Postal Connections: The Looming Sale
Going once, going twice … We’ve talked about the potential sale of
the
Ultimate Fighting Championship for a few years now, and it
looks like we’re finally at that point. News surfaced on Thursday
that there are multiple bids in the $4.1 billion range -- that’s
billion with a “B” -- to purchase 100 percent of the top promotion
in mixed martial arts. “Postal Connections” questions on the
subject abound, so, without further ado, away we go:
***
Why would anyone want to buy the UFC right now? There are so many issues hanging over their heads, like the Ali Act, anti-trust lawsuit and a crappy Reebok uniform deal. I just don’t see how they are going to get $4 billion for this mess. -- Geoff
I get that some people might be scared off by a $4 billion asking
price when you consider some of the aforementioned problems facing
the company. Those are only a couple of the issues with which a new
owner will be left to deal. There’s also a heavy debt burden, close
to half a billion dollars, the uncertainty of the cable television
market and the volatility of the pay-per-view model that has
brought both boom and bust periods for the MMA promoter.
Even if you expect to make $150-200 million profit per year -- that was the estimate from 2015, reportedly the UFC’s best year ever -- that would put the purchase price at about 25 times the earnings. That’s a pretty hefty number. The fact that there are competing bids in the neighborhood of $4 billion tells me that there are some pretty smart people that believe there’s still room for growth for the world’s premier promoter of mixed martial arts. Those who run the UFC have come a long way from the days of being the ugly stepchild of pro sports, and now they’re looking at a massive payday after building this business from the ground up. It’s hard to not stand back in wonder, especially for those of us who were around before Zuffa came into existence.
***
Can you see UFC President Dana White working for anyone not named Lorenzo Fertitta? I don’t see this working out in the long term for the new owners. Joe Rogan already said he’s leaving if the UFC sells. I think Dana will be right behind him. -- Adam
I’ll be honest, I really don’t know how this is going to work out in the long run, but I do find it hard to believe White is going to be able to keep his wits about him working in a more traditional business structure. He’s done things his way for so long that it will take a Herculean effort on his part to rein in things going forward.
However, we may be getting ahead of ourselves a bit. Who’s to say the new owners want him to tone it down? He’s fronted a company that these people are willing to shell out $4 billion to buy. Maybe they’re fans of his in-your-face style. I think it’s doubtful, but you never know.
I think the biggest problem is going to be the lack of passion from the new owners. That’s not to say they won’t be passionate, but let’s be real here: The Fertittas and White made the UFC a labor of love, and no conglomerate is going to be able to replicate that.
Can White stick around in a company that cares more about the bottom line than the actual sport he helped build? We’ll all just have to wait and see.
***
Any thoughts on if Zuffa spending money lobbying against the Ali Act means there is traction, or this is just Zuffa being cautious? -- @SnarkyRedHd
Mixed martial arts being included in the Ali Act has been a long time coming, and Zuffa has been there to throw up the stop sign every step of the way. I’ve spoken with numerous athletic commission directors who have told me for years that MMA should be covered but that they knew the UFC was against it. It isn’t hard to imagine why.
Despite the fact it is rarely, if ever, enforced, the provisions in the Ali Act could shake up the business model that has served Zuffa so well over the last decade and a half. There is real traction, at least to this point in the process, but things can change quickly on Capitol Hill.
The hiring of a lobbying firm is not out of the ordinary for companies that see a piece of legislation as problematic. Truthfully, those in charge at Zuffa are just doing what they believe is in their best interest. It is lawful and well within their rights to advocate for a position they feel will benefit them.
***
What does the UFC do with the middleweight division now? Matchmaker, matchmaker, make me a match, find me a find, catch me a catch. -- @jaypettry
Are we really still discussing this? I’m shocked they haven’t announced the Michael Bisping-Dan Henderson 2 main event for UFC 204 in October. This is a no-brainer if you ask me.
Now, I may be getting ahead of myself with the October date, but I did look and see that date is the only main event available for a pay-per-view card until at least December. Either way, this fight needs to happen. I know, Henderson is not the fighter he once was, but at nearly 46 years of age, the stars have aligned for the old warhorse in a way we never could have imagined.
There is the history: Bisping eating the H-bomb and the diving H-bomb back at UFC 100 and the hilarious memes that followed surely stick in the new champion’s craw. Henderson, long thought to be removed from title contention, could add the one piece of hardware missing from his trophy case. Everything is lining up for either a historic tale of redemption or an epic ride off into the sunset.
Please tell me the UFC isn’t going to screw this up; and don’t worry, Luke Rockhold, Chris Weidman and Ronaldo Souza will all still be there in a eight months to year to get the middleweight division back to reality. It’s a wild little detour and perhaps it’ll be even greater if we get this awesome rematch made.
Sherdog.com Executive Editor Greg Savage can be reached by email or Twitter @TheSavageTruth. If you would like to have your question or comment answered in the weekly Postal Connections mailbag, please submit them by Wednesday evening each week.
Why would anyone want to buy the UFC right now? There are so many issues hanging over their heads, like the Ali Act, anti-trust lawsuit and a crappy Reebok uniform deal. I just don’t see how they are going to get $4 billion for this mess. -- Geoff
Advertisement
Even if you expect to make $150-200 million profit per year -- that was the estimate from 2015, reportedly the UFC’s best year ever -- that would put the purchase price at about 25 times the earnings. That’s a pretty hefty number. The fact that there are competing bids in the neighborhood of $4 billion tells me that there are some pretty smart people that believe there’s still room for growth for the world’s premier promoter of mixed martial arts. Those who run the UFC have come a long way from the days of being the ugly stepchild of pro sports, and now they’re looking at a massive payday after building this business from the ground up. It’s hard to not stand back in wonder, especially for those of us who were around before Zuffa came into existence.
It has been a crazy 15 years. Let’s hope the next 15 are just as
good for this weird, crazy, awesome sport we follow.
Can you see UFC President Dana White working for anyone not named Lorenzo Fertitta? I don’t see this working out in the long term for the new owners. Joe Rogan already said he’s leaving if the UFC sells. I think Dana will be right behind him. -- Adam
I’ll be honest, I really don’t know how this is going to work out in the long run, but I do find it hard to believe White is going to be able to keep his wits about him working in a more traditional business structure. He’s done things his way for so long that it will take a Herculean effort on his part to rein in things going forward.
However, we may be getting ahead of ourselves a bit. Who’s to say the new owners want him to tone it down? He’s fronted a company that these people are willing to shell out $4 billion to buy. Maybe they’re fans of his in-your-face style. I think it’s doubtful, but you never know.
I think the biggest problem is going to be the lack of passion from the new owners. That’s not to say they won’t be passionate, but let’s be real here: The Fertittas and White made the UFC a labor of love, and no conglomerate is going to be able to replicate that.
Can White stick around in a company that cares more about the bottom line than the actual sport he helped build? We’ll all just have to wait and see.
Any thoughts on if Zuffa spending money lobbying against the Ali Act means there is traction, or this is just Zuffa being cautious? -- @SnarkyRedHd
Mixed martial arts being included in the Ali Act has been a long time coming, and Zuffa has been there to throw up the stop sign every step of the way. I’ve spoken with numerous athletic commission directors who have told me for years that MMA should be covered but that they knew the UFC was against it. It isn’t hard to imagine why.
Despite the fact it is rarely, if ever, enforced, the provisions in the Ali Act could shake up the business model that has served Zuffa so well over the last decade and a half. There is real traction, at least to this point in the process, but things can change quickly on Capitol Hill.
The hiring of a lobbying firm is not out of the ordinary for companies that see a piece of legislation as problematic. Truthfully, those in charge at Zuffa are just doing what they believe is in their best interest. It is lawful and well within their rights to advocate for a position they feel will benefit them.
What does the UFC do with the middleweight division now? Matchmaker, matchmaker, make me a match, find me a find, catch me a catch. -- @jaypettry
Are we really still discussing this? I’m shocked they haven’t announced the Michael Bisping-Dan Henderson 2 main event for UFC 204 in October. This is a no-brainer if you ask me.
Now, I may be getting ahead of myself with the October date, but I did look and see that date is the only main event available for a pay-per-view card until at least December. Either way, this fight needs to happen. I know, Henderson is not the fighter he once was, but at nearly 46 years of age, the stars have aligned for the old warhorse in a way we never could have imagined.
There is the history: Bisping eating the H-bomb and the diving H-bomb back at UFC 100 and the hilarious memes that followed surely stick in the new champion’s craw. Henderson, long thought to be removed from title contention, could add the one piece of hardware missing from his trophy case. Everything is lining up for either a historic tale of redemption or an epic ride off into the sunset.
Please tell me the UFC isn’t going to screw this up; and don’t worry, Luke Rockhold, Chris Weidman and Ronaldo Souza will all still be there in a eight months to year to get the middleweight division back to reality. It’s a wild little detour and perhaps it’ll be even greater if we get this awesome rematch made.
Sherdog.com Executive Editor Greg Savage can be reached by email or Twitter @TheSavageTruth. If you would like to have your question or comment answered in the weekly Postal Connections mailbag, please submit them by Wednesday evening each week.
