S&P upgrades business outlook for Zuffa
November 19, 2015
MMA Junkie reports that Zuffa’s Standard and Poor’s business outlook has been elevated from “negative” to “stable” based on its success in its Pay Per View business in 2015. The company’s corporate credit rating remains the same at BB negative which is below investment grade.
Standard & Poor’s Financial Services publishes financial research and analysis on stocks and bonds as well as being one of the Big Three credit-rating agencies. It issues credit ratings for the debt of public and private companies. S&P serves as a resource to investors for a key measure of its success.
In October 2014, S&P downgraded Zuffa, LLC from BB to BB-as a result of “greater EBITDA volatility.” It had maintained a “BB rating” since December 2010. It was previously downgraded in November 2007 from BB to BB-. A couple weeks later, it downgraded the business outlook from “stable” to “negative.”
In October 2014, it identified Zuffa as having $535 million in credit with $60 million in “senior secured revolving credit facility due in 2018 and a $475 million senior secured term loan due 2020” per that S&P report.
Monday’s news is a good sign that the company is recovering from its dip in 2014. While a lot of the numbers are kept under wraps and we’re forced to cobble together how much the company makes, the PPV buys have rebounded from the past couple years on the strength of the first three PPVs of 2015 as well as July’s UFC 189 and Ronda Rousey’s fights at UFC 190 and 193. Also, the international expansion and the assumed proliferation of UFC Fight Pass have provided additional revenue streams for the company. Obviously, you have to offset these gains with its expenses which include the new anti-doping policy implemented with the help of USADA and three big legal battles it is currently involved in (the UFC antitrust lawsuit in Nevada, the appeal of the November 2011 lawsuit against New York and the new lawsuit against the state of New York filed this past September seeking a preliminary injunction to hold an event in New York in April).
Also, on the same day that this news came out, Bloody Elbow unveiled its third installment of its deep dive into UFC finances.