"Cage, not gilded, provides second act for Cash4Gold founder" by Megan Woolhouse, Globe Staff January 18, 2015
LOWELL
When last we left Jeff Aronson, the meteoric rise of the company he founded, Cash4Gold, had ended in a spectacular crash, its assets liquidated for just pennies on the dollar after burning through millions in investors’ money.
But here he was at the Tsongas Center, perched by a steel cage, watching calmly as Desmond “The Predator” Green and Steven “Super” Siler exchanged kicks, body blows, and barrel-fisted punches in the featherweight division of a mixed-martial arts card. “It almost looks like ballet,” Aronson observed.
Aronson’s comparison of the brutal, almost-anything-goes sport to the graceful, disciplined dance is another example of a gift for hyperbole and promotion that made Cash4Gold a staple of late-night TV, pitched by faded celebrities such as the late Ed McMahon and rapper MC Hammer. Now Aronson has turned to ultimate, or cage, fighting, aiming to cash in on a business that has moved from the fringes of the sports world into the mainstream and onto network television.
A year ago, Aronson bought a majority stake in Titan Fighting Championship, a circuit that acts as a feeder to Ultimate Fighting Championship, a $3.5 billion enterprise that is led by former Boston bouncer Dana White and features the sport’s best fighters. Aronson’s business model is similar to that of minor league baseball teams, offering fans close-up looks at the stars of the future — and sometimes the past — at a fraction of the cost of the major leagues.
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Aronson, 42, rose to prominence during the recession, when gold-trade-in businesses sprouted across the nation.
They are still out there.
Frightened investors poured money into gold, driving prices to new records, while desperate people sold jewelry and anything else that might contain gold. Many metal refiners tried to profit from these trends, but few made as big a splash as Cash4Gold.
Aronson founded the company on a simple concept: A person with unwanted gold placed it in a plastic bag, mailed it to Cash4Gold, and waited for a check in the amount of its assessed value.
Woa!
The novelty was that it allowed cash-poor households to sell gold privately, without the stigma of going to a pawn shop.
Aronson attracted millions, if not tens of millions, of dollars from investors, including venture capitalists Joel Cutler of General Catalyst in Cambridge and Dan Nova of Highland Capital Partners, also in Cambridge. Cutler and Nova invested at least $15 million into the business. They did not respond to requests for comment.
In 2009, Cash4Gold spent more than $2 million on a Super Bowl advertisement featuring McMahon and Hammer, drawing in more customers. Yet a growing number of people that mailed gold to the company also became disappointed by the payouts — if they received them at all — and the Florida Attorney General’s Office launched an investigation.
Oh, I'm shocked.
Aronson ultimately shuttered his palm-tree-shrouded gold-melting facility, filing the equivalent of a Chapter 7 bankruptcy in Florida in 2012. A Virginia company, Direct Holdings Inc., bought what remained of Cash4Gold out of court receivership for $440,000.
Aronson also agreed to pay about $15,000 to some former customers as part of a settlement with the Florida Attorney General, but he did not admit any wrongdoing. He still denies that Cash4Gold did anything wrong.
Aronson does not like to talk about Cash4Gold but said its demise was brought on by a changing economy and too many Cash4Gold copycat stores. In a recent interview, he said he was happy to have moved on from the business, including its Boston-area venture investors....
Aronson has put himself in the center of a new world, one that values brashness and showmanship with raw toughness. Ultimate fighting combines boxing, kickboxing, wrestling, jiu jitsu, and other martial arts, set against bright lights, special effects, and scantily clad women.
It's a warrior culture.
In its early days more than two decades ago, the sport had few rules, with fighters often battling until one gave up or passed out. Ultimate fighting was illegal in most states.
Over the years, the sport has since limited the length of fights, standardized rounds, and added referees who can stop fights and judges who determine winners if they end without submissions or knock-outs. Ultimate fighting is legal in all but three states; Massachusetts legalized it in 2010.
The UFC picks elite fighters and sometimes pays them millions of dollars, raking in money from pay-per-view subscriptions, contracts with cable and network TV, and merchandise sales — everything from T-shirts to sunglasses to jewelry. Around this success have popped up smaller outfits, such as Aronson’s Titan FC, which signs aspiring fighters and UFC hopefuls, including many released from UFC contracts hoping to get back to the show.
Aronson bought a majority stake in Titan in early 2014 from its founder, Joe Kelly, with the strategy of bringing the circuit, which largely operated in Kansas, out of obscurity. This year, Titan offered eight events across the nation, including the one in Lowell, and inked a deal with CBS Sports Network for an undisclosed amount to air the fights.
While Ultimate Fighting Championship is by far the biggest promoter of the sport, several smaller ones have emerged, including Bellator MMA, based in California, and ONE Fighting Championship of Singapore, said Ken Pishna, managing editor of MMA Weekly, a trade magazine that follows the sport. Viacom, the media company that includes MTV, Comedy Central, and Nickelodeon, acquired a majority stake in Bellator in 2013 and began airing events on the Spike TV channel last year.
Titan operates just below that level, Pishna said, filling a potentially profitable niche as a feeder to the larger circuits. Aronson lets fighters out of their Titan contracts if the UFC calls them up, making him unusual among lower-level promoters but more attractive to top prospects.
“There’s a good market for that,” Pishna said. “The fighters need stops along the way to get to the UFC. Most fighters are happy fighting for Titan.”
Like most promoters, Aronson won’t disclose what he pays fighters or Titan’s revenues.
Aronson also owns a South Florida property management company called Arco, as well as night clubs in Costa Rica, where he lives half the year.
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In Lowell on a recent Friday night, Titan sold about 1,500 tickets, filling only a portion of Tsongas Center. If Aronson has his way, more seats will be occupied and more viewers will tune in. “At this point, it’s more about building a brand than about profitability,” he said.
The atmosphere was supercharged with sweat, blood, and the occasional fan gone berserk....
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