Lorenzo Fertitta says UFC's 2015 set record with around $600 million in revenue

Lorenzo Fertitta

When it comes to most of the UFC’s finances, “under wraps” is an appropriate term.

The promotion discloses the show and win money it pays its fighters when events take place in a state that has an athletic commission that releases the figures. And it hands out $200,000 in announced bonus money for each event.

In addition, there is a pay structure in place that is clear cut for what fighters make per event from the UFC’s apparel partnership with Reebok. But beyond that, what the UFC brings in itself – as well as much of what it gives out to fighters in undisclosed compensation via pay-per-view points or extra “locker room bonuses” – is left to speculation. Since the UFC is a private company, just how much money it makes every year is something the promotion keeps close to the vest.

But UFC CEO Lorenzo Fertitta, in a recent interview with CNN digital correspondent Rachel Crane, gave some insight into at least how successful the company was over the past year.

“Because we are a private company, we don’t get into profitability (publicly),” Fertitta told CNN. “But we’ll generate around $600 million in revenue for the year 2015, which is a record for the company and it’s a fairly significant growth coming off of 2014.”

The creation lore of the modern UFC is well documented. Dana White, now the promotion’s president and part owner, approached brothers Frank and Lorenzo Fertitta with the idea to purchase the UFC from Semaphore Entertainment Group, which was struggling financially.

Zuffa, LLC was formed, and SEG sold the UFC for $2 million.

“When we bought the company in 2001, it was a business that was almost bankrupt,” Fertitta said. “It was literally going out of business. But we saw an opportunity.”

Today, that opportunity has skyrocketed to the tune of 41 events in 2015, including 13 cards on pay-per-view. Among those big cards were UFC 189 in July, which did a gate in excess of $7 million for what was then a new U.S. MMA record; UFC 193 in Australia in November, which saw megastar Ronda Rousey upset by Holly Holm in front of UFC record-setting crowd of more than 56,000; and UFC 194 earlier this month, which saw Conor McGregor knock out Jose Aldo in 13 seconds and bring in a new U.S. record gate of $10.1 million at MGM Grand Garden Arena in Las Vegas.

But the UFC’s growth is largely because it has branched out beyond mere pay-per-view.

“The exciting part of the platform that we’ve built is that we’ve been able to embrace really different tiers of revenue,” Fertitta said. “So we have our basic pay-per-view business – our premium championship fights sit on pay-per-view. That is our biggest source of revenue. Then we have our media rights, which is really similar to the rights that we sell to FOX for all of the programming we give them. And then we have embraced the over-the-top platforms, where we launched UFC Fight Pass, which is a subscription service – $9.99 a month where you can access the entire UFC library. And then we also put exclusive live UFC events from around the world on that format, as well as original programming. So we really have those three sources of revenue – three ways to monetize our content.”

Fertitta told Crane the reported $100 million a year on average the UFC gets from its broadcast deal with FOX can be a little deceiving, though.

“We have to pay to produce all the events, and we do all of our own production and we have all of the overhead – so it’s not quite what people may think,” the executive said.

He also defended the UFC – yet again – against critics who say the company doesn’t pay its fighters enough money.

“At the end of the day, it’s an absolute open market,” Fertitta said. “There are multiple bidders in the marketplace. In fact, our No. 1 competitor is Bellator, which is owned by Viacom, which have significantly more resources than we do even though we’re kind of the leading brand in the space. The fact of the matter is, our top athletes are making multi-millions of dollars. What is happening is, as the sport grows and compensation goes up along as revenue goes up, you’re starting to see that the guys and girls at the top are commanding a larger share of that pie. And I think you see that in just about every sport and every business – it’s the athletes that make a difference that people want to pay for, they’re commanding the big dollars.”

The UFC returns this week for its first event of 2016 with the UFC 195 pay-per-view Saturday at MGM Grand Garden Arena in Las Vegas, headlined by a welterweight title fight between champion Robbie Lawler and former interim champ Carlos Condit.

For more on UFC 195, check out the UFC Rumors section of the site.

view original article >>