At the weekend MMA site middleeasy.com caused something of a stir when they wrote in detail about the Bellator promotion’s financial struggles in their weekly rumors column and suggested the company was in danger of going out of business.
See the rumor in full below…
“I really wish I wasn’t the bearer of bad news. Bellator has kept me thoroughly entertained since the summer of 2009. However, things with Bellator are starting to ‘hit the fan’. As of this morning, Bellator does not have a television deal to air their season four tournament scheduled for the beginning of 2011. Negotiations with G4 supposedly fell through around the time DirecTV decided to drop the channel from their lineup.
Each Bellator show costs the organization around $400,000. A fee of $65,000 is paid to NBC (similar to what the IFL did) to broadcast regionally in hopes that NBC will pick up the program for a national time slot. They make roughly around $20,000 from sponsors per show which still leaves them in a substantial hole that gets deeper with every week of Bellator broadcasts.
The hedge fund investing in Bellator understood they would take a loss when the organization was created, but with season three wrapping up, they are just not happy with the financial results thus far.
Bjorn Rebney has given away a substantial portion of his share in Bellator away to investors solely for them not to ‘pull the plug’ on Bellator.”
Today Bellator CEO Bjorn Rebney reacted angrily to the story and criticized the site for publishing unsubstantiated claims.
“Usually, when you see rumors that are completely ridiculous, they’re coupled with something that’s true,” Rebney told the MMAjunkie site. “In this instance, it’s false on top of false on top of completely ridiculous on top of completely unfounded.”
“That blog, whoever that is that wrote that, is just so filled with nonsense. It’s completely, unequivocally untrue on every front they wrote. It’s literally as if someone stepped out and just said, ‘I’m going to create whichever fantasy I choose to create, and I’m going to write it.’ There wasn’t even the slightest hint of accuracy or truth in anything that showed up on that blog.”
Rebney then shot down each of the rumors in flames directly.
On the G4 TV deal: “We have never spoken to, never met with, never had any form of communication with G4.”
He went on to note that they had, “finalized a deal”, and hoped to be releasing more details after Thanksgiving.
On his alleged shares giveaway: “Our initial investment happened over two years ago. There’s been no further dilution or additional shares issued.”
On the mood of Bellator’s backers: “Our investors are thrilled. They’ve backed us as strong as any investment I’ve ever seen in sports entertainment. They’re thrilled with where we’re going. They’re wildly excited about our future, and they’ve stepped up in a huge way.”
On the stability of the company: “We’re in an incredibly stable spot right now, and we’re on the cusp of making announcements that our current investment group is thrilled with.”
On the company’s alleged financial losses: “Under two years into our growth, we’re at a cash flow break-even perspective, which is a total anomaly in not just our space but most businesses. We’re exactly where we projected we would be.”
For their part MiddleEasy are stressing that this was posted as a rumor and should be treated as such.
Still, despite the fact they are often off the mark these rumors have a habit of taking on a life of their own very quickly on the internet and it’s understandable that Rebney would be upset at their inaccuracy if what he says is indeed true.
It’s good to see that Rebney appears upbeat about the promotion’s future though that should be tempered by the fact that it is clear that Bellator have struggled at times to bring in healthy crowds for their weekly shows, and issues with the timing and availability of their broadcasts on Fox Sports Net has frustrated fans.
Their core product is good though, and hopefully they can secure a better TV deals and continue meeting their targets in 2011.