An Economic "Perfect Storm" Affecting MMA

October 20, 2008

The twin forces of a credit crunch and a continually deteriorating economy are coming together and are having an impact on the financial backdrop of the mixed martial arts industry. While it is said that a rising tide lifts all boats, it seems to be that this “Perfect Storm” is battering all the MMA ships that are out to sea, the UFC included.

As reported earlier on MMAPayout.com, the Fertitta’s Station Casinos bond rating recently placed on CreditWatch with negative implications. The company is being monitored due to it’s increasing level of leverage that violates certain covenants of its’ bonds. The leverage covenants aren’t being met due to more recent turmoil in the financial markets and continued weakening of economy, which is bringing down performance in the Las Vegas locals market more than previously thought.

The Station Casinos stake may not be the only portion of the Fertitta empire to be hitting on hard times. MMAPayout.com has learned that the UFC has recently went through a round of layoffs in their operations. The UFC looks to be cutting away the fat to make itself lean and mean and capable of weathering an extended time period of financial stress and lowered performance.

The credit crunch has also affected Viacom/CBS, which may in turn impact ProElite/EliteXC. Sumner Redstone, a controlling shareholder of Viacom Inc and CBS Corp, might be forced to sell either of the companies to help tide over the current financial crunch being faced by his movie theater chain, National Amusements Inc, according to a report by Reuters. Such a sell off would place highly in doubt a possible purchase of EliteXC by the Tiffany Network or it sister network Showtime. A purchase by the network had been thought to be highly probable as the company went into its recent EliteXC: Heat card that was to feature Kimbo Slice and Ken Shamrock. The subsequent loss by Slice to Seth Petruzelli as well as a fight fixing controversy in the aftermath of the fight are now joined by the news that one or more pieces of the Viacom empire may be jettisoned. All of these factors in concert call into question whether such a deal for the fight promotion will be ultimately consummated.

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