Finance MMA Uncategorized

The growth of MMA and UFC sale is one of a kind

The UFC is structured unlike any other major sport which allowed for the company to go through with its historic sale.

The UFC sale is an interesting one. It can really only happen because of the unique ownership of UFC. The company is part sports league part promotion/events company and they have excelled growing MMA to incredible heights. Obviously the UFC is structured differently than your traditional big-4 team sport.

The way UFC is structured is extremely unique and led to the possibility of the sale. It isn’t like the NFL/NBA/NHL/MLB will be sold to a private ownership group. Some other smaller sports and competition leagues (e-Sports, drone racing, etc.) could see this type of ownership at some point – aka private, consortium or company investor based ownership with examples such as WME, Turner etc. owning and running the league. Outside of those smaller leagues, the UFC sale probably won’t be replicated.

We’ve seen a lot of different types of league structures, mergers, and investments but nothing exactly like this.

The ABA-NBA merger and AFL-NFL merger consolidated leagues to singular entities, but teams were still privately owned the and the league offices/structure didn’t change with a central governing/business body and 30-32 privately owned teams/businesses.

Providence Equity Partner owns a portion of Soccer United Marketing (SUM) which is a sports marketing/media rights/agency owned by MLS. Theoretically MLS could sell the entire stake in SUM, but that wouldn’t be a cash out of the entire league.

MLB had MLB Advanced Media, which had a portion spun off in to BAM Tech. Right owner MLB and its owners still have a stake in BAM Tech, but 33-percent of it was sold to Disney recently. Theoretically all of BAM Tech could be sold, but not in the same way as UFC, an it is a tech and media company not a league.

It’s hard to figure out what is next for former UFC ownership. There were rumors of a sale in 2009, but that never happened, so the timing after UFC 200 is interesting.

There will be rumors none the less, none that can be substantiated at this time. Some have said it’s because the Fertitta’s are interested in owning the NFL’s Raiders in Vegas. There are so many steps that would have to come before that — stadium being built, a deal with stadium owners/operators (Sands Casinos and Majestic Realty would be investors in the stadium), Marc Davis selling the Raiders, a vote from NFL ownership, any issues the NFL may have with Station Casinos and the Fertitta’s ownership — making that rumor almost a complete conjecture at this point.

Maybe the ownership group just sees a chance to cash out. It would be an amazing return — $ 4 billion for a $2 million investment. After all, everything and everyone has a price, maybe that is just the right amount of money. In the end, it is rare we will see another deal like this. The Fertitta’s and Dana White grew UFC to incredible heights, and now it is an established sport. Recreating their magic would be extremely difficult.

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