Spotlight on UFC’s Finances: Debt, Record Growth & the Future

UFC

Ultimate Fighting Championship (UFC) enjoyed its best financial year to date in 2021, with increased attendance and media rights fees. The organization also benefited from new sponsorship deals and strong event-related revenue. But how did UFC achieve such impressive financials, and what does the future hold for the mixed martial arts (MMA) company?

Background to UFC

Started by Art Davie and Rorion Gracie, UFC held its first event in 1993. The Las Vegas-based promotion company has since grown to become the world’s largest MMA organization and pay-per-view (PPV) event provider. The company is owned and operated by a subsidiary of Endeavor Group Holdings, Zuffa.

Following Endeavor’s public offering in 2021, it gained full equity ownership of UFC, which is its main portfolio asset. UFC produces MMA fights across eight men’s and four women’s weight divisions.

Globally, its events are broadcast to over 1.1 billion homes across more than 165 countries and territories. It set a live attendance record of 57,000 in October 2019 in Melbourne, Australia, while it has exceeded one million PPV sign-ups on 19 occasions, with the highest reaching 2.4 million.

Latest financials

In March 2022, Endeavor reported that 2021 had been UFC’s best financial year in its history, to date. UFC’s financial figures form part of the group’s Owned Sports Properties segment and were not reported separately. However, UFC reportedly accounts for the largest share by far of this segment.

Overall, the segment achieved revenue of $277.3 million for the quarter ending 31 December 2021, up 3% quarter on quarter (QoQ). For the full year to 31 December 2021, revenue reached $1.1 billion, up 16% on 2020. Some estimates suggest that UFC accounted for around $900 million of this figure, but Endeavor has not revealed the specific contribution of its individual assets.

The increases in revenue were attributed to factors including increased media rights fees and additional sponsorship deals, plus nine UFC PPV events with live audiences that were sold out. This followed a period in which audiences were unable to attend, due to Covid-19 restrictions. During 2021, 14 international media rights deals were finalized, averaging a 94% increase on the previous contract terms, while sponsorship revenues achieved record highs.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the segment were $125.1 million for the quarter, up 2% QoQ. For the full year, adjusted EBITDA was $537.6 million, up 17%, year on year.

What does the future hold for UFC?

There appears to be no sign of a slowdown for UFC, which is good news for fans of the sport and for those who enjoy inplay UFC betting. Indeed, during the quarterly earnings call, Endeavor CFO Jason Lublin referred to the Owned Sports Properties segments’ “continued momentum”.

Indications of UFC’s continued strength include the company’s domestic PPV and broadcast distribution rights deal with ESPN, which extends until the end of 2025, while the UK, Brazil, and Scandinavia are among the international markets in which the media rights are coming up for renewal.

UFC has clearly benefited from the lifting of Covid-19 restrictions and the subsequent return of live audiences, as well as the continuing global popularity of MMA.

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