s deep roster of talent, a quality card is not an issue.

But the bottom line, is that for the sport to grow, for the IFL to stay alive and for fans to have affordable access on a regular basis, the floodgates need to open.

Undertones of MMA: Sport or Lifestyle?

June 14, 2008

On its best nights, the recipe for great MMA was real simple: equal parts pro-wrestling and boxing. The pageantry of the former, combined with the legitimacy and unscripted nature of the latter were thought to make for an intoxicating night of fights.

However, Tuesday’s dichotic announcements are an indication that since its assumed all MMA promotions are based in legitimate, unscripted competition, the pageantry associated with pro-wrestling is more important for attracting fans and drawing revenue.

But the bottom-line is that the UFC is the only promotion that has found the balance between too much and too little pomp in the circumstance of MMA.

After all, when EliteXC’s CBS telecast juxtaposed MMA with grand entrances, brash hip-hop artists and MMA’s version of the Dallas Cowboy cheerleaders, it was not only rejected by fans, but by the MMA media as well.

Smaller promotions, like many that appear on HDNet, leave their production in the hands of the network, which does an adequate job, but does not devote the resources on a level equivalent to the UFC, or its cable television partner SpikeTV.

In fact, the UFC owes the majority of its financial success to SpikeTV. Outside of turning the promotion around after launching the Ultimate Fighter reality series, SpikeTV’s pay per view previews give the UFC something no other promotion has: A platform on which to sell, not just the sport, but the lifestyle of mixed martial arts.

Early indicators from Afflication’s pre-show production and promos are that it will be on par, and possibly exceed the UFC’s presentation.

If they find a content partner that allows them to sell their brand and its fighters as a lifestyle, it will quickly become a force to be reckoned with, despite the fact that the initial pay per view is doomed to be a profitless endeavor.

The addition of Donald Trump as one of the organizations backers not only gives Affliction deep pockets, but connections to NBC and the king of reality TV producers, Mark Burnett, who cooked up Trump’s reality show, “The Apprentice.”

Given Affliction’s dual role as an MMA promotion and clothing company, it already has created a context for a lifestyle. Finding that “lifestyle content” partner would drive consumers to its MMA product and clothing line at the same time.

Undertones of Tuesday's Announcements Overlooked

June 14, 2008

Listen carefully… What’s that you hear in the hallowed halls of mixed martial arts?

The sound of silence, since “Announcement Thursday” has come and gone with nothing from Dana White.

With the “big announcement” pushed to this coming Tuesday, many have overlooked the significance of this past Tuesday, which had the UFC and IFL making announcements that could not be more opposite.

While the UFC was announcing a deal with Jakks Pacific that will put UFC fighter action figures in the hands of children of all ages, the IFL announced it was canceling its August 15th show in NJ because of a cash shortage.

While the IFL’s website contends it’s “not dead yet,” the road to recovery will be hard for the league that as recently as a month ago, planned to go into New Jersey guns blazing and unveiling a new six-sided ring dubbed “The Hex.”

Meanwhile the UFC is finally tapping into all those licensing revenue streams created by their TV product, which will add even more cash to its coffers.

On the face of it the scenario is pretty simple: The UFC has a lotta money… And the IFL doesn’t.

But the undertones of these announcements made on the same day are pretty profound.

Leading up to “Big Announcement Tuesday,” MMAPayout’s Andrew Falzon will write a series of posted entitled “Undertones of MMA.”

Each article will be a brief commentary on one of the conclusions that can be drawn from announcements made last Tuesday.

The topics will include:

Saturday – MMA Sport or Lifestyle? (posting later today at 3 PM)

Sunday – The Flood Gates Are Not Opened

Monday – UFC By KO in Round 1

Tuesday – If Dana White doesn’t again disappoint fans by having to reschedule an announcement that was supposedly a “done deal” we’ll be focusing on his overtones, and not the The Undertones of MMA.

IFL asking Price: $1 million

June 13, 2008

Conde Nast Portfolio does a quick synopsis of the IFL’s recent announcement that it was going into suspended animation while trying to partner up. There were some interesting tidbits contained within the article. The IFL has been on the block but this article is the first to actually throw out a figure being asked for the company, $1 million. It would be a steal at that price if not for all the assumed liabilities the company has on it’s financials. The article does let us now that the IFL has about $2 million in cash on hand, which will mainly be used to tide over the executive level through the third quarter as they still actively look to sell or merge with another company.

The article elaborates on how Larkin has slashed costs since he has been brought aboard. He has been able to reduce production costs significantly, going from about $1 million per show to about $125,000. While Larkin’s comment at the press conference that the IFL was no longer operating at a loss seemed dubious, if costs have been cut to that degree then kudos to Jay.

UPDATED: IFL Cancels August Show

June 11, 2008

Earlier today International Fight League CEO Jay Larkin held a conference call in which he announced the IFL has canceled its planned show for its August 15th show at the IZOD Center in New Jersey due to cash flow issues.

“Our cash situation is such that doing an event in August would put the company in jeopardy,” said Larkin.

Larkin said that many of the IFL’s prior changes had been “done on the fly” and compared it to doing open heart surgery – trying to retool an entire organization while still running it. Skipping the August show will allow the company to retool its product and keep cash on hand.

In a release posted on the company’s website, the event was canceled “in light of the company’s current financial condition. If the IFL is unable to successfully leverage any of those options, the company may seek protection from its creditors through a court proceeding.”

Many thought the EliteXC broadcast on CBS would dramatically change the MMA landscape, and that a strong showing in primetime would lead to media outlets lusting after sport to help attract its highly valued demographic, but according to Larkin, that has not yet happened.

“The current business climate has shown us now that the tranition will need more time, and more thought and more creativity. And our current cash position will just not support us going forward (with an August event).”

Though many investors are sitting on the sidelines in the MMA game, Larkin says there is still interest in the sport and in the IFL.

“We’ve had conversations with media companies, film studios, television networks, individuals, celebrities. We have turned over a forest of rocks to see where the interest is… Everytime we have one of these conversations, the interest is very high, but they’re all being very cautious,” said Larkin.

While the company is on hiatus, Larkin says that his fight staff, Bas Rutten and Shannon Knapp, will continue to try to place IFL fighters in fights in other promotions. The IFL will not seek any fee from other promotions that might use IFL fighters.

Looking outside of the IFL and at the sport as a whole Larkin says many other promoters are painting a picture of the glass half full, when it is really half empty.

“Every MMA company is either inflating their numbers or out and out lying about their numbers.”

While many will continue to speculate that this is the end of the IFL, Larkin says that’s not the case.

“If the IFL were to decide the best thing for the shareholders were to close down business, that’s a very bad statement in an industry that’s looking to make nothing but good statements.”

(MMAPayout will have audio from the IFL conference call posted in the days to come.)

IFL: No August Show

June 10, 2008

The International Fight League has released a statement saying it has canceled its August event at the IZOD Center in New Jersey.

A release from the company says the evenwas canceled “in light of the company’s current financial condition. If the IFL is unable to successfully leverage any of those options, the company may seek protection from its creditors through a court proceeding.”

More details to follow from this afternoon’s conference call.

IFL to Hold Conference Call

June 9, 2008

It seems like Dana White isn’t the only MMA exec making an announcement this week.

In a release to the media, the International Fight League announced it will hold a conference call, during which, “IFL CEO Jay Larkin will discuss the IFL business plan moving forward, including an update on potential partners and plans for the scheduled August 15 event at IZOD Center.”

The announcement of the conference call is rather sudden, as the IFL press machine is very well organized. The league usually provides more than just a days’ notice as to media oriented events.

While purely speculation, the sudden nature of the conference call leads me to believe the news will be rather significant. It may not upstage Dana White’s Thursday announcement, but will probably be significant none the less.

Stay tuned, as MMAPayout will bring you any news and developments from the conference call and hope to post audio of the call.

Jay Larkin Talks IFL/EliteXC

June 6, 2008

The ratings from EliteXC’s network debut on CBS seem to indicate the sport passed its profitability test with flying colors.

Since the business of broadcasting is often a game of imitation and spin-off, fans of the sport should be the beneficiaries. All of those channels too afraid to test the waters in regard to MMA programming could now dive in head first.

The real race is between content distributors and content providers to decide who will pair up with whom.

One group looking for a dance partner is the International Fight League.

In his last conference call with the media, the groups CEO, Jay Larkin, told reporters the league was for sale and that they were actively pursuing partnerships with other organizations.

In this interview with MMAPayout.com Larkin discusses a wide range of topics from a possible Kimbo Slice/ Roy Nelson fight, to the WWE’s interest in mixed martial arts.

The league broke into the sport with an unpopular team format, which they have since dropped, though even some MMA hardcore fans still think the league is filled with Silverbacks and Pitbulls.

Despite some very exciting fights featuring their cast of talented fighters including Wagnney Fabiano, Roy Nelson and Ryan Schultz, the league has yet to catch on with MMA fans old or new.
The key points are summarized below, however, the entire 24-minute interview is available for download.

Here’s what Jay Larkin had to say (paraphrased from the interview:

  • The fights were “crap.”
  • A lot of buzz from TV networks about bringing more MMA to network television.
  • Even though the fights were awful and the show ran over, it was still a success because of ratings.
  • Feels there is still reticence about the blood being spilled during the shows.
  • Conversations with TV networks and sponsors are on-going.
  • Conversations between Larkin and EliteXC President Gary Shaw did actually take place, but Roy Nelson/ Kimbo Slice were not specifically talked about.
  • Nelson/ Kimbo came about because Nelson called out Kimbo before the fight.
  • After Kimbo’s performance, Shaw probably would not put Kimbo in a cage or a ring with Roy Nelson for any reason or any amount of money.
  • Fans probably won’t be willing to pay for a Kimbo PPV, but is a good draw on free or cable TV.
  • Kimbo is probably the biggest draw in MMA.
  • The IFL will continue to follow its philosophy of using “rising star” fighters, as opposed to promotions like Affliction who are spending big money on big names.
  • Since the CBS show, the IFL has received a number of offers from potential partners or buyers.
  • The IFL is looking to do more than just raise capital. The best thing for the IFL would be to consolidate with another fight promotion, or to team up with a media company interested in adding MMA to their menu.
  • Rumor is Vince McMahon is not an MMA fan, but Shane McMahon is. However, rumor is at this point the WWE has decided not to enter the sport.
  • The original planning for the upcoming NJ fight card, was looking to craft an ethnic based fight card, like the world of boxing, hoping to draw the Russian and Polish communities, but that style of card fell through due to lack of talent.
  • The IFL will largely concentrate its live event presence along the eastern seaboard, using its strategic domestic and international broadcast partnerships to reach an international audience.

The entire audio interview with Jay Larkin is posted for download.

All audio interviews posted on MMAPayout.com are the sole property of Andrew Falzon and may not be rebroadcast, retransmitted or reposted without the express consent of Andrew Falzon.

Otto out of IFL Board

June 4, 2008

According to their most recent SEC filings, Kurt Otto, one of the founding fathers of the International Fight League, has voluntarily resigned from the Board of Directors of the IFL. Otto heads out the door roughly 7 months after his fellow founder Gareb Shamus left the company in November of 2007.

The IFL would seem to be going through a time of consolidation of power, with the brain trust behind the league’s disastrous first two seasons being either summarily dismissed or resigning of their own accord. VP of Operations Keith Evans and Director of Events Lisa Faircloth, two executives who had been with the company since it’s inception, were also recently dismissed by the company.

As the old guard has been cleared out, the balance of power within the fight company has solidly swung to IFL CEO Jay Larkin. While Larkin is certainly up to the task of running a fledgling fight promotion, one gets the feeling that the die has been cast as it relates to the IFL’s fate and any moves Larkin is making at this point is akin to re-arranging the deck chairs on the Titanic.

The gameplan of playing oversized venues in undersized MMA markets with a team format that never caught on and a roster of unknown fighters has buried the company under a mountain debt that will be hard to recover from.

Update: While Otto has resigned from the Board of Directors and his role as Commissioner of the IFL, Otto will still play a role in matchmaking along with Bas Rutten and Shannon Knapp.

Larkin on EliteXC Debut

June 2, 2008

Executives at the International Fight League have already taken note of EliteXC’s strong showing on CBS and are hoping to reap some of the benefits.

As the league prepares for its August 15th card at the IZOD center in NJ, where it will unveil its new six-sided ring, “The Hex,” CEO Jay Larkin has issued the following statement to the media regarding EliteXC’s CBS debut:

“Saturday’s ratings success of ProElite’s show on CBS again shows that the market for the sport in the mainstream is growing, and we at the the International Fight League are very excited to be one of the industry leaders that can help grow the sport of Mixed Martial Arts collectively. We look forward to continuing our work both independently with our great roster of young, marketable athletes, and with other promotions, to help make exciting fights and encourage further growth of the sport to a larger audience.”

With a roster of somewhat unknown , but incredibly talented fighters like Wagnney Fabiano, Roy Nelson, Tim Kennedy and Jay Hieron, the IFL is certainly in a position to help put on a great night of fights for any organization that wants to co-promote.

While “co-promotion” has been quite the buzz word in the MMA world, especially as a weapon against the UFC, fans have yet to see it except in rare instances.

With EliteXC’s live broadcasts on CBS, and Strikeforce’s taped programming on NBC, it will be interesting to see if either brand is willing to take the IFL up on it offer, or if they will keep their coveted deals to themselves.

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