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The $4 billion question: Is the UFC being sold?

UFC boss Dana White. (AAP/NEWZULU/M.D. MACKINNON)
Expert
11th May, 2016
5

According to a report from ESPN, the UFC’s owners are in “advanced talks” to sell the world’s most prominent fighting promotion for up to $4 billion, a claim company president Dana White vehemently denies.

Darren Rovell’s report claims WME/IMG, China Media Capital, The Blackstone Group and Dalian Wanda Group are in the running to take over the company.

White, the UFC’s figurehead, wasted no time responding to Rovell’s big scoop, telling Yahoo Sports “the UFC is not for sale.”

The 46-year-old promoter has shot down rumours of the promotion being sold for almost a decade now, but this time, reports will be harder to laugh off.

Rovell cites five independent sources have backed his story, and this comes after seasoned fight journo Jonathan Snowden first floated the story of the company’s possible sale in March.

Lorenzo and Frank Fertitta, the majority owners of the UFC, purchased the struggling company in 2001 for just $2 million, and when you think about it, have accomplished almost every goal they set out to achieve with this passion project.

Now, 15 years later, the $2 million investment is now reportedly worth $4 billion and has three distinct revenue platforms in place – pay-per-view, television and Fight Pass, their own digital streaming service.

Moreover, Zuffa LLC, the UFC’s parent company, have purchased all of their major competitors, assisted in legalising the sport in every US state, and have hosted major events in almost every country in the world.

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There’s no denying that the Fertittas are strongly behind the UFC. In the early 2000s, they were losing money by the fistful and didn’t abandon ship, even when it made financial sense to do so.

The brothers believed in the power of the three letters U-F-C when few others did. They fought for them and helped to build a sport that is now globally accepted.

Fans of mixed martial arts are forever indebted to the Fertittas for their gutsy move to stick in the UFC’s corner when they were on the ropes, but let’s not forget the casino executives are businessmen first and foremost.

If they intend to sell, common sense suggests they should strike while the iron is hot, and here in the second quarter of 2016, the UFC has never been hotter.

Lorenzo told CNN that the Nevada-based company netted around $600 million during the 2015 season alone, and with a UFC cast that includes pay-per-view magnets Ronda Rousey and Conor McGregor, it’s not crazy to imagine they’ll replicate or even exceed those numbers this year.

Chinese conglomerate Dalian Wanda Group – the world’s largest cinema chain operator, which owns Wanda Cinemas and the Hoyts Group – is reportedly the top bidder vying for the UFC.

The group has no ties to mixed martial arts but has a dedicated sports division, which has previously invested serious capital into stick-and-ball and track-and-field sports, most notably purchasing 100 percent equity in the World Triathlon Corporation for $650 million.

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At the time of this writing, this is still a developing story, but it’s been suggested that Wanda Group chairman Wang Jianlin – the richest man in China, according to Forbes – could own the UFC by July.

This comes just months after he purchased a 20 per cent stake in Spanish soccer club Atletico Madrid.

Given the layers and layers within this enormous multi-billion dollar company, it’s possible that a change in ownership could alter very little about the UFC’s day-to-day operations.

The behind-the-scenes movers and shakers, some of whom have been employed by the UFC since the 1990s, will almost assuredly remain in their current roles.

Even White, the UFC president who presently owns a nine per cent stake in the company, could remain on board as a well-compensated fight promoter, at the very least.

As noted earlier, White has denied claims of the UFC being for sale, but the bald-headed promoter has been known to play fast and loose with the truth in the past.

And, as always, when there’s smoke there’s fire.

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