THE NEW ZUFFA MYTH: THE UFC’S INFLATED $1 BILLION VALUE IS BUNK

Posted on | July 25, 2010 | 1 Comment

By: Rich Bergeron

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IIIIIIIIt’s time….. to get real when it comes to the Royal Family of the UFC. and expose some of the misleading stories circulating about the value of the UFC being over $1 billion. This billion dollar price tag is pure speculation. The perpetuation of this figure in the media has been hard to track to a primary source, but I blamed Forbes Magazine first:

” It was the latest fightfest staged by Ultimate Fighting Championship, a Las Vegas company that started as a smutlike fight club that’s now worth maybe $1 billion and is drawing competitors like flies to blood.”

Take a gander at that M word before the $1 billion. Somehow from this article, the $1 billion figure grew legs and stuck. For more than two years people have been treating it like gospel as if the value and assets of the UFC are officially worth $1 billion. The Forbes piece’s price is often repeated and referred to as the main reason for other news sources accepting the valuation.

CNBC, a station not necessarily known for winning Pulitzer Prizes, had this segment on this past January where the host uses a “let’s just make it up” figure of $1.25 billion.

Listen for Dana when he says the UFC is worth whatever anyone is willing to pay for it. Listen for Lorenzo Fertitta dismiss the idea the company is in massive debt. There’s been nearly $500 million of those financial instruments taken out already on the face value of the UFC. Lorenzo disputes the debt total only because some of that debt is being paid down by the UFC’s revenue. Maybe he likes to call it by the catchy “bank facility” term to confuse people into thinking it’s not really debt, but that doesn’t change the fact that it exists.

It took two years for that first Forbes piece to actually produce any kind of sale, and even then it was only for a small percentage in the company. MMA Payout printed the details of the sale, including an article quoting the Forbes piece as estimating the billion dollar figure.

Leave it to all the experts at Yahoo’s AssociatedContent.com to change my mind about Forbes. This article claims the UFC bought PRIDE for about 80 million dollars in addition to carrying the headline that the UFC is worth “Over One Billion Dollars.” Some Yahoo under the profile Brian Y might be the first person on record to use the billion dollar figure considering the post was published Published 7/31/2007. So he got the PRIDE PRICE WRONG and the billion dollar price tag might even be his invention.

Check out another MMA Payout piece detailing the real financial structure of the UFC HERE.

The fact is, anyone who would outright buy the UFC would be assuming a whole lot of debt, whatever the real debt figure is. With the economy still “uncertain” in the eyes of the experts, that billion dollar price tag should be going down, but the folks at CNBC just jacked it up when the Abu Dhabi deal went through. All of this is based on nothing, no financial projections or actual figures, just speculation and supposed offers that never actually materialized. This is the world of MMA journalism we live in when so few writers question the so-called facts spouted by big media like Forbes and CNBC. Don’t believe the Hype. If you think the UFC is really, honestly worth a billion dollars, maybe you went to the Dr. Evil school of accounting:

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