EPTUFC/MMA Discussion Thread - Page 39
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royalroadweed
United States8301 Posts
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JimmyJRaynor
Canada17614 Posts
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JimmiC
Canada22817 Posts
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JimmyJRaynor
Canada17614 Posts
http://m.ufc.ca/news/UFC-Fight-Night-Manila-Lamas-Penn-to-be-Rescheduled | ||
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CorsairHero
Canada9491 Posts
Bloomberg reported this week reported the Federal Reserve bank supervisors have issued a caution to Goldman Sachs Groups, Inc. regarding WME-IMG taking on more than $1.8 billion in debt financing in its purchase of the UFC from the Fertitta family. The money was a combination of $1.4 billion for the actual sale of the company to get the bid up to the $4 billion valuation mark, plus another $425 million as part of the company's existing debt. In August, when the first $500 million of the debt went up for sale, largely due to offering 8.5 percent interest, they went in an instant to 70 different investors, which included hedge and mutual funds. The demand was such that UFC was able to lower the interest rates and still was able to raise the entire $1.825 billion. An August Bloomberg article said banks at first shied away from offering the loans, feeling that the market wouldn't be there for them, but the opposite ended up being the case. It was described as investor frenzy, largely due to the difficulty in today's marketplace of getting 8.5 percent interest on investments. The fact the demand was there shows Wall Street is seeing UFC as a hot property, but the Federal Reserve bank was uneasy about debt being more than six times that of annual EBITDA. UFC reported EBITDA of $142 million during the 12-month period from July 1, 2015 to June 30, 2016. That number is significantly down than for 2015 as a whole, meaning essentially that the period of January 1 to June 30 of this year was well down in profitability from the same six month period in 2015. That would mean debt would be nearly 13 times annual EBITDA. That is even with a video game release in the spring of 2016, and what the company has claimed was its biggest pay-per-view up to that point in history on March 5 headlined by Conor McGregor vs. Nate Diaz. The second McGregor vs. Diaz fight, as well as UFC 200, both of which topped 1 million buys, took place after the June 30 cut-off. With those two shows and the Madison Square Garden event on November 12, the final six months of 2016 figure to be the most successful the company has ever had by a wide margin. A key to selling the debt was that prospective investors were shown estimates that the annual EBITDA of the company would increase to $298 million per year, based on a strategy going forward of cost cutting within the company as well as projecting growth in the licensing revenue. At $298 million per year, the debt would fall into the parameters of roughly six times EBITDA. What that means is that Wall Street has tremendous confidence in the future of the brand. The $4 billion sale price came partially with the belief that UFC's U.S. television revenue would increase greatly in 2019 when the current deal with FOX expires. According to sources within the company, they are looking at following major sports like the NBA, MLB, NASCAR and the NFL in having events aired on multiple networks rather than an exclusive deal. This may all sound like good news as far as expansion of the brand and financial growth, but if the annual interest on $1.825 billion averaged 7.5 percent, that is nearly $137 million. In other words, the company has to essentially make an annual profit of $137 million just to break even. And that doesn't even figure paying back the debt itself, just the interest. That's not good news for fighters who no doubt hope to see pay increase under the new owners. When one considers that the EBITDA at this point is only slightly above that number, and that the last 21 months have seen business boom, particularly on pay-per-view due to the star power of Ronda Rousey and Conor McGregor, they are banking on being able to continue at that level of profitability. Even though injuries, losses or early retirements of one or both of the big two would leave a gaping hole a far as the kind of drawing cards able to pull the necessary numbers. Source | ||
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JimmyJRaynor
Canada17614 Posts
http://mmapayout.com/2016/07/ufc-holdings-llc-issues-credit-facility-given-b-rating-outlook-negative-per-sp-global/ "Per a Standard & Poor’s Global press release Friday UFC Holdings, LLC will issue a $1.45 billion first lien credit facility. The company was assigned a ‘B’ rating on the WME-IMG acquisition. The outlook is projected as negative per the Standard & Poor’s Global Ratings report." | ||
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JimmyJRaynor
Canada17614 Posts
"the irressistable force meeting the immovable object". | ||
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JimmyJRaynor
Canada17614 Posts
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Hier
2391 Posts
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JimmiC
Canada22817 Posts
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CorsairHero
Canada9491 Posts
Anderson got an immediate title shot as well after getting KO. On October 13 2016 03:21 JimmyJRaynor wrote: i think Dana White is going to announce Rousey is coming back at UFC 207 in about 10 minutes. https://twitter.com/FS1/status/786269029577035776 ouch. Heelwani doing his thing | ||
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JimmyJRaynor
Canada17614 Posts
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JimmyJRaynor
Canada17614 Posts
128 reddit comments 14 minutes after GSP announces he is an FA.  | ||
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crms
United States11933 Posts
It's just scary seeing all my favorites GSP, Fedor, CroCop etc., making these lack luster returns, I wish GSP the best. | ||
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CorsairHero
Canada9491 Posts
smh | ||
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FiWiFaKi
Canada9859 Posts
On October 18 2016 05:31 CorsairHero wrote: deal was on the table, but the new owners yanked it lmao smh Well if GSP wanted $10mil like those sources claim, UFC would be crazy to say yes imo. I was a GSP fan, but like, I don't understand what numbers you guys expect him to bring. The last 7 UFC events with GSP had an average of 820,000 buys... I don't recall his popularity increasing much after he was fairly dominant. The average buys for a PPV with a championship belt fight without 2 really popular fighters is like 300,000. More if you get any of the somewhat bigger draws, but let's just say that he'd add 500,000 buys against someone like Nate, or whoever else who'd also realistically ask for quite a bit of money. So half a million buys, now the cost of an individual PPV is around $40~ (http://imgur.com/a/QX0Y0), I'm just using a bit of a projection of what I expect the nations which purchase PPV's. So a GSP fight adds $20mil in PPV buys, and looking at UFC gates (http://boxing.nv.gov/results/Top_MMA_Gates/), and seeing only 3 fights of GSP that made above $2.7mil, lets assume that the average GSP gate is $3mil, and assume the same ratio of 800k/300k to say the UFC gate without a big superstar is 1.1mil, so I'll be generous and say UFC adds $2mil at the gate (it's probably closer to $1.5mil, but anyway). So a GSP fight adds $22mil in direct value, out of that $22mil, GSP would get $10mil, and you can only imagine his opponent would be getting a big share too, like Diaz fighting McGregor and getting a big cut, so lets assume $3million. And then when you look at bargaining power, and how really UFC doesn't need the $9mil that GSP would bring, and that's if things go according to plan, it's easy to see his popularity having decreased since he doesn't have the belt and he's been gone for so long. Meanwhile GSP has nowhere else to go to make that kind of money. Then we look at the setting a new standard that will hurt UFC to come when you start paying fighters even more, you look at the opportunity cost of not hosting a different UFC event instead. Some people like to treat each UFC as independent events, but for a lot of people it might be more of "I'll buy 3 PPV's this year", so just because they GSP and not the one that would have been otherwise, doesn't mean they'll skip out on another one later. I didn't really consider GSP pulled a Heisenberg, and should have been happy with the $4mil/fight he was making before, but now he gets nothing, and his name will slowly vanish. | ||
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crms
United States11933 Posts
On October 18 2016 09:47 FiWiFaKi wrote: GSP pulled a Heisenberg, and should have been happy with the $4mil/fight he was making before, but now he gets nothing, and his name will slowly vanish. A well documented issue with GSPs return was the lack of outside sponsorship ala the Reebok deal. UFC could have come down on the $10M/fight if they allowed GSP to use his insane endorsements deals. Though I'm not sure how they could have after they pigeonholed themselves into that deal. Apparently back when GSP was active he made $3M/yr just from sponsorship deals. The Reebok shit was a major point of contention in GSPs return and I can imagine GSP will make a shit load going to Bellator or whoever and recouping whatever lost wage from the promoter themselves with brand endorsements. So to say he gets nothing and will vanish is pretty disingenuous. GSP will be fine I'm sure. edit; I'm surprised they didn't work with him on sort of a fight by fight basis, maybe they can't agree to a 3 fight 10m per fight deal, but they should have been able to negotiate a return fight. I'm confident a return fight for GSP on a big card would get a lot more than 800k buys. Oh well at the end of the day the UFC didn't think it was a good business decision and GSP wasn't happy. We can speculate until the cows come home. | ||
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JimmiC
Canada22817 Posts
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FiWiFaKi
Canada9859 Posts
On October 18 2016 09:53 crms wrote: A well documented issue with GSPs return was the lack of outside sponsorship ala the Reebok deal. UFC could have come down on the $10M/fight if they allowed GSP to use his insane endorsements deals. Though I'm not sure how they could have after they pigeonholed themselves into that deal. Apparently back when GSP was active he made $3M/yr just from sponsorship deals. The Reebok shit was a major point of contention in GSPs return and I can imagine GSP will make a shit load going to Bellator or whoever and recouping whatever lost wage from the promoter themselves with brand endorsements. So to say he gets nothing and will vanish is pretty disingenuous. GSP will be fine I'm sure. edit; I'm surprised they didn't work with him on sort of a fight by fight basis, maybe they can't agree to a 3 fight 10m per fight deal, but they should have been able to negotiate a return fight. I'm confident a return fight for GSP on a big card would get a lot more than 800k buys. Oh well at the end of the day the UFC didn't think it was a good business decision and GSP wasn't happy. We can speculate until the cows come home. Bellator pays chump-change, isn't $75k the highest ever single payout in Bellator? They don't have any PPV deals, so Connor made roughly 200x more than anyone has ever earned in Bellator. Viewer numbers for Bellator would probably be 1.5mil~, but a Bellator viewer is worth way less than a UFC viewer from a business perspective, just because viewers probably have less money, the event doesn't look as good, etc. So an 800,000 PPV buys probably (fermi approximation) is 3 people per PPV (2.4mil), 50% of PPV number doing illegal streaming (400k), and take 10% of that total and add that to the bar population. Lets say proportionally # of people that watch videos of UFC and Bellator is the same, so exclude those. So viewer count wise, I'd say that's 3.1mil, and SpikeTV, let's assume 2 viewers / TV, and we're at 3million as well. Average UFC viewer is idk, 4x more valuable than a Bellator viewer (I think it's heavily watched in poor places, and non-english speaking). Say that GSP fights 3x/year, so $1mil in sponsorship / fight at UFC, now divide that by 4... And at Bellator he'd get $250k in sponsorship per fight. Say he breaks a new record and gets paid $100k. That's what I'd expect, if he leaves UFC he will earn $350k for the fight, if he stays in UFC, he'll earn $5mil-$8mil. | ||
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FiWiFaKi
Canada9859 Posts
UFC 200 Tate v Nunes 1,200,000 UFC 193 Rousey vs Holm 1,100,000 UFC 116 Lesnar vs. Carwin 1,060,000 UFC 66 Liddell v. Ortiz II 1,050,000 UFC 168 Weidman vs Silva II 1,025,000 UFC 91 Lesnar v. Couture 1,010,000 UFC 114 Evans vs. Jackson 1,000,000 UFC 92 Griffin v. Evans 1,000,000 I wasn't even an MMA fan during some of these, but I don't think GSP has the epicness levels of any of these, imo the absolute absolute best case scenario would be 1,000,000 - realistically I'd expect 700,000 - 850,000. Casual viewers just think he's a boring fighter. You know, I really do side with the UFC and not the fighters in these situations. Without the magic that Lorenzo's and Dana White were able to do, half the guys in the UFC would be bums on the street, and the other half would be working another job compared to fighting. Fighters try to use the media to get their way with the UFC, but I have little empathy for most of them nowadays. | ||
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