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.
Payout Perspective:
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.
Time well well on the default business….however, what is very true and inescapable is that to the casual, UFC most certainly is MMA for Americans. Only the die hards know otherwise….
For sure it was overvalued.
It wasn’t “overvalued” its just they took on more debt than you are meant too.m, it’s not overvalued if several companies were trying to buy it.
If Wanda or someone else bought it, they wouldn’t have used loans and it would have been a straight cash, with all or most of the UFC’s previous debt gone.
If they had the same revenue streams as Zuffa did they would be overvalued, however that is not the case here. The domestic tv contract is going to be close to triple what it was with Zuffa. That’s very big. WME also has far better licensing deals, entertainment deals, etc. Their revenue will be much higher than Zuffa’s.
d – unfortunately that means they paid too much. If it’s the WME-IMG connections and network that will increase the UFC’s revenue streams, then in effect WME-IMG paid Zuffa for a valuation that WME-IMG will achieve. Good for Zuffa, but not great for WME-IMG.
For us fans it doesn’t matter whether that extra $2B go to Zuffa or to WME-IMG as long as those purported revenue streams come online and allow the debt to be serviced. If revenues don’t increase, we could have trouble in the future.
Any news on img chinese investor? HahahahahA….highway robbery by the fertitas….no wonder they need operation expenses lol….passing the hat along movie stars haha
Not really though Diego, because if they can’t acquire that type of business anywhere else, and they can make a boatload of money off of them, it was a fair valuation. In other words, if WME’s connections can only work for them in mma with this one company, that is value in itself. Time will tell if it pays off like they hoped.