In 2008, Forbes magazine valued the UFC/Zuffa LLC at 1 billion dollars. Since then, according to an interview UFC President Dana White did with the Indianapolis Star, that figure has nearly tripled with White estimating that the company is now worth around the 2.5 billion dollar range.
This is an impressive growth margin for a company that has generally stuck to the same game plan over the last few years. If these numbers are indeed correct, it speaks volumes about the growth the sport has incurred in a short amount of time. The main difference I see in the UFC from 2008 is how boldly they have expanded. Selling a 10% share in the company to Flash Entertainment of Abu Dhabi to be able to properly position themselves in the Middle East and Asia must have been a wise investment, even though it is hard to gauge from here in the states.
Expansion to countries such as Germany, Australia, and Canada has been overwhelmingly positive upon first glance, and has no doubt been a success financially. The UFC is almost like a rock and roll band going on tour and winning over fans. Every new market it hits seems to be conquered by the hype and the trickle-down effect; it is undeniable.
It would be nice to see hard numbers to back up White’s claims, but even if he is exaggerating by a half billion, to have your company double in growth in 2 years is impressive. White agrees:
“The company is worth about $2.5 billion… I’ve been saying this since day one, and people really thought I was a lunatic, that this could be the biggest sport in the world. What I am surprised about is how fast this has happened. We haven’t even scratched the surface for how big this thing is going to be. I don’t consider us mainstream yet. Mainstream, to me, is if you walked out into the main street of any major city in America and asked them what “American Idol” is. Everyone can tell you what “American Idol” is. Not everyone can tell you what UFC is…Any time we go to a new market, it’s so much fun. When those [fans] leave, they will go infect another 10 to 15 people with what they saw there that night. That’s how this whole buzz keeps rolling. I call it spreading the virus.”
It should also be noted that White admitted that the company was 44 million dollars in debt at one point, which goes to show the business savvy behind the obvious muscle the UFC usually flexes in their dealings. When I see a company turning losses of that magnitude into substantial gains, it shows me that mistakes were made and then corrected and learned from.
It remains to be seen how high the ceiling is for the UFC. Will they ever reach the mainstream like White hopes for? I am inclined to think so, but that could be the fan in me hoping everyone else joins the party. Realistically, it is much easier to market the singing hopefuls of American Idol to the country than two guys fighting each other, but if the UFC can sustain their growth, they will be knocking on the door in no time.
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This article was originally published on sportsagentblog.com