News UFC Fighter Wage Share Dropped in 2020 amid Record Revenue/Profit and $300 Million Dividend

[avenue94]

John Nash did a summary of UFC financials for 2020 based on WME's IPO and also a Moody's report from this month. Most of it isn't new information or surprising, just more details for the curious.
-$890 million in revenue, which was a record. For context, 2019 was $860 million, 2018 was $695, 2017 was $750, 2016 was $690.
-EBITDA was $423 million, which is also a UFC record. That's also a record EBITDA margin of 47.5 percent.
-UFC has $282 million in cash on hand, after they paid out $312 million to shareholders in 2020.
-UFC has about $2.5 billion in debt, with interest payments running about $100 million annually (2021 will actually be less than 2020)

Fighter wage share likely dropped in 2019 and 2020, with fighters taking only 17.6 percent of revenue in 2020, with the maximum possible amount being only $157 million. In the larger scheme, UFC expenses dropped with general cost cutting and not having to pay venues to host events and using the Apex or Fight Island instead.

Conversely, non-fighter expenses went up some because of the Apex and Shanghai PI adding another $40 million in costs.

As far as Fight Island, the UFC made up all their event revenue and then some with site fees from Abu Dhabi. Roughly, those site fees come out to the better part of $100 million. This comes on the heels of the UFC ESPN deal for PPVs being a huge boon in 2019.

As far as WME, it's the opposite, they were hurting badly without the UFC. Endeavor lost more than $650 million in 2020, without the UFC they would have lost over a billion dollars that year alone. They also lost half a billion in 2019. Overall debt for WME is about $6 billion right now.

 

[Get To Da Choppa]

UFC fighters received brand new hot Venum gear and a $5k bump in sponsorship money so they should be happy with what they got

 

[Willy Knuckles]

UFC breaks record for revenue in one year and proceeds to give fighters even less of a share. Wow. Not surprising at all tbh

 

[greenhawk]

Watch how many UFC shills descend on this thread and justify this. They got no shame.

 

[xHeadx]

No dog in this fight just additional info:

What Is Earnings Before Interest, Taxes, Depreciation, and Amortization – EBITDA?
EBITDA, or earnings before interest, taxes, depreciation, and amortization, is a measure of a company's overall financial performance and is used as an alternative to net income in some circumstances. EBITDA, however, can be misleading because it strips out the cost of capital investments like property, plant, and equipment.


This metric also excludes expenses associated with debt by adding back interest expense and taxes to earnings. Nonetheless, it is a more precise measure of corporate performance since it is able to show earnings before the influence of accounting and financial deductions.


Simply put, EBITDA is a measure of profitability. While there is no legal requirement for companies to disclose their EBITDA, according to the U.S. generally accepted accounting principles (GAAP), it can be worked out and reported using the information found in a company's financial statements.


The earnings, tax, and interest figures are found on the income statement, while the depreciation and amortization figures are normally found in the notes to operating profit or on the cash flow statement. The usual shortcut to calculate EBITDA is to start with operating profit, also called earnings before interest and tax (EBIT) and then add back depreciation and amortization.

https://www.investopedia.com/terms/e/ebitda.asp

 

[Randy Fandy Fo Fanders]

Expect this to continue as the UFC now has shareholders to answer to who EXPECT year-over-year profits.

 

[2004 account]

What's new? The elite get richer and the fighters and everyone else gets poorer.

 

[avenue94]

No dog in this fight just additional info:



https://www.investopedia.com/terms/e/ebitda.asp

Yeah, that's why I said it was EBITDA, not profit and posted their interest payments and whatever else was there. The UFC historically doesn't have a huge tax bill either, UFC profits for a couple years are public information. For what it's worth, PFL's chairman gives the UFC profit margin as pushing 40 percent. Make of that what you will, he's not the UFC but PFL is a feeder league to the org of sorts. Or at least WSOF was.

 

[snackgod]

John Nash did a summary of UFC financials for 2020 based on WME's IPO and also a Moody's report from this month. Most of it isn't new information or surprising, just more details for the curious.
-$890 million in revenue, which was a record. For context, 2019 was $860 million, 2018 was $695, 2017 was $750, 2016 was $690.
-EBITDA was $423 million, which is also a UFC record. That's also a record EBITDA margin of 47.5 percent.
-UFC has $282 million in cash on hand, after they paid out $312 million to shareholders in 2020.
-UFC has about $2.5 billion in debt, with interest payments running about $100 million annually (2021 will actually be less than 2020)

Fighter wage share likely dropped in 2019 and 2020, with fighters taking only 17.6 percent of revenue in 2020, with the maximum possible amount being only $157 million. In the larger scheme, UFC expenses dropped with general cost cutting and not having to pay venues to host events and using the Apex or Fight Island instead.

Conversely, non-fighter expenses went up some because of the Apex and Shanghai PI adding another $40 million in costs.

As far as Fight Island, the UFC made up all their event revenue and then some with site fees from Abu Dhabi. Roughly, those site fees come out to the better part of $100 million. This comes on the heels of the UFC ESPN deal for PPVs being a huge boon in 2019.

As far as WME, it's the opposite, they were hurting badly without the UFC. Endeavor lost more than $650 million in 2020, without the UFC they would have lost over a billion dollars that year alone. They also lost half a billion in 2019. Overall debt for WME is about $6 billion right now.

wow breaking news owners make money off companies they own. who knew.

 

[La Elefante]

Hopefully the anti-trust class action suit actually has some claws and is successful

 

[DaleBoca]

Some of the fighters are being paid so little they’re being forced into the sex industry.

 

[2sk]

wme and danas cantenders era

 

[D 1 Wrestler]

 

[BEATDOWNS]

U Fight Cheap

 

[Joe]

 

[IDGETKTFO]

What's new? The elite get richer and the fighters and everyone else gets poorer.

Nobody forced them to sign the contract.

 

[kflo]

John Nash did a summary of UFC financials for 2020 based on WME's IPO and also a Moody's report from this month. Most of it isn't new information or surprising, just more details for the curious.
-$890 million in revenue, which was a record. For context, 2019 was $860 million, 2018 was $695, 2017 was $750, 2016 was $690.
-EBITDA was $423 million, which is also a UFC record. That's also a record EBITDA margin of 47.5 percent.
-UFC has $282 million in cash on hand, after they paid out $312 million to shareholders in 2020.
-UFC has about $2.5 billion in debt, with interest payments running about $100 million annually (2021 will actually be less than 2020)

Fighter wage share likely dropped in 2019 and 2020, with fighters taking only 17.6 percent of revenue in 2020, with the maximum possible amount being only $157 million. In the larger scheme, UFC expenses dropped with general cost cutting and not having to pay venues to host events and using the Apex or Fight Island instead.

Conversely, non-fighter expenses went up some because of the Apex and Shanghai PI adding another $40 million in costs.

As far as Fight Island, the UFC made up all their event revenue and then some with site fees from Abu Dhabi. Roughly, those site fees come out to the better part of $100 million. This comes on the heels of the UFC ESPN deal for PPVs being a huge boon in 2019.

As far as WME, it's the opposite, they were hurting badly without the UFC. Endeavor lost more than $650 million in 2020, without the UFC they would have lost over a billion dollars that year alone. They also lost half a billion in 2019. Overall debt for WME is about $6 billion right now.

your headline says wage share dropped in 2020. can you quote where it says that in the article? (ny post article linked in the article estimated under 16% in 2019....)

 

[DS66]

To be fair, it's a bit misleading/doesn't say much to say the "wage share" dropped while revenues increase. For the vast majority of businesses, as revenues increase, the wage share as a percentage of revenue will drop. That's how you grow a business. Even if wages are overall increasing, the percent share may not increase if revenues are growing fast, which will likely be the case in a business like this where fighters are locked into multi-fight contracts, many of which were signed in previous years.

I'd be more curious to see the average fighter pay vs prior years, and compare how it increased as a percentage vs inflation and other sports organizations.

 

[Mr Fahrenheit]

John Nash did a summary of UFC financials for 2020 based on WME's IPO and also a Moody's report from this month. Most of it isn't new information or surprising, just more details for the curious.
-$890 million in revenue, which was a record. For context, 2019 was $860 million, 2018 was $695, 2017 was $750, 2016 was $690.
-EBITDA was $423 million, which is also a UFC record. That's also a record EBITDA margin of 47.5 percent.
-UFC has $282 million in cash on hand, after they paid out $312 million to shareholders in 2020.
-UFC has about $2.5 billion in debt, with interest payments running about $100 million annually (2021 will actually be less than 2020)

Fighter wage share likely dropped in 2019 and 2020, with fighters taking only 17.6 percent of revenue in 2020, with the maximum possible amount being only $157 million. In the larger scheme, UFC expenses dropped with general cost cutting and not having to pay venues to host events and using the Apex or Fight Island instead.

Conversely, non-fighter expenses went up some because of the Apex and Shanghai PI adding another $40 million in costs.

As far as Fight Island, the UFC made up all their event revenue and then some with site fees from Abu Dhabi. Roughly, those site fees come out to the better part of $100 million. This comes on the heels of the UFC ESPN deal for PPVs being a huge boon in 2019.

As far as WME, it's the opposite, they were hurting badly without the UFC. Endeavor lost more than $650 million in 2020, without the UFC they would have lost over a billion dollars that year alone. They also lost half a billion in 2019. Overall debt for WME is about $6 billion right now.

The last paragraph (plus the info about the debt) is what people won’t care about but it’s pretty important.

While the investment Zuffa made into the business wasn’t nominal, it was compared to what they were making in recent years. It wasn’t totally unreasonable to think about their share of the take going into the principals’ coffers one way or another (after taxes). Bit different now. Endeavor paid for a cash cow, not for a start-up, so the investment HAS to produce for them, especially because they’re so leveraged (i.e. it doesn’t matter if my business has an EBIDTA of $10 billion if I have to pay my creditors $11 billion). Not saying they’re bleeding, just saying it’s a different situation.

Plus, even though the UFC will attempt to be run as its own entity, if the other affiliates are bleeding money there will be more pressure to squeeze every dime out of the UFC.

Not saying they can’t be criticized, just saying that a lot of the practical wiggle room in the company’s profit went up in smoke in the form of the giant purchase price paid to the Fertitas (which was financed with debt, which they have to make payments on).

 

[greatsantini]

Years ago it used to be "we don't know what the UFC is paying fighter," and then we found out it was a real low percentage of the revenue. Then it was "we don't know what the UFC's expenses are! They probably can't pay more." Then we got breakdowns and EBITDA numbers that showed they could easily have paid more. Then it become "They'd go broke if the paid the UFC 50%." Well their EBITDa is that amount so yes they could pay 50% of revenue to the fighters and still survive. The reason they don't is because they don't want to, They want to suck as much money as possible. Which is understandable because they're businessmen. Hopefully now though fans will recognize that instead of being fanoys and offering nothing but excuses. Instead I betcha a lot of fans just move the goalposts again.