As the UFC continues to grow in popularity, a recent report detailing the organization’s earnings indicates that its portfolio has benefited greatly as the company expands its audience and talent pool.
MMA reporter John Nash reported Friday that the UFC earned more than $1 billion in the first quarter of 2022 (April 1, 2021 to March 31, 2022), according to a credit analysis released by the investor services company Moody’s on May 25. The report also shows the promotion grossed just over $1 billion in 2021, double-digit growth that Moody’s attributes to an increase in fan attendance.
The report comes 15 months after Hollywood talent agency Endeavor Group Holdings acquired full control of the UFC in March 2021 after previously holding a 50% stake in the company.
“Attendance revenue is generally a modest portion of revenue (12% of revenue in 2019), but attendance revenue has recovered strongly as health restrictions eased due to strong fan interest,” according to the report. Moody’s credit analysis.
Nash’s report also cited comments from Endeavor’s chief financial officer, Jason Lubin, on May 12 regarding the payout of hunters, a hotly debated topic within the company for nearly a decade. After citing the UFC has had a compound annual growth rate (CAGR) of 21% since 2005, Lubin noted that fighter compensation has had a CAGR of 26% over the same period. According to Nash, the CAGR of 21% would be about $1.02 billion in 2021, while the CAGR of 26% would represent 17.5% of the company’s revenue, or about $178.8 million.
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“We think the right comparison is with other individual sports such as the PGA Tour, F1, NASCAR and ATP,” Lubin said in May. “And if you look at those athletes and what they’re paid, as a relative percentage of those leagues’ revenue, that’s exactly where the UFC is with their athlete compensation.”
The immense financial growth highlights a number of ongoing issues within the UFC related to fighter contracts and rising pay-per-view costs. The company was locked in an antitrust class action lawsuit brought by several veterans against parent company Zuffa in 2014 over allegations that the UFC capped fighters’ revenue and illegally stifled its competition. Additionally, a number of fighters have been involved in tense contract negotiations with the promotion over the years; Current UFC heavyweight champion Francis Ngannou, who last fought in January, has been embroiled in a high-profile dispute with chairman Dana White for more than a year.
In January, the company came under fire after ESPN, which became the UFC’s official broadcast partner in 2019, raised PPV prices for the third time since the massive acquisition. At the time, White told fans the decision wasn’t his, saying, “I don’t like it when prices go up, but it’s not my decision. It’s theirs.” The increase didn’t have much of an impact on results, however, as last month’s UFC 274 event saw the promotion’s highest buy-in rate of 2022 so far. now with 400,000 domestic purchases.
Most recently, the UFC announced on June 9 that it had entered into a landmark $100 million partnership with prominent blockchain logistics company VeChain. The deal is set to kick off June 11 at UFC 275 at the brand’s first event in Singapore,
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