On July 9th, the Ultimate Fighting Championship (UFC) sold itself to WME-IMG, Silver Lake, KKR and MSD capital for $4 billion dollars. The mixed martial arts league is expected to formally make the announcement on Monday, although we’ve already read an internal memo that UFC has sent their fighters. You can read that memo farther down the post.
Chris Maathuis, the Sports Director of KLAS-TV (CBS), announced that the sale was finalized on Saturday–the same day as UFC 200.
Details of the Sale
Dana White will remain with the organization as president of UFC, but his stake in the company will decrease. Lorenzo and Frank Fertitta–once the majority owners of UFC–will now only exist as minority owners. Furthermore, Lorenzo Fertitta will step down as CEO. It hasn’t been announced yet who will replace him.
Although WME-IMG is mostly a talent agency, the NY Times reports that the people backing the deal financially are Silver Lake, Kohlberg Kravis Roberts, and the investment firm of the billionaire Michael S. Dell.
Internal Memo To UFC Fighters
Here’s a letter that was sent by Zuffa, an American sports promotion team (owned by the Fertitta brothers) that bought UFC for $2 million back in 2000, to all the UFC fighters.
We are writing to personally advise you of a change to UFC. Renowned entertainment, sports and fashion giant WME | IMG has entered into an agreement to acquire UFC. Silver Lake Partners, KKR, MSD Capital, L.P. and MSD Partners, L.P. will join WME | IMG as new strategic investors. The transaction is subject to customary closing conditions.
From the moment Zuffa, LLC purchased UFC over 15 years ago, you, the athletes, have always been the central focus of the promotion. That will not change. WME | IMG, who has been involved with UFC for many years, is focused on the continued global expansion of mixed martial arts and committed to further promoting you on the global stage.
Upon closing of the deal, Lorenzo Fertitta will be stepping down as Chairman and CEO of the organization, however, Lorenzo and Frank will retain a minority ownership interest in the business. UFC President Dana White will continue in his role and will also retain a minority ownership interest.
The organization’s leadership, a team of great executives hand-picked to help lead the business, will remain in place to carry on their work and continue to lead the team of dedicated employees who promote your careers as mixed martial arts athletes.
You remain a very important part of a highly driven, dedicated and motivated organization that will continue to deliver wold-class experience and opportunities for you as athletes and for the greatest fans in the world.
The Zuffa executive team.
Earlier this summer, Dana White shut down rumors that the UFC had sold or was even for sale. When those rumors of the sale of the UFC first broke, President Dana White was quick to shoot them down, saying:
“The day we decide to sell, I probably don’t want to do this anymore,” White told NBC Sports’ Dan Patrick. “Me and Fertitta brothers have been together a long time … we’d probably all be looking to get out.”
But, as we all know, Dana White and honesty are the farthest thing from synonymous.
According to Forbes, now is an ideal time for White and the Fertitta brothers to sell, depsite posting it’s highest ever revenue in 2015, following a decade of steady growth:
“The UFC could find itself in some financial trouble in the near future. A controversial bill to extend the Muhammad Ali Boxing Reform Act to MMA is currently in committee after being introduced to Congress in May. If passed, the UFC would lose a lot of its bargaining power with its fighters, and subsequently, a sizable chunk of its profits. In addition, the company is currently embroiled in an antitrust lawsuit with several of its former employees, an expensive process whether or not the case goes to trial.”
While a Forbes writer speculated earlier in the year, that with the legalization of UFC in New York, the company became a $3 billion dollar property. However, one of the four prospective buyers listed in the report — the Dalian Wanda Group, China Media Capital, the Blackstone Group or WME/IMG — is apparently prepared to exceed that total at $4 billion. The Wanda Group, backed by Wang Jianlin — China’s wealthiest man, worth almost $35 billion, according to Forbes— is the frontrunner at this time.