Endeavor's upcoming IPO has raised concerns about company's growing losses and debt, but an investment in the company is also a bet on the growth of UFC, which has been losing its fighters and its fans.
Endeavor's IPO filing values the company at $7.6 billion, which means its ownership of UFC comprises more than one-quarter of its total value.Put simply, Endeavor does it all. The global sports and entertainment company is involved in talent representation, brand marketing, film production, TV rights distribution, event management and live event streaming.
Despite that diversification, though, the reality is that more than one-quarter of the company’s value is from its ownership of mixed martial arts series UFC. In other words, no matter how widely the business reaches into other areas, at this point a bet on Endeavor is largely a bet on UFC’s continued growth and success. And although the series has been a moneymaker, some worrying indicators suggest the fight for mainstream relevancy is far from won.
In 2016, Endeavor led the purchase of UFC for $4 billion, at the time the highest sales price ever paid for a sports property. Endeavor currently owns 50.1% of UFC’s parent company, Zuffa; investment groups Silver Lake Partners, which is also Endeavor’s largest stakeholder, and KKR own 22.9% apiece. UFC president Dana White is believed to own at least a portion of the remaining 4% of the series.
Assuming the fighting series has at least maintained its value in the years since the 2016 sale, Endeavor’s holding would be worth about $2 billion, or more than one-quarter the company’s total value. If UFC has increased in value—last year,But while UFC has built a loyal following and had financial success, viewership is falling, and Endeavor may be limited in its ability to adapt moving forward.
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