Enter It's Showtime.
The Dutch kickboxing organization had a very important question in the wake of this announcement - how can K-1 announce a new show when they haven't paid everyone from last year's shows? It's Showtime, who also has a talent management division, pointed out that their fighters are owed over $400,000 in back pay for previous K-1 events. After six months, It's Showtime has had enough, and have announced their plan to take legal action against K-1 and parent company FEG:
For more than half a year K-1 owes us more than 400.000 US dollars in total because several fighters which we represent have not been paid. Every time we were asked to have more patience because a potential investor would be interested to take over K-1.
Until now, we have never contacted a lawyer to claim our credits because we granted K-1 the time they need to financially recover. However, we were very surprised to hear that DREAM and K-1 want to organize a number of smaller events. In our opinion that isn't possible before K-1 first pays its debts to fighters which already have fought. Therefore, now is the time for us to hire a lawyer.
K-1 responded by contacting It's Showtime head Simon Rutz to apologize and try to work out a deal. On Monday, It's Showtime eased up on their plans a bit:Until now, we have never contacted a lawyer to claim our credits because we granted K-1 the time they need to financially recover. However, we were very surprised to hear that DREAM and K-1 want to organize a number of smaller events. In our opinion that isn't possible before K-1 first pays its debts to fighters which already have fought. Therefore, now is the time for us to hire a lawyer.
[K-1 President] Mr. Tanikawa asked us if we want to delay our juridical actions with another week because he will make us some positive offers within a week. Given our long term relationship with K-1, we will not make a problem out of this week. If we haven't heard anything positive after a week, we will continue our already embarked actions.
Given the financial state of K-1/Dream parent company FEG, I can't possibly see them finding $400,000 to pay off these debts within one week, and it seems as if It's Showtime is done playing the waiting game for new investors come in. It's good that the two organizations are trying to work things out, but things could still move into legal action very soon.
It's Showtime's statement actually goes so far as to name the specific fighters who have not been paid, and it's quite the list: K-1 MAX champion Giorgio Petrosyan, Tyrone Spong, Hesdy Gerges, Daniel Ghita, Melvin Manhoef, Pajonsuk Superpro Samui, Chahid Oulad el Hadj, Gago Drago and Dzevad Poturak. As they point out, these are only the It's Showtime fighters who have not been paid. Over the past year we have heard stories from numerous others regarding similar issues from both K-1 and Dream, including Alistair Overeem, Bibiano Fernandes, Gary Goodridge, and Ben Edwards among others. In April, K-1's Tanikawa publicly stated that all fighters had been paid, including specifically naming K-1 veterans Ray Sefo and Bob Sapp. Sefo quickly responded that this was not true, and that he was personally still owed $700,000.
It's Showtime's questions are very valid. If just a month ago, FEG owed Sefo $700,000, and if today they owe It's Showtime $400,000, how can they be putting on new K-1 and Dream shows right now?
There has long been talk of investors stepping in, including a much discussed deal with Chinese company PUJI Capital last year, but none of that money has materialized. Earlier this year, Tanikawa had this to say about the future:
The current course is that FEG will die. There are probably staff members that will leave as well. The event name will be left but the promotion will change. If the current structure remains as it is it will be impossible to continue. If many investments from companies overseas do not come in we can't survive.
We have heard nothing of restructuring, and nothing of overseas investments coming in. The current K-1 and Dream shows are smaller shows, with less production values, fewer big name fighters, and a heavy focus on Japanese talent - all of which means lower overhead costs. But the fact that they are producing these shows at all while still heavily in debt seems to indicate that what money they do have is being put towards shows, not towards settling those debts and paying fighters for the work they have given the company.
It's definitely not a pleasant situation, and one that we have not heard the last of.