8 ms·

U.F.C. Sells Itself for $4B

71 points by philangist 10y ago

rrggrr 10y ago
Either the UFC $4B valuation is way too high, or Disney stole the Star Wars franchise from Lucas films. The disparity in revenue on a historical or annualized basis is huge. http://fortune.com/2015/12/24/star-wars-value-worth http://fortune.com/2015/12/24/star-wars-value-worth
- slg 10y ago
  Sports assets costs huge amounts of money and their value will only continue to increase as sports becomes the only real televised media that requires live viewing. In team sports, the top teams are generally valued in the $2-3 billion dollar range. This deal basically equates all of UFC to the cost of two middle of the road NFL teams or two of the more valuable NBA/MLB teams.
  - wesd 10y ago
    The only difference between UFC and other leagues is that UFC only has 100 million per year guaranteed income from TV rights. Most of of their revenue (600 million last year) is based on gate and pay per views which can fluctuate based headlines and injuries etc.
- showerst 10y ago
  I've heard that Lucas sold to Disney over others who offered way more because he though they could best steward the franchise going forward.
  - leoc 10y ago
    Since Disney bought Pixar and John Lasseter took on a stack of top Disney roles, I assume that Lucas felt this was the closet he could get to handing Star Wars on to his old Lucasfilm colleagues.
- timdierks 10y ago
  The linked article treats revenue as value, which is obvious BS. The value of Lucas to Disney is much higher than the $4B price tag either Lucas or UFC yielded, but a lot of that stems from Disney's amazing ability to execute on it. UFC seems more capable of standing alone as a business.
- mmanfrin 10y ago
  Star Wars is very valuable, but I think you overestimate -- $4bil does not factor in the cost of making new movies, which is in the hundreds of millions. Consider another way: had Disney not bought Star Wars, do you believe they could have built a franchise or franchises of a similar money-printing status for that $4bil? Pirates of the Caribbean have earned close to $4bil: http://www.boxofficemojo.com/franchises/chart/?id=piratesofthecaribbean.htm http://www.boxofficemojo.com/franchises/chart/?id=piratesoft... UFC is a running institution that other parties work to endure and build. Gyms find and train fighters (UFC does not need to participate in this). Those Gyms hype fighters and build fanbases that feed back in as a tributary to UFC. 8x rev for a quickly growing sport franchise that essentially 'owns' fighting outside of Boxing is not terribly high a valuation.
deleted 10y ago
[deleted]
ctvo 10y ago
I'm an MMA fan who grew up watching Pride (Fedor, Shogun, etc.). I never became a fan of the UFC. Little things like the lack of production value for the graphics, the commentators (Mike Goldberg makes me cringe), to the need to use ring girls bothered me. I couldn't get over how low class and over commercialized it felt.
neves 10y ago
I'm Brazilian. UFC is a big success here. Sometimes we think that Humanity is evolving, but then we see that we are back to the gladiators era. This stuff makes me really sad:-(
- JayHost 10y ago
  I imagine UFC fighters will have bad brain damage when they get older so while "Voluntary" and "lots of money" are decent arguments... Do these people know what they are getting themselves into and how does that compare to Porn? Feel free to answer however... I'm genuinely curious.
  - douche 10y ago
    If anything, it looks less dangerous than regular boxing, or an NFL wideout going over the middle and getting laid out by a strong safety.
  - hyperion2010 10y ago
    Compared to boxers the UFC guys experience much less brain related trauma because fights usually end after a single blow to the head instead of 10+.
  - antoniuschan99 10y ago
    It's quite sad, it seems to be on the same level as wwe or boxing. Mark Coleman seems to be deteriorating really fast: https://www.youtube.com/watch?v=IFkw1YyipIM https://www.youtube.com/watch?v=IFkw1YyipIM
    - MRSallee 10y ago
      Thanks for linking this video. I had no idea Coleman was in this shape. He's just 51.
      - antoniuschan99 10y ago
        Yea I know eh? And Randleman died earlier this year too :(. Have you heard stories of Roger Mayweather wandering around and getting lost? Hes deteriorating really fast as well.
ourmandave 10y ago
They bought it for $2 million. And then poured time and money into getting it considered a legitimate sport, spun off a reality show, promoted it's stars, and cranked out the merchandise. Branding 101, etc.
- icpmacdo 10y ago
  They brought it to this point but my hope is now the new owners can turn it into a more legitimate sport. As an example right now the UFC is setting up a fighter named Dan Henderson to fight for the middle weight title just because its a rematch with the current champ Michael Bisping and is a big money making opportunity for the company. If you look at his record[0] though he's 3-3 in his last 6 fights and is passing people much more deserving of a title shot[1] if the new owners have a more defined system for championship fights it will eliminate the biggest issue I think the UFC currently has. These new owners are in a position to make buckets of money. There online subscription service FightPass is apparently super popular and I could see a new tier being added they would include the PPV cards for $30 or $40 a month. I hope Joe Rogan stays as a commentator even though he has said he will leave if the company sell's. [0] https://en.wikipedia.org/wiki/Dan_Henderson#Mixed_martial_arts_record https://en.wikipedia.org/wiki/Dan_Henderson#Mixed_martial_ar... [1]https://en.wikipedia.org/wiki/Ronaldo_Souza#Mixed_martial_arts_record https://en.wikipedia.org/wiki/Ronaldo_Souza#Mixed_martial_ar...
  - thinkpad20 10y ago
    Yeah I'm a Hendo fan but his title shot is pretty ridiculous. It's a great storyline and a great last hurrah (and who knows, he may beat Bisping as he did a few years ago). But there are so many others who should be ahead in line. Henderson isn't even the Sherdog top 15 at MW...
  - proc0 10y ago
    This is why currently the UFC is more like WWE in that respect. They care more about the marketing then about the sport. No big league team sport would do this in a championship. The pairing of contestants has to happen in a predictable system that rewards skills within the sport itself. Unfortunately whenever this is mentioned, fanboys like to argue that it comes down to selling tickets etc., which is true unless you care about the sport and its integrity. As a martial artist I would much rather have an unpopular tournament that stays true to its core values for the sake of promoting the sport as an art form, even if this means that the champion will have the most boring style of fighting (in fact, if there ever is a champion that has a boring style that would indeed be interesting).
salimmadjd 10y ago
UFC is a bit like NFL except instead of just a 3-4 month season, it has a 12 month season and it has international appeal. However, unlike NFL it doesn't have a league that can control expansion or prevent others to compete in its market. In other words, UFC is a brand and it's a brand that is not fully understood and it's hard to predict what the loyalty to this brand is. So the buyers are taking a big risk. They're buying into UFCs reach via FOX, etc. But the market is prime from other players to take away market share.
- bproper 10y ago
  At this point, however, they have built an interesting business beyond their own league and live events. They have a subscription service - $10 a month - that has both the biggest library of important MMA fights and acts as the streaming platform and distributor for dozens of smaller leagues. http://www.theverge.com/2016/7/8/12122826/ufc-200-sale-streaming-fight-pass http://www.theverge.com/2016/7/8/12122826/ufc-200-sale-strea... The UFC is even branching out to stream more niche combat sports that aren't MMA. Because they were banned from television for so long, they were forced to focus on the digital side of the business, and it is now paying big dividends.
- buckbova 10y ago
  UFC has worked hard to scoop up the competition like strike force and others. They also have strict contracts with their fighters to keep them from competing in other leagues. There's been several anti-trust lawsuits already. http://bleacherreport.com/articles/2299031-ufc-sued-by-fighters-in-class-action-lawsuit-latest-details-and-reaction http://bleacherreport.com/articles/2299031-ufc-sued-by-fight... http://espn.go.com/mma/story/_/id/12037883/antitrust-lawsuit-filed-ufc-parent-company-claims-monopoly http://espn.go.com/mma/story/_/id/12037883/antitrust-lawsuit...
  - aidenn0 10y ago
    I'm surprised those contracts are enforceable without a CBA in place.
seanalltogether 10y ago
The success of the UFC is fascinating to me. I really disliked the culture of MMA back in the early 2000s, but nowadays I love the sport. The technical skill of these guys fighting is amazing, and the near monopoly of the UFC has actually created a situation where big fights are constantly happening, rather then the years of negotiation that some boxing matches have required. As ownership now diversifies among several groups, so will the focus of the UFC, and I'm curious how that will affect things going forward.
- danso 10y ago
  I'm glad I grew up in the age of Karate Kid movies, when having a black belt was enough to scare kids from beating me up in school. I remember how the first UFCs utterly demolished the movie-mythos of Kung fu/karate, as Royce Gracie and other grapplers made strikers look rather impotent. I kind of missed the early days of UFC, when things were much more no-holds-barred. There weren't rounds or time limits or weight classes (for the most part), which meant that Royce had to beat an opponent 80 pounds heavier for the championship (Dan Severin, but I swear I thought Gracie had to beat even heavier opponents [0]). The flip side was that watching 20 minutes of one guy sitting atop another was not very compelling, and probably unfeasible as pay per view TV. [0] http://www.gracieacademy.com/news/gracie-breakdown-royce-gracie-vs.-dan-severn.asp http://www.gracieacademy.com/news/gracie-breakdown-royce-gra...
  - feklar 10y ago
    The Karate guys in the UFC and cleaning up these days like Stephen 'Wonderboy' Thompson. Early MMA/UFC until recently was battle of the PEDs Royce was juiced to the gills in those marathon early matches. Selling UFC right now was a good exit, the barrier to entry has fallen where competitor promotions can easily move in now since early UFC did all the arduous regulatory lobbying to legalize these matches and create a PPV market.
    - zarkov99 10y ago
      Royce was juiced to the gills? How do you figure that? He looked as scrawny as ever.
aljones 10y ago
So about 2 NBA teams.
- deleted 10y ago
  [deleted]
- mrtron 10y ago
  Yes, so pretty amazing. And potentially a really high ceiling from here.
  - dajohnson89 10y ago
    Without knowing the balance sheet, etc, I consider $4B kinda low for what is effectively a pop culture phenomenon.
cm3 10y ago
I didn't know what UFC is, so looking it up I saw that there's a European version which has teams competing. I can't tell how legitimate it is, since it also has teams comprised of seemingly football(soccer) hooligans. If so, it sounds like a better stress relief than engaging at a football(soccer) match. https://teamsfight.com/ https://teamsfight.com/ https://www.youtube.com/c/teamsfight77/videos https://www.youtube.com/c/teamsfight77/videos
- sliverstorm 10y ago
  Never participated in MMA, but when I trained BJJ (which is a big piece of MMA), was pretty stress relieving.
samfisher83 10y ago
I think the athletes in the UFC are kind of getting screwed. Floyd Mayweather made more money in one fight than every UFC athlete has made combined since the UFC started.
- krelian 10y ago
  The thing is Floyd Mayweather is practically the only fighter in that position. He had a contract where he made 40 Million on each of his last 6 fights but for a "normal" fighter a pay of just 2M - 5M is considered an excellent deal.
- deleted 10y ago
  [deleted]
- paulpauper 10y ago
  Floyd Mayweather alone sells millions of tickets ..that's why he makes so much
  - bluecalm 10y ago
    Still, I think it's fair point that fighters in boxing capture more of a revenue than fighters in UFC. UFC is very young though, unionization and revenue % negotiations are bound to happen as they did in any other popular professional sport.
- antoniuschan99 10y ago
  It's also a different business model. Also, Mayweather had to buy out his own contract at one point or something. Before that (as Money Mayweather), he was only known as Pretty Boy Floyd
- feklar 10y ago
  Floyd was his own promoter and put up the insurance and paid his opponents. It could happen that a very popular fighter in the UFC decides to branch and hold his/her own PPVs if they have the capital to insure it, cover security, advertise ect.
unwind 10y ago
Mods: please consider expanding the acronym (Ultimate Fighting Championship, https://en.wikipedia.org/wiki/Ultimate_Fighting_Championship https://en.wikipedia.org/wiki/Ultimate_Fighting_Championship) for the title. I had to click just to find out what it was about. Thanks.

71 points by philangist 10y ago

Either the UFC $4B valuation is way too high, or Disney stole the Star Wars franchise from Lucas films. The disparity in revenue on a historical or annualized basis is huge. http://fortune.com/2015/12/24/star-wars-value-worth http://fortune.com/2015/12/24/star-wars-value-worth

slg 10y ago
Sports assets costs huge amounts of money and their value will only continue to increase as sports becomes the only real televised media that requires live viewing. In team sports, the top teams are generally valued in the $2-3 billion dollar range. This deal basically equates all of UFC to the cost of two middle of the road NFL teams or two of the more valuable NBA/MLB teams.
- wesd 10y ago
  The only difference between UFC and other leagues is that UFC only has 100 million per year guaranteed income from TV rights. Most of of their revenue (600 million last year) is based on gate and pay per views which can fluctuate based headlines and injuries etc.
showerst 10y ago
I've heard that Lucas sold to Disney over others who offered way more because he though they could best steward the franchise going forward.
- leoc 10y ago
  Since Disney bought Pixar and John Lasseter took on a stack of top Disney roles, I assume that Lucas felt this was the closet he could get to handing Star Wars on to his old Lucasfilm colleagues.
timdierks 10y ago
The linked article treats revenue as value, which is obvious BS. The value of Lucas to Disney is much higher than the $4B price tag either Lucas or UFC yielded, but a lot of that stems from Disney's amazing ability to execute on it. UFC seems more capable of standing alone as a business.
mmanfrin 10y ago
Star Wars is very valuable, but I think you overestimate -- $4bil does not factor in the cost of making new movies, which is in the hundreds of millions. Consider another way: had Disney not bought Star Wars, do you believe they could have built a franchise or franchises of a similar money-printing status for that $4bil? Pirates of the Caribbean have earned close to $4bil: http://www.boxofficemojo.com/franchises/chart/?id=piratesofthecaribbean.htm http://www.boxofficemojo.com/franchises/chart/?id=piratesoft... UFC is a running institution that other parties work to endure and build. Gyms find and train fighters (UFC does not need to participate in this). Those Gyms hype fighters and build fanbases that feed back in as a tributary to UFC. 8x rev for a quickly growing sport franchise that essentially 'owns' fighting outside of Boxing is not terribly high a valuation.

deleted 10y ago

[deleted]

ctvo 10y ago

I'm an MMA fan who grew up watching Pride (Fedor, Shogun, etc.). I never became a fan of the UFC. Little things like the lack of production value for the graphics, the commentators (Mike Goldberg makes me cringe), to the need to use ring girls bothered me. I couldn't get over how low class and over commercialized it felt.

neves 10y ago

I'm Brazilian. UFC is a big success here. Sometimes we think that Humanity is evolving, but then we see that we are back to the gladiators era. This stuff makes me really sad:-(

JayHost 10y ago
I imagine UFC fighters will have bad brain damage when they get older so while "Voluntary" and "lots of money" are decent arguments... Do these people know what they are getting themselves into and how does that compare to Porn? Feel free to answer however... I'm genuinely curious.
- douche 10y ago
  If anything, it looks less dangerous than regular boxing, or an NFL wideout going over the middle and getting laid out by a strong safety.
- hyperion2010 10y ago
  Compared to boxers the UFC guys experience much less brain related trauma because fights usually end after a single blow to the head instead of 10+.
- antoniuschan99 10y ago
  It's quite sad, it seems to be on the same level as wwe or boxing. Mark Coleman seems to be deteriorating really fast: https://www.youtube.com/watch?v=IFkw1YyipIM https://www.youtube.com/watch?v=IFkw1YyipIM
  - MRSallee 10y ago
    Thanks for linking this video. I had no idea Coleman was in this shape. He's just 51.
    - antoniuschan99 10y ago
      Yea I know eh? And Randleman died earlier this year too :(. Have you heard stories of Roger Mayweather wandering around and getting lost? Hes deteriorating really fast as well.

ourmandave 10y ago

They bought it for $2 million. And then poured time and money into getting it considered a legitimate sport, spun off a reality show, promoted it's stars, and cranked out the merchandise. Branding 101, etc.

icpmacdo 10y ago
They brought it to this point but my hope is now the new owners can turn it into a more legitimate sport. As an example right now the UFC is setting up a fighter named Dan Henderson to fight for the middle weight title just because its a rematch with the current champ Michael Bisping and is a big money making opportunity for the company. If you look at his record[0] though he's 3-3 in his last 6 fights and is passing people much more deserving of a title shot[1] if the new owners have a more defined system for championship fights it will eliminate the biggest issue I think the UFC currently has. These new owners are in a position to make buckets of money. There online subscription service FightPass is apparently super popular and I could see a new tier being added they would include the PPV cards for $30 or $40 a month. I hope Joe Rogan stays as a commentator even though he has said he will leave if the company sell's. [0] https://en.wikipedia.org/wiki/Dan_Henderson#Mixed_martial_arts_record https://en.wikipedia.org/wiki/Dan_Henderson#Mixed_martial_ar... [1]https://en.wikipedia.org/wiki/Ronaldo_Souza#Mixed_martial_arts_record https://en.wikipedia.org/wiki/Ronaldo_Souza#Mixed_martial_ar...
- thinkpad20 10y ago
  Yeah I'm a Hendo fan but his title shot is pretty ridiculous. It's a great storyline and a great last hurrah (and who knows, he may beat Bisping as he did a few years ago). But there are so many others who should be ahead in line. Henderson isn't even the Sherdog top 15 at MW...
- proc0 10y ago
  This is why currently the UFC is more like WWE in that respect. They care more about the marketing then about the sport. No big league team sport would do this in a championship. The pairing of contestants has to happen in a predictable system that rewards skills within the sport itself. Unfortunately whenever this is mentioned, fanboys like to argue that it comes down to selling tickets etc., which is true unless you care about the sport and its integrity. As a martial artist I would much rather have an unpopular tournament that stays true to its core values for the sake of promoting the sport as an art form, even if this means that the champion will have the most boring style of fighting (in fact, if there ever is a champion that has a boring style that would indeed be interesting).

salimmadjd 10y ago

UFC is a bit like NFL except instead of just a 3-4 month season, it has a 12 month season and it has international appeal. However, unlike NFL it doesn't have a league that can control expansion or prevent others to compete in its market. In other words, UFC is a brand and it's a brand that is not fully understood and it's hard to predict what the loyalty to this brand is. So the buyers are taking a big risk. They're buying into UFCs reach via FOX, etc. But the market is prime from other players to take away market share.

bproper 10y ago
At this point, however, they have built an interesting business beyond their own league and live events. They have a subscription service - $10 a month - that has both the biggest library of important MMA fights and acts as the streaming platform and distributor for dozens of smaller leagues. http://www.theverge.com/2016/7/8/12122826/ufc-200-sale-streaming-fight-pass http://www.theverge.com/2016/7/8/12122826/ufc-200-sale-strea... The UFC is even branching out to stream more niche combat sports that aren't MMA. Because they were banned from television for so long, they were forced to focus on the digital side of the business, and it is now paying big dividends.
buckbova 10y ago
UFC has worked hard to scoop up the competition like strike force and others. They also have strict contracts with their fighters to keep them from competing in other leagues. There's been several anti-trust lawsuits already. http://bleacherreport.com/articles/2299031-ufc-sued-by-fighters-in-class-action-lawsuit-latest-details-and-reaction http://bleacherreport.com/articles/2299031-ufc-sued-by-fight... http://espn.go.com/mma/story/_/id/12037883/antitrust-lawsuit-filed-ufc-parent-company-claims-monopoly http://espn.go.com/mma/story/_/id/12037883/antitrust-lawsuit...
- aidenn0 10y ago
  I'm surprised those contracts are enforceable without a CBA in place.

seanalltogether 10y ago

The success of the UFC is fascinating to me. I really disliked the culture of MMA back in the early 2000s, but nowadays I love the sport. The technical skill of these guys fighting is amazing, and the near monopoly of the UFC has actually created a situation where big fights are constantly happening, rather then the years of negotiation that some boxing matches have required. As ownership now diversifies among several groups, so will the focus of the UFC, and I'm curious how that will affect things going forward.

danso 10y ago
I'm glad I grew up in the age of Karate Kid movies, when having a black belt was enough to scare kids from beating me up in school. I remember how the first UFCs utterly demolished the movie-mythos of Kung fu/karate, as Royce Gracie and other grapplers made strikers look rather impotent. I kind of missed the early days of UFC, when things were much more no-holds-barred. There weren't rounds or time limits or weight classes (for the most part), which meant that Royce had to beat an opponent 80 pounds heavier for the championship (Dan Severin, but I swear I thought Gracie had to beat even heavier opponents [0]). The flip side was that watching 20 minutes of one guy sitting atop another was not very compelling, and probably unfeasible as pay per view TV. [0] http://www.gracieacademy.com/news/gracie-breakdown-royce-gracie-vs.-dan-severn.asp http://www.gracieacademy.com/news/gracie-breakdown-royce-gra...
- feklar 10y ago
  The Karate guys in the UFC and cleaning up these days like Stephen 'Wonderboy' Thompson. Early MMA/UFC until recently was battle of the PEDs Royce was juiced to the gills in those marathon early matches. Selling UFC right now was a good exit, the barrier to entry has fallen where competitor promotions can easily move in now since early UFC did all the arduous regulatory lobbying to legalize these matches and create a PPV market.
  - zarkov99 10y ago
    Royce was juiced to the gills? How do you figure that? He looked as scrawny as ever.

aljones 10y ago

So about 2 NBA teams.

deleted 10y ago
[deleted]
mrtron 10y ago
Yes, so pretty amazing. And potentially a really high ceiling from here.
- dajohnson89 10y ago
  Without knowing the balance sheet, etc, I consider $4B kinda low for what is effectively a pop culture phenomenon.

cm3 10y ago

I didn't know what UFC is, so looking it up I saw that there's a European version which has teams competing. I can't tell how legitimate it is, since it also has teams comprised of seemingly football(soccer) hooligans. If so, it sounds like a better stress relief than engaging at a football(soccer) match. https://teamsfight.com/ https://teamsfight.com/ https://www.youtube.com/c/teamsfight77/videos https://www.youtube.com/c/teamsfight77/videos

sliverstorm 10y ago
Never participated in MMA, but when I trained BJJ (which is a big piece of MMA), was pretty stress relieving.

samfisher83 10y ago

I think the athletes in the UFC are kind of getting screwed. Floyd Mayweather made more money in one fight than every UFC athlete has made combined since the UFC started.

krelian 10y ago
The thing is Floyd Mayweather is practically the only fighter in that position. He had a contract where he made 40 Million on each of his last 6 fights but for a "normal" fighter a pay of just 2M - 5M is considered an excellent deal.
deleted 10y ago
[deleted]
paulpauper 10y ago
Floyd Mayweather alone sells millions of tickets ..that's why he makes so much
- bluecalm 10y ago
  Still, I think it's fair point that fighters in boxing capture more of a revenue than fighters in UFC. UFC is very young though, unionization and revenue % negotiations are bound to happen as they did in any other popular professional sport.
antoniuschan99 10y ago
It's also a different business model. Also, Mayweather had to buy out his own contract at one point or something. Before that (as Money Mayweather), he was only known as Pretty Boy Floyd
feklar 10y ago
Floyd was his own promoter and put up the insurance and paid his opponents. It could happen that a very popular fighter in the UFC decides to branch and hold his/her own PPVs if they have the capital to insure it, cover security, advertise ect.

unwind 10y ago

Mods: please consider expanding the acronym (Ultimate Fighting Championship, https://en.wikipedia.org/wiki/Ultimate_Fighting_Championship https://en.wikipedia.org/wiki/Ultimate_Fighting_Championship) for the title. I had to click just to find out what it was about. Thanks.