According to a recent SEC filing, UFC parent company Endeavor will be purchasing 100 percent of the UFC. Once Endeavor purchases UFC officially, the MMA promotion will be wholly owned by the talent agency Endeavor, formerly WME | IMG, and the company is planning to go public with a new IPO.
Endeavor Purchases UFC
In July 2016, it was announced Endeavor will be purchasing 50.1% of the UFC from the Zuffa-owned Fertitta brothers. This gave the talent agency a controlling stake. According to the March 31, 2021 Securities Exchange Commission filing, see prospectus, Endeavor will have a deal soon to raise $1.75 billion to buy out the remaining 49.9% of the UFC before its Initial public offering (IPO) and its stock goes public. A spokesperson for the UFC has declined to comment on this transaction.
In 2016, when Endeavor initially purchased the UFC, it did so for the price tag of $4 billion. To raise that much funds the company partnered with other private equity firms, such as Silver Lake Partners and Elliott Management, for example, these equity firms own around 40 percent of the UFC because of this.
According to the SEC filing, Endeavor generated $3.48 billion and shows a net loss of $625.3 million in 2020. Revenue was more than $1 billion lower compared to 2019 numbers, likely due to pandemic shutdowns.
Endeavor CEO Ari Emanuel said in the filed prospectus on 2020, “As challenging a year as 2020 was, it underscored the strength, creativity, and resilience of our people who mobilized time and time again in the face of overwhelming odds … We made difficult decisions but worked as a team to find creative solutions and best position the business for the future …
“As the global pandemic unfolded, we developed the protocols necessary to help our businesses safely restart operations, providing a model for other professional sports, events, and programs. UFC and PBR were two of the first sports organizations to responsibly return last spring, and we followed in the summer by hosting the WNBA’s season at IMG Academy. In the fall, we brought New York Fashion Week to life, becoming one of the first major events to resume in New York City.”
This story was initially reported by ESPN’s Marc Raimondi who said, “It’s unclear what Endeavor owning all of the promotion would mean, if anything, for the UFC.”
Endeavor originally did begin filing proceedings for an IPO in 2019 but scrapped these plans due to weak demand, as reported by CNBC. The company will likely be public and trading on the stock market in late 2021. Endeavor owns subsidiaries Zuffa (UFC), IMG (talent agency), Professional Bull Riding, and purchased Miss Universe from Donald Trump in 2015.
Elon Musk Joins Board of Directors
In addition to the above announcement, Elon Musk has been nominated to join Endeavor as part of their board of directors, one of 11 directors of the company. Musk is the CEO of Tesla, SpaceX, founder of The Boring Company, Neuralink, and PayPal.
Musk is listed as a director nominee on the SEC filing.
″Mr. Musk was selected to serve on our board of directors because of his professional background and experience running a public company, his previously held senior executive-level positions, his service on other public company boards and his experience starting, growing and integrating businesses,” Endeavor said in its SEC IPO filing.
CNBC adds, “Investors in Endeavor, including Elliott Management and Silver Lake Partners, confirmed that the nomination of Musk is not an April Fool’s prank, despite the proximity of the company’s S-1 filing date to April Fools’ day, which is Thursday.”
What this purchase means exactly for the UFC and the sport as a whole has yet to be seen. Elon Musk’s influence is unknown as of now; he still has yet to be officially elected. The transaction does not directly say anything regarding the future of the UFC. No official announcements have been made from the UFC or Endeavor offices yet.
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