The Wall Street Journal reports that Endeavor Group has secured a $260 million loan to help its operations as it continues to fight through an economic downturn during the shuttering of events.
The newfound funds will carry an almost 11% interest rate. JPMorgan Chase & Co. will serve as the servicer and Oaktree Capital Group LLC will be the lead credit investor. The additional loan announced on Monday will supplement a $2.8 billion term loan.
Endeavor is the parent company of the UFC and its return to the Octagon on Saturday marked a positive due to its ESPN contractual ties. At this point, the UFC is one of the only assets that is producing at a time when most events are frozen until further notice.
Endeavor has gone through two rounds of layoffs, furloughs and salary reductions to keep afloat while most of its companies are not producing.
As previously written, the UFC has a $750 million rights fee deal with ESPN if it produces a requisite number of events by the end of 2020. In addition to UFC 249, it has 3 more events in May and another in June on schedule.
Payout Perspective:
The debt is mounting and the loan, at just under 11%, seems steep which infers that there may not have been another option for the company. One might infer that Endeavor is leaning on the UFC at this point as the rest of its assets are stuck in pause. The concern for the company is how much longer can the company stay afloat without any other production aside from the UFC.
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