UnderGround Forums UFC loses 100 Million in revenue in 2018

5/18/19 3:01 PM
1/16/12
Posts: 5821

I remember all my friends casually bringing up random upcoming UFCs events. Casual fans but now no one. Not a single person gives a fuck  

5/18/19 3:29 PM
2/9/09
Posts: 8815

2019 won’t be better....ive been saying for awhile they are over saturating the market.

The ESPN APP isn’t helping things. (But...but its the future) gtfo with that shit 

5/18/19 3:30 PM
2/9/09
Posts: 8816
Thats fukin illegal -

I haven't watched an event since it been on ESPN .. it's a cluster fuck now 

I only watch it if its Cowboy or at a bar. Cards don’t have the starpower And its too hard to watch these days

5/18/19 3:34 PM
1/1/01
Posts: 13511
Shut up! Dana's doing great! - Tards on the UG
5/18/19 3:56 PM
6/3/10
Posts: 492

Havent had a UFC in Montreal since 2015 since people stopped giving a fuck. 

70% of UFC's 2019 revenue is estimated to be contractually fixed, the highest ratio it's been / less reliant on PPV.

Scary position, they have to get ratings and stars before the contracts run out, or they're in a terrible bargaining place - at least from an uninformed outside perspective. 

If it were my organization, would go full jumbotron / fireworks / live bands (UFC 189 walkout was an incredible atmosphere) and try to build up more excitement. Brock Lesnar was just in discussion and CM Punk isn't ruled out for another fight, just embrace the WWE at this point, at least for the fight nights.

5/18/19 4:06 PM
11/24/13
Posts: 3848
youarewhatiswrong - 
Sandy Pantz - So wait, the UFC is losing money, but also the fighters are underpaid?

It’s not losing money in terms of revenue vs operation cost, but the purchase cost put WME way behind the 8-ball.  The future does not look good, though.  They are not building superstars, ESPN is losing viewers every day and I guarantee that UFC is losing viewers as a result of the ESPN deal, not gaining them.  MMA’s prime is long past.  


MMA's prime hasn't even happened yet, ONE and Rizin getting big in Asia, Bellator and high-level boxing on DAZN, and the UFC falling out of that top spot can change the whole game. Coker and Sakakibara being so willing to co-promote is a good sign too if these UFC guys continue to go to Asia.
5/18/19 4:24 PM
7/9/07
Posts: 1530

be me:  Have extra ticket to UFC Ft. Lauderdale.  2.5 months asking friends if they want to go for FREE.  End up selling it on gametime, to some random woman who didn't speak English.  She leaves after one of the womens undercard fights because she said "boring boring." and never came back.

 

the idea of having a house party to watch a UFC PPV will never happen again unless McGregor comes back.  They have negative star power.  The one guy they are leaning on is a drug cheat, who hits and runs preggos, hides under the ring, and constantly says GOD is testing him while being enabled by a psycho President in Dana crook White.

 

please let the UFC go out of business.  please.

5/18/19 4:25 PM
12/28/12
Posts: 5944

Moodys: “UFC Holdings, LLC's (UFC) B2 CFR reflects very high pro forma leverage of 7.8x as of Q4 2018 (including Moody's standard adjustments) but is expected to decline materially in 2019 as the impact of the new media and pay per view (PPV) contracts with ESPN are reflected in the results. ... While the media rights deal is projected to lead to a material increase in revenue and EBITDA for the company, the PPV agreement is expected to dramatically reduce the volatility of the business. ... The stable outlook reflects our expectation for significant growth in revenue and EBITDA with less volatility due to the new media and PPV agreements with ESPN. While leverage is high, we expect it to decline to the mid 5x range by the end of 2019 absent any additional debt issuance.”

 

 

5/18/19 4:49 PM
5/10/08
Posts: 44997

I always said that the UFC was in trouble given their ridiculous valuation and given how much they were adding debt.

When they did an offering of secondary shares (i.e. existing owners selling out) to shitty large fund managers (some in Canada - well known for being dumb money), I knew they were in trouble.

My prediction is that the UFC will be run into the ground and then the Fertitta brothers will "buy it back" on the cheap...

5/18/19 6:01 PM
11/10/18
Posts: 2534
BJTT-BigDaddy -
youarewhatiswrong - 
Sandy Pantz - So wait, the UFC is losing money, but also the fighters are underpaid?

It’s not losing money in terms of revenue vs operation cost, but the purchase cost put WME way behind the 8-ball.  The future does not look good, though.  They are not building superstars, ESPN is losing viewers every day and I guarantee that UFC is losing viewers as a result of the ESPN deal, not gaining them.  MMA’s prime is long past.  


MMA's prime hasn't even happened yet, ONE and Rizin getting big in Asia, Bellator and high-level boxing on DAZN, and the UFC falling out of that top spot can change the whole game. Coker and Sakakibara being so willing to co-promote is a good sign too if these UFC guys continue to go to Asia.

Lol do you mean for Asia? I agree that One May do great in the future. However, North American mma peaked years ago. I’ve trained jujitsu for 22 years and for the longest time everyone I trained with watched virtually every event. That’s changed dramatically over the last 5-7 years to the point that out of my entire gym there might only be 3-4 other guys that watch mma. Those guys certainly don’t watch every event and neither do I. The fucking instructors don’t even watch and they personally know multiple people that have fought in the ufc lol. It is a small minority of the population that likes mma and it’s not growing in North America. 

5/18/19 6:14 PM
11/9/18
Posts: 1063
Right Hand JO Power -

i wish i could afford to lose 100 million in revenue and still be fucking killing it

Then you'd be Donald Trump. #winning

5/18/19 6:27 PM
2/9/09
Posts: 8817

The fix isn’t hard, less cards with more star power. Easier way to watch. UFC app that offers the PPV for a reasonable price

5/18/19 7:55 PM
8/2/11
Posts: 3048
Morpheus1976 -

According to the Moody’s report “[r]evenues for 2018 were well over $600 million.” This would signify a decrease from the previous year, when the promotion was reported to have generated “well over $700 million” in 2017.

According to both Moody’s and S&P Global Ratings, the UFC is expected to increase the size of their senior secured 1st lien term loan from $1.442 billion to $1.877 billion, an increase of $435 million. This additional debt was to be used to pay off their $425 million 2nd lien term loan as well as to pay related transaction expenses. Furthermore, their undrawn revolving credit facility will be upsized from $150 million to $162.75 million.

While EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was not given in either report, we can make an estimate using the reported pro forma leverage. With the change in the loans, the ratio of debt to EBITDA apparently increased from 7.7x to 7.8x for the 4th quarter of last year. With $1.877 billion in debt, EBITDA for 2018 would therefore be approximately $240 million.

 

https://www.bloodyelbow.com/2019/5/15/18310943/ufc-revenues-for-2018-were-well-over-600-million

I respect that you actually used some seemingly legit financial information here. It is very rare on the UG. 

I do however think all these posters that claim they want the UFC to go out of business are ungrateful cunts and would be fucking sad to lose all the epic fights the UFC and Dana have given us over years

5/18/19 8:18 PM
3/26/13
Posts: 846
The Closed Guard -

The fix isn’t hard, less cards with more star power. Easier way to watch. UFC app that offers the PPV for a reasonable price

I think the fix is somewhat hard, and Eskimo nailed it.  What you described is what the hardcore UFC fans want, but the overall interest simply isn't there.  I've trained with/currently train with all kinds of accomplished combat sports athletes (jiu-jitsu, wrestling, pro/am MMA figthers) as well as hobbyists, and the interest isn't there even amongst this demographic, nevermind the people that don't train or have never trained, whom are a much larger block of the viewing audience.

 I never saw the numbers but when the UFC was priced at 4-5 Billion, I wonder if that valuation was based up the uptrend that was current at the time continuing into the future.  The uptrend during that time was based on the popularity of Ronda (the first woman champion and doing movies) and Conor (a talkative Irishman with an accent and representing one of the largest heritage groups in the United States), not the overall interest in fighting/MMA itself.  The problem with the "building more starpower" idea is that these stars have been very unique with Ronda being the first woman champion and Conor being a guy that all other talkative fighters in the future will be compared to.  There can't be another Ronda, and even if there is another Conor, it won't be a novelty. 

So, in my opinion, I think the issue they have is that the appropriate pricing for the UFC would more likely need to have been based on the pre-Conor/Ronda years, but after the "golden era" when MMA was a novelty still, TUF was cool, and GSP was king of Canada.  Think 2013-2014, that probably more accurately represents interest in MMA, and not "characters".  Again, I'm not some Goldman Sachs valuation expert, but I'm a fan, I train, and I've worked in the bar industry and have seen the ebb/flow of MMA interest.  They're making money, but the concern from my viewpoint is how far away the break even point for the investment is.  Typical Private Equity investments have a 7-10 year horizon at which the projected profitability of the investment is expected to be reached.  Based on the revenue/valuation information we have on the UFC, we're looking at longer than that just to break even.

5/18/19 8:21 PM
3/26/13
Posts: 847
Tug Dabone -

They have guaranteed massive revenue from ESPN (including the guaranteed PPV money) and enormous international broadcast rights, plus live gate, plus merchandise, plus Fight Pass, etc. With a 7-year income stream locked in, there's no reason to believe that the value of the company will drop. 

So, the ownership group has a net positive income picture and could sell the company at any time with a nice return on the investment overall. 

They've also got a virtually endless supply of young guys who aspire to be UFC fighters and are willing to accept a 12/12 pay rate with an average of 2 fights a year. A tiny fraction of their roster makes 100K or better per fight. The majority are disposable and can be cut from the roster at any time if they lose a fight.

For now, UFC's ownership is in a can't lose position. Last year's revenue drop - if it actually was a drop, when you consider the 2017 McGregor vs. Mayweather fight - was no big deal.

 

Sell the company, to who? and at what price?  If the UFC is having issues on the two largest sports platforms in the United States (Fox Sports and ESPN), who pays that 4-5 Billion price tag?

5/19/19 8:08 PM
7/12/12
Posts: 1055

I used to just hope it didn't wind up like boxing where you get 1 maybe 2 good fight per card...but this weekend's main card didn't even have that.

5/19/19 8:28 PM
1/27/12
Posts: 908
nek -
The Closed Guard -

The fix isn’t hard, less cards with more star power. Easier way to watch. UFC app that offers the PPV for a reasonable price

I think the fix is somewhat hard, and Eskimo nailed it.  What you described is what the hardcore UFC fans want, but the overall interest simply isn't there.  I've trained with/currently train with all kinds of accomplished combat sports athletes (jiu-jitsu, wrestling, pro/am MMA figthers) as well as hobbyists, and the interest isn't there even amongst this demographic, nevermind the people that don't train or have never trained, whom are a much larger block of the viewing audience.

 I never saw the numbers but when the UFC was priced at 4-5 Billion, I wonder if that valuation was based up the uptrend that was current at the time continuing into the future.  The uptrend during that time was based on the popularity of Ronda (the first woman champion and doing movies) and Conor (a talkative Irishman with an accent and representing one of the largest heritage groups in the United States), not the overall interest in fighting/MMA itself.  The problem with the "building more starpower" idea is that these stars have been very unique with Ronda being the first woman champion and Conor being a guy that all other talkative fighters in the future will be compared to.  There can't be another Ronda, and even if there is another Conor, it won't be a novelty. 

So, in my opinion, I think the issue they have is that the appropriate pricing for the UFC would more likely need to have been based on the pre-Conor/Ronda years, but after the "golden era" when MMA was a novelty still, TUF was cool, and GSP was king of Canada.  Think 2013-2014, that probably more accurately represents interest in MMA, and not "characters".  Again, I'm not some Goldman Sachs valuation expert, but I'm a fan, I train, and I've worked in the bar industry and have seen the ebb/flow of MMA interest.  They're making money, but the concern from my viewpoint is how far away the break even point for the investment is.  Typical Private Equity investments have a 7-10 year horizon at which the projected profitability of the investment is expected to be reached.  Based on the revenue/valuation information we have on the UFC, we're looking at longer than that just to break even.

If I could add to your.point about how there can't being another ronda/conor...seems like the UFC was valued based on those stars and new.ones being developed, but the new ppv model has kinda further excluded the creation of any new stars

5/19/19 10:28 PM
2/8/12
Posts: 3532
Mike OxBIG -


 

5/20/19 12:00 AM
8/20/03
Posts: 143170
Right Hand JO Power - 

i wish i could afford to lose 100 million in revenue and still be fucking killing it


This.

I hate when they say they "lost" revenue.

So they made less of a profit than last year?

So...they still made a profit?

5/20/19 12:12 AM
3/23/12
Posts: 23821
Captain Canuck -
Right Hand JO Power - 

i wish i could afford to lose 100 million in revenue and still be fucking killing it


This.

I hate when they say they "lost" revenue.

So they made less of a profit than last year?

So...they still made a profit?

If you buy a house and take out a $2k a month mortgage with the belief that you will earn $3k a month, then find your income decreasing every month, when your income gets down to $2200 a month, you’re still paying your bills but do you feel good about things?

5/20/19 12:16 AM
12/23/02
Posts: 5082

Like the one guy said nobody brings it up anymore in any of my group of friends or wheverever I am at for that matter.

Edited: 5/20/19 12:24 AM
3/26/13
Posts: 870
youarewhatiswrong -
Captain Canuck -
Right Hand JO Power - 

i wish i could afford to lose 100 million in revenue and still be fucking killing it

 

This.

I hate when they say they "lost" revenue.

So they made less of a profit than last year?

So...they still made a profit?

If you buy a house and take out a $2k a month mortgage with the belief that you will earn $3k a month, then find your income decreasing every month, when your income gets down to $2200 a month, you’re still paying your bills but do you feel good about things?

Even if it's profitable, it's the purchasing price tag that is the concern.  What's the break even point?

5/20/19 1:08 AM
1/26/08
Posts: 17444
youarewhatiswrong -
Sandy Pantz - So wait, the UFC is losing money, but also the fighters are underpaid?

It’s not losing money in terms of revenue vs operation cost, but the purchase cost put WME way behind the 8-ball.  The future does not look good, though.  They are not building superstars, ESPN is losing viewers every day and I guarantee that UFC is losing viewers as a result of the ESPN deal, not gaining them.  MMA’s prime is long past.  

I'll guarentee you that you are wrong

5/20/19 3:37 AM
2/22/13
Posts: 1628

We can only judge the state of MMA based on our own personal perspective.

When I first got into the UFC (around the early 00’s), I wouldn’t miss an event. Friends would come over to watch; I traveled to Vegas (from the UK) just for a fight; I absorbed every bit of MMA-related news; knew every fighter on a card; the UG was thriving with fans/fighters.

Now I barely give a fuck. I started pre-recording events to watch them (rather than watching live); then I started fast-forwarding through them for results. Now I just check the UG for results and just delete the recording.

I’m not bitching (I’m way past caring about the popularity of the UFC), it just highlights a dramatic down-turn.

The moment Dana started talking about getting into boxing was the cherry on the cake. He’s spoken nothing but ill-words about the sport since working in MMA, and now - following a record PPV with Conor - he wants a piece whilst the UFC is circling the toilet bowl.

Buy Hey! They’re building a state-of-the-art production center that aims to give us endless episodes of TUF/Looking for a fighter etc. It’s not all bad news. Lol.

5/20/19 4:12 AM
10/28/16
Posts: 2509
maybe its on purpose cuz of the lawsuit
make less pay out less