On Friday, we debuted Part I of our exclusive interview with new ProElite Chairman Chuck Champion. Champion was gracious enough to sit down with Five Ounces of Pain for an extended interview.
In Part I, we asked Champion his thoughts on the resignations of Doug DeLuca and Gary Shaw; whether Shaw’s son, EliteXC Vice President Jared Shaw would be remaining with the company; Champion’s business background before getting involved with MMA; whether a replacement for Shaw will be recruited outside the company; and more.
In Part II, Champion answers questions regarding what needs to happen in order for MMA to go to the next level; whether EliteXC will focus on going after established stars or up-and-coming fight prospects; whether the company’s plans for Sept. and Oct. are too ambitious; if the company can survive without pay-per-view revenue; what the future holds for ProElite.com; his thoughts on the most recent CBS show; and more.
Sam Caplan: The sport has come a long way but there are those who believe it has the potential to grow further. Doing things such as reality television like the UFC has done and going on primetime network television such as EliteXC has done, those have been two tremendous things that have happened to grow the sport. What are some other things you feel either need to happen or would like to see happen in order for the sport to go to the next level?
Chuck Champion: A couple of things. I think it’s going to take additional broadcast television (and) more events on broadcast TV to continue to promote and spread the sport. I think that we can do a better job amongst and in between — because there is no cooperation amongst and in between all the organizations out there — to promote the positive aspects of the sport (and) to work together. There are things that we can do collectively, together, to promote anti-violence, for example. And really positive agendas that position us as a good corporate citizen that in essence, a concept of “keep it in the cage,” that’s where all of this should be done (and) not outside of the cage.
I think we can do a lot more in that regard to help our “image” of this just being a bunch of brawlers just getting in and kicking the living hell out of each other. One senator said a long time ago the famous remark about it being “human cockfighting.” It’s anything but that. And we just haven’t done a good job of promoting the fact that these guys are star athletes; these are some of the best-trained human beings on the face of the Earth. If you look at the end of the events, after two guys or two girls go out it as hard as they have, and the sportsmanship that they show… it’s all about discipline and it’s all about that culture. And we don’t do enough to promote that and educate people for that. I think that there’s a lot more we can do cooperatively on that front.
There’s a time for us to compete with one another and then there’s a time for us to cooperate in the best interest of this sport, which will only lead to every one’s economic viability and thrivance moving forward. Again, it’s around education and it’s around inner-cooperation and it’s around promoting that. And then it’s getting in front of more eyeballs a lot faster than we have in the past.
Sam Caplan: You have a track record of turning businesses around. When you first joined ProElite, what did you feel were the biggest changes that needed to be made?
Chuck Champion: Focus, focus, and more focus. It was stereotypical of a startup organization. It was trying to do everything all at once with a lack of prioritization and focus. We tried to launch a very ambitious fight division and a greater ambition around the Internet. Then a worldwide expansion and a DVD and music. I mean, just a hundred different projects that exceeded the bandwidth of the management team. As good as the management team was, it exceeds the bandwidth and you start getting all these things started and unfortunately, financially and intellectually, you can’t support them.
That’s stereotypical — at least in my experience — of where there’s problems at an early juncture of a startup; your appetite is bigger than your ability to digest it. And that’s what I saw when I came into ProElite. It grew so damn fast that in certain areas it got beyond their bandwidth and so which you will see me doing, and what hasn’t been visible, is us sitting there and getting back to the core of what this is: this is about being a fight company that produces some of the best events on the face of the Earth.
Someone said “How are you going to position yourself in a market where there’s already a guy that has a first-mover’s advantage and has a tremendous amount of resources behind him?” And the answer simply is, first of all, rule number one, if the shoe fits; steal it. They’ve made a number of mistakes, let’s not repeat those mistakes. They’ve had successes, don’t be embarrassed by knocking those successes off and innovating and doing them better. Ford (and) General Motors were much larger than Toyota… once. Not now. Because they learned how to innovate. They learned how to take the best of the best and make it better. And that’s what we intend to do.
We’ve got some of the best on our management team. But look at our fighters. We’ve got some great stars in that group. We’ve got superstars in that group. We’ve got great fighters in that group. And we’re going to concentrate on fights. We’re going to go out and get more fighters. We’re going to put on more fights. We’re going to make those fights more profitable. We’re going to develop our relationship further with CBS and SHOWTIME. And we’re going to become pre-emminient in that area, for both hardcore fans who look at our fights and say “These are damn good MMA matchups. These are real serious guys who are fighting real serious fights.” And they’re entertaining. Because for the mass markets, they truly need to be entertaining for as much as we can get them as well.
Then you’ll see us stage the rest of everything else we do. We still have an Internet. We’re still going to have an Internet. At some point we’re going to blow that out but at this point it’s not the moment in which we’re going to try and compete with Sherdog, Five Ounces of Pain, and all these other sites that do some good work. That’s not where we’re going to compete today. We’ll compete there eventually (and) we’ll complement them eventually, but we’re going to focus on fighting. We’re going to build it up.
You’re going to see us find more female fighters because we believe in them. We think it’s appropriate. It’s one place where we disagree with our friends. We think that women do belong in there and we intend to provide that opportunity. If you want to see them, there are plenty of great female fighters and we’ve got them. And we intend to exploit that and use that.
Sam Caplan: When ProElite first came onto the scene, they made a huge initial investment in the Internet. Looking back the returns are not there. You can see it in the SEC filings. Do you think it was a mistake for ProElite to invest so heavily in the Internet?
Chuck Champion: I think it was extremely ambitious. I love the idea that underpins it. I love what they were thinking of doing. I love a lot of the feature and functionality that they’ve built. I think that you couldn’t have gotten some of the people involved in it that got involved in it the way we got involved if we didn’t have a big vision. You don’t get some of the talent that we got and attracted to it to build what we built. Did it cost us a lot of money? Absolutely it cost us a lot of money. Could we potentially have staged it differently and not blown it out as quickly and been more conservative and built it in a way where we’d be spend money and reaping more benefits sooner? The answer is yes. Would I have like to have done it differently? Yes. Would everyone involved in it want to do it differently? Yes. But I don’t think the overall idea down the road is going to be bad. If things work out as I plan and I hope as the company is looking at it, that some day you’ll see those streams come to fruition. But let there be no bones made about this: that is not what we’re going to be emphasizing, particularly over the next twelve months.
Sam Caplan: You mentioned a few answers ago that you’ll be focusing more on the fight aspect of ProElite and that you’re going to be bringing in more fighters. Are the fighters EliteXC is looking to bring in younger, lesser established names with upside or will EliteXC look at more established names such as Tito Ortiz, and fighters of that nature?
Chuck Champion: I’m not trying to duck the question; I think it’s a combination of both. There are guys out there that people want to see that they know and who have moved to different places in their career at this point or are about ready to make career changes. We want to be involved in those conversations.
Sure, do we want to talk to a Tito Ortiz and see if there’s a possibility that there’s something ProElite and Tito can work out when it’s appropriate and not interfering in any of his contracts with anyone else? You’re damn right we do and we’d be stupid if we didn’t have that conversation. Do we want to sit there and groom the brightest talent as it’s beginning to matriculate up through the MMA communities and identify and grab the stars of tomorrow early? Absolutely we want to do that.
What we want to do is create an organization where fighters recognize that they are very, very, very important to us. With the fans, they are everything to us. We believe we treat our fighters better than anyone treats their fighters. We will show them the respect that they deserve for who they are and what they are. We want them to be our partners in this process.
That’s not to say we’re just going to sit there and go for the ride with people. We’re not. We’re in custody of our own destiny in partnerships with our fighters. So we truly are looking for both and again, we’re not only looking domestically, we’ll look internationally. As you know, we’ve got a number of Brazilians; we’re looking at Europeans; and all over the world to get people that are exciting and great fighters. It’s a multi-dimensional approach. It’s not one size fits all. And what we’re not just going to do is get one or get the other — we’re going out and getting both. And actually, we think we can do both.
Sam Caplan: Does EliteXC have the capital needed to go after someone like Tito Ortiz, Frank Trigg, or a Jason Miller? Is the funding that EliteXC needs to be successful in place right now?
Chuck Champion: You know, we don’t have a billionaire sitting behind us if that’s what you’re asking. Sitting there and writing checks as he did early on in the process. So it’s not like we have a “rich owner.” But we have got a strategic partner in CBS and SHOWTIME — guys that I am absolutely convinced will help and assist us and be able to provide things to our fighters that others simply can’t. Look at the CBS empire. It’s massive. It’s huge. And being associated with that is going to be huge for our fighters on a go-forward basis.
Sam Caplan: I want to ask you about the July 26 CBS show. There are reports that the final rating will be anywhere between a 1.7 and a 1.9 and MMAjunkie.com is reporting that less than 50% of tickets to the Stockton Arena were sold even though the arena looked full. From ProElite’s perspective, was the show a success? And have you been able to talk to CBS and get their feeling about the show?
Chuck Champion: First of all, the 5/31 show was phenomenal. I don’t think anybody can question or doubt that 5/31 was phenomenal. We had our best stars — our superstars on the card. We had great fights. It’s 5/31 and all of the promotion that came out of CBS for that event, we were running commercials during the Final Four and other sporting events appealing to the 18-34 demographic.
We had four months to promote the event and again, to bring our best people. There were great storylines. We came back very quickly after that. We had a very short period of time to promote 7/26. We get a great venue in Stockton. It’s a great venue in Stockton. I mean, it’s a beautiful arena. A great facility. But the reality is opposed to being 20 minutes away from 8 million people, it’s 50 minutes away from the next 1 million people. If you look at what the Sacramento numbers did in the rating, it had a 10 share! So in the markets where we promoted the hell out of the show, TV got a great audience from it. Did that make ticket sales more difficult? Yes it did. But we balanced that. And the estimates you’re hearing are not fully accurate.
But no, did we sell out the crowd for the full face amount? No. Did we expect to? No. Did we hit the targets we expected to? Absolutely. And did we set ourselves up for October 4 really well? Absolutely. I thought that Jeremy Lappen, J.D. Penn, J.T. Steele, and Turi (Altavilla) and all the guys on the fight team just did a phenomenal job running three hours of great fights.
It was the first time in history that we had a SHOWTIME and CBS event hooked up like that going from premium TV to national TV. I think we did that extremely well and we knocked out a lot of bugs in production that existed that we at ProElite were creating for SHOWTIME and CBS. We knocked those out and we got a lot smoother. I think it was very much a success. I think that people that were at the event had a helluva great time. I know I did. The place was electrifying to me and I think that the other 7,000 people that were in that building got to see great fights.
Good audience numbers. Not great audience numbers. But 2.6 million people? Against a number of other things besides just the date in the summer. And this is great; I don’t think it’s going to work for them long-term but g-d bless you for trying. But we must have really gotten their attention because now they are counter-programming. If you’re not worried about somebody, you sure aren’t doing stuff like that. That’s the only thing I’ll say. I don’t pay attention to anybody. I pay attention as far as staying on my game. And when you can get the competitor to worry about you and start altering its business model and start changing its game plan as radically as they did; counter-programming and talking about us left and right… that tells me we’ve got somebody worried. Which tells me we’re onto something.
Sam Caplan: Can EliteXC survive in the long-term if it doesn’t start making inroads into pay-per-view within the next 6-8 months?
Chuck Champion: Certainly it’s got to. Certainly it’s got to reduce its expenses and increase its revenues. We’re going through the process of raising additional money and then to set us up for pay-per-view in 2009. But the answer is will ProElite survive? You’re damn right it will. There’s no doubt in my mind that this isn’t going to be another casualty on this road. I think it’s different. I think it’s positioned differently. I think that it’s got great strategic partners in CBS and SHOWTIME and it’s got the intellectual property inside the building to make this work. And we’re making those adjustments to insure that. That’s what in large measuring this is all about; to take it to the next step.
Sam Caplan: Coming up EliteXC has shows scheduled for Sept. 20, Sept. 26, Oct. 4 and I’ve heard rumbling there could be a ShoXC event towards the end of October. Is that too ambitious of schedule for such a young promotion? Not even the UFC is really running a schedule that ambitious right now.
Chuck Champion: No, actually I don’t think it is. Again, we have a tremendous amount of resources in the other assets we’ve purchased. We’ve got a good, strong fight team that are some of the most motivated people I have ever worked with. They love the sport. And so this is a great building experience for us. There is nothing like building team through task. If you want to get something done, give it to the busiest guy you can find.
And that’s what’s going on at ProElite right now. People are all over it. Yeah, are they coming in early and are they staying late? Are they working six and seven days a week? Are they sacrificing vacations? Are they asking their families for understanding as they go through this period of time over these six fights? They are. But they are excited about it and the neat part about it is that we’re meeting on a daily basis and with the process that’s going on, they are seeing things that they can do better and they are building those into the model.
So not only do I think we can do those fights, but I think each subsequent fight card will only get better and it’s only going to make us stronger. It forces us to go out and find more talent quicker. It forces us to do a lot of things and again, they are not distracted with five or six other priorities. This company understands what it’s got to do in order to win. It’s got to put on great fights with great fighters. And that’s what we’re going to do and that’s what we’re going to concentrate on.
Sam Caplan: I recently read an article on MMAPayout.com and there is some speculation that as the second largest shareholder in ProElite, CBS and SHOWTIME has a growing influence on the company and that they are possibly influencing some major decisions right now in regards to the direction of ProElite.
Chuck Champion: We talk to our partners at SHOWTIME and CBS on a regular basis. And it’s just that: a partnership. They have one representative on our board, which is contractual and its’ Ken Hershman of SHOWTIME who understands this sport and understands what we’re doing. He’s been tremendously supportive. There has been no dictates; edicts; demands. There’s been no undue influence on us. It’s been a good, strong collaboration. They believe in us. They want this to be successful. They want it to be financially successful for us because they are investors in the company (and) they hold debt on the company. So they want us to be successful. They are working to help us be successful. They are committed to the process.
And then obviously they have their own vested interest on their broadcast side to see this be successful. It reaches a demographic that is highly desirable (and) that they want to achieve success around. This could be a delineator for that and they are working through that with us to make it a tremendous success. So any kind of speculation that they have the hands on the steering wheel and have shoved us to the back seat is crap. What they’re doing is talking to us about the direction; the road map; the destination (and) making sure there is enough gas in the tank and then rooting us on the whole damn way to make sure we get to where we say we’re going to go. I’m delighted with our relationship with these guys.