Will Zuffa ever go public?

[TheonGreyJoy**]

Well this is part of what I do for a living so I will reply.

the answer seems to be no, or unlikely but without seeing the UFC financials and growth over the last few years it is impossible to say for sure.

The public markets are all about growth companies. The UF's growth seems to have plateaued which would not make them a particularly attractive public company.

 

[jiujitsuforever]

Well this is part of what I do for a living so I will reply.

the answer seems to be no, or unlikely but without seeing the UFC financials and growth over the last few years it is impossible to say for sure.

The public markets are all about growth companies. The UF's growth seems to have plateaued which would not make them a particularly attractive public company.

and they arent really showing any signs "that i can see", of growing or signs of growth in the future, especially in the US market

 

[mma midwest fan]

Has any sports organization ever gone public? I just don't see it happening. I don't think they want fighters to know just exactly how much money the company is making.

 

[Degen Gambler]

Has any sports organization ever gone public? I just don't see it happening. I don't think they want fighters to know just exactly how much money the company is making.

WWE is the most comparable public company (market cap $1.4B)

 

[Lead]

MLB NBA NFL all are private companies. Shareholders would lead to bad decisions imo for the sport. If you want better fighter pay, the fighters are free to make a union.

 

[jthatdude]

No, because the books would be open and Dana's mouth would be shut by shareholders.

 

[TheonGreyJoy**]

and they arent really showing any signs "that i can see", of growing or signs of growth in the future, especially in the US market

When considering going public there are generally two driving issues.

1. - liquidity or the ability to sell all or part of their ownership to the existing shareholders in a market that will price their shares and create a system of trade. Generally this is done more for secondary shareholders than founding shareholders as founders selling shares will usual destabilize your market and drive the price down.

2. - Access to capital for growth. They are called the capital market for a reason. You stock literally becomes Capital you can use to acquire or grow and you generally have more access to outside capital (debt and equity).

Downside or better yet 'other' factors to consider re going public

3. - scrutiny of every area of your business which can no longer be treated like a private piggy bank. All shareholders must be treated equally.

4. - Cost. You can add $500k to $1MM in extra cost per year to maintain the public company compliance.

5. - potential loss of control even if you maintain a majority share block. Even minority shareholders have rights you must consider.

 

[grooves12]

If Zuffa went public, it would hurt their profitability immensely. They would no longer be able to keep fighter in the dark about revenues, profitability, and fighter pay since they would need to disclose financials to shareholders and the FCC.

It would likely lead to fighters unionizing or stars holding out for significantly more money.

 

[1punch1KO]

They did sell 10% not that long ago.

 

[eiyuu]

If they go public, Dana White and Lorenzo Fertitta will be answering to a board of shareholders. You really think they want to give up control of the UFC to that?

If they ever sell the UFC, maybe the next owner might. But not with Zuffa in charge.

 

[TheonGreyJoy**]

If they go public, Dana White and Lorenzo Fertitta will be answering to a board of shareholders. You really think they want to give up control of the UFC to that?

If they ever sell the UFC, maybe the next owner might. But not with Zuffa in charge.

well more then likely the board would be their appointees and Zuffa would control the votes. That said, the demanded openness of a public company and the laws around shareholder rights make it much harder to do anything that would be considered biased to one shareholder or group over any other.

 

[SherdogGoat]

No it won't but if I am wrong and it does, I sure as hell wouldn't invest in it but I may have if it had happened in 2008-2009

 

[eiyuu]

well more then likely the board would be their appointees and Zuffa would control the votes

They'd have to be SHAREHOLDERS. Meaning the only way the Zuffa could appoint them is if they gave them money to buy a majority of the shares, thereby defeating the purpose of going public.

 

[mmacrisis]

With how horrible the stock market is the question of fighter pay would just be made worse., since it will be only about profits and not anything else. The UFC should not be a public company. They disclose how much is made at the events and data around PPV buys as well as fighter salaries.

Could they pay some fighters more, sure. Could they pay some fighters less, yes. Is this a simple discussion, not at all.

When Weidman first fought Anderson did he deserve 250k a fight? No, and he didn't get it. Does he deserve it now? No let him win 4 more title fights then he can command big money.

When Brock came to the UFC he destroyed PPV numbers and brought tons of media, he deserved the money he was given. Does Matt Brown? No not yet.

 

[spankdaddy]

Do you guys/gales think it will ever go public? If so i feel it would certainly raise the question of fighter pay to another level and could create some debates. The UFC isnt a monopoly or even close to one, but would you consider investing in it? Personally as an investor i dont think it would be wise due to the changing landscape of mma and it being difficult to predict when it rises or falls. 2009 was an amazing year, and now the ufc is lucky to get 350k buys on a ppv (which i understand is good in todays standards considering ppv's should be slowly taken out of mma). I think if the ufc eventually stops ppvs, markets better, and become public, it would be the best decision for them.

Thoughts?

What do you mean the UFC isn't close to a monopoly? MLB is a monopoly, so much so that it has an antitrust exemption. The fact that there are minor leagues in baseball, much in the same way as there are minor leagues in MMA, doesn't mean that MLB or the UFC aren't monopolies.

None of the other MMA organizations say they are rivaling the UFC, only trying to fill other niches in the market. And there aren't that many large MMA promoters in the first place. The UFC is pretty close to a monopoly.

 

[mma2013]

as long as frank and lorenzo fertitta own controlling interests in zuffa (they both own 40.5% each for a combined 81%), zuffa will never be a public company.

here's the reason why:

frank and lorenzo are both billionaires. according to forbes, frank and lorenzo are each worth $1.3 billion. they have more money than they'll ever need in several lifetimes.

the ufc is profitable. the money that is needed to expand and grow the ufc in other markets such as asia, europe, mexico can be accomplished by using the profits earned by the ufc.

if more money is needed, frank and lorenzo can borrow money from the 18 casinos that they both collectively own in las vegas.

for the above reason, zuffa will never be a public company as long as frank and lorenzo control zuffa (uncle dana is a minority owner with 9% ownership in zuffa; the remaining 10% is owned by sheikh tahnoon bin zayed al nahyan).

 

[El Magnifico]

They will be looking to sell the UFC within the next few years. They are totally posturing for selling.

The Fertitta bros and Dana are not the sole owners. Sheik Tahnoon of Abu Dhabi (Flash Entertainment) owns 10% of the company.

Here's the breakdown of ownership:
-Fertitta brothers 40.5% ea
-Dana White 9%
-Sheik Tahnoon of Abu Dhabi (Flash Entertainment) 10%

didn't see the post of when I posted mine.

 

[spankdaddy]

The UFC is a promotions company. Its need for investment is small. They have operating expenses but recoup them with the revenues for each event. Then they have other revenue streams such as marketing deals and brand use contracts that give them extra cash. They're not looking for more capital.

Zuffa sold a stake to someone in the middle east a while back, but I don't think new shares were issued for it. Shares were simply transferred to that guy. As a business they have no need for going public.

The only reason to do it would be for the owners to cash out. And that could be a good thing because it would probably means no one has to see Dana White's face ever again.

 

[TheonGreyJoy**]

They'd have to be SHAREHOLDERS. Meaning the only way the Zuffa could appoint them is if they gave them money to buy a majority of the shares, thereby defeating the purpose of going public.

What?

Again I do this for a living so lets be clear.

Right now between Zuffa and Dana they own 90% of the company with Flash entertainment owning the remaining 10%. If they wanted to take Zuffa public they could do so by floating as little as 10% new shares to the market and new shareholders which would lower Zuffa and Dana to 81% and flash to 9% and 9% in the hands of the new shareholders who would constitute the Board Lot, required to be a public company.

With Zuffa and Dan controlling 81% of the votes they would be able to pick whoever they wanted for the board. They could pick and vote in all friends of theirs and since the Board is paid and they may want to keep those jobs they would have to keep Zuffa happy.

Now it is not that simple as being a Public company comes with certain rules and obligations so you cannot completely control everything but as long as you play within the rules you can control a lot.

the reason to 'Go Public' is not for Zuffa to sell all their shares. It is to 'Put a Value' on their shares and then allow them to use those shares as currency.

 

[spankdaddy]

What?

Again I do this for a living so lets be clear.

Right now between Zuffa and Dana they own 90% of the company with Flash entertainment owning the remaining 10%. If they wanted to take Zuffa public they could do so by floating as little as 10% new shares to the market and new shareholders which would lower Zuffa and Dana to 81% and flash to 9% and 9% in the hands of the new shareholders who would constitute the Board Lot, required to be a public company.

With Zuffa and Dan controlling 81% of the votes they would be able to pick whoever they wanted for the board. They could pick and vote in all friends of theirs and since the Board is paid and they may want to keep those jobs they would have to keep Zuffa happy.

Now it is not that simple as being a Public company comes with certain rules and obligations so you cannot completely control everything but as long as you play within the rules you can control a lot.

the reason to 'Go Public' is not for Zuffa to sell all their shares. It is to 'Put a Value' on their shares and then allow them to use those shares as currency.

Fine point, except for the fact that the UFC doesn't need cash. And it makes no sense to float 10% of the capital given the greater compliance costs that will imply.

The UFC will only go public when the Fertitta brothers have the need to cash out or when they get tired of being in the limelight. And I don't see that happening.