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The IFL is making moves

The IFL has made two major announcements in the last week.

The first announcement, which you may have seen, was that the IFL has signed a new television deal with Fox Sports to broadcast 10 additional hours of IFL shows. Fox Sports has said that ratings for the IFL’s previous shows on the network were “extremely impressive,” and Eddie Goldman thinks that this television deal could make the IFL’s team concept a winner.

However, that is not the only IFL news as of late. Yesterday the IFL issued a press release announcing that it has completed a reverse merger with publicly traded Paligent Inc. (OTCBB:PGNT) pursuant to which the IFL will emerge as the surviving entity. Paligent was a publicly traded shell company that sold its previous lines of biotech business but remained listed as an over-the-counter stock whose sole business purpose was to find a merger partner.

In plain English – the IFL will merge with Paligent in order to become a publicly traded company.

There are several reasons why private companies choose to go public by completing reverse mergers. First, by completing a reverse merger instead of an initial public offering, the private company avoids the time and expense of completing an initial public offering. Second, once the reverse merger has completed, the companies can raise money by issuing additional stock. Third, companies can make acquisitions using their publicly traded stock. Finally, company owners have increased liquidity when they hold publicly traded stock instead.

Not all experts agree that this is a smart way for a company to go public, however. For example, law professor Bill Sjostrom takes the position that companies that go public through a reverse merger find it difficult to create a market for their stock, and that they lose many of the advantages of being a publicly traded company.

Regardless, it is almost certain that the IFL has decided to go public as part of a larger plan. What that plan is, and how the IFL will leverage its status as a publicly traded company, remain to be seen.

By the way, the IFL’s becoming a public company also means that it will be required file regular financial reports with the SEC, which will be publicly available for anyone to review.

At one time Dana White remarked about the International Fight League that:

The IFL’s another one of the small shows in the country that’s helping build the grassroots of this sport. Unless someone tells me the IFL’s doing something, I don’t even know they exist.

Something tells me that White, when he is not busy being embroiled in litigation with the IFL, just might read those SEC filings to learn what this “small” “grassroots” promotion is up to.

(Hat Tip Zach Arnold)

Update 9/1/06: In yet another move, today the IFL announced a strategic partnership with Dale and Thomas Popcorn.

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3 Responses

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  1. While more coverage on FSN can’t hurt, both the UFC and Pride have shown that FSN does not make that much of an impact. It is better than nothing, but a regular channel would be better.

    Does anyone know if they are getting paid for this? Or is it still paid time with them picking up any ad revenue they sell?

  2. Someone will have to read it to White. As for IFL, no “ex”-Mafia or yakuza here, for a change – that we know of, anyway.

  3. Good article. However, I do wish that the IFL-FSN announcement had been more clear about what exactly will be on the IFL’s primetime special in October.