Karma’s a bitch; Elite XC closes up shop
Published by Staff on October 21st, 2008 in Current Events

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By Zach Arnold

The idea of Pro Elite Inc, the parent company of Elite XC, closing up shop is not surprising. This is an organization that lost $55 million USD in 18 months and then had to rely on CBS to help finance their October 4th event in Sunrise, Florida.

What’s surprising, however, is the way the organization closed up shop and how it happened. Even stranger are the parallels between the end of Elite XC and the end of PRIDE.

According to both Dave Meltzer and Adam Swift, Elite XC was on the verge of being purchased by CBS & Showtime. CBS network executives were supposedly thrilled at the ratings that the third MMA event drew on broadcast TV, despite the clear debacle that was Kimbo Slice vs. Seth Petruzelli. Viacom officials were reportedly so happy that they were reportedly preparing the paperwork to purchase Elite XC and … bring back Gary Shaw on board. Seriously.

Then, a funny thing happened. Elite XC got hit hard by the Kimbo Slice/Seth Petruzelli ’stand-up’ scandal and CBS found themselves in a position similar to the position that Fuji TV found themselves in a couple of years ago with PRIDE. In 2006, PRIDE withered under heavy media scrutiny from a negative campaign by Shukan Gendai in regards to yakuza allegations and stories. Fuji TV, facing the prospects of having to deal with angry shareholders, pulled the plug on PRIDE programming from the network despite the fact that PRIDE was attracting ratings anywhere in the 15-20% range per show. CBS, meanwhile, pulled the plug on buying EXC within a couple of weeks of the promotion’s third broadcast MMA event. The lesson to be learned here in the bigger picture is that as a fight organization, if you do not control 100% of your operation you are at the mercy of a corporate sugar-daddy that can make you or destroy you instanteously. This is why WWE and UFC will remain monopolistic players in their respective sectors of the fight business — they understood this business concept long ago and became self-financing business machines that produce 100% of their product. It doesn’t matter what TV platform these organizations shift to, as the product will always look and feel the same.

There is karmic justice at play here with the closing of Elite XC. If it is true that CBS wanted to bring back Gary Shaw into the fold of Elite XC management, then the irony grows even thicker in regards to the comments Shaw made to The LA Times newspaper regarding the Kimbo/Petruzelli stand-up scandal. When asked by a reporter from the newspaper about the stand-up scandal, Shaw said that he didn’t think it was a big deal at all and that it is not unethical for promoters to ask fighters to ’stand-up’ during fights because the promoter is encouraging a ‘fan-friendly fight.’ Shaw’s words only added fuel to the fire of what was a spectacular PR disaster of magnificent proportions involving one Jeremy Lappen, whose conflicting statements and words in various media outlets got him into so much hot water. Why? Because the media closely studied the lawyer’s words and the lawyer’s statements started contradicting each other. It got so bad for Lappen that at one point he claimed (in an interview with Michael David Smith of AOL Fanhouse) that both Sports Illustrated writer Josh Gross and ESPN writer Franklin McNeil had ‘misquoted’ him regarding bonuses paid out to fighter in Elite XC, despite the fact that both writers had audio recording of their interviews with Lappen. Suffice to say, Lappen’s resume in the MMA business is now largely tainted (between the collapse of WFA and the disastrous collapse of Elite XC) because of what has transpired in the last few weeks.

However, I expect Lappen to only receive a minor footnote when the history is written regarding the collapse of Elite XC. It shouldn’t be this way, but it will be nonetheless. Instead, the face of Elite XC’s collapse will be, for better or worse, the ‘Smoothie King’ Seth Petruzelli. Petruzelli will forever go down in MMA annals as being the face of Elite XC’s collapse, much in a similar vein to how Mr. I (aka Mr. Ishizaka aka Kim Dok-Soo, the mysterious backer of PRIDE according to Shukan Gendai) became associated as the face of the PRIDE yakuza scandal. It was Petruzelli’s own self-inflicted verbal wounds that started the stand-up scandal, just two days after he beat Kimbo Slice in 14 seconds by KO. Petruzelli’s controversial comments on an Orlando radio station that he might have been financially ‘encouraged’ by Elite XC officials to have a stand-up war with Kimbo Slice caused such an immediate media blowback that Petruzelli had no idea what hit him. Further complicating matters for Petruzelli was the impression (in my opinion) that he and Jeremy Lappen were not exactly on the same page in terms of having a PR strategy to handle the controversy from the comments. There were conflicting quotes from both parties in various media reports throughout the week. There were so many conflicting statements that both men were only adding fuel to the raging fire that was gaining significent traction in both new & mainstream media circles. Petruzelli, who was being heralded as a hero a couple of days after beating Kimbo Slice, became the face of the Elite XC stand-up scandal. Consequently, according to both Meltzer and Swift, the stand-up scandal supposedly cost Elite XC the opportunity to be purchased by CBS.

When historians look at the collapse of MMA promotions such as the IFL and Elite XC, the one common denominator in the groups that have collapsed is the absolutely insane burn-rate that these organizations had when it came to financing their operations and spending all the money they obtained so quickly. $55 million USD lost in 18 months? Hell, when the IFL closed up shop, they lost $35 million and were relentlessly mocked by everyone for doing so.

There are a lot of angles to analyze in regards to the story of Elite XC collapsing. We will analyze several different storylines over the next week, including what Elite XC’s demise means for the MMA industry as a whole. The biggest loser in the collapse of Elite XC is Gina Carano, who will likely have to give up on being a full-time MMA fighter and make a permanent transition to Hollywood for good. Meanwhile, PRIDE and Elite XC hanger-ons like Jerry Millen and Jeremy Lappen will continue to try to get work (and likely will) in the MMA business. Eventually, however, karma will catch up with everyone involved in these scandals in a big way. It always does.

Finally, a tip of the cap to Dana White. Give the Vince McMahon of MMA credit — he saw how big of a deal the Elite XC scandal was and how it could damage the entire industry and UFC brand as a whole. White took charge and went after Elite XC publicly in the media. He described to the average human being what the stand-up scandal was all about and why it should matter in the time span of about two minutes in a media interview. White was protecting his turf, his industry, and smelled blood all at the same time. His comments helped keep the heat on Elite XC in mainstream media circles, which led to even more ridiculous statements from people like Gary Shaw, which in turn reportedly soured CBS on investing any more in Elite XC.