Bloomberg ran a feature on the Fertittas and its ownership of the UFC. The feature provides details on the Fertittas as well as some interesting financial information.
The article states that the UFC brings in $500 million in annual sales. The Fertittas, according to Bloomberg, control a fortune worth at least $1 billion dollars.
Via Bloomberg:
In addition to their company stakes, they own real estate, art and four jet planes. The brothers hold their assets separately and through family trusts, they say. Las Vegas-based Fertitta Enterprises Inc., a single-family office that employs about 60 people, manages the Fertittas’ wealth. The office staff vets investment opportunities (it turned down a chance to buy stock in Facebook Inc. before its public offering), handles art transactions (each brother has a collection of art worth more than $100 million) and arranges for personal security.
The article also talks about fraternal disputes occurring in business and Bloomberg reveals a rather unique dispute resolution method for the Fertittas:
They had their lawyers draft a document that stipulates the brothers fight each other. “If we can’t resolve our differences, we’ll have three 5-minute rounds of sport jujitsu,” Lorenzo says. “It’s on a point system, so whoever gets the most points gets to vote the other guy’s share. Dana White would be the referee.”
Payout Perspective:
A fight as dispute resolution? Maybe not the best way to settle things especially if White is the only judge. Kidding aside, the story is a comprehensive look as to how the Fertittas amassed its fortune.
One of the things not clear was whether the $500 million in sales is its revenue or total sales from its PPV business. The feature is fair on the perceptions of its business despite the graphic opening describing the Cain Velasquez-Bigfoot Silva fight in May in which Cain bloodied Silva. It also covered the Stations Casinos bankruptcy and details how the brothers reorganized the company. One of the other interesting things that Bloomberg highlights is the possibility that its business could soar if online poker is permitted once again.
The $500MM number is clearly a wild-ass guess based on Zuffa’s high water mark a couple of years ago when Brock Lesnar was averaging over a million PPV buys per fight and their bottom-of-the-barrel shows were pulling in 400K. In 2012, Lesnar is long-gone and and they are regularly pulling in numbers below the old 400K floor. The 2012 floor is closer to 150K.
Interesting, but I would really like to know how much of their gross revenue and net income comes from their global markets, compared to domestic.
500 M might be a conservative estimate. Assuming 200K PPV sales, 50 shows a year and a $50 price tag is exactly 500 Million (200Kx50x50). However, Silva regularly brings in around 1M PPVs, Overeem, GSP, Diaz etc. also sell well above average, so an average of 300 PPV might be realistic. This would result in 750 M yearly revenues (300Kx50x50), not including the gate which is 2-3Million per event (x50 fights a year = 100 M)
Add to this 1) TV contracts with Fox (300 hrs or 56 fights per year) and Showtime (Strikeforce), 2) advertising revenues from major retailers (Burger King, Bud Light and now even Nike with Jones) and 3) Merchandising revenues… and 1 Billion yearly revenue becomes very realistic…even conservative. And this is just the beginning.
Here is the entire Bloomberg article:
http://www.bloomberg.com/news/2012-08-01/fertittas-made-billionaires-by-head-blows-with-chokeholds.html
Bob
Where are you getting 50 PPVs from? Try 14.
They have 14 PPV’s per year with about 400K buys on average, they only get half of the PPV money, the cable provider gets the rest. UFC does an estimate of 30 events, 14 PPV and the rest on free TV.
REVENUE
-estimate PPV revenue would be close to +$200million
-FOX deal +$90million
-advertising and TV contracts throughout the world(unknown figure)
-Live gates for each PPV event and Free TV shows is around $2.5million*30events= $75 million
– Merchandising also brings in serous cash(unknown figure)
When all of these figures are added up I have come up with my own estimate of annual sales at about $365 million plus the unknown figure of merchandising and advertisement could bring the total close to $475 million.
If someone has any figures on merchandising and advertisement let me know, we can come up with a better figure.
lol @ bob. Since when does Anderson bring in around 1 million PPV buys regularly? Overeem sells above average? Dude, he has had one fight in the UFC and that was against Brock.
lol Bob WTF? When did the UFC start having 1 PPV per week?