UFC to be sold to talent giant WME-IMG for around $4 billion.

[Greenbacks]

Zuffa LLC, owners of UFC, will sell the promotion to a group led by talent giant WME-IMG for around $4 billion.
Announcement of the sale could come as early as Monday, according to the New York Times.

Dana White, UFC president, told ESPN's Brett Okamoto that his responsibilities within the promotion won't change.
"President, owner, working my ass off," White said. "Just doing it without my best friend and partners for 20 years."

White classified the sale as "very" bittersweet, but assured fans they shouldn't worry about the change in ownership.
"Exact opposite," White said. "Sport is going to the next level."

Lorenzo Fertitta, who with his brother Frank owned more than 80 percent of the business at last public acknowledgment, told CNN in December that the private company grossed about $600 million in revenue last year. Besides the Fertittas, who are each worth about $1.6 billion, according to Forbes, the company has two other minority investors: White and the Abu Dhabi government, which, under its Flash Entertainment arm, bought a 10 percent stake in the business for an undisclosed sum in 2010.

At least four bidders are believed to have submitted bids for the organization, including WME/IMG, China Media Capital, The Blackstone Group and Dalian Wanda Group. The winning bid was expected to be for a valuation between $3.5 billion and $4 billion, multiple sources with knowledge of the negotiations told ESPN.com in May.

In May, sources with knowledge of the potential sale told ESPN that the bid book, prepared by boutique investment bank The Raine Group on behalf of Zuffa LLC, was sent to prospective bidders in late March.
The Raine Group has advised the UFC in the past, and it also has relationships with two of the bidders. WME/IMG was a founding investor in the investment bank.

 

[Greenbacks]

 

[Greenbacks]

Largest sale in history of sports. UFC sold for 4 billion to WME-IMG and MSD capital.

 

[Greenbacks]

 

[slapshot]

Good move after the 200 bore fest

 

[Greenbacks]

 

[Greenbacks]

January 2001...Bought The UFC for $2 million.....June 2016: Sold UFC for $4 billion..... Greatest ROI in sports history.

 

[PatsFan1283]

Good move by the Fertittas...Some threats coming around the corner to their organization, not to mention we're probably close to the peak prices for sports and entertainment assets.

 

[Greenbacks]

The most valuable sports franchise in the world is believed to be the Dallas Cowboys, which Forbes estimates is worth $4 billion.

 

[MattyMatt]

This is insane...4 times GROSS revenue, wth? Who does that??? Unreal .....hopefully wme-img will have a dollar left to share with the athletes (not likely)... they must have some incredible growth strategies in store....

 

[PatsFan1283]

Would've been cool if Blackstone bought since they are public and we could get a better understanding of the UFC's finances.

4B is a ton but everything is expensive now with interest rates being so low and most scaled operations being able to function globally (which the UFC does a good job of)

I just see a lot of threats on the horizon though. Some may come to fruition, some won't.

I've always had my doubts if 90% of a combat sport could function under 1 umbrella like the UFC . Obviously boxing couldn't. Both McGregor and Rousey lost when they were on the cusp of becoming big stars but with social media/MMA being mainstream the fighters can promote themselves better than they ever could before and if a huge star emerged it could force co-promotion.

PPV is dying, the UFCs PPV sales aren't any better than they were years ago. It used to be you had to search for a stream, now you can find a good one with a few mouse clicks. WWE saw this coming and adapted, UFC makes more off PPV than they do so it may be tougher to do so.

You have a lot of newly minted Asian billionaires, it would only take 1 or 2 to disrupt the process. Allow the biggest UFC stars to co-promote and get more of a piece to the pie like Mayweather does. This is a space dying for real competition, something better than Bellator or Strikeforce. Networks would jump on board as TV is dying if it isn't live sports.

It isn't like WWE where 1 company owns everything because of their brand and creative direction, at the end of the day it is just dudes fighting regardless of the banner it is under and expecting have a monopoly on that could be a bit of hubris.

 

[PatsFan1283]

http://mmapayout.com/blue-book/pay-per-view/

Cool chart of all UFC (and MMA) PPV sales.

 

[TheFalls]

http://mmapayout.com/blue-book/pay-per-view/

Cool chart of all UFC (and MMA) PPV sales.

interesting numbers...but pretty worthless without the price per ppv.

 

[BigHurt007]

This is insane...4 times GROSS revenue, wth? Who does that??? Unreal .....hopefully wme-img will have a dollar left to share with the athletes (not likely)... they must have some incredible growth strategies in store....

What exactly is insane about this?

 

[PatsFan1283]

interesting numbers...but pretty worthless without the price per ppv.

Don't think price per PPV has changed too much over the last 10-15 years though. About $40-60 per. Not too far off being indexed for inflation.

The numbers lately seem pretty bad if Rousey/McGregor aren't on the card. Obviously that is being pretty selective by taking the two biggest draws off the list but it if you can get 1mill+ buys and think you are only going to have to dish out a few million to your fighters then I'm not sure how long that is sustainable in a world where Floyd was getting 60-70 million for the numbers he was doing.

Not saying that was a main reason they sold but I do think keeping mega-stars from being in on the co-promoting is really going against market forces and may be unsustainable.

 

[MattyMatt]

What exactly is insane about this?

It's way overpriced, but hell it ain't my money, and those UAE folks have it to blow, so go for it...

PatsFan post are pretty spot on as well...

 

[razorbackpicks]

Companies are usually valued anywhere from 3-5 times their annual gross revenue. Now you get a lot more technical and start discussing debt and so forth, but general rule
of thumb for a short explanation is 3-5x gross revenue for a healthy fairly debt free business. .... Seems they split the number right in the middle and shook hands

 

[PatsFan1283]

4b divided by 600M would be closer to 7x revenue

Obviously entertainment/sports tend to get a premium.

Tough to say how sustainable that 600M is. Another thing is the deal with Fox is up after 2018 and if cable subscriptions continue a downward trend then the rights fees may not increase.

Someone like Netflix or Amazon could eventually get involved to air fights online though. Sure the new owners think there will be revenue streams from online streaming that haven't really been tapped yet.

Twitter just paid to air NFL games and wants to buy some NBA games as well, and they don't even have the subscription revenue that those guys do.

 

[MattyMatt]

4b divided by 600M would be closer to 7x revenue

Obviously entertainment/sports tend to get a premium.

Tough to say how sustainable that 600M is. Another thing is the deal with Fox is up after 2018 and if cable subscriptions continue a downward trend then the rights fees may not increase.

Someone like Netflix or Amazon could eventually get involved to air fights online though. Sure the new owners think there will be revenue streams from online streaming that haven't really been tapped yet.

Twitter just paid to air NFL games and wants to buy some NBA games as well, and they don't even have the subscription revenue that those guys do.

Yea, I obviously meant to say 7x, instead of 4x, meaning overpriced like I originally stated. They must have big things in store also as stated, because I can't justify paying the price they did, but what do I know, I'll stick to doing my local shows and enjoy it more anyways...

 

[Greenbacks]

Meet the new owners who paid $4 billion to buy the UFC

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It was announced on Monday that the Ultimate Fighting Championship had been sold for a whopping $4 billion to a group led by WME-IMG.

UFC co-owners Lorenzo and Frank Fertitta will be stepping away from the organization after the sale with UFC president Dana White still sticking around in the same role he currently holds within the promotion.
There are still plenty of questions to ask about the future of the UFC now that there are new owners in place for the first time in 15 years, but who are the people behind the sale?
Let's take a look at some of the key players that put together the funds to plop down $4 billion to buy the UFC.

William Morris Endeavor-International Marketing Group is a huge conglomerate that merged in 2013 after WME purchased IMG for a reported $2.4 billion price tag. WME already boasted an incredibly powerful slate of clients as a talent agency representing movies, television, music and more. Some of the clients represented by WME include Ben Affleck, Matt Damon, Oprah Winfrey, Dwayne Johnson, Justin Timberlake, Drake and Rihanna.

IMG is an international sports, events and talent management agency based out of New York. IMG hosts a number of big sporting events and also heads up the PBR -- Professional Bull Riders.
Since merging, WME-IMG have worked on a ton of crossover promotions combining the talent agency's impressive roster of talent with events and sports programming.
One of the names you'll hear the most during this UFC sale is Ari Emanuel, who is the co-CEO behind WME-IMG.

Emanuel is already well known within the UFC after helping to orchestrate the television deal that landed the promotion with FOX in 2011. He also had a hand in helping fighters like Jon Jones negotiate deals with brands such as Gatorade and Nike in the past.
Emanuel is a veteran agent, who started his career with Creative Artists Agency (CAA) as well as ICM Partners before founding his own company called Endeavor. Eventually in 2009, Emanuel along with co-CEO Patrick Whitesell led an initiative to merge the company with the William Morris Agency to create one of the largest talent agencies in the world.

Emanuel may best be known as the inspiration behind the character Ari Gold in the HBO series "Entourage". Famously the Ari Gold character was originally based on another agent, but after "Entourage" creator Doug Ellin met with Emanuel, he changed his mind about the creative process. Emanuel also made a push for Jeremy Piven to play the character when casting was being done for the show and he represents Mark Wahlberg, who the show was loosely based on when first created.
Emanuel is also the brother of Rahm Emanuel, who is the current mayor of Chicago and former chief of staff to President Barack Obama.

Patrick Whitesell is a former agent who worked with United Talent Agency and also served as the head of talent at Creative Artists Agency for six years. Whitesell eventually teamed up with Emanueal as a co-CEO after the merger between William Morris and Endeavor in 2009.
Whitesell's client list also includes a slew of "A" list celebrities including Ryan Reynolds, Denzel Washington and Jake Gyllenhaal.
Both Emanuel and Whitesell are known for being fierce negotiators and extremely passionate when doing business for their clients. WME-IMG already represents former women's bantamweight champion Ronda Rousey.

SILVER LAKE PARTNERS
Silver Lake is a private equity firm with investments in technology and many technology based industries. Silver Lake has invested in companies such as Dell, Go Daddy, and of course WME-IMG. Silver Lake reportedly purchased a 31-percent stake in WME as part of their investment portfolio with the company.
Silver Lake was a key partner in William Morris Endeavor merging and purchasing IMG in 2013 and remain financial partners with the agency now as well.
The Silicon Valley based firm famously purchased a controlling stake in Skype for a reported $1.9 billion before selling it to Microsoft two years later for $8.5 billion.

EGON DURBAN
A third name to associate alongside Emanuel and Whitesell is Egon Durban, who is a managing partner and managing director at Silver Lake. He also sits on the board of directors for WME-IMG.
If a major decision is being made at WME-IMG, Emanuel, Whitesell and Durban are the people making the call.
Before joining Silver Lake, Durban worked at Morgan Stanley's investment banking division while heading up investment opportunities in the technology industry.

KKR - KOHLBERG KRAVIS ROBERTS
A strategic investor in the UFC purchase, KKR is a multinational private equity firm that specializes in leveraged buyouts. Founded in 1976 by Jerome Kohlberg, Henry Kravis and George Roberts, KKR has been a part of some massive purchases over the years including a buyout of RJR Nabisco.
KKR has also made significant investments in industries such as health care, retail, energy and natural resources.

MSD CAPITAL
The company responsible for the investments involving Michael S. Dell, who is best known as the creator behind Dell Inc and Dell computers.
Dell is listed by Forbes as the 35st richest person in the world with a network around $19.8 billion.
MSD Capital has teamed up with Silver Lake previous in a sale to purchase EMC, a company specializing in cloud computing, information security and data storage. They also teamed up to acquire Dell Computers, a company Michael Dell started with $1,000 when he was still a teenager 30 years ago.