Beyond the cost-cutting measures implemented since the start of the coronavirus pandemic, UFC parent company Endeavor has secured a $260 million loan to help sustain its faltering business.
According to reports from the Wall Street Journal, the term loan will supplement an existing $2.8 billion term loan and carry an interest rate of just under 11%.
Endeavor — a company that includes subsidiaries such talent agency WME IMG, On Location Experiences, Miss Universe Pageant, Professional Bull Riders, and the Ultimate Fighting Championship (UFC) — is saddled with a 4.6 billion debt burden owed to Silver Lake Partners and other private equity investors over the purchase of the UFC in 2016. Unable to proceed with their live events schedule due to the COVID-19 global pandemic, the organization is now struggling with its high debt load and limited revenue sources.
Endeavor’s financial problems has lead to a series of cost-cutting measures across the company, including plans to lay off or furlough 2500 employees, which accounts for one third of its total staff. The cutbacks are expected to save Endeavor $100 million in 2020.
The Wall Street Journal also reported that Endeavor’s revenue has fallen about 70 percent during the pandemic, excluding the UFC, which held a Pay-Per-View event last Saturday night in Jacksonville, Florida.
As such, the promotion continues to bring in revenue through a deal with ESPN and is expected to boost profits by between $150 million and $200 million in 2020.