The relationship starts this Saturday night in Hawaii as DREAM mainstay Ikuhisa Minowa takes on Ultimate Fighter 3 winner Kendall Grove in the main event of ProElite: Da Spyda vs. Minowaman.

President of ProElite Billy Kelly commented on the new affair by saying, “Our partnership with DREAM forms a promotional bond with the most prominent Japanese MMA organization. Dream has developed a stable of great fighters on their roster and a strong team behind the scenes. With this exchange, the two organizations are building a cultural and fight-event bridge that our fans are sure to welcome.”

Also on the card will be DREAM light heavyweight grand prix runner-up Tatsuya Mizuno taking on Ilima Maiava. Plus, the voice of Japanese MMA, Lenne Hardt, will introduce the fighters as they walk down to the cage before battle.

“I’m really honored to join the partnership with ProElite,” added DREAM Event Producer Keiichi Sasahara. “It is important for us to exploit Asian or Pan-pacific markets by improving relationships with foreign organizations like ProElite. We would like to make this fighter exchange program a first step to generate synergistic success for both organizations.”

ProElite

News of the bout was first reported by MMAFighting.

Winner of The Ultimate Fighter 3, Grove was released by the UFC earlier this year following a loss to Tim Boetsch. “Da Spyder” compiled a 7-6 record inside the octagon, showing a lack of consistency when the cage door closed. Grove bounced back from his UFC pink-slip though to quickly submit Joe Riggs at ProElite 1 in a rematch of Grove’s first professional loss in 2004. Grove has victories over the likes of Alan Belcher, Jake Rosholt, and Ed Herman.

One of the most popular fighters in Japan, Minowa will be heading to the US for the first time in his career when he challenges Grove. Competing in nearly 100 professional fights during his 15 year career, Minowa has fought everyone from Mirko Filipovic to Bob Sapp and Don Frye to Giant Silva. He’s best known for taking fights against larger opponents and in 2009 he captured the Super Hulk title in DREAM.

PHOTO CREDIT – PROELITE/FEG

Pedro Rizzo, set to scrap with former UFC heavyweight champ Tim Sylvia at the show, took to Twitter where the 19-9 Brazilian relayed news of having torn his tricep while training for the bout.

Injuries have chipped away at “The Rock” as the result of a fifteen-year fight career though the 37-year old remains relatively strong. Rizzo is currently on a three-fight winning streak with success against Ken Shamrock, Gary Goodridge, and Jeff Monson.

No word has come from ProElite on how the vacancy will be handled but it seems likely a replacement will be found given the amount of time and Sylvia’s involvement.

The festivities are set to take place in Moline, Illinois with a lineup featuring former UFC title-holder Andrei Arlovski taking on 300-fight veteran Travis Fulton with appearances also expected from Tara LaRosa and Reagan Penn in addition to opening round action from the promotion’s heavyweight Grand Prix featuring up-and-coming talent.

UPDATE: Andreas Kraniotakes has agreed to replace Rizzo in the main event against Sylvia. The German native has 12 career victories in 16 contests and has finished all 12 of his opponents. He’s currently on a three fight win streak.

News of the replacement comes via MMAFighting.com.

Here is a preview of the event courtesy of ProElite:

PHOTO CREDIT – FEG/UFC

Arlovski avoided absorbing any clean strikes to his often-questionable chin and pulled out the victory, though not necessarily in highlight-reel fashion as he plodded his way to the third round TKO over 5-3 Ray Lopez. The performance improved Arlovski’s overall record to 16-9 and was his twelfth strike-based stoppage.

Grove, on the other hand, looked much better in his first post-UFC appearance, latching on to a Guillotine Choke early on in his bout with Joe Riggs and securing the victory in less than a minute. The success broke a two-fight skid “Da Spyder” had been on and avenged the first loss of his career.

Read below for a more-detailed breakdown of the action from “ProElite: Arlovski vs. Lopez”…

Drew McFedries vs. Garret Olson

Fight Recap: Olson, who took this fight on a couple days notice, was doing well early with his striking activity and cage control, but McFedries dropped him late with a lead hook. Olson survived, but was dropped again at the end of the round with a body shot. McFedries couldn’t finish though, and Olson made it to the 2nd frame. In the second round, McFedries dropped Olson early with a left and tried to finish but Olson moved enough to avoid the stoppage. For the rest of the round, Olson looked for the home run punch while McFedries stayed composed and picked his shots. McFedries dropped Olson again late in the round, and this time put him away with strikes.

Result: Drew McFedries def. Garret Olson via TKO Round 2 (Punches)

Sara McMann vs. Raquel Pa’aluhi

Fight Recap: Pa’aluhi is the hometown favorite and the crowd is really behind her. McMann dominated the first round with her aggressiveness and wrestler. She constantly threw flurries to get inside, clinched, and powered Pa’aluhi down to the ground. Pa’aluhi did a nice job defensively on the ground and scrambling up but anytime McMann wanted the takedown, she got it. The second round was more of the same with McMann dominating with her wrestling. She had mount at one point and was pounding away but Pa’aluhi survived. Pa’aluhi went for a triangle late but McMann easily fended it off. Pa’aluhi tried her best to make it a brawl in the third round but McMann quickly clinched and got the takedown every time. Just over halfway through the round, McMann locked up a kimura from side control and forced Pa’aluhi to tap. Very entertaining scrap.

Result: Sara McMann def. Raquel Pa’aluhi via Submission Round 3 (Kimura)

Jake Heun vs. Mark Ellis

Fight Recap: Heun came out quickly in round one but Ellis’ wrestling instincts took over and he put Heun on his back. Heun did take too much damage on the ground but every time he got up, Ellis put him right back on the ground and passed to better positions, including getting mount and back mount. Heun still very in the fight after the first though. Round two was a back and forth submission battle. Heun survived a d’arce choke and kimura attempt, nearly locked up a kimura of his own, but eventually Ellis got the back and locked on a rear naked choke. Really entertaining ground fight.

Result: Mark Ellis def. Jake Heun via Submission Round 2 (Rear Naked Choke)

Reagan Penn vs. Paul Gardiner

Fight Recap: For those that don’t know, Reagan is the brother of BJ Penn and he sounds exactly like him. Gardiner immediately went for a takedown but Penn stuffed it, spun to the back, and locked on a rear naked choke. Fight lasted just over a minute.

Result: Reagan Penn def. Paul Gardiner via Submission Round 1 (Rear Naked Choke)

Andrei Arlovski vs. Ray Lopez

Fight Recap: For some reason, despite being the headlining fight, this bout is going on 2nd to last. Arlovski stayed patient on the feet, picked his shots, and got out before Lopez could fire back. Arlovski ended up getting a takedown right into mount. Arlovski pounded on him and went for an armbar but Lopez slipped out, got the back, and tried to finish with the choke bu the round ended. All Arlovski in the first until Lopez nearly shocked the MMA world. Second round was all Arlovski as he got on top of Lopez within the first two minutes and pounded on him from every position, including the mount. Lopez covered well and survived, but he’s getting beat up. Lopez swung for the fences early in the third but once again, Arlovski got the takedown into mount, and pounded on Lopez. The ref finally saw enough and stopped the fight. Not a great performance by Arlovski, but he gets the win.

Result: Andrei Arlovski def. Ray Lopez via TKO Round 3 (Punches)

Kendall Grove vs. Joe Riggs

Fight Recap: Riggs went for a takedown after eating a straight punch and Grove immediately locked up a standing guillotine, which forced Riggs to tap out. Quick fight.

Result: Kendall Grove def. Joe Riggs via Submission Round 1 (Guillotine Choke)

PHOTO CREDIT – PROELITE

However, before things became official in the Aloha State the lot of competitors stepped on the scale first with all making weight meaning the event will go on as originally planned. Fans can catch all the live action Saturday night (or Sunday morning for those on the East Coast) starting at 10:00 PM PST / 1:00 AM EST.

Read below for a full rundown of ProElite weigh-in results. All figures have been rounded to the nearest quarter-pound:

Reagan Penn (170.25 lbs) vs. Paul Gardiner (169 lbs)
Drew McFedries (194.5 lbs) vs. Garret Olsen (194.5 lbs)
Sara McMann (135.75 lbs) vs. Raquel Pa’aluhi (134.5 lbs)
Jake Heun (236.0 lbs) vs. Mark Ellis (244.75 lbs)
Kendall Grove (184.75 lbs) vs. Joe Riggs (185 lbs)
Andrei Arlovski (241.25 lbs) vs. Ray Lopez (225.75 lbs)

PHOTO CREDIT – STRIKEFORCE

In May 2004, Ultimate Fighter Season 3 winner Kendall Grove was three fights into his career when he ran into Joe Riggs at Rumble on the Rock 5 and suffered a knockout a little more than midway through the opening round. Fast-forward to August 27, 2011 and he’ll once again be locking horns with Riggs in Hawaii at the newly reformed ProElite’s inaugural event.

The bout’s significance is not lost on Grove who is fighting for the first time since parting ways with the UFC.

“I’m a fighter. I don’t just do this to say I’m a fighter. I do it because I’m good at it, and I want to make an impact in this sport,” the lanky competitor explained in an official ProElite press release. “So I’ve trained extremely hard for this fight. But how much bigger of a fight can I get than fighting the guy who gave me my first loss?”

“I’d be lying if I said there was no emotion behind the fight,” he continued. “I’ve been waiting for this fight since that loss. I’ve been telling my guys this camp that when he fought me before, I was a boy…now I’m a man.”

Grove’s growth as a Mixed Martial Artist was evident during an initially successful run in the Octagon where he racked up three straight wins including an outpointing of Ed Herman to win the TUF 3 crown five years ago. However, after choking out Alan Belcher at UFC 69, “Da Spyder” went 4-6 over his next ten UFC fights and was handed his release on the heels of back-to-back decision defeats.

When it comes to this weekend, though, the 28-year old has made it clear he expects to show people a different fighter will be on display come showtime in Honolulu.

“It’s hard to say that fans are going to see a new Kendall Grove, but I have to make sure they do. I have to get out of this rut I’m in. People have figured me out. So I have to change…it’s mandatory. But I have not only changed, I’ve gotten better and evolved. That’s what the fans are going to see Saturday night. When the fans see me fight Saturday, they’re going to see someone lay it all on the line. I’m just excited to be back home for a great organization. I get to help build this organization, and what better way to do that than in front of my home crowd?”

Other pairings scheduled for the ProElite card, streaming live for free on Sherdog at 10:00 PM PST / 1:00 AM EST, include former UFC heavyweight champ Andrei Arlovski taking on 5-2 finisher Ray Lopez and hard-hitting Drew McFedries mixing it up with island favorite Kala Hose, as well as an appearance from undefeated Olympic silver medalist wrestler Sara McMann and the professional debut of Reagan Penn (brother of UFC star B.J. Penn).

PHOTO CREDIT – UFC

Adding to the necessity of a victory on August 27, it now appears Arlovski will face a relatively unknown opponent who usually enters the cage as a light heavyweight – Ray Lopez. However, while fans may not be familiar with his adversary, the 5-2 Lopez is definitely a threat to Arlovski’s hopes of righting his sinking ship as he’s finished all five of the opponents he’s beaten and notched a fairly fast TKO earlier this month on a King of the Cage card.

The match-up was first reported by MMAFighting and has since been confirmed by other outlets.

The 15-9 Arlovski hasn’t had his hands raised since a run in 2008 netting success against Jake O’Brien, Ben Rothwell, and Roy Nelson. Prior to his recent fall from grace the 32-year old Belarusian was considered to be one of the top fighters in the division with numerous finishes to his credit and wins over Tim Sylvia and Fabricio Werdum.

PHOTO CREDIT – STRIKEFORCE

However, ProElite CEO Chuck Champion is quoted in a recent press release as saying that the company will continue to exist and intends to promote MMA shows under its King of the Cage brand.

“With the sale, ProElite can now operate substantially debt free,” Champion is quoted, “and devote more resources to the development of our King of the Cage brand which founder Terry Trebilcock has managed profitably from its inception. Terry is one of the most capable leaders in the MMA space. He’s staged hundreds of successful events and I’m confident that under his guidance King of the Cage will continue to be a major force in the sport.”

While ProElite sold approximately 42 fighters contracts and a vast majority of the EliteXC tape library to Strikeforce, it still retains ownership of King of the Cage, ICON Sport, Cage Rage, Rumble on the Rock, and a partial stake in the South Korean-based SpiritMC. Additionally, the company still owns the EliteXC brand name, its interactive web site, ProElite.com, as well as over 100 fighter contracts that could be utilized on King of the Cage shows in the future.

Champion has come under a great deal of scrutiny since EliteXC stopped promoting shows in October and executed mass layoffs. While Champion and his skeleton staff worked towards a sale of assets, many of the company’s top fighters suffered financial hardships as they were forced to sit on the sidelines. However, the former YouBet.com CEO believes last week’s deal with Strikeforce was a win/win for all parties involved.

“Getting to this point has been a long hard road and I’m grateful to Showtime, Strikeforce, the fighters and their managers for their patience and their perseverance,” said Champion. “The company has managed its way through a very difficult time and it has done so in a way that has built bridges rather than burn them. Everyone involved deserves a lot of credit for the outcome.”

As a part of ProElite’s deal with Strikeforce and the subsequent absolution of its debt to CBS and Showtime the company will no longer have its events televised on the CBS Corp.-owned networks. However, Showtime still holds a 20 percent ownership stake in ProElite. ProElite also has an existing television agreement with Fox Sports Net and continues to shop a fighting-based reality television show through a prior agreement with television producer Mark Burnett.

According to sources, several members of the MMA media had been informed that Scott Coker and his San Jose-based Strikeforce promotion were in the process of closing a deal to complete the ProElite acquisition. This information contradicts what this website originally reported on Thursday.

However, Five Ounces of Pain stands by its original reporting which stated that Strikeforce’s bid was not successful. Sources informed us last weekend that Strikeforce’s bid was only believed to be 20-25% of the approximate $9.5 million (a correction from our original report of $9 million) asking price for ProElite. Soon after submitting the bid, Strikeforce did not receive any communication from ProElite.

Additional sources now claim that Strikeforce officials had resumed communications with ProElite earlier this week but that they were informed they were $1 million short of the highest bid received. The identity of the high bidder was not revealed and it’s uncertain whether it was a ploy to get Strikeforce to increase its bid.

Five Ounces of Pain has also been informed that CBS is apparently pushing for ProElite to sell its assets to Strikeforce. The network has aspirations of televising MMA again and executives from both CBS and Showtime hold the promotion in high regard. Furthermore, Coker is believed to be backed by the same ownership of the HP Pavilion in San Jose and the fact that he is backed by a reputable company is seen as a major plus. It is also believed that CBS’ blessing could go a long way towards closing a deal, as part of the $9.5 million asking price is the $6.5 million that is owed to the company by ProElite. With a suitable buyer, it is believed that CBS might be open to restructuring the term of the debt re-payment.

However, a source informed Five Ounces of Pain on Friday night that Coker has told friends that he is on vacation, making it unlikely that he is in the midst of closing a major acquisition unless he is not being forthright.

The identity of the company with the winning bid still remains unclear. Five Ounces of Pain had originally reported that a group led by Terry Trebilcock was considered the leading candidate. However, a single source informed us Friday night that it is believed that Trebilcock and his backers, a group of high-profile Native American casino owners, have pulled out of the bidding.

The source also expressed their belief that our reporting that a group led by Jeremy Lappen had placed an unsuccessful bid may not be entirely accurate. At this point in time, it cannot be ruled out that Lappen’s group does in fact have the highest bid. However, there are strong doubts as to whether a deal to acquire ProElite could be finalized by Lappen’s group as CBS may not want to work closely with such a prominent member of EliteXC’s former management team. Without CBS’ cooperation, it’s possible that any attempted deal to acquire ProElite could very easily collapse.

With the CBS contract structured so that a promotion could lose up to $1 million per show if they were unsuccessful in selling sponsorships, it is believed that the crown jewel of the ProElite acquisition is the one year remaining on the Showtime contract. Sources have revealed that the rights fee for a mixed martial arts event on Showtime is $800,000 and that with a responsible fighter budget, a promotion could make a significant amount of money per show.

While the identity of the winning remains unclear, so does the question of whether the promotion’s 70-plus fighter contracts are transferrable to a new owner. Five Ounces of Pain has talked to multiple lawyers and agents within the industry who have expressed varying opinions. The only reasonable conclusion that can be drawn at this time is that the matter is a gray area that only a court may be able to determine. However, it is believed that many managers and agents would decline to take their case to court if a suitable group takes over ProElite because it is their desire to have a viable alternative to the UFC for their fighters.

However, Five Ounces of Pain has been unable to verify the identity of that company. It is also unclear whether the company came close to receiving its asking price of $9 million. An announcement could be made by the end of business on Thursday, or possibly on Monday.

Several companies have submitted formal bids to ProElite in recent weeks, with the company believed to have set a Thursday deadline to decide on a buyer. Sources have indicated that if a bid was not accepted soon, ProElite would not have had enough money to continue operations and likely would have filed for bankruptcy.

Over the weekend, multiple sources identified a group led by King of the Cage promoter Terry Trebilcock and a financial backer as the leading candidate to acquire ProElite’s assets.

Other groups said to have made bids were Strikeforce; a group led by former EliteXC Director of Fight Operations Jeremy Lappen; and another group headed by former ProElite COO William Kelly. Sources have confirmed that neither Strikeforce or Lappen’s bids were successful.

Published reports also suggested that Mark Ecko’s Ecko Enterprises had also submitted the bid, but two separate sources have informed Five Ounces of Pain that Ecko was never a serious contender and it’s uncertain whether they even submitted a formal bid.

Multiple sources have also revealed that the UFC expressed an interest in ProElite’s assets at one point before deciding not to pursue matters any further.

While ProElite’s fighter contracts are considered to be a valuable asset, industry insiders have stressed to Five Ounces of Pain that it’s the company’s television contracts with Showtime and CBS that are perceived as the most valuable asset. However, it remains to be seen just how valuable the CBS contract is.

While the terms of CBS’ agreement with ProElite contains a mutual option, only one more fight exists under the current deal. Being that CBS is also a major network, it retains the right to cancel the contract at any time so the remaining broadcast is not guaranteed.

Furthermore, a source says that what CBS has told companies interested in placing a bid on ProElite that they would be paid a rights fee of $400,000 per show. However, any company that inherits the television contract would also be obligated to cover CBS’ production costs, which are believed to be as much as $500,000.

Under the aforementioned financial terms, a fight group could potentially lose money promoting shows on CBS. However, the same source indicated that under the terms of the deal, a company would have the ability to sell some of CBS’ ad inventory and if they were successful in that regard, they could turn a profit on the show.

The terms also do not factor in the intangible value of using free-over-the-air television to build potential pay-per-view drawing cards. But being able to take advantage of such a platform in order to build stars is far from a given, as EliteXC was only able to build Kevin “Kimbo Slice” Ferguson and Gina Carano into true ratings movers. And while Slice and Carano were legitimate ratings movers, their ability to draw pay-per-view buyers was never tested.

According to sources, as many as three groups are believed to be vying for ProElite. Only the identity of one of the groups is certain, with multiple sources stating that a group led by King of the Cage promoter Terry Trebilcock has made a bid.

However, Trebilcock’s group is not considered the leading contender at this date. Sources will only go so far as to describe the top contender as a company with over a billion dollars in annual gross revenue that also is a recognizable name.

One group that is not considered to be a leading contender is the publicly traded Art of War promotional fight company. In response to a Nov. 26 report by this website, a source said that while the company was interested in submitting a bid on ProElite early in the sale process, that Art of War is no longer considered to a legitimate suitor at this time.

Whether there is a legitimate third contender for ProElite is not entirely certain, as only one source indicated the involvement of a third unnamed group in the bidding process.

It is believed that upon the completion of the sale, the leading contender hopes to inherit ProElite’s television contracts with both CBS and SHOWTIME. While it is believed that the two television partners have no desire to work with ProElite’s current ownership, Five Ounces of Pain has learned that they would be open to working with a new ProElite management team. Sources have indicated that both CBS and SHOWTIME have every intention of televising MMA events in 2009 and that they are looking for a group that can promote a large number of events.

The likelihood of a ProElite sale to a new owner raises the possibility that fighters under contract to EliteXC will not be granted free agency. While select fighters are being allowed to fight outside of their current deals on a one-off basis, the bulk of their fights could potentially come with a new version of EliteXC in 2009.

“The Company is continuing discussions with potential strategic investors to secure financing sufficient to cure any possible default under the Showtime loan agreements. However, there is no assurance as to whether any such financing will be available or available on reasonable terms,” was the exact wording used in the filing.

While ProElite opted to protect the identity of its potential investor, FiveOuncesOfPain.com has learned from its sources that the so-called would-be mystery investor is the Art of War promotion, which had tried to specialize in promoting MMA arena shows in Dallas before cutting back due to financial losses.

Art of War is the subsidiary of SUN Sports & Entertainment, which trades under the pink sheets with the ticker symbol SUNR. The company has undergone changes to its board of directors over the past several months and recently notified the public on Oct. 20 that it had secured $5 million in funding after a period of dormancy from promoting shows over financial issues.

However, it’s important to note that several industry insiders expressed skepticism to Five Ounces of Pain regarding Art of War’s possible involvement with ProElite.

For one, it is believed that one of Art of War’s primary objectives through a potential acquisition is to gain access to the company’s current broadcast deal with Showtime. However, in order to do that, the promotion would have to re-pay over $6 million worth of loans and outstanding debt to the premium cable provider in order to have any hope of moving into the slot previously occupied by EliteXC.

The $6 million figure also surpasses the recent $5 million raised by Art of War and for a company just coming out of a financial crisis, it is not believed they are in a position to take on additional debt.

Additionally, by taking a position in ProElite, Art of War would then be responsible for settling any pending or outstanding lawsuits that have been or could be brought against ProElite. It is believed that any company that would acquire ProElite could be putting itself in a tremendous position of liability. As such, it is unclear if Art of War is still a serious candidate to make a bid to acquire ProElite’s assets.

In other ProElite-related news, MMA Weekly is reporting that the promotion has moved to block EliteXC welterweight champion Jake Shields’ bid to be declared a free agent. Last week, Shields and his manager/father, Jack Shields, had pronounced the younger Shields as free to sign with another promotion in an MMAjunkie.com interview after claiming that a 30-day window given to ProElite to cure a breach in his contract had elapsed. According to the MMW Weekly report, ProElite is claiming that it issued a response in time.

Also, California State Athletic Commission Assistant Executive Officer Bill Douglas has moved to reinstate ProElite’s promoter’s license in the state of California. The license had been suspended last month by outgoing Executive Director Armando Garcia.

“Showtime Networks Inc. has adjourned the previously announced public sale of personal property of ProElite, Inc. and certain of its subsidiaries scheduled for November 17, 2008,” the release states.  “Showtime reserves all of its rights, including the right to further adjourn or cancel the public sale and thereafter dispose of such property in a public or private sale or in any other manner provided under its agreements with ProElite and by applicable law.”

The most notable asset that had been scheduled to be auctioned off were the contracts of the 80-plus fighters that are still signed to ProElite even in spite of a massive downsizing by the company last month.

“The Collateral includes all contracts between any Debtor and mixed martial arts fighters (including, but not limited to, Kevin Ferguson a.k.a. “Kimbo Slice“, Gina Carano, Jake Shields, Robbie Lawler, Frank Shamrock, Antonio Silva, Brett Rogers, Dave Herman, Scott Smith, Nick Diaz, Cristiane Venancio Justino a.k.a. “Chris Cyborg“, Eddie Alvarez, Yves Edwards and Wilson Reis) and all of each Debtor’s video library, still photographs and home videos (e.g., DVDs and VHS tapes),” reads an excerpt from an advertisement placed on Nov. 5 by Showtime on NoticeOfPublicSale.com.

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.

Despite the auction’s postponement, many of the fighters remain in limbo as they are still contracted to ProElite.

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.”

The contract for EliteXC’s fighters basically states that if EliteXC is unable to fulfill its payment obligations that the fighters can seek to terminate their contract with the company. Upon notifying the company of a possible breach, EliteXC has thirty days to respond. Cesar Gracie is the latest to do so, sending a notice to EliteXC officials last Friday that the company had breached their contract with his fighters.

This news comes via a report by MMA Weekly.

Gracie, however, is already making plans for Nick Diaz’s next fight, which could come as early as New Year’s Eve for the DREAM promotion in Japan. Gracie claims that if Diaz fights in Japan that he doesn’t have to adhere to the thirty day waiting period that EliteXC has to respond to the notice of breach of contract.

“We’re not doing anything wrong if he fights in Japan. As far as him fighting in the U.S., then the 30 day thing (applies),” Gracie told MMA Weekly.

Gracie said that representatives from both DREAM and Sengoku have approached him about using Diaz on their New Year’s shows. DREAM and K-1 are scheduled for a combined event on December 31 while Sengoku’s New Year’s show will take place on January 4. Gracie said that Diaz will be fighting on one of the two shows.

The news comes via a report by Sherdog late this evening.

“We are confirming that EliteXC has folded. What this means for our fans and supporters is that there will not be a Nick Diaz vs. Eddie Alvarez fight on November 8th,” reads a notice on the Graciefighter.com website, a website which is run by member of Diaz’s camp. 

Showtime Networks had filed public notice with the U.S. Securities and Exchange Commission in early September that had announced the Networks’ intention to enter into preliminary negotiations to purchase ProElite. It seems that all was well and moving forward with the purchase heading into CBS’ third installment of Saturday Night Fights two weeks ago.

However, with the comments made by Seth Petruzelli to a morning talk show that he was paid to keep the fight standing, negotiations seem to have come to a screeching halt. The negative press combined with the preliminary investigation of the October 4 show by the Florida Boxing Commission may leave the company hanging out to dry with no funding and a huge $55 million dollar deficit which may cause ProElite and, in turn, EliteXC to close their doors.

ProElite is the parent company of EliteXC, King of the Cage, Cage Rage, and ICON Sport and has television deals with Showtime, CBS, and Fox Sports Net but has also absorbed losses of approximately $55 million since its inception in late 2006. Showtime is a subsidiary of CBS Corp. and owns an existing 20 percent stake in ProElite.

ProElite warned investors of financial instability in an SEC filing this past August, stating that the company did not have enough resources to function into next year without securing additional financing.

“(The company) expects to report in its Quarterly Report on Form 10-Q that its capital resources are sufficient only until the end of the year, and only if the Company makes significant reductions in operations and expenditures,” ProElite warned in a Aug. 15 NT filing that announced to investors and government officials that it would be late in filing its second quarter fiscal report.

The filing also indicated that ProElite believed it was close to securing an additional $3.0 million in financing needed to allow it to operate through the remainder of 2008. However, the filing also cautioned that the deal to raise the additional capital was not finalized and there was no guarantee that the deal would be closed.

“The Company is actively negotiating to consummate a financing of approximately $3.5 million in secured debt (with a funded amount of $3.0 million after an original issue discount of $0.5 million) and believes a successful closing is reasonably likely,” the filing stated. “But there is no assurance that it will be successful in doing so at all or on a timely basis. Any such failure to obtain financing in the immediate future would have a material adverse effect on the Company’s liquidity and capital resources and ability to continue as a going concern.”

On Wednesday, the company issued another filing revealing that it had been unable to close the deal and that it instead had received a $1 million loan from Showtime.

“The Company no longer believes that a successful closing of the $3.5 million secured debt (with a funded amount of $3.0 million) will occur,” the 8-K filing states. “Although the Company has received $1 million pursuant to the Note, such funds are less than the $3.0 million needed to avoid the consequences described in the preceding paragraph and in the Company’s prior reports filed with the Securities and Exchange Commission. The $1 million funding defers such consequences only for a brief period of time while the Company continues to evaluate its options on how to respond to its severe liquidity problem.”

Indications that ProElite was looking for either a merger or acquisition partner came to light in a Sept. 11 column by CBS and SHOWTIME broadcaster Mauro Ranallo on the website for The Fight Network.

“I contacted Pro Elite head honcho (CEO and Chairman) Chuck Champion and he told me that he had held preliminary talks with a variety of promotions including Affliction,” wrote Ranallo in a blog entry that speculated on a promised major announcement by Affliction last week.

When contacted by FiveOuncesOfPain.com, Showtime Director of Sports Communications Chris DeBlasio declined comment and e-mail and phone messages left for Champion were not immediately returned.

In other company-related news, according to ProElite’s 8-K extension request submitted to the Securities Exchange Committee, the company will be filing its second quarter report today. We’ll have more details once the report becomes available.

Another reason why ProElite canceled the show is to focus more on its Oct. 4 show on CBS. As of today, the card for that show has not been completely finalized. That task becomes a lot easier with all the displaced fighters from the Sept. 20 show now available. While I do not know this to be the case, it would not surprise me if there was another one-hour pre-show on SHOWTIME prior to the CBS telecast at 9 p.m. ET.

The first SHOWTIME pre-show prior to a CBS telecast on July 26 did not draw an impressive rating, but it may be a tough sell to put a 140 lbs. clash between Wilson Reis and Bao Quach as well as have a second female fight featuring Cris Cyborg on the network show. The Oct. 10 ShoXC event could be a possible landing spot for both those fights. It will be interesting to see what happens with Paul Daley. Daley’s erratic behavior have turned some people off but he remains an exciting fighter with star potential. Putting him on CBS would be a great way to expose him to a large audience.

The cancellation of Cage Rage’s “Contenders” event is being sold as a way for the UK-based promotion to focus on its bigger November event. The reality is that cost cutting is taking place. The promotion is down to three full-time employees and they are now renting out smaller venues. You don’t cancel an event days out before it is supposed to take place because you want to focus more on a future event. When an event is canceled that close out, it’s done because the promoters anticipate taking a loss and they cancel it to cut those losses.

The huge jump in the value of the stock on Friday is not something that is clear to me. I’m an investor in stocks but hardly an expert. The way it was explained to me is that people are reading too much into the new price and that it really isn’t that big of a deal. The same applies to the company’s decision to file for an extension in regard to reporting their second quarter results. Many micro-cap stocks are repeatedly requesting extensions because they lack the staff resources needed to do full financial reporting while still trying to run a viable business.

As a micro-cap company that is not attached to a major exchange and isn’t carried by major firms because it’s a pink sheet, there isn’t a lot of volume trading going on. According to the financial information that is out there, a single investor recently bought 5,300 shares and that is what pushed the stock up. And unlike a major stock, a micro-cap’s asking price often has little to do with its true market value. Just because someone bought the stock at $8 a share doesn’t mean they will be able to sell it for anywhere near that much. If you try to sell stock in General Electric, you’ll have no problem unloading it because it’s a high volume stock. There are always people looking to buy stock in GE. The same cannot be said for such a small company such as ProElite. ProElite stock often goes weeks without a trade. The next time it’s sold it probably will be for a lot less than $8 a share and when it does sell, that will likely be the new price.

The one thing I do not understand is why someone would pay $8 per share. If the stock price is at $8 a share, it means someone sold it at that price. And if it was sold at that price, someone had to buy it at that price. I’m not sure how someone could unload 5,300 shares of stock at $8/share when it had been trading at $2.50/share. Even if they were contractually locked in to buy at $8 a share, why would you strike at that price considering it’s trading so low? Since it was only one investor, maybe they got some bad advice? Or maybe they were being generous and trying to get someone some money? Or, maybe someone decided to spend $40,000-plus dollars to try and take away some of the negative attention for the Sept. 20 cancellation? Again, I’m no stock expert so I could be way off the mark here. The important thing to know here is that the company is not on the verge of being bought by the UFC, CBS, or anyone else.

Also, some have speculated that the stock jumped because of a possible merger with Affliction. Well, a merger with Affliction is out of the question for now. On paper, a merger makes sense. Affliction would get access to EliteXC’s major distribution platforms and EliteXC would get to feature Affliction’s high-priced talent on its platforms. But from a pure business standpoint, a merger makes no sense. It remains to be seen if Affliction can afford to pay its talent for what they are contracted to be paid. If EliteXC wasn’t able to go out and sign guys like Andrei Arlovski, Josh Barnett, and Fedor Emelianenko in the first place, how could they afford to take on their six-figure guarantees now? Neither company is in a position to take on the other company’s problems. But for the sake of ensuring that there’s a viable competitor in existence to rival the UFC, they may need to find ways to work together and support one another.

So for now, EliteXC is not in danger of suddenly going out of business. According to their SEC filings, it appears they have enough capital on hand to get them through the year. Will they be able to go out and land major free agents such as Tito Ortiz? Most certainly not. Can they afford Frank Shamrock’s six-figure guarantee and book him for a show? I have my doubts. No matter how you want to spin it, the promotion is underfunded, as it came well short of its goals for executing a raise. The $3 million it did raise several months ago is believed to be nothing more than a loan from corporate partner SHOWTIME. The fact that the company was not able to attract new major outside investors following the strong numbers that its May 31 show did on CBS is a major cause for concern.

But the changes and cuts we’re seeing made are being done to help insure that the cash to get them through the end of the year is there. In addition to the management changes involving the resignations of Gary Shaw and Doug DeLuca, I’ve heard that other staff cuts were made. I can’t get confirmation as to who was let go at EliteXC but MMA Hawaii is reporting that Patrick Freitas, a matchmaker and marketing guy at ICON Sport, who was a vital part of the company’s success, recently resigned. It is surprising because Freitas was often an active voice in the Underground forum and quite often came to ProElite’s defense and sounded very positive about the company’s long-term prospects.

One thing to take note is that even though Shaw and DeLuca have taken on reduced roles, they are still being paid the same. The Wrestling Observer even reported that DeLuca received a bonus upon his resignation. Why would such moves take place? This is pure conjecture on my part, but if someone has a guaranteed contract then a company can only take their salary off the books if they have just cause to fire them. If ProElite wanted to get some new leadership in place with a different vision for the company’s long-term growth then they just couldn’t cut the contracts of Shaw and DeLuca without winding up in court.

If the company can’t reduce its costs by cutting back on upper management then they will have to find other ways. Not going through with shows such as the Sept. 20 event that they may started to believe would be a money-loser is one way. Investing less money in smaller shows such as Cage Rage and ICON Sport that offer EliteXC little exposure is another way. If you look at the August ICON show, it featured Phil Baroni and then Quach vs. Mark Oshiro. Baroni doesn’t fight cheap and while a match between Quach and Oshiro isn’t going to break a show’s budget, it’s a pretty good fight that easily could have headlined a ShoXC event and been presented to more potential viewers. It was essentially a title eliminator fight that hardcore fans would have cared about but had no way of watching.

One idea for ProElite to consider until it improves its financial position is to stop promoting mid-level EliteXC shows such as at the one that had been planned for Sept. 20 and instead just focus on doing ShoXC events and major CBS shows. ShoXC events appear to be money makers. Most promoters I have spoken to indicate that most casinos pay an event fee for promotions to bring a boxing or mixed martial arts event to their casino. In this situation, a promotion doesn’t have to worry too much about ticket sales, marketing the event, or rental costs for a venue. The fighter budget for a ShoXC event is also much less than what a show such as the Sept. 20 event would have cost, plus, there is no rental fee. Renting out a 18,000-plus seat arena for a night is not cheap.

If EliteXC cut back from mid-level shows for the time being, they would then have the depth to bring more star power to the ShoXC events. Proposed fights for Sept. 20 such as Daley vs. Lyman Good and Reis vs. Quach for the vacant EliteXC 140 lbs. title would fit in well for planned ShoXC events on Sept. 26 and Oct. 10.

In order to make it into next year, ProElite must secure financing. In order to continue to operate like a major national promotion, it needs to secure lots of it. I’m not sure it’s going to be able to do that. For one, the economy sucks right now. This is a terrible time for startups and young companies to have to go out and try and secure investors. Second, investors aren’t as bullish about MMA as they once were. If an MMA company makes a pitch and presents a PPM to a prospective investor, that investor is going to do its due-diligence. And when the investor does his or her research, they are going to see that the IFL, WFA, BodogFIGHT, and several other promotions faded into oblivion. The reports of low ratings and poor attendance for the July 26 show didn’t exactly do much for investor confidence either.

Some are speculating that it will be CBS who rides in and saves the day. That was my prediction at one point. However, CBS isn’t going to make a play for the company anytime soon. I know that some network executives at CBS were pleased with the quality of the July 26 show but I don’t think many people can be happy with the ratings even in light of the fact that expectations were tempered. The reality is that the masses want to see recognizable names fight each other. You could put on the greatest card in the world that has hardcore fans foaming at the mouth but it’s not going to draw a strong rating if the starpower is lacking.

As much as I love it when corporate executives pay attention to blogs, perhaps CBS paid too much attention to them? The July 26 show was programmed in large part in response to what was written by members of the hardcore MMA community. Is that the right way to go? It was television pioneer Roon Arledge who once said in regard to “Monday Night Football,” “F— the fan, they’ll watch anyway. Let’s go after the casual viewer.”

Arledge was a man ahead of his time. If MNF was a pure football show, it wouldn’t have lasted more than a season. But because they jazzed it up, it changed the way people watched the sport. “Saturday Night Fights II” was a much tighter production than “Saturday Night Fights I” but SNF II looked more like a SHOWTIME event while SNF I was a new way to present how the sport was viewed and it hooked the casual television viewer that was channel surfing.

If you watch NBC’s prime-time coverage of the Olympics, you’re not watching a pure sports event. They are doing a lot of story-telling and selling a lot of human-interest drama. Such an approach angers pure sports fans to no end, but without the casual viewer, NBC would be better off running new episodes of “Deal or No Deal” as opposed to spending billions on the summer games every four years.

When you look at what CBS has done with MMA after its first two shows, I think they need to find a happy medium going forward. The production for the 5/31 show was a little overboard. But perhaps the production for the 7/26 show was a little too stripped down? You need something for everyone, which is the direction EliteXC when in for its “Street Certified” show this past February, a show that I consider to be the company’s most successful to date.

If you are looking at things from a business perspective, one thing that the company cannot afford to do on Oct. 4 is a match involving Slice and Brett Rogers. Rogers would be a heavy favorite in that fight and could possibly finish Slice early. Slice has the better technique when it comes to the standup, but Rogers will have a serious advantage when it comes to power. Slice’s fighting weight is 235 lbs. while Rogers cuts to make 265 lbs. and apparently has weighed at much as 280 lbs. on the day of his fights. Slice could be giving up as much as 45 lbs. if the two meet. So what you have is a lighter heavyweight fighter going against a super heavyweight. If this was Olympic-style boxing, Slice’s footwork and head movement would allow him to out-point Rogers. But Rogers has massive hands and if he touches Slice’s chin, he’s going to be dazed.

When Slice fought former heavyweight boxing champion Ray Mercer in an MMA-rules exhibition match in 2007, Slice’s camp decided for him to play it safe and take Mercer off his feet and not to stand with him for a prolonged period of time. The strategy worked like a charm but Mercer was in his mid-40s and abandoned any attempt to learn ground fighting after a couple of classes at Ricardo Almeida’s. Rogers is not a master of ground fighting but reports on him is that he’s a good natural wrestler. I would think a man that big and strong would be rather difficult to take of his feet. What I’m getting at here is that Plan B isn’t an option for Slice. He’s going to have to stand and slug it out and the odds are against him. He might want to fight Rogers, but he’s not ready.

EliteXC has not built many stars and Kimbo is one of their few exceptions. If he loses to Rogers in his hometown, that will kill him completely as a draw. The promotion needs more drawing cards, not less, which is likely why the promotion is holding off on promoting a match between Gina Carano and Cyborg. Coming off Slice’s disappointing performance vs. James Thompson during the 5/31 show, EliteXC needs to build him up again and give him more time to develop. Hardcore fans will bitch and moan that he’s not fighting top competition, but after three pro fights, should he be fighting top competition? Many will point to Brock Lesnar as a guy going out there early in his career and taking on top guys but Lesnar is an aberration. Slice is not Lesnar. But how many fighters are?

The company needs to choose wisely when finalizing Slice’s next opponent. For the life of me, I can’t figure out why they wouldn’t do Ken Shamrock vs. Slice. The promotion is believed to have soured on Shamrock following his upset loss to now-retired Robert “Buzz” Berry during a Cage Rage event earlier this year, but how many people saw that fight? And did Thompson not lose to Rogers in February yet he was brought back to headline vs. Slice? I don’t see anyone complaining about the ratings for Slice vs. Thompson.

EliteXC needs to bring back the casual viewer for the Oct. 4 show and the Shamrock name could help in that regard. Plus, the loss to Berry could be viewed as a positive in some ways. The average casual fan will be oblivious to the loss and a promotion that is looking to cut costs could use it against Shamrock when trying to negotiate a guarantee for a fight with Slice.

Those speculating that CBS is about to buy EliteXC need to realize that it is not going to invest heavily into ProElite coming off the numbers from the 7/26 show. Being a network television executive is a high-pressure job that doesn’t usually offer a lot of job security. A network television company buying a mixed martial arts promotion has never been done before. If executives push CBS to buy ProElite and the bottom falls out, chances are they’ll not only be looking for a new job, but they could be looking for a new career as they could be branded as untouchable in the television industry. It’s too high risk for CBS to buy the company out now and whether they’ll be interested in doing so in the future will have a lot to do with how Oct. 4 goes. If the ratings aren’t strong, why would the network buy programming that it may end up canceling or not renewing in the future?

EliteXC has to make sure the ratings are good for Oct. 4. They need to use the same formula they used for “Street Certified” to make things work. Slice vs. someone like Shamrock and Carano vs. Kelly Kobald-Gavin will be a good hook for the casual fans. When filling out the final two matches on the show, they should keep the hardcore fans in mind. Sure, they’ll bitch about Kimbo but if you give them Jake Shields, Eddie Alvarez (who is not expected to be on the show as he takes time off to get married… but man, they really need him), Quach, Reis, etc. that will get them talking enough for them to tune in. They also need to do a better job building up the K.J. Noons to Nick Diaz feud. Trying to pretend the melee that happened on June 14 never took place is a bad idea. EliteXC is handed a gift and it wants to take it back for a refund?

We already know the Oct. 4 show will have a stronger lineup from a marquee name standpoint than 7/26 but will it be enough? May 31 got a great number because all of the planets were aligned perfectly. There wasn’t much competition for the 18-34 demographic and they had months to promote the show to a targeted demographic during events such as the NCAA tournament. But you know the UFC will counter-program the Oct. 4 show again and EliteXC could be going up against both college football and the Major League Baseball playoffs that night. Also, how much promotional resources can CBS devote to “Saturday Night Fights” in August and September when it has to promote its new fall lineup?

There’s also the curiosity element to factor in. A lot of people tuned in on May 31 just to see what all the buzz about MMA was and exactly who this Kimbo Slice guy was. A lot of new fans were created while a lot of people will never tune in again. The first telecast of mixed martial arts in prime-time network television history was a big marketing hook that can never be used again.

If the Oct. 4 show does not hit it out of the park in all facets then CBS will not be the corporate savior some expect them to be. And without their support, I do not see how ProElite can survive. If EliteXC folds, I don’t think that will be good for fighters or the fans (competition brings the best out of everyone) but this is how I see things breaking down. If something doesn’t change and change soon, we could be living in a UFC-only world by next summer. Having four major national promotions compete for the same nut might not be the best thing for the growth of the sport. However, I am not sure having one major national promotion is good for the sport either.

ProElite also filed a notice with the SEC that they will be late in filing their 10-Q quarterly report for the fiscal second quarter that ended June 30. According to the extension request, ProElite intends to file their second quarter report on Aug. 19.

In other ProElite-related corporate, the company’s stock (PELE.PK) jumped from $2.50/share to $8.00 on Friday. That’s an increase of $5.50 in just one day. There’s no word why the stock suddenly jumped 220% in one day. I could speculate, but I won’t. But I think it’s obvious that something is going on behind the scenes.