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More agents join the stand against Showtime’s planned auction of ProElite fighter contracts

Several of the top agents in the mixed martial arts industry released a joint press release earlier this week to declare their opposition of Showtime’s planned Nov. 17 auction of ProElite’s assets. They formed a united front due to the fact that some of the advertised assets for the auction include the contracts of the men and women that they work for.

In reading the release, it was almost surreal seeing managers and agents that compete for the same clients on a daily basis be able to join together for a common cause. The most surprising alliance is one involving well-known rivals Ken Pavia of MMA Agents and Monte Cox.

But according to Pavia, the decision to put differences aside in order to act in the best interest of their clients was a no-brainer.

“I have 12 fighters that are under contract to ProElite and I figured the position would be stronger if other agents shared my voice,” Pavia told FiveOuncesOfPain.com in an exclusive interview. “So I approached Monte Cox, another well known agent, and asked him what his desire was in terms of the position of his athletes and our concerns fit each other to a ‘t.’ And together we thought through the process and approached a couple of agents, and to a man, they were supportive of the effort.”

In the days preceding the press release, Pavia indicated that he has been contacted by four other agents that have pledged their support. The most notable being American Top Team president Dan Lambert and Ed Soares, manager of EliteXC light heavyweight sensation Rafael Feijao.

Since issuing the joint statement, neither ProElite or Showtime has issued a formal response. And to Pavia’s knowledge, Showtime has not decided to cancel the auction even in spite of the fact that the agents have made it clear they intend to challenge whether the contracts are transferable.

CBS and Showtime elected to hold the auction after ProElite defaulted on several loans it had received from the two sister companies. According to SEC filings, one of the primary terms of the loan agreement was that ProElite could not have a balance of less than $550,000 in cash deposited with a major national bank.

Once ProElite’s balance fell below the threshold, Showtime called in the loan and scheduled an auction of the company’s assets in an attempt to recoup some of the $6.3 million it claims it’s owed by ProElite. The total stems from $4 million in outright loans and another $2-plus million in costs to fund the final EliteXC events.

While CBS and Showtime are only trying to protect their business interests, there is still a human side to all of this. It’s one thing to engage in legal proceedings with ProElite in dispute over the possession of tangible assets, it’s another thing to haggle over contracts, thus forcing fighters to sit on the sidelines.

Pavia, a dedicated agent who conducted the interview in the wee hours of the morning, has formed a close bond with several of his clients and is concerned about the financial implications many of the fighters are experiencing.

“Taking the lawyer hat off and looking at it from a human perspective, it’s really unfortunate because some of these guys fight for five grand to show and five grand to win,” Pavia said. “And if they made five grand in their last fight and it’s been three or four months since their last fight, they’re scrambling — they’re hungry. They’re fighters and they want to fight so that they can earn a living.”

But it’s not just the fighters working the way up the ranks that are suffering, as times are apparently tough all over.

“I even have some of the higher earners, such as James Thompson, who made a considerable payday in his loss to Kimbo (Slice),” expressed Pavia. “He was a hot commodity coming out of that and subsequently hasn’t been given an opportunity to compete. Funds are getting low for all of the guys, to a man.”

While ProElite has reportedly given some of its fighters permission to fight outside of their contracts on a one-off basis, Pavia does not believe it’s a suitable solution for most of his clients.

“(The fighters) come to me and ask for me to search for opportunities for them but they are really limited because they are under contract,” he said. “The contracts do state that the fighters are not exclusive but that they are bound to a restrictive non-exclusive clause that requires certain permissions.

“So we’re really restricted in what we can pursue. We can go after one fight deals but it’s hard to get one fight deals at market value without an organization even behind you to push for you. (The restrictive non-exclusive) also eliminates the possibility of signing with the UFC or the WEC. It’s (even) restrictive about us going to Japan.”

4 COMMENTS
  • GassedOut says:

    The outcome of this mess is going to be one of the biggest influences on fighter contracts to date (outside Zuffa). If they are indeed Personal Service Contracts, they can’t be transferred to a third party (i.e., auctioned off). I just feel for the guys that need to eat in the meantime, because if this hits court, and we have every indication it will, there are going to be some seriously sidelined fighters. Things in court can take years to sort out.

  • […] Showtime had been planning the auction in an attempt to recoup some of the $6.3 million it had loaned and given ProElite prior to CBS and Showtime’s decision to call in a note after ProElite’s liquid savings fell below $550,000. The decision to use fighter contracts as assets to be auctioned drew great criticism from the MMA community with several major agents and managers representing the fighters in question having joined together to denounce Showtime’s intentions. […]

  • mike wolfe says:

    If the fighter contracts state that they’re transferable, I question the basis of arguing they’re not. If the contracts do not state whether they are or are not, then the issue is murkier, although most states have case precedents that suggest the likely outcome.

    In any event, it’s not the transferability that’s the issue. The issue is whether there’s enough demand for the fighters. If there isn’t, the issue of transferability doesn’t really matter.

  • James Dunn says:

    I think that Showtime should go back to what they know. Showing fights, not selling humans. These guys have families and work hard, give them a break. It’s not like they have some other job to go to. Five grand a fight is nothing. I work a desk job and I almost make that much but my paychecks keep coming in. I am not putting my body on the line.

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