The Fall of Elite XC

Elite XC has folded.  This was the news greeting MMA fans this morning, confirming the fears of many.  Whilst this news is a big blow to the MMA community, it is not a surprise.  The company has been visibly struggling almost since their inception in 2006.

Many critics of the company are attributing the demise to bad leadership on behalf of both the current executives and the previous ones, but this may not be the whole case.

Elite XC have struggled to make money, which is no secret.  They didn’t put on any pay per views in the year and a half they were in business. Pay per views provides a high level of revenue for their promoter, so the lack of these shows may have caused issues for Elite XC.  It is worth noting that the company refused to put on a pay per view until they had names and match up’s big enough to warrant one.  Whilst this was a very noble move on Gary Shaw’s behalf, it may have contributed to the fall.

Secondly, Elite XC made a huge move in purchasing several other MMA companies in different countries, including Cage Rage and Spirit MC.  This was a wise move in that it allowed the company name to expand into other countries. However, as they didn’t have much money coming in, and they fans in other countries couldn’t watch their main product as there were no pay per views, the move was perhaps a little premature.  They spent a lot of money on the purchase of these companies, ($5,000,000 on Cage Rage alone), which was money they could ill afford.  Pro Elite advisor T.J. Thomson stated that he had advised against such expansion so early, but his warnings went unheeded.

The third issue Elite XC faced came from their TV shows on CBS.  These shows allowed MMA fans to get to know the company and their fighters, and provided them with a lot of exposure, as they were the first company to put MMA on mainstream sports TV.  This is something that the company should be commended for, as they provided a big boost in the popularity of MMA across America.  However, this was as good as it got for the company.  In reality, Elite XC could not afford to put on these shows themselves, and so they struck a deal with CBS.

This deal meant that CBS would pick up the full cost for the Saturday Night Fights events, but they also took all of the profits.  This meant that whilst Elite XC’s popularity and exposure was growing, they were not reaping the financial benefits.

This sounds like the demise of Elite XC was caused by poor decisions and poor management, but I would say this is not entirely the case.  I think that a lot has to be said for the power and influence of the UFC.  The UFC is, undoubtedly, the biggest MMA organisation in the world.  It is going from strength to strength and is knocking all opposition aside.  I think it is plain from the fall of companies like Elite XC, IFL, Pride FC etc, that there is only room for one big player in the MMA world at the moment, and that position is taken by the UFC.