Q&A with ProElite CEO Chuck Champion
SI.com: The EliteXC brand, will that continue?
Champion: We have a right to that brand on a go-forward basis. We own it. And we've licensed the ShoXC brand to Strikeforce, so we could use that brand as well. But we've got a very strong brand in King of the Cage. Terry [Trebilcock] has done a great job over 10, 12 years. It's a profitable brand. He's run hundreds of shows -- 50, 60, 70 a year -- and they're all profitable. We can concentrate on that and build on that. The overhead of the company is dramatically, as you might imagine, significantly reduced. We're just an entirely different position today than we were on Oct. 4.
SI.com: What kind of events do you see ProElite promoting? I'd imagine the fighters Strikeforce are taking over are some of the bigger stars that you had cultivated in your time promoting. What will be the size and scope of your shows?
Champion: That's yet to be decided and determined. But remember the organization came on the scene two-and-a-half years ago with no fighters, zero, nada, no stars, nothing ... and produced what it did in a period of time. Some can argue many of the decisions that were made, particularly in retrospect, could've have been made differently and done differently. But you can't take away from the former manager team, the likes of (Gary) Shaw and (Doug) DeLuca. They started from ground zero and built what they built and got millions of people to watch it that were new. None of these people were ProElite fighters two-and-a-half years ago. So attracting fighters to do what we do is going to be something for Terry Trebilcock to address in the weeks and months to come. We're going to be relying very heavily on Terry. Actually, I have been over the last year, along with a lawyer that works with him, a guy by the name of Howard Zellner, who has been absolutely magnificent through this whole thing.
SI.com: Will you have any kind of relationship with Strikeforce moving forward, or are things on good terms just based on the completion of the deal?
Champion: We have a great relationship with them. We have no plans. We're going to help them do what they need to do in order to be successful and for the fighters to be successful. We'll be working with them over the next couple months to make a smooth transition, to work out any issues, get tape libraries to them and so on. We have a tremendous amount of respect for ... the guys that are behind Strikeforce. Negotiations can drive people apart or drive people together. This one has clearly driven two organizations that were competitors closer together with greater degrees of trust that had been exhibited before.
Our respect levels have only increased for them over the course of the negotiations. Whatever we can do to help them, we'll do. I've always looked at them as other providers of content, and it would simply get more eyeballs to the sport. The sport would grow faster. The faster the sport grows, the more sponsorship dollars and advertising dollars are available to us. It's better for the fighters that we pay. It's kind of like building the pie a lot bigger. In the early stages of an industry like ours, there's plenty for everybody to go around. It requires a more disciplined approach to be more successful at it.
SI.com: Can you walk me through the Strikeforce deal? The asset sale was a limited asset sale, including fighter contracts?
Champion: Some fighter contracts.
SI.com: And Strikeforce, do they pick and choose which contracts they want, or do you have a say in that?
Champion: They pretty much gave us a list they were interested in, and option fighters they were interested in. And there has to be conversations with fighters as well.
SI.com: It's my understanding that there has to be some renegotiation involved with these contracts.
Champion: Well, there are contracts that have been written that give the company full assignability rights to those contracts. There are contracts that we have that have provisions we have to meet in order to assign contracts. There are furtherance clauses in all the contracts that fighters are required to work with us to achieve what was originally contemplated in the contracts. Those are very strong and serious clauses.
And the other thing, with Strikeforce continuing to have a relationship with CBS, the fighters came to us in part because they wanted their talent exhibited to a greater number of people. And Showtime certainly does that beyond anything, in fact even beyond what the UFC does. These guys are going to be interested in wanting to sit down, but they shouldn't be thinking that this is going to be an opportunity to put on a gun and a mask and stick something into Strikeforce's face. That would be a false premise to be operating under.
SI.com: When is a list of fighters going to be made available?
Champion: We'll be releasing our 8Ks, we have to do it within four business days by law. All of the material aspects of this transaction have to be released within that. The lawyers are currently working on those 8Ks as we speak. I want to get them out there as soon as possible, because the industry has a tendency to fill in the blanks they don't have the right information. They just speculate.
So I'd like to get as much of this out there as possible, so everybody knows what's going on. Strikeforce, I can't say for, I would assume Strikeforce is in contact with those fighters and their representatives. We would be more than happy to talk to fighters and representatives if and when they call us. We're working through that issue as we speak.
SI.com: And in addition to certain fighter contracts, you said the video library.
Champion: Of just EliteXC. So it's the fights that were on Showtime and CBS that were EliteXC fights.
SI.com: And the third component?
Champion: There were the fighters. The libraries. There was the sub-licensing of ShoXC, which was the smaller event, so that both of us can use ShoXC footage, and [the] ShoXC title. All the specificity of that will be out there. But again, to be very clear, this is not a sale of the assets of ProElite just like what we saw with the IFL or closing down of ProElite or any of these kinds of things. That is not what occurred here. There were two separate transactions -- one with CBS and one with Strikeforce -- that basically now has resolved. You may recall we had litigation against the company by Wallid Ismael. That litigation has been settled, so the company is now without litigation. We're in the process of paying off all the unsecured creditors, and the secured creditor being CBS is retiring its note.
The company will be debt free. We'll have cash in the bank and a profitable entity in King of the Cage moving forward. I'll now be turning my attention to issues following the Oct. 4 fight, and there are several I can't talk about specifically. I'll be dealing with Cage Rage, and I'll be dealing with Icon, with Rumble World, and Spirit MC to determine how those assets will fit with us on a go-forward basis.
SI.com: Do you feel at the end of the day that this was the best deal you could have made?
Champion: Actually, yeah. You look at the potential alternatives when you're literally in a battle for your life with several people knocking on your door, this thing could have turned out much different than it is today. I am really happy that a lot of fighters, a good number of them, will be back to work very quickly. That was important to us. The fighters were, contrary to again what a lot of people may think, this was looking at a debt holder in a UCC position, which was CBS, unsecured creditors, which did not include fighters -- we did not owe money to fighters -- and the rest of it was trade tables, advisors, those types of things. We'll be able to take care of that. And we'll be able to work out of the outstanding issues like the one we had. We'll get those resolved.
I think the company will be on better footing. It'll be in the right space. King of the Cage is a great brand. He has done a lot of great work. We have a lot of confidence in Terry taking us forward, with a much different infrastructure. I've to got to at least renegotiate and a number of other things to make sure that we don't ourselves right back into the same place a year from now.
GROSS: Shields joins Strikeforce