(The Fertitta brothers, preparing to order something expensive.)
The poor get poorer while the rich land on the cover of Forbes: Financial stability was a recurring theme in MMA this week, as two prominent leagues face death while another cemented its place at the top. First the bad news…
— The IFL filed their 10k SEC report on Tuesday, and things are looking grim. Since the league was founded in January 2006, it has suffered losses of $31 million. Last year’s revenues weren’t nearly enough the make up for the $15.9 million it spent on events; notably, the IFL only took in $498,000 in sponsorship revenue and $117,544 in branded merchandise sales in 2007. At this rate, the company won’t be able to survive past the third quarter of the 2008 fiscal year, and due to their continued losses, the IFL’s auditors have included a paragraph in their financial statements questioning their financial viability, which will make it even harder for the IFL to secure the additional financing it needs to sustain operations. As the report says, “If revenues grow slower than we anticipate, or if operating expenses exceed our expectations or cannot be adjusted accordingly, we may not achieve profitability and the value of your investment could decline significantly.”
— An earlier rumor that BodogFight was near death gained more traction yesterday with MMAWeekly’s report that the Bodog subsidiary may be ceasing operations next week. The company lost a reported $38 million in 2007, and hasn’t announced any more events since it sponsored a Las Vegas Tuff-N-Uff show in February. From the article:
Asked if the company was folding, one executive who declined to be named told MMAWeekly.com, “I can neither confirm or deny that.”
When asked what Bodog Fight was currently working on, the executive responded, “I’m sitting in an empty office.”
Of course, in the land of the Octagon, it’s all champagne and caviar…
— Frank and Lorenzo Fertitta landed on the cover of Forbes this week for a feature titled “Ultimate Cash Machines”, which ran down the UFC’s rise from money-bleeder to billion-dollar empire. The article estimates that the UFC will generate $250 million in revenue this year. The Fertittas claim that they’ve been presented with offers exceeding $1 billion to sell the company, which they bought for just $2 million in 2001. In 2004, after blowing $44 million of their family’s money, the Fertittas told Dana White that they wanted out. The best offer that White could find was someone who offered $4 million for the UFC. Creating The Ultimate Fighter was a desperate move (which cost them another $10 million), but it made the UFC a hit. According to the article, neither Dana White nor Frank and Lorenzo Fertitta currently have any interest in selling the company.