UFC parent company’s credit rating improves with successful 2015 events

Holly Holm and Ronda Rousey

Apparently Ronda Rousey’s upset is not bad for the UFC’s business.

Hot on the heels of the hugely successful and shocking UFC 193 event, Standard and Poor’s reported UFC parent company Zuffa’s business outlook is better with its recent success on pay-per-view.

The credit rating agency’s rating services on Monday announced it has revised the industry-leading fight promoter’s credit outlook from negative to stable after a tough year with the loss of several marquee fight cards.

Zuffa’s corporate credit rating remains the same at BB negative, or three levels below investment grade.

While Zuffa is a private company and is not required to disclose its financial information, Standard and Poor’s Ratings Services provides investors with a key measure of its success – whether it’s able to repay debt and how that affects its ability to do business.

In 2014, S&P said Zuffa’s EBITDA (earnings before interest, taxes, depreciation and amortization) were expected to decline 40 percent, citing card changes and higher operating costs. The company’s credit rating could rebound if the promoter lowered its debt-to-EBITDA ratio, the agency said.

Monday’s announcement provided no earnings figures for Zuffa but said they would recover to “above 2013 levels” and said the company’s debut to EBITDA is expected to decline to the “low- to mid-3 (times) area” by the end of the year. That’s close to the target set in 2014.

Cautioning that fighter injuries could always drag on future earnings, S&P expects Zuffa to sustain a relatively healthy level of debt. Notably, the credit agency also predicts the closure of a recently re-opened Federal Trade Commission investigation as “an expected but positive event.”

So far this year, injuries have scratched 42 main and co-main events. But the fight promotion also won big at the box office on several occasions, including July’s UFC 189 and the recent UFC 193, which reportedly could generate more than 1 million PPV buys.

For complete coverage of UFC 193, check out the MMA Events section of the site.