Hollywood conglomerate confirms purchase of UFC for $4B
Saturday’s historic UFC 200 event at T-Mobile Arena marked the end of an era for the Ultimate Fighting Championship.
After months of speculation and denials about whether the organization was on the market, the sale of the world’s largest mixed martial arts organization was made official with an emailed statement at 5 a.m. Monday morning.
Entertainment and sports conglomerate WME-IMG has acquired the UFC with a group of investors and will serve as the operating partner, with current president Dana White remaining in his current role as the public face of the organization.
Financial details were not revealed, but indications are the purchase price was approximately $4 billion for the company Frank and Lorenzo Fertitta bought for $2 million back in 2001.
It is believed to be the largest sale ever for a sports entity.
Lorenzo Fertitta, who will step down as CEO upon closing of the deal but maintain a passive minority stake along with his brother Frank, believes the company can continue to grow.
“We’re confident that the new ownership team of WME-IMG, with whom we’ve built a strong relationship over the last several years, is committed to accelerating UFC’s global growth,” he said in a statement. “Most importantly, our new owners share the same vision and passion for this organization and its athletes.”
The UFC will remain based in Las Vegas. A new global headquarters is nearing construction in the southwest and is expected to be completed in mid-2017.
WME-IMG, which was formed in 2013 when the William Morris Endeavor agency acquired International Management Group, is a power in Hollywood and the sports world. In addition to representing athletes, musicians and actors, the company owns distribution rights on many events and has acquired both the Professional Bull Riders tour and Miss Universe Organization, among many other properties.
WME-IMG represents UFC superstar Ronda Rousey, raising the specter of a conflict of interest. It is believed, however, that the company only represents her entertainment interests and hasn’t been involved in negotiating her fight contracts, meaning she could remain with the agency.
“We’ve been fortunate over the years to represent UFC and a number of its remarkable athletes,” WME-IMG Co-CEOs Ari Emanuel and Patrick Whitesell said in a joint statement. “It’s been exciting to watch the organization’s incredible growth over the last decade under the leadership of the Fertitta brothers, Dana White and their dedicated team. We’re now committed to pursuing new opportunities for UFC and its talented athletes to ensure the sport’s continued growth and success on a global scale.”
The WME-IMG-headed group includes Silver Lake Partners and KKR as new strategic investors in the UFC, along with MSD Capital LP and MSD Partners LP, which represent the business capital of computer mogul Michael Dell and will provide preferred equity financing.
Silver Lake is an investment firm focused primarily on tech companies. KKR is a global investment firm with more than $400 billion of private equity transactions since it was founded in 1976.
White told the Review-Journal late Sunday via text message that while he’s excited about the future of the company, it will be disappointing not working alongside Lorenzo Fertitta on a daily basis.
“I’m obviously bummed about not being in business with my best friend and my partners of 20 years,” White said. “I am happy about the future of the UFC, the sport and my role moving forward.”
White, who attended high school with the Fertittas, persuaded them to put up the money to buy the UFC when the fledgling organization, which was founded in 1993 as a no-holds-barred spectacle, wasn’t legally allowed to hold events in most markets and was even banned from television.
After first leading the charge for a unified set of rules and weight classes, they helped lead a push to get professional MMA sanctioned in all 50 states, culminating with legalization in New York earlier this year. The UFC has also expanded globally with offices in five nations and programming available in 156 countries and territories to more than 1.1 billion households worldwide in 29 languages.
UFC also landed a broadcast deal on Fox in 2011 that includes four prime-time events on network television each year, along with additional programming on Fox Sports 1 and Fox Sports 2. That deal is expected to expire in 2018, which may have been a key selling point to the new owners.
White believes the sale is just the next step in the UFC’s progression as a company.
“No other sport compares to UFC,” White said in the statement. “Our goal has always been to put on the biggest and the best fights for our fans, and to make this the biggest sport in the world. I’m looking forward to working with WME-IMG to continue to take this sport to the next level.”
While financial details of the UFC have always been closely guarded, the Fertittas are believed to have each owned just over 40 percent of the company, with White around 9 percent and Flash Entertainment, a subsidiary of the Abu Dhabi government, owning the remaining 10 percent.
The deal was reportedly finalized over the weekend and is expected to close later this summer.
Contact reporter Adam Hill at ahill@reviewjournal.com or 702-224-5509. Follow him on Twitter: @adamhilllvrj.
