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UFC has never made more money and encountered as much eye-bulging debt as they are right now

By Zach Arnold | July 1, 2018

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Forgive me for not getting excited over a fight product that has long surpassed its expiration date.

The Bain Capitalization of UFC by its vulture investors is now complete. John Nash at Bloody Elbow notes a Moody’s report claiming UFC made over $700 million USD of revenue in 2017. The company’s current debt load is allegedly $2 billion USD.

With the new ESPN/Disney TV contracts, UFC is primed within the next five years to get flipped to another owner. Look at this impactful graphic created by Paul Gift regarding UFC’s PPV buys over the last decade:

If you chart stocks, you’ll immediately spot what looks like a “head and shoulders top” pattern. Given the dramatic change in the UFC business model, expect PPV buys to continue decreasing.

I don’t particularly have much interest in UFC at this point outside of the physical & financial health of fighters. On one battle front, fighter Leslie Smith had initially gotten a positive ruling in Philadelphia with a regional section of the National Labor Relations Board. Smith is trying to fight the independent contractor classification that UFC uses for all its talent. However, her case has now been transferred to The Swamp in Washington D.C. for “further review.”

The administrative state giveth and taketh away. You don’t need to be a rocket scientist to figure out the temperature for action against UFC in DC under Trump given that UFC’s owner was Trump’s former Hollywood agent and Dana White was enthusiastically promoted as a prime guest speaker at the 2016 GOP Convention. Putting Leslie Smith’s case on ice in DC is meant to send a chill.

What does interest me is UFC’s positioning in the macro sports content wars. It’s ESPN (with UFC, Top Rank, and Golden Boy) vs. former ESPN boss John Skipper at DAZN (with Matchroom Boxing & Bellator). Disney is paying a premium to try to thrive in the streaming business. There are no guarantees. It reminds me so much of mainstream American sports media companies throwing tons of cash at the MMA scene a decade ago to hire any and every writer only for everything to blow up in corporate faces. You have to get the money while the getting is good.

The calculation behind the DAZN/Bellator relationship is fascinating. Viacom is in huge turmoil with the Shari Redstone vs. CBS & Les Moonves court battle about the possibility of a remarriage between the two media empires. Using Bellator to test the profit margins in the streaming business is an interesting play for Viacom. Do they eventually cut a deal with Netflix or Amazon and risk their platform business model to become a pure content play? Bellator’s success or lack of success on DAZN will prove to be a worthwhile test case.

Topics: Bellator, Media, MMA, UFC, Zach Arnold | 5 Comments » | Permalink | Trackback |

5 Responses to “UFC has never made more money and encountered as much eye-bulging debt as they are right now”

  1. 45 Huddle says:

    I might be purchasing the PPV on Saturday. It’s the first PPV I have bought since UFC 220 which was in the middle of January. I’m at a point now that I will only purchase PPV’s for Lesnar, GSP, McGregor, and sometimes Miocic. If you notice, 2 of those guys are basically retired and McGregor doesn’t fight very often. The UFC has lost its ways. Not building any new stars. Stale product. Poor treatment of fighters. It has truly suffered with this new company who seems more interested in making money then doing anything good with the company.

    • Zheroen says:

      But 45 Huddle, you promised us all back in 2006 that once the UFC had a virtual monopoly on the MMA scene, it would become a major sport with household names and bigger market/mind share than hockey and soccer. Only Pride/Dream and Strikeforce were holding the sport back.
      What happened?

      • 45 Huddle says:

        Wow, bringing up stuff during the Bush era. Impressive.

        As I have said for a long time, MMA would be best with all of the fighters under one roof with a fighters union to create checks and balances. The fighters have been cowards on that regard. And the UFC use to care a little more about rankings. Now it is a circus with new ownership.

  2. RST says:

    Did you blame 8 years of no luck in court against the UFC on obo? But now everything that you dont get your way is always the fault of a phantom Trump tyranny isn’t it. How progressive boss.

  3. Diaz's packed bowl says:

    Dana spent more money on his son’s B-day party than the total fighter salary for ufc 227 shitshow!!! He can top his sons last birthday party with an unlimited budget, but when it comes to entertaining the world with his product its strictly second rate scraps.


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