I think it is a great deal but I see one major flaw. These guys are going to want a reward if they win. Eventually they will want to be liberated if they win x amounts of fights. Also you're going to have to beef up security because Person1 kills Person2. Person3 was friends with Person2 and brings his posse of inmates to take out Person1. I know this is how it already works but it will get much more out of hand than it already is. It's not like the WWE where everything is planned out and feuds always work themselves out.
Off topic: when i said the word "liberate" earlier in this post it reminded me of that Slipknot song by the same name. Now my friend is a Slipknot freak so I've heard this song a bunch of times. Anyway, when Corey says "Liberate...my madness!" doesn't it sound like "Liberate...bananas!"?
Wow I really get carried away sometimes...