ProElite, Inc., parent company of Elite Xtreme Combat, is throwing in the towel on mixed martial arts.

Several sources MMAWeekly.com spoke to said notifications had been sent out on Monday informing managers that the company was ceasing its fight promotion operations by the end of this week and it had begun the process of letting its employees go. One source even said that ProElite had already begun clearing out its corporate offices.

EliteXC’s remaining show scheduled for Nov. 8 in Reno, Nevada has been canceled. The card was due to be broadcast on Showtime networks, EliteXC’s original broadcast partner since the company’s formation in November of 2006.

Industry sources on Saturday informed MMAWeekly.com that ProElite made a last ditch effort to salvage its assets by selling off portions of the company, including fighter contracts and the satellite promotions it acquired in 2007.

The company had accrued over $55 million in debt in its twenty-four months of operations. Though its third CBS-televised offering, Oct. 4’s “Heat,” was looked at as a ratings success by EliteXC and CBS executives, the company's financial position had become untenable in recent months.

In an August SEC filing, EliteXC disclosed they were seeking 3.5 million dollars to fund operations through the end of the year. Only a month later, another SEC filing said they had received only $1 million in funding, provided by Showtime networks.

Elite CEO Chuck Champion last month told MMAWeekly.com that the Showtime loan came after two principal investors in the company had elected not to provide the $3.5 million "bridge financing."

An SEC filling dated Oct. 9 revealed that CBS had funded "Heat" due to ProElite's inability to pay for the show.

Multiple calls to EliteXC and Showtime representatives on Monday went unreturned, although EliteXC Vice President Jared Shaw told MMAWeekly.com on Saturday he had no comment on the matter.

Although EliteXC now is out of the picture, that doesn't necessarily mean that CBS and Showtime are out of the MMA business. Sources have indicated that, having worked with Affliction Entertainment to add Andrei Arlovski and Roy Nelson to the "Heat" event (both are Affliction fighters), there is now the distinct possibility that CBS may look towards a relationship with Affliction to fill the void left by EliteXC's exodus.

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ELITEXC INSIDER DETAILS COMPANY'S DOWNFALL

In an interview with MMAWeekly.com Monday evening, Icon Sport founder T.J. Thompson said crisis management, or lack thereof, brought Pro Elite down.

Thompson history with Elite began in August of 2007 when he sold his Hawaiian MMA promotion Icon Sport to the then-expanding company. As part of his deal, he entered into a five-year consulting deal with the Los Angeles-based company and participated in many strategic talks with its executives.

A 15-year industry veteran who got his start promoting fights in the backrooms of bars to a couple hundred fans, Thompson got a call Monday morning from EliteXC Head of Fight Operations Jeremy Lappen, who informed him that the company had filed for bankruptcy and everyone in the company would be let go.

Thompson said it was CBS, not Showtime, who backed out of an impending deal to purchase the ailing fight promotion. Last Tuesday, he spoke with Elite CEO Chuck Champion, who said the company had a fifty-fifty shot of surviving.

“His opinion was that the deal was either going to close in the next two to four weeks, or it was going to crash a lot faster than that,” Thompson said.

Though he was not present during negotiations between Elite and CBS, Thompson believes the handling of Elite’s third CBS televised card, “Heat,” sealed their fate.

“I was there cageside and watched the whole thing happen,” he said. “I think (CBS) got cold feet watching. The way the Ken Shamrock pullout was handled, all the way from the beginning to the end with Seth Petruzelli. Watching Jared Shaw jumping up and down and screaming as a representative of the company, I think was disgusting and embarrassing.”

Almost as quickly as “Heat” was over, the Oct. 4 show was mired in controversy over comments Petruzelli made to an Orlando radio show. During his interview, Petruzelli implied that Elite XC officials had attempted to influence the outcome of the fight. Subsequent outcry from fans and media caused the Florida State Boxing Commission to open an investigation, another reason Thompson believes CBS pulled out of talks with Elite.

“I don’t have a smoking gun, (but) I’ve been around long enough, I’ve talked to enough people that were there, I won’t name names of executives in the company that I know—Seth was paid to stand up. I’m confident of that. If the commission wants to talk to me, I’ll tell them what I know.”

Thompson believes his company and other MMA promotions under the Pro Elite banner are destined to languish in bankruptcy court, along with EliteXC’s fighter contracts. On Tuesday, he will meet with his lawyers to determine whether it’s possible to free Icon Sport from its parent company. He’s not overly optimistic.

“(The promotions are) there for creditors to go after, really,” he said.

As a promoter, Thompson says he’s made hundreds of mistakes in his fifteen-year career. Elite’s size and visibility did not give them that luxury.

“When things are going good, anyone can promote a show,” he said. “Kimbo Slice knocking someone out, it’s pretty easy to get good ratings. It’s when crises happen that you earn your money as a promoter. It isn’t an exact science. The people that have been at the helm of EliteXC didn’t have the years of experience that are needed to promote MMA shows.”

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