The latest issue of Forbes presents the owners of the UFC as the Ultimate Cash Machines:
With his older brother, Frank Fertitta III, 46, and UFC President Dana White, 39, Lorenzo Fertitta has transformed UFC from a business once labeled by Senator John McCain as “human cockfighting” into a lucrative sports empire that competitors like Mark Cuban are now hoping to horn in on.It’s the Ultimate Money Machine. That night before the Super Bowl 10,700 fans packed the arena, paying an average of $340 for a ticket to witness nine mixed martial arts fights. Another 500,000 fans paid $45 ($55 for high definition) to watch five of the nine fights at home. The total haul from the event: $25 million.
This year UFC is likely to generate $250 million, capturing perhaps 90% of mixed martial arts revenue. The majority of UFC revenues come from the monthly pay-per-view events. Additional cash is made from ticket sales to live fights and licensing fees from its Spike cable shows The Ultimate Fighter and UFC Fight Night . These shows in turn act as promotional tools to drive fans to pay-per-view events. More scratch comes from sales of DVDs and T shirts, as well as downloads from UFC’s library of past bouts.
The Fertittas field pleas from private equity and media firms to sell UFC. Those offers, they assert, exceed $1 billion. Not a bad return on investment for something they paid a mere $2 million for in 2001. (Indeed, in 2002 FORBES wrote skeptically about the Fertittas’ ability to turn their new purchase into anything worthwhile.) The price, if they could get it, would be rich in comparison with the $1.4 billion market value for publicly traded World Wrestling Entertainment, which has almost double the revenue. Both UFC and WWE racked up similar pay-per-view buys in 2007: UFC got 5.1 million buys for 11 fights while WWE got 5.2 million for 15 fights. Often UFC pay-per-view events draw as many male viewers ages 18 to 49 — some 3 million — as one of last year’s biggest college football games, Michigan versus Ohio State. That number assumes six people are gathered around the TV to watch each pay-per-view purchase. UFC has broadcast events to 170 countries and territories and recently sold out live fights in Manchester, U.K. and Montreal.
The brothers each own 45% of UFC (White owns the rest), which is operated through their holding company Zuffa (Italian for “fight”), LLC. Add in personal assets and their stake in Station Casinos, which they took private with buyout maven Thomas Barrack for $9 billion in cash and assumed debt last year, and each Fertitta has a net worth of $1.3 billion, ranking each 380th on The Forbes 400.