Following a difficult year for the UFC, where injuries and a slew of lackluster pay-per-views events have become characteristic, the promotion has suffered a significant decline in overall earnings.
Major credit rating agency Standard and Poor's (S&P) announced on Wednesday that the UFC parent company Zuffa, LLC is expected to decline 40 percent in their EBITDA (earnings before interest, taxes, depreciation and amortization). The recent revision shows that the decline is actually 10 percent higher than originally anticipated.
As expected, the promotion's earnings decline will have a noticeable impact on their credit rating. Zuffa's rating has already been downgraded from a BB to a BB-, and will not rise until the promotion has a noticeable increase in business.
"Higher ratings would be dependent upon contractual broadcasting revenue increasing to a level that significantly mitigates the negative cash flow impact of event risk from potential future cancelled and rescheduled events," stated the report (via MMAJunkie.com). "Although unlikely over the next few years, we could consider higher ratings if we believe Zuffa will sustain debt to EBITDA below (three times) on average."
The S&P's recent revelation came shortly following the UFC's ambitious 2015 schedule, which is expected to feature an array of worthwhile events and championship fights in the first quarter of the year.