Mike Chiappetta • E-mail

EliteXC and ProElite, racked by growing financial difficulties and an investigation into a controversial Oct. 4 fight featuring headliner Kimbo Slice, will cease operations later this week, according to multiple sources.

The news first broke on GracieFighter.com. Cesar Gracie fighter Nick Diaz had been scheduled to face Eddie Alvarez for the 160-pound title in the organization’s Nov. 8 show, which has been canceled.

The company was officially founded in late 2006, and promoted 20 events in its history, the last coming on Oct. 10. Just over one year into its history, it signed a historic agreement with CBS to broadcast the first-ever primetime live mixed martial arts card. That event, EliteXC: Primetime, aired on May 31, 2008 and drew an average of 4.8 million viewers, with over 6.5 million tuning in to watch the main event featuring Kimbo Slice.

But even in success, EliteXC was hemorrhaging cash in alarming amounts. At last count, parent company ProElite was more than $55 million in the hole since beginning operations, and a recent Securites and Exchange Commission filing revealed that CBS had paid the costs of the most recent show due to ProElite’s lack of liquidity.

It was expected that CBS and Showtime Networks, which already owned a 20 percent piece of the fight company, would buy the remaining shares, but according to sources, the investigation into the Kimbo Slice fight caused the network to back out of those talks, thinking the brand to be irrevocably damaged.

During that Oct. 4 fight, journeyman fighter Seth Petruzelli replaced Ken Shamrock on short notice, and knocked out Slice in just 14 seconds. Afterward, Petruzelli told an Orlando radio show that, “the promoters kind of hinted to me, and they gave me the money to stand and trade with him. They didn’t want me to take him down, let’s just put it that way. It was worth my while to try to stand up and punch with him.”

Petruzelli later tried to amend his comments, saying that EliteXC had offered a lucrative knockout bonus which he was trying to earn, but the damage was done as the Florida Department of Business and Professional Regulation announced an investigation. That set into motion a chain events that led to CBS and Showtime pulling out of the deal, which in turn left the company without the necessary cash to run another show.

ProElite also owned several other fight companies around the world, including Rumble on the Rock, King of the Cage, Cage Rage and ICON. The fate of those companies is unknown.

EliteXC’s other popular fighters include Gina Carano, welterweight champion Jake Shields, and middleweight champion Robbie Lawler.

With EliteXC closing up shop, that leaves Strikeforce on NBC as the only MMA promotion with a network TV deal. Both UFC and Affliction have negotiated with networks but have never come to terms. The opening could give both organizations another chance to strike a deal.