The owners of the UFC are in advanced talks to sell the business, sources told ESPN.com.
At least four bidders are believed to have submitted bids for the organization, including WME/IMG, China Media Capital, The Blackstone Group and Dalian Wanda Group. The winning bid, should things proceed, is expected to be for a valuation between $3.5 billion and $4 billion, multiple sources with knowledge of the negotiations told ESPN.com.
"As a private company, we don't discuss speculation or rumors related to our business," said David Sholler, vice president of public relations and athlete marketing for the UFC.
Investment bank Goldman Sachs has been representing Zuffa LLC, which bought the UFC in 2001 for only $2 million. Sources with knowledge of the numbers presented to potential investors said that Goldman Sachs had represented UFC's last full year earnings in the $200 million to $250 million range, before interest, taxes, depreciation and amortization. A new television rights deal, which would begin in 2019, could add an additional $250 million in annual revenue to the bottom line, investors were advised.
Lorenzo Fertitta, who with his brother Frank owned more than 80 percent of the business at last public acknowledgment, told CNN in December that the private company grossed about $600 million in revenue last year. Besides the Fertittas, who are each worth about $1.6 billion, according to Forbes, the company has two other minority investors: UFC president Dana White and the Abu Dhabi government, which, under its Flash Entertainment arm, bought a 10 percent stake in the business for an undisclosed sum in 2010.
The leader in the bid to buy the biggest mixed martial arts business in the world is said to be Chinese-based conglomerate Dalian Wanda Group, sources said. Its chairman, Wang Jianlin, is the richest man in China, worth nearly $35 billion, according to Forbes Magazine.
The company has slowly been getting into sports. Last year, Wanda bought a 20 percent stake in soccer superpower Atletico Madrid for a reported $48 million. In March, amid the FIFA scandal, the company agreed to sign on as a FIFA partner, the highest level of sponsorship, through 2030.
In January, Dalian Wanda Group became the first Chinese company to become owners of a major Hollywood film studio when it agreed to buy Legendary Entertainment from Pittsburgh Steelers minority owner Thomas Tull for about $3.5 billion.
The UFC, under parent company Zuffa, is privately owned and does not publicly reveal financial information. It's safe to say, however, the company is coming off a monster financial year in 2015, led by the emergence of crossover stars in
Ronda Rousey and
Conor McGregor.
Rousey and McGregor each headlined three UFC events in 2015. Rousey's title fight against
Holly Holm in November set a new company attendance record at Etihad Stadium. One month later, McGregor's title fight against
Jose Aldo in Las Vegas drew the promotion's second-highest gate receipts in its history, with ticket sales grossing more than $10 million.
Other bidders said to be in the mix are WME/IMG, which owns media properties and represents athletes, including Rousey, the former UFC bantamweight champion. Blackstone Group is also believed to be a bidder. A senior executive at the private equity firm, David Blitzer, owns a minority stake in the
New Jersey Devils,
Philadelphia 76ers and British soccer team Crystal Palace.
