UFC one of the best brands in 2016
October 26, 2016
Forbes.com reports on 2016’s 40 best business brands. The UFC ranks 6th as one of the best brands for 2016.
Nike topped the list with a current brand value of $27 billion which is up 3.8% from last year. ESPN came in second with a brand value of $16.5 billion despite being down almost 3% from 2015. Adidas, Under Armour and Sky Sports round out the top 5.
The UFC placed seventh with a brand value of $2 billion and a remarkable one year change of 335%. Reebok, the UFC’s official clothing sponsor, ranked 9th with a current brand value of $800 million, down 3.6% from last year.
Forbes.com explains the brand value for a sports business, which differs from sports teams, athlete and sport event brands, in the article:
the brand value is the difference between the estimated enterprise value of the business brand and what the enterprise value of a similar business is worth.
Forbes.com specifically addressed the UFC sale as well as a word of caution:
By my count the price allocation of the deal valued the UFC’s brand at $2 billion–more than three times its value a year ago–based on the enterprise value premium paid for the mixed martial arts promotion. The UFC posted the biggest year–over-year increase among business brands. But if the UFC does not become bigger and more profitable–thereby justifying its $4 billion price tag–its brand could fall sharply in value.
Undoubtedly the UFC’s sale to WME-IMG impacted the brand value. Is it possible that the UFC brand is overvalued? One of the reasons for the high price tag for the company was the strength in the brand. It is MMA to the casual fan. Of course, the buyout loan strategy implemented in the sale has been questioned by federal regulators due to the increase in the possibility of a default.