Why Did Dana White Lead UFC 112 to the Desert?
by Nate Wilcox on Apr 7, 2010 4:06 PM EDT
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Yesterday there was a good bit of coverage about the possibility that bad weather in Abu Dhabi will impact the UFC's first outdoor event this Saturday at UFC 112. MMA Mania covered the story:
"I've always been terrified of doing an outdoor show. If it starts raining and the wind starts blowing ... right now there's no Plan B. The high possibility of rain happening... it's not gonna happen. It's not gonna rain there; we know it's not gonna happen. It would have to be crazy for it to rain in Abu Dhabi. Wind could be a factor. It's very dusty and sandy there. I'm worried about the wind."UFC President Dana White puts his fate in the hands of Mother Nature heading into the promotion's first-ever outdoor event slated for the Concert Arena at Ferrari World on Yas Island in Abu Dhabi. While rain doesn't come too often in the desert, it's not unusual for high winds and sandstorms to wreak havoc at a moment's notice.
Zak Woods also points out the unusual situation with the still under construction arena for UFC 112:
Speaking of the arena at UFC 112, tickets are going fast and Flash Entertainment has released additional tickets due to the "overwhelming demand". Of course, judging by the latest stadium photograph the stadium doesn't exactly appear to be a 20,000 or even 15,000+ venue. Still, it is going to be very interesting to see what kind of crowd is in attendance this Saturday.
Woods also points out the enormous cultural difference between the UFC's native Las Vegas, Nevada and the strict Muslim etiquette of Abu Dhabi:
For those who aren't up to speed with Arab and Muslim cultures here is quick refresher. Abu Dhabi may be one of the more liberal Gulf countries --then again, when your neighboring emirate is arresting people for kissing in public it isn't hard to be considered "liberal"-- and women are not required to wear the hijab (head scarf) but local women still wear abayas (the long black, flowing garb), which covers their bodies, heads and sometimes faces, as a sign of modesty. Obviously there are different expectations for Westerns in country but the Emirate's official English language tourist site states that, "[women and men] are advised not to wear excessively revealing clothing in public places, as a sign of respect for local culture and customs. This also applies to public beaches, where swimmers should avoid excessively revealing swimming suits."
Will Zuffa send the Octagon Girls in their boy shorts to walk the cat walk in front of a Muslim crowd that may be offended? Or will Chandella and Arianny wear different, more Muslim friendly attire at UFC 112?
So putting on a UFC in Abu Dhabi entails: 1) risking utter disaster due to weather; 2) putting on an event in an arena that will still be under construction at fight time; 3) Gate receipts will be low; 4) Cultural values in Abu Dhabi may impact the presentation of the fights.
That's on top of the normal hit in PPV buys in the U.S. that comes with the event being aired at 1pm EDT rather than the 10pm EDT that is the norm for U.S. events. Plus having Dana White, the Zuffa PR team and the fighters half-way around the planet from the MMA media is giving competitors like Strikeforce and Bellator a virtually open field to promote their events this week without having to compete with the UFC for attention.
And I'm not even bringing up the fact that the UFC has been absolutely starved for title fights to headline cards since UFC 100. Off the top of my head, UFC 102, 103, 105, 106, 108, 109 and 110 had no title fight headliner. I've blogged before about the erosion of the UFC's PPV numbers during this run.
And yet they suddenly pull up with not one, but two title fights for a PPV that is almost guaranteed to underperform for other reasons.
So just what the heck is Dana White thinking?
Admittedly, Dana and I are a little behind on our heart to heart chats lately, but I have a few ideas as to why the UFC is willing to invest so much and risk so much to put on their debut Abu Dhabi event:
- Cash Money -- Zuffa sold a 10% stake in the UFC to Flash Entertainment, a wholly owned subsidiary of Abu Dhabi. Some have speculated that the Fertittas' Station Casinos money troubles and the UFC's own significant debt obligations made this cash infusion a must.
- International Deal Brokering -- Zuffa is pushing this angle. Since international expansion has been such a huge priority of Zuffa's, the involvement and backing of a group of serious players from the UAE brings a whole new set of established relationships, especially in hard to reach, but potentially huge markets like India, China and Russia.
This last point is critical, especially following the news yesterday that the recent set backs the UFC has experienced in Germany were aided and abetted by Vince McMahon of the WWE working behind the scenes to sabotage his competitors. As we know from watching the UFC try and fail to break into the Japanese market or sign Russian superstar Fedor Emelianenko, Zuffa needs some diplomatic help in dealing with foreign markets.
It should also be noted that it's no coincidence that Renzo Gracie is making his long overdue UFC debut in this event. Gracie fought in the headliner of the infamous Pentagon Combat event in Brazil in 1997. That event was bankrolled by a group of investors from Abu Dhabi. Those same folks went on to found the Abu Dhabi Combat Club which puts on the world's most prestigious no gi grappling events. Read this anecdote from MMA Mania about Renzo's signing to the UFC:
"I was over in Abu Dhabi having dinner with the Sheik, Lorenzo [Fertitta], Dana [White], and Frank [Fertitta]. And Lorenzo asked me if I was done fighting or if I was planning on coming back. So I said to him, ‘is this an invitation, and he said ‘you bet it is.' It was that simple. We shook hands and here I am."
Clearly Renzo Gracie was an important middleman in arranging Zuffa's marriage with the UAE.
Will the alliance with Abu Dhabi pay dividends for the UFC? Time will tell.
-- photo via twitter.com/ufc
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The UFC already censored Dan Hardy's tatoo's for China....
Would it be a stretch to see…“Chandella and Arianny wear different, more Muslim friendly attire at UFC 112?”
Yes. Arianny said via Twitter she is on her way there. I can’t link since I’m on my phone. :-(
Be a man, not a child-Phil Anselmo
by ANance on Apr 7, 2010 4:36 PM EDT via mobile up reply actions
I don’t see what the point of them being there is if they’re not wearing something skimpy. Not trying to be sexist or anything, but it’s not like they do a whole lot.
I don't want to lick any butt. - GSP
But how will we know what round it is?!?!
We're just a million little gods causin' rain storms, turning every good thing to rust.
i don't see the point of them being there
whether they wear something skimpy or not.
is the average mma fan that sexually repressed? no offense to the girls themselves, but i find what they do and the fact that they’re still around truly pathetic.
They could do this:
New Orleans Saints - 2010 Super Bowl Champions. Unbelievable. Who Dat.
Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better. -Samuel Beckett
by Scott C. Broussard on Apr 7, 2010 6:20 PM EDT up reply actions
is this some kind of protest? count me in
We're just a million little gods causin' rain storms, turning every good thing to rust.
Technically protesting the ban on burqas in France, but they’re wearing clothes strictly condemned by burqa-wearers…
New Orleans Saints - 2010 Super Bowl Champions. Unbelievable. Who Dat.
Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better. -Samuel Beckett
by Scott C. Broussard on Apr 7, 2010 7:43 PM EDT up reply actions
too bad
all 3 have bodies that shouldn’t be hidden with a full body scarf, especially the one of the left
"It’s going to be like sex with a grizzly bear, you know, a lot of scratching and growling on both sides." - Don Frye
i wonder what the arab community will think since dana is advertising a “fight for the troops” in Afghanistan. or better yet, i wonder what the troops will think now that dana has gotten in bed with this terrorist bankroll state! Billionaire arabs from UAE, Yemen, Duabi, etc, etc. all funnel money straight to terrorist organizations. it isn’t far fetched to believe that some of the revenue from this UFC 112 will finds its way to the hands of those who wish ill upon the west. if so, dana and the Fertitta’s should be executed in public for treason!!! talk about a ppv, i’d tune in to watch that!!!
You should have your fingers chopped off so that you may never type again.
Sorry if my comment is ban-worthy.
"Well, yes, but I’m afraid I prematurely shot my wad on what was supposed to be a dry run, if you will, so now I’m afraid I have something of a mess on my hands." - Tobias Fünke
"There are just so many poorly chosen words in that sentence." - Michael Bluth
One of my favorite lines from the best TV show ever.
The UFC has proven time and time again that it will take a big financial hit to get into new markets. This show is a sign of respect for the investment and opportunities afforded by the sheik. Sometimes people don’t hear the music until you move in next door and start blasting it through your open windows.
Youre right.
This show is a gift to the Sheik and Flash Entertainment. I like the move, UFC are changing things up and I like the vision. This is a good launching point for UFC in the Middle East. I wouldnt be shocked if TUF Middle East is announced and the Ricardo Arona involvment is addressed.
If Russia attacked Turkey from the rear, Do you think Greece would help?
Just to clarify, PPVs may take a hit, but people can buy the UFC live at 1 PM EST, or at the normal 11 PM EST time as well.
Casual fans won’t even know the difference. If they want to have a normal UFC party and tune in at the regular time, they can.
1pm
I love afternoon events, I’ll be watching at 1 EST
by Jedi Mind Kicks on Apr 7, 2010 4:43 PM EDT up reply actions
My DISH guide also says I can order the fights at 4 PM as well. That’s 3 options – live and 2 same day delayed times, including standard PPV time.
I had a similar option for the German event as well.
I am not likely to beawake for 1:00 though nevermind hosting a party then.
The Sheik seems like a cool guy.
Hunting boars with automatic assault rifles. Bringing in an american fight promotion and buying a 10% share. My guess is he wouldn’t care about ring girls.
He seems to be apart of the younger, more liberal generation. Probably not up to him though. I’m guessing he still has to appease to the older generation which most likely answers to.
by HappyLittleTreez on Apr 7, 2010 4:34 PM EDT reply actions
Why exactly is Dana leading the UFC into the desert?
My guess would be that in order to sell the 10% they had to guarentee Flash a show in Abu Dhabi.
Now why did they sell the 10%. That depends on who you talk to. Some claim it’s for the international expansion, others will calim it’s because Station Casino’s are about to go under.What the truth is? Nobody really knows. Maybe a mix of both.
So what if this show does bad. The UFC has had bad shows before and will have them in the future as long as the UFC doesnt hit a wall where they cant get back they will be ok.
by bigdmmafan on Apr 7, 2010 4:37 PM EDT reply actions 1 recs
Th Fertitas have grown Station casinos from 18 casinos to 4 and they will have to fork up 85 million to hang onto 50% of those. We can’t blame this on Dana he is the 10% minority owner. It is the Fertitas playing Lawrence of Arabia in this case.
There is a story of what is going on here.
http://www.google.com/hostednews/ap/article/ALeqM5j45xkf13fFtgAABbKkyeRTbg_GZQD9ELUMM00
Selling part of the UFC had nothing at all to do with Station Casinos, they are two entirely separate companies. I posted a couple of articles on this towards the bottom.
Yes but the Fertitas need to get that money they are giving to the creditors from some where. That some where turned out to be in the middle east. They have been pouring money into Station for a while now and they don’t have 85million in their pockets currently.
1. How do you know what they do or don’t have access to? Frank Fertitta III was the highest paid executive in the nation in 2007(he made $147million in one year) and he just shelled out $30million for a vacation home last summer. Between the two brothers and the sister they may have $85million setting around as petty cash.
2. They didn’t sell their shares in Zuffa to Flash entertainment they issued all new shares to sell them. Thus that money went straight to the company not to the Fertitta brothers pockets. They can’t just move Zuffa assets to Station Casinos they are two separate companies.
by who me on Apr 7, 2010 7:55 PM EDT up reply actions 6 recs
Stop using logic.
It is amazing how many people spout shit off with no business knowledge. Recd.
CEO’s pay themselves with money they don’t have all the time. look at all the major corporations the gov’t had to bail out. there were companies with (-) net profit that were paying millions to incompetent ceo’s. big business owners and ceo’s try to get all the cash they can from their creditors, debtors and lean holders before they inevitably lose their business for good. for some reason bankruptcy courts cant touch the money ceo’s pay themselves to help pay off the debt’s each company owe’s. oh for the old communist soviet way’s of business, ceo’s didn’t pay themselves with money they didn’t have in those days!!
If you want to see Arianny in a burqa, then look at any other woman in a burqa.
New Orleans Saints - 2010 Super Bowl Champions. Unbelievable. Who Dat.
Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better. -Samuel Beckett
by Scott C. Broussard on Apr 7, 2010 7:44 PM EDT up reply actions 5 recs
“Obviously there are different expectations for Westerns in country but the Emirate’s official English language tourist site states that, “[women and men] are advised not to wear excessively revealing clothing in public places, as a sign of respect for local culture and customs.”
Does that mean that the fighters are going to fight in wet suits??? But seriously, it will be interesting to see if the fighters get to pick their own walkout music for this one. Or if the UFC will just use generic music like on their DVDs.
Be a man, not a child-Phil Anselmo
by ANance on Apr 7, 2010 4:45 PM EDT via mobile reply actions
I’m excited for this event more for the answers to these questions than a number of the fights themselves. Having to do business overseas I’m always interested to see how much concessions Zuffa had to make to have their product sold in UAE, it should be very interesting.
Also, the seating discussion has already been debunked has it not? There will be over 15k seats given someone counting and estimating from the photos given.
I think it’s safe to assume that either the gate will be really high, or there will be some other cash getting sent to both zuffa and the fighters for this card happening here.
There have been talks about several fighters who get a cut of the PPV avoiding fighting overseas due to lower numbers, and I remember Anderson even having hangups about fighting in the US without big draws, so i doubt that zuffa and co (particularly silva) would fly across the world to do aan overseas pPV in the desert without some financial compensation.
Fighters seemed to be clamoring to be on this card, so I am assuming you are correct and some extra cash was being thrown around as an incentive.
there are a lot of non-cash incentives involved too i would say
The UAE is a high profile area, being at the forefront of the invasion into a rich fan base can pay dividends in the future.
This is a big step and a big deal. Maia and Frankie are pretty lucky they’re getting their shots at this exact time.
First thing is is that my very limited knowledge of the Middle East is, well, limited. But, I’m under the impression that many ME countries basically isolate small areas for “Western” visitors, where they can engage in various forms of non-Muslim debauchery. My guess would be that Yas Island falls into this category, but I have no evidence for that guess.
As for money, one thing to keep in mind is that – worst case scenario – Dana and the Fertittas got an infusion of cash without an IPO (i.e. going public with the UFC, which would have major implications for the UFC). Again, that is worst-case scenario. Better – and more realistic – scenario is that the UFC got a new partner with a ton of extra cash that can both open doors to a new region and will front the money for additional elite BJJ fighters (eg. ADCC competitors) that the UFC is reluctant to sign because many perform poorly (see Alberto Crane and the most recent Gracie, who I’m intentionally not naming just to reiterate the point that most of you won’t remember his name). One indication of that the second scenario is more likely is Renzo Gracie’s presence on the card.
There’s more I want to say, but I’ll end with this instead… for UG fans, this opens the door for a merger with Deghani and UFC Iran!!!
by mma_critic on Apr 7, 2010 4:56 PM EDT reply actions
Yas Island is where the Formula One race is held
and the tourists present at that event last year didn’t appear to be making any effort to be fully covered.
I like using semi-colons; they make me feel smart.
Nothing at all! Nothing at all!
"Someone is WRONG on the internet. What do you want me to do? LEAVE? Then they'll keep being wrong!"
-Randall Munroe
by pdl on Apr 7, 2010 7:10 PM EDT up reply actions 7 recs
UFC is doing the right thing.
1. Flash Entertainment gets a show in their home.
2. Flash helps the UFC get into new markets in Asia.
3. UFC 111’s 700k – 800k buy rate will offset UFC 112’s 250k – 350k buy rate.
- Fuck WWE and their kid entertainment. I watched their Monday Night Raw on Monday…. what crap. No grow adult should get into that junk. UFC is kicking their butt worse than I thought. Vince is freaking scared.
by snakecharmer1340 on Apr 7, 2010 5:02 PM EDT reply actions
of course he is.
thats why he is sabotaging the european efforts. he is a sad, pathetic, little man who knows his product is obsolete and a thing of the past and he cries himself to sleep each night worrying about it. sad, pathetic, little man….sad, sad, sad.
by Opposites Attack on Apr 7, 2010 5:05 PM EDT up reply actions
That Raw was crap, It was in my home town. I almost went to it just for something to do. Glad I didn’t.
Be a man, not a child-Phil Anselmo
by ANance on Apr 7, 2010 5:06 PM EDT via mobile up reply actions
*facepalm*
Actually I happen to enjoy both… well, WWE+ and UFC.
+ It depends on the show. Screw RAW.
Instead of Octagon girls....
…They should hire some exotic belly dancers and snake charmers to perform between rounds.
"If I wanted to spend a half hour between two hairy legs I'd go to your mother's house." -Don Frye
After seeing the headline, I have visions of Dana White riding a sandworm at the head of an army of fighters wearing stillsuits.
Sergio Non,
MMA writer, USA TODAY
http://mma.usatoday.com
I don’t know what’s worse, your Dune reference or the fact that I immediately knew what you were talking about
We're just a million little gods causin' rain storms, turning every good thing to rust.
by Anthony Pace on Apr 7, 2010 6:20 PM EDT up reply actions 1 recs
For he is the Kwisatz Haderach!
watchkalibrun.com
by Zak Woods on Apr 7, 2010 7:51 PM EDT up reply actions 1 recs
I can’t wait for the first UFC in space
by RobertGBP on Apr 7, 2010 6:17 PM EDT reply actions 6 recs
already got the poster for that one
We're just a million little gods causin' rain storms, turning every good thing to rust.
but that's only if Sokodjou makes a comeback
We're just a million little gods causin' rain storms, turning every good thing to rust.
by Anthony Pace on Apr 7, 2010 6:24 PM EDT up reply actions 1 recs
It's funny..
Most of the reason Maia is even on the card is because he is well known there, and has little to do with his contender status.
right, because there were tons of better options around after Belfort got hurt that were passed over for this reason only.
by Phildo on Apr 7, 2010 6:42 PM EDT up reply actions 1 recs
Chael could have pulled it off I think.
by Polyhedron on Apr 7, 2010 7:30 PM EDT via mobile up reply actions
No. Maia is not “well known there”. At all. On any level. He’s there because Vitor’s injured, Sonnen couldn’t make the turnaround in time and Marquardt just got spanked.
People are acting like the crowd is going to be full of Arabs with a great appreciation of BJJ, rather than a bunch of Western expats, rich kids and military with a sprinkling of Emiratis.
they wont take a PPV hit
That’s on top of the normal hit in PPV buys in the U.S. that comes with the event being aired at 1pm EDT rather than the 10pm EDT that is the norm for U.S. events
On all the commercials they are saying its on at 10PM, almost like they are trying to keep it on the down low that you can get it at 1PM. All the bars in my area are showing it at 10PM, and if UFC 111 is any indication alot of people who go to the bar to watch fights (like me) get pissed when the place has no room. So they end up going home and ordering it.
I <3 Hardy
by KingAtRock on Apr 7, 2010 6:44 PM EDT reply actions 1 recs
But a lot of people will be see results on the scroll of ESPN or online, too
We're just a million little gods causin' rain storms, turning every good thing to rust.
maybe some but not most.
most casual fans are frat boys or the typical “Roman” neither of which will be watching much TV or be on the internet on saturday.
I <3 Hardy
live is always going to do better than taped. Do you have some other reason why every other tape delayed card has done worse than the live ones?
I tend to agree. The taped cards – since they are available live somewhere in the world – generally end up on some torrent site before the taped PPV even airs. And UFC fans are generally young white men – the same demographic most prominent on the internet.
I like using semi-colons; they make me feel smart.
and most likely to watch SportCenter
We're just a million little gods causin' rain storms, turning every good thing to rust.
most MMA fans in Florida that I know aren't MMA fans they are UFC fans that like to have a party get really drunk and watch two guys beat the shit out of one another.
maybe thats just Florida though.
I <3 Hardy
Haven’t they tended to be weaker cards?
Bolts from the Blue // "He looks like a catfish" - Nick Hardwick on Brandon Siler
Bloody Elbow // " looks like your comment violated rule #4. and it’s a heck of a rule, rule #4" - Kid Nate
the UFC expanding globally is some pretty exciting shit.
I am very curious to see what will happen with the ring girls, wtf are they gonna be wearing?
"Live fast, die."
Silva vs Maia is not as competitve as I would like but neither was Silva vs Forrest.
Watching Silva destroy Forrest was awesome. Silva makes former champs look like chumps. It’s a pleasure to watch. I’m down.
by snakecharmer1340 on Apr 7, 2010 7:15 PM EDT reply actions
On Station Casinos and the Flash entertainment money(it would be nice to finally put that one to sleep):
It "should be very simple for people to get" that Zuffa and Station Casinos are "totally separate companies," he said.
"There’s no connection other than the fact that me and (brother) Frank (Fertitta) own an interest in both companies," Fertitta added.
Fertitta and his brother, Station Casinos Chairman and CEO Frank Fertitta III, along with high school friend and current UFC President Dana White, bought the UFC in 2001 for $2 million.
The two brothers own 81 percent of Zuffa. Although Lorenzo Fertitta oversees the company’s operations, Frank Fertitta III has no operational role in Zuffa.
Lorenzo Fertitta sits on Station Casinos’ board as vice chairman, but he resigned as Station’s president to focus on Zuffa in June 2008.
Although Lorenzo Fertitta repeatedly emphasizes that the sale to Flash was a strategic move to help the UFC enter the Middle Eastern and Asian regions, fight blogs immediately began trying to make a connection between the investment and a possible investment into Station Casinos.
Abu Dhabi controls the world’s largest sovereign wealth fund, with an estimated value of between $400 billion and more than $875 billion.
The issue reached The Wall Street Journal’s "Bankruptcy Beat" blog Jan. 13.
Paul Thistle, a professor and chairman of the finance department at the University of Nevada, Las Vegas, said the division of the two companies is not unusual among entrepreneurs who often set up separate corporations to protect themselves in case one investment goes bad.
"If it was all one company, Station and UFC, then they would have to use the money from UFC to pay off the debt from Station Casinos," Thistle said. "They’d have to legally because it’s all been borrowed by one company. This way, they’ve got two separate companies, so that actually protects the assets of UFC from the financial problems they’re having with the casinos. That is really what it comes down to."
Flash Entertainment’s investment will not benefit Station Casinos, but it is already paying dividends for the UFC.
Now, who is getting this money?
The 10% purchase is dilutive to the current shareholders (the Fertitta Brothers and Dana White). As a result of this transaction, the Fertittas now own 40.5% each (down from 45%), while Dana White now owns 9%. Flash Entertainment is now the third largest shareholder at 10%.
Zuffa, LLC issued NEW shares in the company to complete this transaction. This means that White and the Fertitta brothers didn’t sell any of their shares in the company – they were simply diluted.
If this were a case of the current shareholders "cashing" out, then they would not have issued new shares in the company. They simply would have sold a chunk of the existing shares.
So, all of this money is going into the company. What happens to the money once it is in the company is anybody’s best guess.
The UFC may simply be building up their cash reserves. The UFC may be planning on some kind of an acquisition. Or, maybe the UFC is going to pay down a substantial portion of the $450 million dollars in debt that they currently have. Only they know the answer to that question.
Some have said that the Fertitta brothers may have done this transaction for a reason related to Station Casinos, which is currently in Chapter 11 bankruptcy.
This doesn’t make sense to me though – if they were planning on trying to raise cash to make an offer for Station Casinos via the bankruptcy process, then why would they have issued new shares in Zuffa, LLC to Flash Entertainment? Why not just sell a portion of their existing shares in the company?
http://www.mma-king.com/2010/01/12/analyzing-the-ufcs-sale-of-a-10-stake-to-flash-entertainment/
Not necessarily, the only reason why Payout heard of the dividend was due to the loan and the rating that was applied to it due to Zuffa’s own announcement..
As Zuffa is a private held entity they don’t have to announce any dividend that was paid out that came from the liquidity injection from Abu Dhabi.
watchkalibrun.com
The terms of this agreement came out. So what you are saying is that the Fertitta’s went through an elaborate scheme to create new shares in Zuffa and sell them to Flash and then has a secret dividend payout to get the money to cover Station’s bankruptcy that may not even go through till this summer? Why go through all that trouble when all they had to do was sell some of their shares and keep the cash?
your misunderstanding why the above mentioned dividend was public. It had nothing to do with reporting. It was made public by Zuffa and a loan rating firm. It wasn’t reported by an intrepid journalist.
My understanding is that Zuffa can pay out dividends to ownership without disclosing it to the public.
watchkalibrun.com
No I understand that, the point was why would they go through all that trouble to create an elaborate scheme to issue new shares, have Flash pay Zuffa for them and then pay themselves a huge dividend when if they needed money all they would have to do is sell some of their own personal shares and pocket the money? It just doesn’t make much sense to go through that kind of effort when if they needed money all they would have to do is sell existing shares.
Could they do all that? Yes, but why would they go through that much trouble instead of just selling some personal shares? We can weave a complex conspiracy laden path to just about anything but why would they bother when if they needed personal funds there was a much simplier way to do it?
“elaborate scheme” diluting your shares is not really elaborate scheme. Anytime you sell stock you are doing it to raise revenue. The question is why is Zuffa raising revenue in the range of $100-150 million dollars?
The sale of a new stock plus the news that the Fertitta’s will offer a substantial infusion of equity makes a very simple juxtaposition of a reason for the sale.
Besides, for the Fertitta’s it is smart to keep the same number of shares as before in case they want to sell individually in the future. Not to mention there is a PR element to this. If the owners begin selling original shares vs. offering new shares it opens the door for people to ask questions regarding the health.
watchkalibrun.com
Plus, we have to consider the Capital Gains tax if they had just sold their own stock.
watchkalibrun.com
And what would be the difference between them selling private shares and them getting a dividend payment from the company? Someone is still going to end up on the hook for a capital gains tax be it them personally or the company (and for companies the rate is more)not to mention that they will have to pay taxes on a divident payment too.
Not anytime you sell shares of a private company are you doing it to raise revenue sometimes they do it to bring in new people to the company. This isn’t stock in a public company this is shares in a LLC, they aren’t saving up stock to sell later they are bringing in a new partner into their private company.
As far as the simple juxtaposition on this the Fertitta family (which also includes the sister and her husband who have nothing at all to do with Zuffa)has been talking about a cash infusion into Station for damn near a year now it’s not like this is something new here. The majority owner Colony Capital manages something like 30 billion dollars worth of investments and has hundreds of millions in liquid funds at hand yet no one ever seems to mention the people who own 75% of Station Casinos. Wouldn’t the simplist juxtaposition be that the majority owner with all the cash would just take care of it?
As far as the PR element of this goes what PR, damn near everyone thought they were selling their own shares to start with and no one can keep the story straight anyway. Hell they have been dogged with stories about them selling Zuffa to save Station for darn near a year by people who didn’t even know they are only miniority owners in Station Casinos. How would everything being the exact same except them selling their own shares change the PR situation? As you have pointed out it’s a private company they don’t have to make the details known so why would they go through the trouble of all of this then?
I fully agree that there is nothing unusual in keeping the companies separate. But the Fertitas have been pouring money into Station for a while now trying to get the creditors off their backs and they very likely don’t have 85million just sitting around to make this deal happen. By putting $100M into the UFC which is currently half a billion dollars in debt it gets easier to borrow that money using their shares as collateral.
Also note that your story was from January where as the new offer to the share holders wasn’t made until the end of March. There is a good chance that even that offer will be rejected because there are a large number of debt holders who think they are getting screwed in the deal.
The Fertitta’s aren’t even the majority owners in Station Casinos and when have the ndumped any equity into it recently? Yes they have been trying to float a deal for this bankruptcy but why would they inject cash before the bankruptcy was over into a company they only own 25% of? Of course there is also this huge assumption that they don’t just have the cash and I’m not sure where that is coming from, has there even been a rumor of any of the family being in personal financial trouble?
Brothers and company executives Frank Fertitta III and Lorenzo Fertitta, and sister Delise Sartini and husband, Blake, will receive a combined $494.8 million for their remaining company options, unvested restricted stocks and share holdings at the close of the $5.7 billion buyout by Fertitta Colony Partners.
They will also invest approximately $870.5 million worth of remaining stock toward a 25 percent equity investment in the joint venture with Los Angeles-based private equity firm Colony Capital.
Colony Capital will contribute a cash investment of $2.6 billion for a 75 percent equity share of the new company, which will still operate as Station Casinos.
It’s one thing to claim ignorance the first couple of times, but “who me” has refuted the entire “OMG FERTITTAS NEED MONEY SO THEY’RE BLEEDING UFC DRY” thing in a well reasoned, well referenced way in every one of these threads, so I’m not sure why the site writers continue to be so willfully ignorant of the information he’s been sharing.
As for the tape delay, I honestly didn’t realize it wasn’t airing at the normal time until a friend mentioned it. I thought they pulled some clever scheduling like the Australia card and kept it at the normal time. The thing is, it WILL be airing at the normal time, just like every other event in a timezone that didn’t allow it to air live.
The last couple of Europe PPVs didn’t sell great, but I think the tape delay had less to do with it than the fights (Franklin-Silva in Germany, Franklin-Okami in Belfast). There is tons of interest in this card from the casuals I know, who could have given two shits about, say, the Australia card, which aired live.
I could be wrong, it wouldn’t be the first time but man I just wish someone would come up with something that actually has some backing or at least all it’s facts straight. Heck the more stuff I read on this the more I think the Fertittas are actually using the whole bankruptcy thing to make money and gain more control over Station not to desperately hang on to it.
Heck lets look at the link posted towards the top of the discussion:
http://www.google.com/hostednews/ap/article/ALeqM5j45xkf13fFtgAABbKkyeRTbg_GZQD9ELUMM00
Under the new plan, the Fertitta brothers will pay $85.6 million in cash for a 50 percent stake in the four casinos, then sell a 4 percent share to Colony Capital LLC.
So not a cash infusion it’s them buying a bigger stake in four of the casinos and then selling 4% back to Colony for an undisclosed price(which for all we know could be $85.6 million dollars). They own 25% of Station now and they could end up owning 46% of the new Station Casinos when it’s over. But wait there is more:
The Fertittas would manage the properties under a long-term deal, according to the plan.So not only would they increase their stake in the new debt free Station Casinos coming out of bankruptcy they would still be in charge too(and most likely getting paid to manage those properties). and were not done yet:
Marc Falcone, chief financial officer for Fertitta Gaming, said the Fertittas would try to buy the assets to be sold.So the Fertitta’s are looking at selling 14 Casinos to themselves in order to get out of Bankruptcy…. Seriously does that sound like a family that is having a money crisis? If they could pull this off Fertitta gaming could end up owning most of what Station had before(and not just 25% of it) and have those casinos free and clear out of bankruptcy. These are cut throat billionaire moves not a couple of guys so desperate for 85million to save their company that they sold a piece of their other company and took the money away.
“Frank and Lorenzo Fertitta remain keenly interested in these properties, and Fertitta Gaming would like to aggressively pursue the acquisition of these assets,” Falcone said.
Will all that play out that way? Who knows there are other players at work here in this but it sure doesn’t sound like these guys are desperate or short on cash now does it? They seem to be wheeling and dealing and playing the system pretty hard and may come out of the bankruptcy richer than they were when it started.
Every time I read something about this bankruptcy I don’t see desperate Fertittas fighting to stay above water I see Fertittas playing the system to increase their own personal wealth and control. If somebody finds something that says the Fertittas are broke and desperate then by all means share it but I have yet to see anything yet that doesn’t point to these guys working the system and filling their pockets.
I didn’t think it was possible for Nate to reach anymore than he has but this post proved me wrong. Honestly Mr. Fantastic would be proud and probably thrown out his back by now.
The Fertittas needing money for station casinos nonsense has already been squashed, so is the idea that the UFC is starving for anything considering that even on their worst selling shows they make alot of money.
Yet instead of writting several paragraphs about how big a hit UFC 111 was all that gets is a short note. While continually going on and on about how the UFC is in trouble seriously shits embarrassing how wrong you continue to be about almost everything.
wonder what the octagon girls will be wearing?
because i can’t imagine that they’d be decked in the shorts that they usually have on
You can't be serious with some of the points you make.
2) putting on an event in an arena that will still be under construction at fight time
Are you serious? The UFC just held a press conference which you posted a blog about earlier and you have doubts as to whether the construction will be finished before the event.
The event organisers in Abu Dhabi are not amateurs to putting on live events. Look up their record and you’ll see the events they have put together.
Why create drama where there isn’t any?
"I'm Nobody's FanBoy" - higgledy-piggledy
by higgledy-piggledy on Apr 8, 2010 5:14 AM EDT reply actions
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