once WME pays off their debt.. what do they do next?

[Verace]

Profit?

 

[Pied Piper]

Profit?

ok how

 

[bbandito925]

its obvious that WME has been milking super fights and immediate titleshots for opponents who are draws rather than those who have worked their ways up the rankings so they can take huge cash grabs and pay off their debt. and even allowing the MAYMAC fight, so they can take a cut. once they finally break even, how do they manage the UFC? what is their big plan with the company that they felt it was worth 4.2 billion?

If, not when.

 

[jeremyemilio]

2.6% of the companies in the s&p 500 carry no debt. that's 13 out of 500. debt is normal.

It is.

The UFC debt looks bad, though. Most companies on the S&P could take a picture of something tangible to explain their debt (like you could take a picture of your house to explain your mortgage debt). Either that, or show you the patent, or the R&D progress, or something that looks like an investment.

WME has a logo, a few fighting Octagons with chain link fencing, and a roster of almost entirely unknown athletes who are already contracted at free market value.

 

[Captain Herb]

I doubt they're worried about the debt one bit as long as they can carry it and pay themselves as much as possible. It's always a good idea to use other people's money in business.

 

[tithas]

yeah but how

Go take a few undergraduate business courses.

 

[DannyNL]

What I'd love to know is how much did they know about the UFC's problems before they decided to buy? I tend to think that the UFC hit its peak and is trending downhill. They have a roster full of disgruntled employees who are probably going to push for a union/association in the near future.

 

[in the liver]

its obvious that WME has been milking super fights and immediate titleshots for opponents who are draws rather than those who have worked their ways up the rankings so they can take huge cash grabs and pay off their debt. and even allowing the MAYMAC fight, so they can take a cut. once they finally break even, how do they manage the UFC? what is their big plan with the company that they felt it was worth 4.2 billion?

re-open flyweight division

 

[tithas]

How do you figure? If the new TV deal pays out 300 million per year, as reported, it's probably going to come with some demands for more big shows on free TV rather than as PPVs and/or a PPV partnership with Fox.

Those shows are going to cost money to promote, to organize, and to fund fighter pay.

In a perfect world they keep $100 million of that. That's in a perfect world, but I'm feeling generous.

Then you add in $150 million or so in profits from other revenue streams. That's also very generous considering the highest profit they have ever made was just over that, including the current TV deal and a full PPV model that is likely scaling back with the new TV deal, and happened at the height of Ronda Mania, while Conor was also huge.

So that's $250 million per year.

At least $150 million of that goes to servicing the current debt. (Being very conservative here, as well.)

That leaves $100 million per year to:

a. Pay down the debt.
b. Expand the company.

Still feels like 40 years to me.

It's step 1 in WME's plan. You really think they bid that much just to put all the egg's in a single TV deal? We wont know they real plan until 2018 or 2019. Until then they are continuing the old business model. I don't buy that they spent 3.9B unless they had specific ideas on how to expand the company. They are one of the smartest companies in the entertainment world.

 

[Pied Piper]

Go take a few undergraduate business courses.

nah, spoon feed me the answer

 

[tithas]

What I'd love to know is how much did they know about the UFC's problems before they decided to buy? I tend to think that the UFC hit its peak and is trending downhill. They have a roster full of disgruntled employees who are probably going to push for a union/association in the near future.

All of it. There were MULTIPLE sealed bids all above 3.5B form big investors and companies including Fox. Everyone involved knew every detail of the UFC. And they all STILL bid 3.5B+.....but they must all be completely stupid........

 

[MilesAbove]

It is.

The UFC debt looks bad, though. Most companies on the S&P could take a picture of something tangible to explain their debt (like you could take a picture of your house to explain your mortgage debt). Either that, or show you the patent, or the R&D progress, or something that looks like an investment.

WME has a logo, a few fighting Octagons with chain link fencing, and a roster of almost entirely unknown athletes who are already contracted at free market value.

To be fair to WME, they also have the IP. That's huge because they also hold it for all the affiliate companies to a point (depending on their varying deals).

The company I work for would seemingly have little in the way of asset.... unless you know the value of making 90% of all UFC banner and shorts IP for the 6 years leading up to the Reebok deal.

 

[gimp0]

They retire because it will take 20 years to pay it off.

 

[tithas]

They retire because it will take 20 years to pay it off.

I'm sure one of the biggest entertainment companies in the world with Billions in their portfolio paid 3.9B for a company anticipating a 20+ year return.......There is a plan but we wont know what it is until 2018 at the earliest.

 

[Toner]

The Ferttitas conned WME.

 

[tasticles]

its obvious that WME has been milking super fights and immediate titleshots for opponents who are draws rather than those who have worked their ways up the rankings so they can take huge cash grabs and pay off their debt. and even allowing the MAYMAC fight, so they can take a cut. once they finally break even, how do they manage the UFC? what is their big plan with the company that they felt it was worth 4.2 billion?

It's very hard to accurately predict 20 years into the future.

 

[Electrifyin1]

After they pay off their debt I think they should get a proper job, settle down and start a family

 

[Calipwnia]

its obvious that WME has been milking super fights and immediate titleshots for opponents who are draws rather than those who have worked their ways up the rankings so they can take huge cash grabs and pay off their debt. and even allowing the MAYMAC fight, so they can take a cut. once they finally break even, how do they manage the UFC? what is their big plan with the company that they felt it was worth 4.2 billion?

When the USA pays off its debt then derp de derp derp de derpdy derpdy dumb

 

[gimp0]

I'm sure one of the biggest entertainment companies in the world with Billions in their portfolio paid 3.9B for a company anticipating a 20+ year return.......There is a plan but we wont know what it is until 2018 at the earliest.

That was sarcasm, brother. I'm sure WME knows what they are doing. They aren't this successful by being morons.

 

[blaseblah]

What I'd love to know is how much did they know about the UFC's problems before they decided to buy? I tend to think that the UFC hit its peak and is trending downhill. They have a roster full of disgruntled employees who are probably going to push for a union/association in the near future.

What problems?