First on CNBC sat down with Dana White and Lorenzo Fertitta to talk about the latest financial news concerning Zuffa: the sale of 10% of the company to Abu Dhabi-based Flash Entertainment.
Payout Perspective:
The 10% share in Zuffa wasn’t directly sold, but rather the existing positions of the Fertitta brothers and White were diluted by the issuance of new common stock. In the interview, Lorenzo states they have the option of reinvesting the new capital into the company or distributing it, but the latter is likely the case.
Zuffa took out a $100 million loan last summer , which was used to pay down its $25 million credit facility and issue a $75 million dividend to the ownership. Under the terms of the loan covenants its possible that the $75 million capped the amount of money the company was able to distribute, and therefore selling this stake provided the Fertittas with the next best option to securing further cash for Station Casinos’ bankruptcy battle.
Make sure to check tonight’s MMAterial Facts for a slew of good reading on the new Zuffa stock issuance and more!
on the surface it is being spun as a sale to help the 10 year plan, where you hit the nail on the head – this is to provide case for the Fetittas to help with their ailing casino.
Or it could be exactly for what they said it would be for, I know people love conspiracies but at some point facts and logic have to win out.
I Just dont like messing with something that is not broke!! But maybe its not the UFC they are trying to fix!!!