MMA loans

Best Nine Months in UFC History – Is the UFC on Track to Make $ 1 Billion in 2021?


The UFC continues to break its financial records. Even after huge numbers in 2019 and 2020, 2021 could be an even bigger success for the mixed martial arts leader.

After having had the “most important first half of all time” this year, the third quarter numbers continued that trend and the UFC would now have the “best nine months since the start of the year” of the year. history of the company.

“We once again exceeded our quarterly revenue and adjusted EBITDA targets,” Endeavor CEO Ari Emanuel boasted of their finances during their third quarter earnings call.

UFC recorded its best nine-month period since the start of the year in its 28-year history in terms of revenue and Adjusted EBITDA, despite lower event production in the third quarter compared to the third quarter of 2020. “

The noted difference in third quarter revenue for 2020 and 2021 was due to a one-time contract termination fee of $ 25 million with Aurora Cannabis recognized last year. Other events also took place in the third quarter of 2020 due to events canceled due to the displacement of COVID-19 to this period.

Where do these lucrative 2021 figures come from? UFC 264, which pitted Dustin Poirier against Conor McGregor 3, was a huge success, while ticket sales and PPV income from bars and restaurants are also back, but Endeavor officials have attributed their growth a sharp increase in sponsorship revenues and international media rights.

“UFC 264 became the third highest grossing event in UFC history,” said Emanuel. “The Pay-Per-View commercial had the highest gross revenue quarter in the world since the start of the pandemic, in large part thanks to the many American restaurants and bars starting to open at full capacity.

“UFC sponsorship revenues are up 59% from the third quarter of 2019, the last [ph] non-COVID impacted here, ”noted Emanuel.

“We closed nine new transactions across Asia-Pacific during the period. If you combine these nine agreements with the five previous international rights agreements that we discussed last quarter, the overall average annual value is over 80% compared to previous agreements. “

According to Endeavor’s CFO Jason Lublin, they signed “several” new multi-year licensing and sponsorship deals, including deals with companies like Icon Meals, Battle Motors and ZipRecruiter.

Graphic by John S. Nash

In addition to the impressive earnings from the UFC, they also increased their debt. According to them 10-Q filing with the SEC, as of September 30, 2021, they had a total debt of $ 2.2 billion on first-term loans. An additional $ 600 million was added to this on October 27, with the borrowed money going to Endeavor.

Interest on these $ 2.8 billion first-term loans is expected to cost the UFC around $ 98 million per year, based on their terms using the current London Interbank Offered Rate (LIBOR). In addition, the term loan includes a 1% principal amortization, which adds $ 28 million over the next 12 months to its debt service.

As they mentioned, the past nine months have been a huge success for the UFC. Endeavor’s Owned Sports Properties, which is primarily driven by the UFC, had an impressive third quarter revenue of $ 288 million, bringing its total for the year to around $ 830.9 million already. Meanwhile, their EBITDA (earnings before interest, taxes, depreciation and amortization) will be $ 412.5 million, or a margin of 49.6%.

Endeavor’s Owned Sports Properties generated $ 147 million more revenue in the first 9 months of 2021 than in the first 9 months of 2020. Their EBITDA also increased by $ 78 million compared to last year . This continues the trend of seeing this segment have a higher EBITDA margin on new revenue.

In 2019, their revenue increased by $ 163 million from the previous year, with 90% of this new revenue going to EBITDA. In 2020, revenue increased by $ 17 million, but Owned Sports Properties’ EBITDA increased by $ 40 million, a margin of 235%. For the first 9 months of this year, their EBITDA margins on increased revenues were 53%.

Dana White and Ari Emanuel watch the UFC from the cage.

Dana White and Ari Emanuel.
Photo by Jeff Bottari / Zuffa LLC / Zuffa LLC via Getty Images

If the UFC still accounts for around 90% of these owned sports properties as it has been in recent years, they could envision revenue of around $ 750 million and EBITDA of $ 370 million for the three. first quarters of 2021 only.

To put it in context, even with a quarter to go, that would be equal to or greater than the total revenue for each year except for 2019 and 2020, which would have had $ 860 million and $ 890 million, respectively.

As the fourth quarter of 2021 is likely to be larger than in 2020, they are expected to exceed both of these totals and set a new record for the company. If things go as planned, it looks like there is a very strong possibility that the UFC will actually hit that billion dollars.