In late 2009 it was announced that Stratus Media Group had purchased ProElite for $2 million. Now we’ve received word that Stratus Media has assumed control of the ProElite board and will look to bring relaunch the company in 2010.
SANTA BARBARA, Calif.–(BUSINESS WIRE)–Stratus Media Group, Inc. (OTCBB:SMDI – News), a live entertainment company, announced today that Stratus has assumed control over the board of directors and the management of ProElite Inc. (Pink Sheets:PELE – News), an entertainment and media company involved in the promotion of mixed martial arts (MMA).
“This acquisition allows Stratus and ProElite to combine forces at the management and board levels of both organizations,” stated Paul Feller, President and CEO of Stratus. “ProElite has a globally recognized brand. We believe that by combining select key experienced management executives, who made ProElite the immediate success it was, with new top executives with demonstrated successes in conducting and televising MMA events internationally and sufficient capital, that we will achieve the brand’s strategy for global growth and success. With this combination, we can start focusing on strengthening and repositioning ProElite events and the brand, planning a series of MMA events that we believe will bring excitement to the MMA market, fans and our shareholders and establish ProElite as a leading international MMA company.”
Founded in 2006, ProElite still holds the record for highest ratings for a major network telecast of a MMA event. ProElite also owns a web portal with social networking for MMA fighters and fans and live streams of MMA bouts not broadcast on television. A focal point of ProElite’s live event promotions is Elite XC. Running its first show in 2007, it quickly became one of the most visible brands in mixed martial arts in the United States. Prior to the sale of specific assets which produce ongoing financial considerations owed from Strikeforce and King of the Cage, ProElite recorded $13.5 million in MMA event and television revenues for the 18 months ended June 2008. ProElite has engaged in an extensive restructuring that included the sales of certain assets for cash and a share of future revenues, significant expense reductions, the elimination of $12 million of direct and contingent liabilities and the shedding of unprofitable subsidiaries. The company maintains its ownership stake in South Korean-based Spirit MC, and British promotion Cage Rage.
Payout Perspective:
It’s hard not to be skeptical of the acquisition and assumed control; Stratus isn’t the first group of non-MMA business people that thought they could jump into MMA and be successful. ProElite still has a long way to go before it resumes promoting MMA shows with any frequency or modicum of success.
Moreover, I question just how globally recognized ProElite’s brands truly are. If Stratus thinks it can jump back to the CBS caliber shows the company was running – at significant losses – it’s likely got another thing coming. This management team is better off starting in the United States with a small show and trying to slowly expand from there.
Regarding the Showtime-Strikeforce-ProElite Deal:
A portion of that revenue ($25 million), first disclosed by an SEC filing by ProElite on Feb. 11 and, according to the source, put in the neighborhood of five percent, will be paid to ProElite Inc. as consideration for the sale of its assets to Strikeforce. The total revenue coming into ProElite coffers could total up to $1.25 million.
Since the sale, the Los Angeles-based company has been mostly silent about its future in MMA promotion. CEO Chuck Champion told SI.com that the company had an existing TV deal with Fox Sports, and planned to nurture its relationship with the remaining active promotion under its umbrella, King of the Cage. But how that relationship would develop, and what shape the restructured company would take, remained unclear.
Man, why can’t they just die already. Haven’t we seen enough damage done to MMA?