MMA agents unify in hopes of blocking Showtime-EliteXC contract auction
Some of the top agents in mixed martial arts have banded together in hopes of blocking Showtime's upcoming auction of ProElite's assets, including their fighters' contracts.
The letter -- sent to MMAjunkie.com (
www.mmajunkie.com) by Ken Pavia and co-signed by Monte Cox, Ed Soares, Matt Stansell, Bob Cook, Chas Bowling and Cesar Gracie -- warns would-be buyers that the agents plan to fight the legality of any sale.
"The unity of this effort is unprecedented and the message that is being sent is clear," the statement read. "Absent significant pre-established negotiated terms, do not bid on these contracts unless you are prepared to fight the challenge to their legality."
Showtime has claimed rights to ProElite's "tangible and intangible" assets after the company defaulted on two promissory notes of $4 million that it lent to the company in June and September. The premium cable company notified the public markets last week of its intentions to auction off those assets, including the fighter contracts, on Nov. 17.
ProElite, the parent company of EliteXC and a handful of other promotions, ceased operations and notified the Nevada State Athletic Commission of its closing in October. However, a skeleton staff told the agents earlier this month that it planned to promote an event in early 2009, though the move has largely been considered a last-ditch effort to block Showtime's auction.
The unified agents contend the contracts can't be transferred anyway.
"Whether or not these contracts are legally transferable is a matter of law," the statement read. "What is not at issue however is Showtime's disclaimer that the assets are being sold 'as-is, where-is basis, without recourse, warranty or guarantee of any kind.' We intend to fight the lawful ability to transfer these assets, and as we believe these are personal services contracts. We do not believe there is an obligation to perform if transferred. With pooled resources we are prepared to fight this issue.
As of today, the auction was still scheduled to go on as planned.
ProElite formed in December 2006 and promoted a total of 20 events under the EliteXC banner -- most of which aired on Showtime or CBS. While the organization eventually grew to claim No. 2 status behind the UFC, a series of financial and public-relations gaffes eventually led to its demise.
The full statement is below:
Agents Unite to Block Showtime Fighter Contract Auction
We as sports agents battle against each other every day for the best opportunities for our clients. Ultimately we realize the struggle is always about the client's best interest. That is why we as the elite agents in MMA today have [banded] together to address what we perceive to be a grave injustice.
On November 5th in an SEC filing and in related advertisements, Showtime Networks Inc. announced its intention to liquidate "Collateral" as defined by the assets of Pro Elite and their related entities at auction scheduled for November 17th. Included in these assets are certain fighter contracts. These fighters are our clients.
Individually we consummated promotional agreements with Pro Elite. These agreements were made based on a multiplicity of factors including but not limited to relationships with certain Pro Elite personnel, venues, television exposure, jurisdictional concerns, public relations support, and numerous other intangibles. These considerations are not readily transferable.
Whether or not these contracts are legally transferable is a matter of law. What is not at issue however is Showtime's disclaimer that the assets are being sold "as-is, where-is basis, without recourse, warranty or guarantee of any kind." We intend to fight the lawful ability to transfer these assets, and as we believe these are personal services contracts. We do not believe there is an obligation to perform if transferred. With pooled resources we are prepared to fight this issue.
The unity of this effort is unprecedented and the message that is being sent is clear. Absent significant pre-established negotiated terms, do not bid on these contracts unless you are prepared to fight the challenge to their legality. It is our intention to honor our commitment to Pro Elite, but if Pro Elite is not able to perform in accordance with the contractual terms, the fighters should be granted unrestricted free agency with the unfettered ability to enter the marketplace.
Ken Pavia
Monte Cox
Ed Soares
Matt Stansell
Bob Cook
Chas Bowling
Cesar Gracie