"I don?t give a f_ck about money, bro. Believe me when I tell you that." Dana White
An Abu Dhabi-owned entertainment promotion company has bought a 10 per cent stake in the UFC.
UFC co-owner Lorenzo Fertitta told The Associated Press that the deal with Flash Entertainment, a subsidiary owned by the emirate's government, was done to create increased value for UFC and help the mixed martial arts juggernaut expand in the Middle East and Asia.
Neither Fertitta nor Ossama Khoreibi, chairman of Flash, would estimate UFC's worth or say what Flash paid for the newly issued shares in Zuffa LLC, its parent company. Fertitta says terms of the deal are confidential.
A Forbes story in May 2008 estimated the privately held company was worth perhaps US$1 billion. Fertitta said then that several investors have offered more than that for the company
The Fertittas bought the ailing organization in 2001 for $2 million, pouring more than $40 million into it before it started to turn around.
The UFC is expected to hold a show in Abu Dhabi in April and entertained members of the royal family at UFC 103 in Dallas in September. A show is slated for Australia next month.
"We're building a global brand," Fertitta said. "It's never been done before in the fight business."
Fertitta told the AP that the new offers have come from many private equity funds, as well as several media companies and hedge funds.
"We made the decision early on that if we were to bring on a partner, it wasn't for financial reasons," Fertitta said. "We didn't need to raise any money, that wasn't the purpose. If we were going to bring somebody it was going to be with someone that could really be a true strategic partner and could help create an increased value for the company long term."
Fertitta said he believes Flash -- a promoter known for bringing high-profile concerts and other events to the Middle East -- can accelerate UFC's growth there and in China, India and other countries.
Flash's new shares mean Fertitta's 45 per cent stake in Zuffa dropped to 40.5 per cent. His brother, Frank Fertitta III, owns the same amount.
UFC president Dana White saw his stake go from 10 per cent to nine per cent after the deal.
Fertitta would not say what would be done with the money Flash invested or whether it would stay in UFC. Station Casinos Inc., where Frank Fertitta is chairman and CEO and Lorenzo Fertitta is vice chairman, has a pending bankruptcy case in Nevada that is separate from UFC.
Fertitta said day-to-day operations at UFC would not likely change.
Khoreibi said in an email that its role will be to support UFC as it keeps growing.
"The sport has incredible potential and the commercial opportunities were very obvious to us," Khoreibi said.
UFC makes money with pay-per-view and live fighting events, as well as TV deals, merchandise, licensing and DVD sales.
Lets go Brent!
Dana White Q&A
With today?s announcement of the FLASH investment in the Ultimate Fighting Championship, UFC President Dana White took the opportunity to talk about various aspects of the deal and its impact on the world?s premier mixed martial arts organization.
Why did UFC do this deal?
Dana White: We view this as the perfect strategic partnership to help us grow this business and fast track our expansion into other parts of the world. There are a lot of guys over the last nine years that have tried to buy in, invest, get us to go public, and try to partner up with the UFC. We got in this thing because we love this sport, we love the UFC, and we have this vision to take this thing globally and turn it into the biggest sport in the world. And when I say that, I know people think I?m a lunatic, but it?s true, and it?s gonna happen. So this deal is a perfect strategic partnership. These guys are awesome strategic partners to help us reach that goal even faster.
Who is Flash?
DW: Flash is an independent live events and entertainment organization based in the UAE. Its sole shareholder is the Government of Abu Dhabi. We got to know these guys discussing an event in Abu Dhabi. This led to the investment conversation. After conducting in-depth due diligence, they saw the tremendous global potential of the UFC brand. The guys who run this company are young, hip, aggressive visionaries. They are big thinkers.
What is the structure of this deal, what exactly does Flash own?
DW: Flash acquired a 10 percent minority stake through a direct investment in the equity of Zuffa, LLC.
How will this affect the operations of the UFC?
DW: It affects it positively. As for the day to day and how everything runs, it?s business as usual. Strategically, in our global expansion, it?s gonna help us get to certain places a lot faster than we could have done it.
Were there any concerns about bringing another partner into the UFC fold?
DW: I didn?t feel that way at all. I don?t look at this as my baby and nobody else can touch it. The way I look at this thing is that the UFC is a brand, like Microsoft, McDonald?s or any of these other ones. I think that I?m gonna have a certain amount of time here and then my time will be done and I will have done my part. And then somebody else will carry it on after me. I don?t look at this like I?m gonna be here forever. A lot of people say ?without Dana the UFC couldn?t do this or couldn?t do that.? I think the UFC is bigger than that and bigger than one person, including me.
How many UFC events will happen in Abu Dhabi each year?
DW: Hopefully we will conduct one event there in 2010; we?ll see after that.
How will this affect the fighters?
DW: This will have no effect on the fighters; it is business as usual.
How long is this deal? Is Flash a permanent partner?
DW: This is not a short-term investment. Flash is a long-term partner that understands the dynamics of our business model.
Was this deal done because UFC needed money?
DW: UFC has no financial issues and business has never been better. We did this deal because of the huge opportunities it provides for UFC?s global growth.
Will UFC now establish an office in Abu Dhabi?
DW: There are no immediate plans to establish an office in Abu Dhabi.
Is there anything else you want to tell UFC fans about this deal?
DW: I?ve been saying for years that UFC is going to become the biggest sport in the world. With this new partnership in place, it?s going to happen even faster. These guys get it and they love the sport. We built a relationship with them over the last few years, they?re guys we like, respect, and trust, and we know that they?re the perfect strategic partners. We made all the right moves over the years, done all the right things along the way, and we know that this is a good thing for the sport.
Lets go Brent!
Thanks OBC, this is in fact a huge story, youve jumped PJers and Snakerattle in the breaking story dept but still lag behind MMA Reporter.
I wonder if Dana will set up an office in the worlds tallest building?
Like Billy Jacks' soul attack, I'm one Injun you wont forget.
im sorry but that was not the announcement.
Word is no office will be set up over there. Very cool building though! Claudale, what do you make of the big announcement? Major $ implications. Do yo think the owners are lining their pockets and preparing to dump the UFC?
Lets go Brent!
Lets go Brent!