Yesterday, ESPN writer Darren Rovell reported that the UFC was up for sale to four possible bidders: WME/IMG, China Media Capital, The Blackstone Group, and the reported bidding leader the Dalian Wanda Group.
While Dana White has denied the UFC is for sale Rovell still stands by his report. Rovell has said that sources told him that Goldman Sachs has been representing Zuffa LLC in the deal. Also, a company called The Raine Group reportedly prepared the bid book that was sent to possible investors at the end of March. The Raine Group has advised the UFC in the past and has a connection with both WME/IMG and China Media Capitol.
Dana White on $4 billion estimated sell value:
We’re not up for sale. We’re always working on deals and our expansion globally. I’ve been saying since this thing came out, no, we’re not for sale, but let me tell you what. If somebody shows up with $4 billion, we can talk. We can definitely talk.
Dana White on a possible partial sale:
Obviously, if I’m in the middle of a deal right now, there’s a lot of confidentiality involved in it. We’re working on expanding. We’re working on growing the company and moving into other territories like China and Japan, Korea. So, yeah, we’re always working on deals.
White on his role in the company after a possible sale:
I don’t know. I don’t know how that would all work out, but I’ll tell you this. The day we decide to sell, I probably don’t want to do this anymore. I love this. I love this business. I love the sport. I jump out of bed everyday excited to go to work.
And listen, me and Fertitta brothers have been together a long time. We’re very close friends. We work well together. Something we did would be a mutual decision and we’d probably all be looking to get out.
I think it is more likely than not that the UFC is going to sell off some ownership shares in the company. There is a lot of smoke for there to be no fire. The UFC sold 10% of the company to Flash Entertainment in 2010. The partnership was designed to bring in knowledge of the Asian market and getting contact with key decision makers.
As Dana White mentions, there is still room for growth in parts of Asia. White also said when prompted about a partial sale that there is a lot of confidentiality involved while being in the middle of making a deal, which could lead one to believe the UFC is in talks to bring on another possible minority partner. It also then comes as no surprise that a Chinese ownership group is in the front running to outbid competitors.
Zuffa LLC, Lorenzo Fertitta, and Dana White have always been secretive of the operations inside the company. They frequently mention that the UFC is a private company that does not need to share financial information so it doesn’t come as a surprise that they are outright denying any claims of selling.
If one were to look at the UFC like a startup then selling the company would be a solid exit strategy, especially when the selling price is near $4 billion. At the beginning of any venture an entrepreneur or group will decide on an exit strategy to ultimately cash out on their hard work. It’s possible, however unlikely, that the Fertitta Brothers and Dana White have decided that it is time to exit. Something else to take into consideration, while even more unlikely, is that the Fertitta Brothers have decided that they have pushed the company as far as it can go and that someone worth $35 billion by himself can push the company further.