Friday, March 7, 2008

More Details About Kimbo Coming to CBS

taken from

(CBS primetime star, Kimbo Slice.)

A few more details have dropped about the EliteXC/CBS marriage, although you should consult a finance guy and an attorney to explain it to you. Luckily, I do both of those as side jobs so I will lay it out proper. MMAPayout has a solid breakdown of the deal, but there are still some things we haven’t been provided with yet and a lot remains murky at best. The details we do have come from the SEC filing by Pro Elite for the agreement. If you’re in need of good bathroom reading material, print off the SEC filing and enjoy.

MMAPayout had originally suggested the agreement was not a rights fee arrangement, but a time buy. CBS and Pro Elite both shot down that notion. The SEC filing says that CBS will pay a rights fee. Check it:

According to the filing, CBS has the right to order up to four two-hour events during the first year of the agreement. Under the terms of the agreement, CBS was also granted four consecutive annual renewal options. CBS also has the rights to order derivative programs based on the events, in a possible nod to the long rumored Mark Burnett produced EXC reality series featuring Hershel Walker and Jose Canseco.

I told you “What Would Kimbo Do?” would find its way onto CBS’s Saturday morning kiddie programming. With the explosion in MMA’s popularity and now jumping over to network primetime, derivative programming could mean a lot of things so it’s hard to speculate what that could be. Unfortunately, “Survivor: EliteXC”, isn’t out of the realm of possibilities.

More agreement details:

— Showtime, who has been airing EliteXC shows and is owned by CBS, was issued two warrants - each for the purchase of two million shares of stock at $2 per share. The first vests immediately, expiring in 2013. The other warrant is for four chunks of 500,000 shares to vest when an EliteXC show airs on CBS.

— Getting four million shares of Pro Elite stock would give Showtime ownership interest in the company to the tune of approximately 8.6%. The current value of the shares are $7.50, so Showtime is getting a $22 million savings.

— Showtime did buy two million shares at $2 per share, giving proceeds to Pro Elite totaling $4 million.

— Whether this $4 million is a rights fee or not is unclear.

The Hollywood Reporter claims that CBS and Pro Elite will “jointly sell advertising.”

What does all this mean? CBS, Showtime, and Pro Elite are all going to make a mint togther. And it’s great for the sport. Now, what should I have for lunch?