Showtime’s fire sale that isn’t
Published by Zach Arnold on November 12th, 2008 in Current Events

 Print |  Email |  RSS

When we last checked in with what was happening on the Zombie Elite XC front, we discovered that the organization was telling its fighters that they were intending on running future shows, so therefore the fighters could not be released from their contracts. Considering the awful economic situation in the States, combined with the Holiday season, and you had a recipe for many families in the MMA industry struggling to survive.

And now an update… the situation is actually getting worse.

First, Showtime announced that they were going to have a fire sale of all Elite XC assets on November 17th. Included in the fire sale are the assets to King of the Cage, Icon Sport, Cage Rage, and fighter contracts. You too can buy Kimbo Slice’s fight contract for $1. Everything must go!

But wait, there’s more.

Once Showtime announced that a fire sale would be happening of Elite XC’s assets, Elite XC management decided to fight against Showtime. The Zombie organization is now planning to try to halt the fire sale proceedings and/or stop the asset sale through peaceful means. How? Why? Nobody really understand what is going on at this point, other than the fact that Elite XC is trying through a last-ditch effort to get back onto CBS television.

But what about all those fighters who are stuck in legal limbo, not able to talk to other MMA organizations? After all, UFC has several big shows coming up. Plus, both K-1 and Sengoku have major NYE events coming up in Japan. Well, the fighters and their agents are now trying to fight back. Several MMA agents issued a press release stating that they would work together to get their clients out from under their Elite XC contracts so that they could work for other organizations.

According to MMA Payout, there is a two-pronged legal strategy at work here for the agents in regards to how they will legally attack Elite XC in court. First, there will be an argument made that the fighter contracts should be voided because they were not submitted or approved by the California State Athletic Commission. It may work as a legal argument, but it’s not exactly the most sure-fire away to attack Elite XC. The second strategy, however, has much more solid footing — and it involves the issue of personal service contracts.

PSCs are a nasty issue in the MMA world, especially in asset sales. As we found out when Dream Stage Entertainment sold their fighter contracts to UFC, the deals were reportedly PSCs — and in states like California, PSCs can sometimes be deemed as ‘not transferrable’ to third parties. So, why would fight organizations use personal service contracts when they know that there’s a good chance that fighters could break out of them if the contracts are sold to a third party? This legal argument, which will be made by at least one fighter, has a real winning chance in court. If Elite XC doesn’t have the financial means to put on future shows and the deals are PSCs, then there’s a decent chance that certain fighters will be able to break away from their deals. However, what about the fighters who don’t have lawyers or who can’t afford to hire legal representation? They are stuck in never, neverland.

On November 17th, a lot more questions than answers will be raised at Showtime’s fire sale of Elite XC assets. Will someone try to snatch up fighter contracts on the cheap and then try to hawk them as part of a co-promotional strategy with organizations like Strikeforce? How much money will exactly be raised at the sale? Will promoters like T. Jay Thompson appear at the fire sale to buy back the assets of companies they once owned but sold to Elite XC? As with the final days of PRIDE, the final days of Elite XC appear to be far more interesting and chaotic than anything the promotion ever booked for fight cards. Unfortunately, a lot of fighters and agents are paying a heavy price to get off this sinking ship.