Zuffa 2004-2006 financials
- Thread starter FrankieNYC
- Start date
-
- Tags
- zuffa
Let's be real: Bonnar vs Griffin was badass fight, and both of them winning contracts was a storybook feel-good ending, but the UFC was not leaving the building without a contract offer from Spike. They'd already delivered very solid ratings by that point, and their future was assured. Bonnar vs Griffin probably gave them extra leverage and extra fans going forward though.
100%
I'm pretty sure they were renewed before that night (or at least close to it)
As you said the ratings were good & more than projections.
I remember someone (maybe Meltzer) saying it was higher than projected
i could be off a bit since I started following MMA at that time, but I do remember reports of good ratings
Good ratings at 11pm are not easy
What I think would be a fair thing for WME to do as far as fighter pay going forward:
I think a fair % would be 25% now
in 2016 that would have been roughly $175m
That is about $55m more than they paid & would have still put UFC at $170m profit for the year (so UFC & fighters would basically be partners after UFC expenses)
What I think would be fair & go a long way is to keep the money the way it is, but come up with a bonus structure at the years end once the financials are confirmed.
They can give fighters a % bonus compatible to their pay structure & amount of fights
If they added $55m to a bonus & have 550 fighters (lets make it easy) that is $100k per average
So if they went by %, even a prelim guy might get a nice $20-25k check
If they go by fiscal year instead of calendar, they could pay the bonus in December.
Imagine a lower end fighter getting $20-50k for holidays & mid tier fighters $50-100k?
I think a fair % would be 25% now
in 2016 that would have been roughly $175m
That is about $55m more than they paid & would have still put UFC at $170m profit for the year (so UFC & fighters would basically be partners after UFC expenses)
What I think would be fair & go a long way is to keep the money the way it is, but come up with a bonus structure at the years end once the financials are confirmed.
They can give fighters a % bonus compatible to their pay structure & amount of fights
If they added $55m to a bonus & have 550 fighters (lets make it easy) that is $100k per average
So if they went by %, even a prelim guy might get a nice $20-25k check
If they go by fiscal year instead of calendar, they could pay the bonus in December.
Imagine a lower end fighter getting $20-50k for holidays & mid tier fighters $50-100k?
The thing was they'd had it since 2000 and who knows what the losses and debts acquired in the original purchase were. Also, Station was on the road to bankruptcy at the time so the Fertitta cash may not have been as long as it was at the outset.
Though this does support the theory that the Fertittas deliberately bankrupted Station to finance Zuffa.
/cdn.vox-cdn.com/uploads/chorus_asset/file/4166592/UFC_revenue.0.jpg)
More info from Nash that makes it seem like Fertittas exaggerated their losses early on:
Using data from the 2007 Deutsche Bank memorandum, we can determine the EBITDA for 2004-2006. It was reported to potential credit facility lenders that the UFC had a net income of -$653,000 (a loss) for 2004, $6.3 million for 2005, and $75.3 million for 2006.[ii] It was also reported that their amortization and depreciation was approximately $609,000 for 2004, $383,000 for 2005, and $621,000 for 2006. For later years (2007-2014), we can make a reasonable estimate using the reported EBITDA margins and the UFC's reported revenue from part 1 or the reported debt-to-EBITDA leverage ratios along with the debt estimates from part 2. (The debt-to-EBITDA leverage ratio represent the number of times the EBITDA divides into the debt. Thus the EBITDA for a given year can be obtained by dividing the current debt with the ratio.)
I know
@Wild is shocked they would exaggerate numbers to form a narrative 
Using data from the 2007 Deutsche Bank memorandum, we can determine the EBITDA for 2004-2006. It was reported to potential credit facility lenders that the UFC had a net income of -$653,000 (a loss) for 2004, $6.3 million for 2005, and $75.3 million for 2006.[ii] It was also reported that their amortization and depreciation was approximately $609,000 for 2004, $383,000 for 2005, and $621,000 for 2006. For later years (2007-2014), we can make a reasonable estimate using the reported EBITDA margins and the UFC's reported revenue from part 1 or the reported debt-to-EBITDA leverage ratios along with the debt estimates from part 2. (The debt-to-EBITDA leverage ratio represent the number of times the EBITDA divides into the debt. Thus the EBITDA for a given year can be obtained by dividing the current debt with the ratio.)
I know
@Wild is shocked they would exaggerate numbers to form a narrative
This would be great. If the UFC only raised purses slightly and doled out most of this as a monthly stipend, even better. If they asked Reebok to design new uniforms with room for two sponsors—which would cost the UFC practically nothing—even better.
They could use all that to not lose people like Gegard Mousasi, Kyoji Horiguchi, Ryan Bader, Rampage Jackson, Rory MacDonald, Benson Henderson, Nikolai Krylov, Erik Perez, Michael McDonald, and Matt Mittrione. They could attract more elite prospects like Aaron Pico who might otherwise go to Bellator, or more significantly might not even get into MMA.
They could use all this to negotiate a CBA with a fighter's association, get antitrust exemption, and sign whoever they want without fear of an FTC investigation. They could get a higher caliber of athlete on average because more high-caliber athletes would be in MMA, particularly in the heavier divisions where they compete more with other sports for those people. They could pay enough to have all their fighters be focusing on training year round, and have more injury replacements on-hand, as well as a wider variety of stars to headline shows, and more potential people who could be the next Conor McGregor or Ronda Rousey.
And in the long run, I think the UFC would be a bigger, better, and more popular and more profitable organization for all of this. But it would require ownership that wasn't retarded.
Sorry for breaking up a post like this, but I didn't want the above to be a wall of text since this is kind of a tangent.
Re: WME is retarded:
I know Nunes was never going to be a mega-draw, or even a Miocic-level draw, but when she fought Rousey they didn't do a fucking thing to promote Nunes, which is everything that's wrong with WME's mindset. Most people have probably already heard this, but according to Joe Rogan, on the night of UFC 207 one of the WME executives backstage didn't even know Nunes name, and said it didn't matter because she was "cannon fodder." Regardless of who won though, promoting Nunes as a proper badass opponent would have been win-win: if Ronda won she would have looked even better for beating this monster, and when Nunes did win she could have scooped a lot more of Rousey's heat since the promotion would have put her in the viewers' consciousness already. It also would have been a bit better for Ronda if the story was a bit less "look how bad Ronda is!" and a bit more "wow that Nunes chick is scary as fuck!"
And then there's Nate Diaz. Most people don't know this, but those A-List celebrity talk show appearances he did before his rematch with CMG? Those weren't booked by WME, they were booked by Nate Diaz's own management team. If Diaz's team had left things to WME we would not have had great bits like this that were not only funny, but showed Diaz as a compelling star in his own right to further heat things up.
They actually wanted Conor in that spot instead, even though Conor already had mountains of publicity. It's like they're still don't know how to promote something that isn't pre-determined. In fact it's even worse than that: I get the feeling they'd promote Infinity War without once mentioning Thanos.
Re: WME is retarded:
I know Nunes was never going to be a mega-draw, or even a Miocic-level draw, but when she fought Rousey they didn't do a fucking thing to promote Nunes, which is everything that's wrong with WME's mindset. Most people have probably already heard this, but according to Joe Rogan, on the night of UFC 207 one of the WME executives backstage didn't even know Nunes name, and said it didn't matter because she was "cannon fodder." Regardless of who won though, promoting Nunes as a proper badass opponent would have been win-win: if Ronda won she would have looked even better for beating this monster, and when Nunes did win she could have scooped a lot more of Rousey's heat since the promotion would have put her in the viewers' consciousness already. It also would have been a bit better for Ronda if the story was a bit less "look how bad Ronda is!" and a bit more "wow that Nunes chick is scary as fuck!"
And then there's Nate Diaz. Most people don't know this, but those A-List celebrity talk show appearances he did before his rematch with CMG? Those weren't booked by WME, they were booked by Nate Diaz's own management team. If Diaz's team had left things to WME we would not have had great bits like this that were not only funny, but showed Diaz as a compelling star in his own right to further heat things up.
They actually wanted Conor in that spot instead, even though Conor already had mountains of publicity. It's like they're still don't know how to promote something that isn't pre-determined. In fact it's even worse than that: I get the feeling they'd promote Infinity War without once mentioning Thanos.
That would effect profit not revenue though (since it was cash out), but pretty smart of you to think about it
Yeah wasn't thinking when I posted.That would effect profit not revenue though (since it was cash out), but pretty smart of you to think about it
Indeed
The fledgling mma company saved from the brink by a rocky-style slugfest.
Basically people believe and put faith in these numbers because they want to. There's zero evidence they are 100% factual. But, there's no better source so they go with this. Sad. It's ok to just not know some things. You don't have to just make stuff up.