This right now is a pivotal point in history for the fledgling sport of Mixed Martial Arts. In the past few months we have seen one of the Ultimate Fighting Championship’s self-proclaimed rivals, the IFL crumble to the ground, with EliteXC looking like it might follow. Both are publicly held companies, and if anything, there are lessons to be found in each one, as every aspect of their business plans are available for us to view. There is still no word if Zuffa has outright purchased the IFL or if they have simply bought out a few fighter contracts and licensed some footage to use for highlights for said fighters. The IFL announced earlier today that they are 35.7 million dollars in the hole, with a grand total of 4 remaining employees right now. It is safe to say that the International Fight League was an interesting approach to capitalizing on the MMA boom, but an untimely failure.

The IFL was a (relatively) complicated, concept-laden approach to the simple game of Mixed Martial Arts. MMA has never been a team game, and has always been about individual performers and their struggles in the ring/cage. IFL took what most consider “name” fighters and trainers and made them the marquee stars, promoting their “team” fighting it out against another trainer’s team. The problem was, these fighters were not all mainstream stars, so there was very little appeal to mainstream fans. To the average fan, MMA alone is rather savage and a fringe attraction. Watching two Midwestern guys in their early 20’s slug it out with each other is not an attraction. As much as I disagree with comparing MMA to pro wrestling or another sport, the stars are what draw the fan interest. Tito Ortiz, Chuck Liddell, Randy Couture, Forrest Griffin and many others were what captivated the attention of the mainstream fans. Not only can these men fight, but they have families, personalities, they go beyond the sporting fighter and move into mainstream star status. Just like Olympic Swimming in and of itself is not very appealing to many viewers, but having a dynamo like Michael Phelps look unstoppable and take home 8 gold medals captivates people to watch something they usually do not care about.

This was IFL’s failure. It wasn’t their fault that they didn’t have the big name stars, or that they didn’t have a chance to build any, but it was their fault for how they operated and appealed mainly to the hardcore fans solely, as opposed to a broader audience. IFL was not a total failure, the fact that they made around 20k per show is proof that MMA can draw, can operate in the black, but you have to be smart. Zach Arnold today came out and made a point of saying that IFL and ProElite’s financial short-comings are bad for MMA today. ProElite’s debt right now is staggering, and they are grasping at straws to survive. With two major network appearances left for them, one coming up in October, featuring Kimbo Slice vs. Ken Shamrock, and the other yet to come, one has to wonder how long they can keep going.

EliteXC’s recent SEC filings have raised some eyebrows as well as alarms for MMA fans, as the collapse of ProElite would mean the collapse of many regional promotions such as ICON and King of the Cage. What we have to take in from this, is that EliteXC is not a minor league, no matter what your average blogger says about them. UFC, when Zuffa purchased it, was in the red by 40 million, and it took the Fertita Brothers’ fortune and Dana White’s wily promotional tactics and risks to make it into a financial and critical success. ProElite has made many mistakes since opening up its doors; they moved too fast for example, and wanted to be a juggernaut from the very beginning and make a huge impact on the MMA world. What we have to show for it is not only tremendous amounts of debt, but the fact that EliteXC has the biggest reach of any MMA promotion in the world right now, as well as the most recognizable star in Kevin “Kimbo Slice” Ferguson. It is a giant conundrum.

There, I said it, Kimbo Slice is the biggest star in MMA history. Did Chuck Liddell get Nike ads? Did Randy Couture have the most-watched fight in MMA history live on network television? No. Most fans don’t want to admit it, but EliteXC picked up at what UFC scoffed at and became an instant success. A lot of people saw the ratings for the second show and immediately claimed the first, far more successful show, to have been a fluke, just something to pick up the casual fan who was interested in seeing “Human Cockfighting” for themselves on free TV. The truth is, it was still seen by more people than most UFC PPVs could ever dream to have watching. Will CBS get upset if the ratings for this next show and the fourth continue to drop? Most likely, but if Ken Shamrock vs. Kimbo Slice does as well as I’m thinking it will, CBS will see what they need to do, and that is control EliteXC. UFC has shown that a money-losing MMA organization can be turned around on a dime and turn into a financial success, you just need to find the right formula. For UFC it was a cable reality show trailing after WWE Monday Night Raw. For EliteXC it could be Kimbo Slice tearing apart recognizable, broken-down fighters on national television. A problem is people look at MMA like pro wrestling and wonder why it doesn’t get Monday Night Raw ratings. The truth is, boxing on cable doesn’t get Monday Night Raw ratings and is still incredibly profitable. MMA outdraws boxing now, remember that, and boxing is in no way in danger of disappearing.

If EliteXC does fail, what we can reflect upon are their financial mistakes, and how they moved forward too quickly. No company needs to spend over $800k in a year to build and promote a social networking site that generates under $30k of revenue. What is clear is that they most likely didn’t need a fancy social-networking platform to make that $30k, as that money most likely would have came through ad revenue as well as merchandise sales; aka that money would come regardless of their website’s platform. They built up a large company full of highly paid officials and employees, when they really didn’t need that to compete. They bought out every regional promotion that was willing to enter discussions with them, only to gain a few marginally popular fighters and to put on money-losing shows outside of their main brands, when all they needed to do was offer the bigger name fighters and prospects contracts to fight on their ShoXC and EliteXC cards.

Looking at these two promotions, what is clear is that MMA is popular, MMA does draw, MMA can make money, it just takes smart business and smart promoting to make a profit. Strikeforce, for example, promotes regional shows in Northern California and Seattle, they do not over reach, have some TV deals in place and have worked on building up some regional superstars such as Frank Shamrock and the uncanny Cung Le. When they needed more exposure, they worked with Gary Shaw and EliteXC to co-promote shows and share the live gates. Strikeforce has a bunch of upcoming shows and shows no signs of halting any time soon. The big difference between the IFL, EliteXC and Strikeforce is that Strikeforce has no delusions of grandeur right now. I think that Strikeforce has a good product and has been very smart when it comes to promoting their shows. Their late night network TV deal has given them more exposure than before, and while not EliteXC numbers or money, good numbers and money. While we don’t have access to their financials, we can see that they show no signs of slowing down and aren’t trying to pretend that they are something that they aren’t.

Regardless of the survival of the IFL and EliteXC that attempted to instantly promote themselves as national competitors to the UFC, that does not mean impending doom for MMA in the United States. Instead, we have a shining beacon like Strikeforce to reinforce the fact that MMA can work, and that not every promotion is promoting in a high-risk atmosphere where it is do or die.