Standard and Poor's Credit Report for UFC Gives Clues to Total Revenue

Without knowing Zuffa’s cut of the PPV buy and better understanding the public viewing situation (bars, casinos, other venues) these numbers could be dramatically off. I don’t think there is sufficient information for even a rough estimate presented here.

That’s a helluva thing to state authoritatively when Zak’s gone through all this trouble. Where are your numbers?

once you account for the revenue split with the PPV providers. Mind telling how you got it?

That would indicate that the UFC is getting a 60/40 split instead of the 50/50 most throw around.

Are are those online PPV’s 100% revenue for Zuffa?

Most large enterprises carry significant debt.

Let’s go with S.C.‘s number of 350M—-the WWE’s financials can help us out here (the only time I’ll use PROWRASSLIN in comparing MMA……because they are a public company with SEC reported numbers). Their EBITDA margin was 19.8%, and I would imagine the UFC’s is higher given that they have to pay their fighters less than the WWE actors, but rolling with that number you’d get an EBITDA of 70M.

The WWE’s current market cap is $1.06B giving them a EBITDA equity multiple of 11.3, I’d imagine that the UFC’s is higher given that they are in a better spot in their growth worldwide, but even that would give a simple valuation of 791M—-I’m 100% confident that the actual valuation is a lot higher than this, but even conservatively with the pure financial valuation techniques that would make the debt/equity a pretty palatable 53%. So yeah, the debt isn’t a problem.

From a creditor perspective, the UFC brand itself is worth at least 425M let alone any valuation of their current revenue, let alone any valuation of their projected future revenue.. The Dodgers had 440M in debt financing and they are not anywhere near as valuable as the UFC, though granted baseball is a much more stable business—-though hopefully the Fertittas/Dana have sweet pre-nups as that would apparently make it much safer.

To head off the question “well if they are doing so well, why do they even have debt??”, the answer is that their return has been almost guaranteed to be higher than the interest rates they are paying. Example: if I could guarantee you that I could get you 10% return on any amount of money you gave me, and you could take a loan out for 5%…..well hell you’d want to borrow an infinite amount of money because you’d be profiting 5% even after paying back the loan. This is essentially what banks do, they borrow money from their depositors and “make investments” at higher interest rates. This example obviously has its limits in that no one can guarantee 10%, or any, rate of return, but I don’t think anyone wants an academic explanation of “risk”.

Long story short, leverage in growth industries isn’t a bad thing, it’s a sign that creditors think the UFC is healthy.