The UFC is seeking to raise $100 million in incremental loans to repay the previous owners (i.e. Frank and Lorenzo Fertitta and Flash Entertainment) in the case of a potential earnings-based payout according to a report from Reuters.
The payouts of $175M and $75M are due in the event of EBITDA milestones. According to the Reuters report, the first payout could be due in the latter part of 2017.
KKR Capital, which took over from Goldman Sachs in January as the lead financier, is leading the process for this new loan. Federal regulators took issue with Goldman Sachs due to its add-backs in projecting the company’s EBITDA. KKR is not subject to the federal leverage lending guidance.
According to an investor presentation, with the addition of the $100 million loan, the UFC will be at 5.8 times whereas the first lien net leverage will be 4.8 times.
The UFC is marketing the company at $320M EBITDA which is an increase from an estimated $226M EBITDA from 2016 and $192M from 2015. The numbers come from an investor presentation although there is skepticism about the vast jump from $226M to $320M. Additionally, it is said that the company’s cuts once it took over in July has achieved cost savings of $10 million and it is projected to save $55 million by the end of 2017.
H/t: Front Row Brian
Payout Perspective:
The money is intended to payout the prior owners assuming that the WME-IMG owned company meets its financial milestones which may or may not occur. Borrowing to payout previous owners, appears to the outsider, as a company living on leverage. The good news for those seeking to purchase the debt is the cost cutting it has done and the increasing earnings. Plus, there is a market for this debt and the company is bullish on its financial future so we shall see where this goes.
Wow…..simply wow. Bellator has to be licking its chops about now.
Not good, the writing is on the wall.
Hahahaha.mousasi wont get paid,he doesnt sell tix – dw….80/20 split….in dire need of cash hahahaha
Why would this do anything what so ever for Bellator? What does one have to do with the other? Did you read the article? They are getting those loans because they expect to hit milestones that would require them to pay the Fertittas and Flash more based on performance. That would mean WME is doing well. Even if they weren’t, it still wouldn’t benefit Bellator. If WME failed, someone else would buy the UFC and they’d still wouldn’t lose any ground to Bellator.
More fighters to be released if theyre solution is cost cutting….good for bellator hahaha
Always amazes me. This website is a more numbers based website, which would lead people to think it’s more intellectual…., but the people who post on it are some of the dumbest on the internet.
…..no better example of it than the guy who uses a different alias every time he spews ignorance all the while believing no one realizes who it is. Haha.