# UFC has a ton of debt



## Samborules (Jun 16, 2009)

The company carries $450 million in debt based on loans taken out to fund company growth. There is a $25 million credit facility due in 2012, and a $425 million loan due in 2015.

I was surprised to see this, I wonder if this is partially why they hesitate in sharing any profits with M1 and hesitate further in giving big $$ to aging fighters like Hendo? 

Thoughts?

PS ~ Also curious how much debt Strikeforce carries.


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## jasvll (Mar 28, 2007)

That's not unusual for a big business, especially one that doesn't go to the public to raise capital.


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## imrik32 (Dec 31, 2006)

Samborules said:


> The company carries $450 million in debt based on loans taken out to fund company growth. There is a $25 million credit facility due in 2012, and a $425 million loan due in 2015.
> 
> I was surprised to see this, I wonder if this is partially why they hesitate in sharing any profits with M1 and hesitate further in giving big $$ to aging fighters like Hendo?
> 
> ...


A company having debt doesn't mean they're going to dail or in danger of failing.


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## Samborules (Jun 16, 2009)

Huh? How big is this business if their EBITDA (Earnings before Interest Taxes Depreciation and Amortization) is $100 million (I doubt its that high) then they are still leveraged 4.5x.

That is High!


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## alizio (May 27, 2009)

likely all the streamers fault, right DW?? :sarcastic12:


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## DanTheJu (Mar 3, 2007)

where are you getting this info? I am guessing it is all just estimates and guesses!


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## mudpie (Apr 20, 2008)

imrik32 said:


> A company having debt doesn't mean they're going to dail or in danger of failing.


It does if the debt gets called in, which has happened to a few companies recently. Although I think that is getting less and less likely.


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## FrankMir20 (Dec 21, 2009)

First of all, what is your source?

Second, this is probably why they sold 7% of their company,,,those people have billions of dollars.Im not worried.


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## Samborules (Jun 16, 2009)

what you guys don't trust me? 

http://sports.yahoo.com/mma/news;_y...o14?slug=dm-ufcsale011210&prov=yhoo&type=lgns

BTW ~ Not saying its a bad thing they needed capital to grow the business I am just surprised at how high the levels are.


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## DanTheJu (Mar 3, 2007)

I still dont trust the numbers... there is no source for them... They are just estimates and guesses!


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## Jord -Jitsu (Nov 3, 2008)

I seen an interview with DW and FF after the Maynard fight and Fertita was adamant that they were doing fine financially and they only sold to the sheikh for strategic reasons.

If they do have that much debt then they must be on schedule for their payments.


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## Xerxes (Aug 14, 2008)

I wonder where Meltzer got these numbers from..


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## Samborules (Jun 16, 2009)

"The company carries $450 million in debt based on loans taken out to fund company growth. There is a $25 million credit facility due in 2012, and a $425 million loan due in 2015."

This is a direct quote from the article, no where does that say "assumption", "estimate" or "guess". Why do you believe it is not factual please? 

Some more info for you:

Some fans might have heard that the UFC (AKA Zuffa, LLC) took out a $325 million loan not too long ago: DETAILS OF ZUFFA LOAN. In June 2007 Zuffa, LLC, the parent company of the UFC, borrowed $325 million through a Senior Secured Credit Facilities Term Loan due 6/18/15. This debt instrument was placed with Oppenheimer Funds, Franklin Templeton Funds, Fidelity Funds and others.

Evidently the Fertittas spent most of the proceeds on the purchase of Pride and on a dividend for themselves and Dana White. The provisions of the loan are as follows: The loan is a pledge of the entire Zuffa assets and revenues, including the UFC, and a stated amount of revenue must come from sponsorships.

The new UFC Xyience contract, which newly-crowned co-CEOs Adam Frank and Kirk Sanford negotiated with John Mulkey, the CFO of Zuffa LLC, calls for $9 million the first year, $11 million the second year and $12.14 million the third year. And Xyience will reportedly not be in the center of the mat after March. In other words: The Fertitta funding and new UFC contract with Xyience appears to be a sham for the auditors of Zuffa and the UFC to cover-up the fact that a key covenant in their $325 million loan was in breach.

They were allowed to obtain this loan by representing the sponsors they have are all above board, successful companies. Once Zuffa had secured and collected on their own loan, Fertitta Enterprises and a few other outside investors gave Xyience financing in a deal that shareholders were told would directly benefit the company and provide operating funds for an expansion of the brand. The alternative would be to bankrupt the company. The scare tactic worked. The new investment group now plans to do what they said they were trying to avoid all along, all in order to truly capitalize for themselves on their investment.

Instead of providing bridge financing for an IPO of Xyience stock (as some investors were told the Fertitta funding would facilitate) or funds to pay off a host of other vendor fees Xyience has accrued, the Fertitta loan barely made a dent in Xyience's extensive debt. 

Fertitta Enterprises entered into financing Xyience primarily to pay off the company's UFC debt. Almost immediately after the Fertitta money came in, Xyience reportedly forked out over $6.5 million in past due sponsorship fees that had been accrued by Xyience and were owed to the UFC. The company also extended their UFC sponsorship contract right after the Fertitta Enterprises deal became official. The Fertittas and a few other investors basically funded a company on the verge of bankruptcy to provide capital for themselves. So, the Fertittas and a few friends paid the debts owed to the UFC by Xyience while also propping Xyience up as a valid, viable company. Any way you slice it, it's a scam perpetrated by misdirection and manipulation.

http://www.unlimitedfightnews.com/xyiencewow.htm


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## coldcall420 (Aug 2, 2007)

Samborules said:


> The company carries $450 million in debt based on loans taken out to fund company growth. There is a $25 million credit facility due in 2012, and a $425 million loan due in 2015.
> 
> I was surprised to see this, I wonder if this is partially why they hesitate in sharing any profits with M1 and hesitate further in giving big $$ to aging fighters like Hendo?
> 
> ...


 
This is an intresting post, where did you finsd the source for these numbers as i have slightly different ones and info, however mine is slightly dated as I have not been over the numbers since the last time this was discussed...

Thanks in advance for the link or source, this stuff is my passion and I want the latest look at the books....:thumb02:

EDIT: I def have different info.....thought they were like 52 mill in debt when the Fertittas bought it for 2 then put like 50 into it to get it going....but cash flow pos now...so something is off...post those sources....:thumbsup:


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## Samborules (Jun 16, 2009)

coldcall420 said:


> This is an intresting post, where did you finsd the source for these numbers as i have slightly different ones and info, however mine is slightly dated as I have not been over the numbers since the last time this was discussed...
> 
> Thanks in advance for the link or source, this stuff is my passion and I want the latest look at the books....:thumb02:
> 
> EDIT: I def have different info.....thought they were like 52 mill in debt but cash flow pos now...so something os off...post those sources....:thumbsup:



Zuffa carries $450 million in debt, including a $25 million credit facility due in 2012 and a $425 million loan due in 2015, according *to a November report issued by Moody’s Investors Service.* Moody’s, however, said Zuffa’s income, which comes largely from events and pay-per-view receipts, should be sufficient to make its debt payments.

Moody’s said Zuffa’s financial outlook is stable with good growth prospects. Its in about the middle.

http://www.watchkalibrun.com/2010/1/12/1247004/minority-share-of-the-ufc-sold-to


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## DanTheJu (Mar 3, 2007)

Why do I not think it to be fact? Because it has not been proven to be fact. It is a random number thrown out with no source attributed to it at all.

Zuffa is a private company and does not have to disclose ANY of their financials to anybody, so I have my doubts that these numbers are actual facts.

I know that Forbes did a story about the UFC and Zuffa and they came up with a bunch of estimates and guesses (very educated guesses with their knowledge of business) to come to a conclusion, and those numbers were VERY similar to what Yahoo is saying as fact...

I went to Journalism school and it just KILLS me to see this stuff thrown around as fact with out even a simple mention of where the numbers came from.


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## Samborules (Jun 16, 2009)

DanTheJu said:


> Why do I not think it to be fact? Because it has not been proven to be fact. It is a random number thrown out with no source attributed to it at all.
> 
> Zuffa is a private company and does not have to disclose ANY of their financials to anybody, so I have my doubts that these numbers are actual facts.
> 
> ...


Dan, I am close to negatively repping you. This is Moody's rated debt and thus available for all to see!!

CREDIT : Zuffa, LLC 
OUTLOOK OF CREDIT : Stable, 22 MAY 2007 

DEBT DESCRIPTION 

COUPON : 

MATURITY : 19 JUN 2012 

DEBT TYPE : SR SEC REVOLVING CREDIT FACILITY 

FACE AMOUNT : USD 25 mil. 

SENIORITY : Senior Secured 

SALE DATE : 

DEBT HAS SUPPORT : No


CREDIT : Zuffa, LLC 
OUTLOOK OF CREDIT : Stable, 22 MAY 2007 

DEBT DESCRIPTION 

COUPON : 

MATURITY : 18 JUN 2015 

DEBT TYPE : SR SEC 1ST LIEN TERM LOAN 

FACE AMOUNT : USD 425 mil. 

SENIORITY : Senior Secured 

SALE DATE : 

DEBT HAS SUPPORT : No


The debt is rated Ba3 = Junk

Here is the link but you need a Moodys account to access, which being in the financial services industry I have. Although I think anyone can get it, actually?

http://www.moodys.com/moodys/cust/q...earch&searchresult=rated&ratg_clss_num=700950

:thumbsup:


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## DanTheJu (Mar 3, 2007)

Well that stuff was not at all listed in the Yahoo article which is why it was questioned by me... and Neg rep if you like, I am not sure what that even means...


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## Samborules (Jun 16, 2009)

DanTheJu said:


> Well that stuff was not at all listed in the Yahoo article which is why it was questioned by me... and Neg rep if you like, I am not sure what that even means...


I was kidding!!! I am not going to neg rep. you but stop being such a skeptic...LOL

Anyway, have I proven my point?


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## jasvll (Mar 28, 2007)

As I said in the beginning, these numbers are normal for a company like Zuffa, and Moody's assessment proves that I am awesome.


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## shocktheworld (Dec 14, 2009)

*Calm Down*

They are sitting on a billion dollar asset - hell, they turned down a $1.2 offer. things are more than fine in UFC land...


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## Samborules (Jun 16, 2009)

jasvll said:


> As I said in the beginning, these numbers are normal for a company like Zuffa, and Moody's assessment proves that I am awesome.


Debt is rated Ba3 = junk...I bet the Company is highly leveraged. So not necessarily "normal" I would lean to "Not unusual".

But you can still be awesome...LOL


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## jasvll (Mar 28, 2007)

Samborules said:


> Debt is rated Ba3 = junk...I bet the Company is highly leveraged. So not necessarily "normal" I would lean to "Not unusual".


 Again, though, Zuffa is engaging in an expensive expansion and has to finance that without public equity, so yes, there is more risk, which is why Moody wouldn't rate the debt as a sure thing; it isn't. It's not something fans should worry about or detractors should gloat about, either.



> But you can still be awesome...LOL


Sweet.


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## DanTheJu (Mar 3, 2007)

I was trained to be a skeptic, and will always be a skeptic... I want proof, not just somebodies word for it...


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## Samborules (Jun 16, 2009)

DanTheJu said:


> I was trained to be a skeptic, and will always be a skeptic... I want proof, not just somebodies word for it...


Dan...buddy!! Did I get you the proof? My skeptic friend? Please say YES!!!!

:thumbsup:


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## DanTheJu (Mar 3, 2007)

Well you got me a source for the numbers, which is what I was looking for! So thanks!


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## jasvll (Mar 28, 2007)

Exclamation points for everyoneﻁ


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## coldcall420 (Aug 2, 2007)

Samborules said:


> Zuffa carries $450 million in debt, including a $25 million credit facility due in 2012 and a $425 million loan due in 2015, according *to a November report issued by Moody’s Investors Service.* Moody’s, however, said Zuffa’s income, which comes largely from events and pay-per-view receipts, should be sufficient to make its debt payments.
> 
> Moody’s said Zuffa’s financial outlook is stable with good growth prospects. Its in about the middle.
> 
> http://www.watchkalibrun.com/2010/1/12/1247004/minority-share-of-the-ufc-sold-to


 
Thanks man i will dig way into this later...i appreciate...repped...




Samborules said:


> Dan, I am close to negatively repping you. This is Moody's rated debt and thus available for all to see!!
> 
> CREDIT : Zuffa, LLC
> OUTLOOK OF CREDIT : Stable, 22 MAY 2007
> ...


Once again thanks for the source, Dan always is in these threads those of us in Big Business end up in the same threads or discussions alot...LOL.. My issue is they are private so anything they share for the most part is just that....what they choose to share, but either way you have given me an intresting homework assignment...I appreciate....:thumbsup:



jasvll said:


> Exclamation points for everyoneﻁ


 
For Sure!!!!!!!!!!!!!!!!:thumbsup:


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## Samborules (Jun 16, 2009)

HW assignment? What are you working on, please?


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## rabakill (Apr 22, 2007)

if they were ever in any need of help they could instantly go public. A company like Zuffa would sell shares like hotcakes.


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## Samborules (Jun 16, 2009)

rabakill said:


> if they were ever in any need of help they could instantly go public. A company like Zuffa would sell shares like hotcakes.


An equity raise is plausible but then you give up a good portion of control. Has its pluses and minuses for sure.


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## rabakill (Apr 22, 2007)

Samborules said:


> An equity raise is plausible but then you give up a good portion of control. Has its pluses and minuses for sure.


that's why they only do it when they are in trouble. I think DW would cry if he saw UFC on NBC. It'd be like a slap in the face for all their hard work, he did just give up 10% of his ownership.


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## Samborules (Jun 16, 2009)

rabakill said:


> that's why they only do it when they are in trouble. I think DW would cry if he saw UFC on NBC. It'd be like a slap in the face for all their hard work, he did just give up 10% of his ownership.


A strong IPO would make him wealthy enough not to cry

LOL


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## rabakill (Apr 22, 2007)

I think he's in it because he likes the job. I've seen his house, he could quit tomorrow, sell his stuff and never have to work again.


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## DanTheJu (Mar 3, 2007)

rabakill said:


> that's why they only do it when they are in trouble. I think DW would cry if he saw UFC on NBC. It'd be like a slap in the face for all their hard work, he did just give up 10% of his ownership.


DW has never owned more than 10% of the company... The brothers gave up 5% each!


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## No_Mercy (Oct 17, 2006)

Samborules said:


> The company carries $450 million in debt based on loans taken out to fund company growth. There is a $25 million credit facility due in 2012, and a $425 million loan due in 2015.
> 
> I was surprised to see this, I wonder if this is partially why they hesitate in sharing any profits with M1 and hesitate further in giving big $$ to aging fighters like Hendo?
> 
> ...


They simply have a grace period that they opted for, to run their business for the long term. They've profited in every event and area of their business from merchandising, to licensing, PPVS, sponsorships and of course the live shows. Every major company accrues debt to defer payment which means they have spending capital. This is how all major corporations operate. Why do you think there was a major crisis in the economy when credit lenders stopped lending. Only the viable companies were strong enough to withstand it and or were bailed out. UFC spreadsheets are in the black, but Station is in the red. Although it's two separate entities it is inevitably intertwined. 

I estimate the selling of 10% stake raised at least $100 million capital unless there was equity involved which gives them a bit more spending power and clout in the middle east/Eurasia which is where the market will be shifting in the next 20-30 years. 

Trouble they are not, they've been rated the top 100 best companies around the world.


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## jasvll (Mar 28, 2007)

DanTheJu said:


> DW has never owned more than 10% of the company... The brothers gave up 5% each!


All 3 gave up 10% of their ownership.


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## fightpragmatist (Dec 3, 2009)

Yeah, Dana just said in an interview he currently owns 9% and the fertitles own 45%, I think.

Where'd you get this infos, msnbc / cnn, BLASPHEMY!1!1rawrarawr


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## beardsleybob (Jan 3, 2010)

The Fertitas and DW gave up 10% of their shareholding. So DWs 10% is down to 9%. While both Fertitas gave up 4.5% each.

Just imagine what a cash injection they're getting personally. I assume Zuffa has a worth of in and around $1 billion. So that's $10 mill for Dana.

Nice


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## HCbreaker (Aug 21, 2009)

FrankMir20 said:


> First of all, what is your source?
> 
> Second, this is probably why they sold 7% of their company,,,those people have billions of dollars.Im not worried.


So the hell what? You really think they will be willing to pour billions of dollars into the UFC? You have to remember the Fertittas are businessmen first, fight fans second. If a business is tanking and looks like it could end up losing them a bunch of money, they will cut the cord and not think twice. Goodbye funding, Goodbye Dana White, and hello MMA dark ages like the ones faced in the early 2000's. MMA is not a stable business in the states yet, and grows/falls in streaks.


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## Samborules (Jun 16, 2009)

I am frankly surprised Trump is not in on this somehow.

LOL


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## beardsleybob (Jan 3, 2010)

HCbreaker said:


> So the hell what? You really think they will be willing to pour billions of dollars into the UFC? You have to remember the Fertittas are businessmen first, fight fans second. If a business is tanking and looks like it could end up losing them a bunch of money, they will cut the cord and not think twice. Goodbye funding, Goodbye Dana White, and hello MMA dark ages like the ones faced in the early 2000's. MMA is not a stable business in the states yet, and grows/falls in streaks.


you don't seem to understand these new investors view on money. They don't mind losing some as long as they get what they want. Obviously they couldn't buy all of the UFC. But they got in there as a minority shareholder. They've focussed on making MMA a major global sport. So they'll throw everything at it to get there

it's the same situation as Manchester City. Investors came and bought the club for a few hundred million pounds. In a year they've sunk another £150 million. Now there's no hope of seeing that money unless they sink more money in and wait at least 5 years for the club to become a major player. Even then I don't see them making more than £30 million a year in profit. So they're not actually gona make a profit from their total investment on the football club. Yet they're still investing funds for new players.

Why? Because they want the club to succeed.


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## Samborules (Jun 16, 2009)

Man City will always be 2nd fiddle to Chelsea and Man U...they are the Matt Hughes to Chelsea's GSP.


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## JWP (Jun 4, 2007)

its funny when i saw the first post straight away i thought

well man utd is in huge debt and they seem to be doing ok

the difference with man city is their income is MUCH lower, having said that the dudes that bought them are super minted

i think the ufc will be fine, though the PPV's better not go up in price. its on the limit as it is


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## Samborules (Jun 16, 2009)

Agreed on the price 100%


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## coldcall420 (Aug 2, 2007)

Samborules said:


> HW assignment? What are you working on, please?


 
I just wanted an opportunity to look over the numbers, I work in investment banking so I like these things....I guess I was wrong when I said they were wanting silent partners on another thread, i saw a video and Dana says they intend on building a facility just for UFC events....


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## Ruckus (Oct 2, 2009)

jasvll said:


> All 3 gave up 10% of their ownership.


I'm sure you meant 10% combined.


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## jasvll (Mar 28, 2007)

Ruckus said:


> I'm sure you meant 10% combined.


No, I didn't, but that statement would be correct, too, although irrelevant to the point I was making at the time.

My statement: All 3 gave up 10% of their ownership

*10%* of 10% = 1%

*10%* of 45% = 4.5%

Yours: All 3 combined gave up 10% of the company.

White had 10%, now he has 9%.

Each Fertita had 45%, now they have 40.5%.

1+4.5+4.5 = *10%*

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Both statements are correct. I chose the former because it corrected an implied claim that the Fertitas gave up proportionally more than White, when all 3 gave up the same. Math is magical.


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## BobbyCooper (Oct 26, 2009)

coldcall420 said:


> I just wanted an opportunity to look over the numbers, I work in investment banking so I like these things....


But you didn't worked for Lehman Brothers... right? 

you must be very good at Math CC, it was always my worst subject.. omg I hate mathematics..  the logical way of thinking is missing somewhere in my brain... I guess lol

sry for Off Topic^^


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## coldcall420 (Aug 2, 2007)

BobbyCooper said:


> But you didn't worked for Lehman Brothers... right?
> 
> you must be very good at Math CC, it was always my worst subject.. omg I hate mathematics..  the logical way of thinking is missing somewhere in my brain... I guess lol
> 
> sry for Off Topic^^


 
No Bobby...Thank God raise01:LOL, I own my own Investment Banking firm, and I have brokers that work for me. We also do alot of Private Placements...some IPO's if we cannot sell the Private to a large buyer, we then bring them public, but usually we look for a large buyer...:thumb02:


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## Ruckus (Oct 2, 2009)

jasvll said:


> No, I didn't, but that statement would be correct, too, although irrelevant to the point I was making at the time.
> 
> * Math is magical*.


My mistake jasvll, I should not be trying to do anything remotely associated with math late at night/early in the morning with a lack of caffeine in my system.


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## jasvll (Mar 28, 2007)

Ruckus said:


> My mistake jasvll, I should not be trying to do anything remotely associated with math late at night/early in the morning with a lack of caffeine in my system.


Haha, no problem. :thumbsup:


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