UFC President Dana White last night confirmed that the company "had been sold" for approximately $4B to a group headed by WME-IMG, according to Kevin Iole of YAHOO SPORTS. White via text message wrote that he "would remain with the company." The new group "bought the shares of the company" co-owned by Frank Fertitta (40.5%) and Lorenzo Fertitta (40.5%) and White (9%). Abu Dhabi-based promoter Flash Entertainment, which purchased 10% of the UFC in '10, will "keep its share for now." White said that he will "remain as an owner, president and head of day-to-day operations and the Fertittas have a minority interest in the new company" (SPORTS.YAHOO.com, 7/11). In N.Y., Michael de la Merced reports those "backing the deal" are private equity firms Silver Lake and KKR, as well as Michael Dell's investment firm MSD Capital. Silver Lake and KKR will "own minority stakes in UFC." MSD capital will "own preferred shares," which will "essentially pay out interest" (N.Y. TIMES, 7/11). Patriots VP/Media Relations Stacey James confirmed that the Kraft Group "was part of the group buying UFC but declined to give any more detail" (BIZJOURNALS.com, 7/11). ESPN's Darren Rovell notes there originally were "two parties from China interested in this, but ultimately it didn’t happen.” UFC earned $600M in revenue last year, and they "just got an offer that they couldn’t refuse at this point” ("SportsCenter," ESPN, 7/11).
LANDMARK PURCHASE: ESPN.com's Rovell & Okamoto note the sale "stands to be the most expensive transaction for an organization in sports history." It is "quite a story considering" the Fertitta brothers bought the UFC in '00 for $2M (ESPN.com, 7/11). White said, "As far as the business goes, our goal was to always take this sport to the next level." He said WME-IMG are the "guys to take it from here." In L.A., Lance Pugmire writes White "cashed out an undisclosed sum for his percentage of the company, then repurchased a percentage with WME-IMG." White added that "denying reports since March that the company would be sold was necessary because 'there was 100 times it wasn't going to be sold'" (L.A. TIMES, 7/11).
SEE AROUND THE CORNER: In Las Vegas, Knapp & Maathuis cite sources as saying that Lorenzo Fertitta will remain as UFC Chair "for 6-8 weeks during the transition but will step down after that" (LASVEGASNOW.com, 7/10). YAHOO SPORTS' Iole writes Fertitta is the "most significant reason this company has ascended to the heights it has." He was the person who "could see around the corner, who thought in the long view, who knew how to promote a fight." Iole: "He fixed problems and managed White" (SPORTS.YAHOO.com, 7/11). ESPN's Brett Okamoto notes the Fertittas “always cared about this sport." He said, "They’re brilliant businessmen, otherwise they wouldn’t be able to sell this thing for $4 billion. But they did care about the sport. They promoted it to a new level. Under their leadership it was sanctioned in different jurisdictions where it wasn't before. It was taken globally. It has gained a respect that it lacked before they bought it” ("SportsCenter," ESPN, 7/11).
BIG PLAYERS: The N.Y. TIMES' de la Merced notes WME-IMG acquiring the UFC is the "latest step in creating a huge stable meant to command digital media." WME-IMG has "gained financial firepower for such deals, taking investments this year" from Japan-based telecommunications company SoftBank and Fidelity. WME-IMG has already "taken steps into the sports world," including buying the PBR last year. However, the UFC "is a much bigger step in the agency's goal to become a platform for content, to which it can apply a host of levers -- from marketing to talent management to television and digital distribution." Sources said that though WME-IMG represents UFC fighter Ronda Rousey and other combatants in their endorsements and movie deals, the agency "will not get involved in the actual pay negotiations with athletes" (N.Y. TIMES, 7/11).
TWITTER REAX: MMAFighting.com's Ariel Helwani: "Biggest takeaway at the moment on this historic day for MMA: UFC fighters are worth more than we all thought. Hope they realize that, too. ... Last 5 days in MMA: Jones pulled from 200, 3 events, 2 title changes, record-breaking 200 happens, Lesnar returns, UFC sold. What a stretch." Yahoo Sports' Iole: "The @UFC's biggest loss in its $4 billion sale is @lorenzofertitta." BloodyElbow.com's Mookie Alexander: "This news hit me like a ton of bricks. The UFC was adamant that they weren't for sale." Bleacher Report's Jonathan Snowden: "New UFC owners must be bullish about a huge television rights increase and massive Fight Pass growth. Numbers don't work at current levels." Author James Andrew Miller: "WME-IMG further & further away from traditional agency biz."
