Station Casinos’ Owners Are on the Verge of Selling UFC for $4.1 Billion

Last updated on November 2nd, 2018

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The Ultimate Fighting Championship (UFC) is on the verge of being sold for around $4.1 billion. One of the bids was made by China Media Capital, while the other bid was placed by a combination of Dalian Wanda Group and WME-IMG.

Whichever company wins the bidding is going to own the entire UFC. Both sides are trying to consolidate the financing for the buyout talks. WME co-chairman Ari Emanuel said his group is seeking $25 million to $50 million contributions from investors.

One such investor is the Kraft Group, the owners of the New England Patriots and the New England Revolution. A variety of other investors are said to be interested, including TenCent Holdings, one of the largest Chinese Internet portals.

The Fertitta Brothers

The UFC currently is owned by the Fertitta Brothers, who own the Station Casinos in Las Vegas. The Fertittas have owned UFC since 2001 for a reported $2 million, but the Fertitta Family has owned a majority or large minority stake in Station Casinos since its founding in 1976.

The Fertitta family has been maneuvering financially since October 2015 to regain majority control of their family business and the sell of the UFC would give them more than enough liquid assets to make it happen.

Station Casinos owns 18 “locals” casinos in Nevada. Casinos owned directly by Station Casinos include Boulder Station, Green Valley Ranch, and Red Rock Resort. Station Casinos also own casinos under brand names or in conjunction with Wildfire Gaming, Fiesta Casinos, and the Federated Indians of Graton Rancheria.

Station Casinos Bankruptcy

Station Casinos entered the bankruptcy during the Global Recession, requiring the Fertitta Family to juggle assets. In 2011, the company emerged from bankruptcy with the Fertittas owning 45%, while Deutsche Bank owned 25% and JP Morgan owned 15%. Last October, the family announced plans to take the company public, which presumably would allow the family to own a majority stake in their business once more (under the name “Red Rock Capital”).

The sale of the UFC is a chance to gain a huge cash influx, though it divests the family of its most famous asset. Since the brothers bought the UFC, the mixed martial arts promotion has become the dominant MMA organization in the world. The UFC not only has pay-per-view events, but it has Spike TV programs and network television reality shows. Besides its many champions famous in the MMA world, the UFC also is home to famous fighters with crossover appeal, such as Conor McGregor, Ronda Rousey, and Brock Lesner.

About Dalian-Wanda Group

Dalian-Wanda Group is a Chinese conglomerate based in Beijing. One side of the conglomerate is the world’s largest property developer. The other side of the conglomerate is the world’s largest movie theater chain.

WGE-IMG is a global entertainment and talent management group headquarted in New York City. The company has over 3,000 employees in 25 different countries. IMG’s divisions include events and media, colleges, golf and tennis, performance arts and the IMG Academy, fashion, model management, consulting, licensing, art and commerce, and joint ventures.

About China Media Capital

China Media Capital is a public equity and venture capital firm based in Shanghai. CMC invests in technology, media, entertainment, and telecommunications firms. China Media Capital also holds interest in medical treatment, consumer relations, and the cultural sector.

Rumors of the Sale

Rumors of the sale have been floated for months. In May, UFC President Dana White vehemently denied the chance the UFC would be sold. Speaking of the ESPN reporter who leaked rumors of the sale, Dana White told the Las Vegas Review-Journal, “The UFC is not for sale. The ESPN story is overblown. Darren Rovell is not a fan of facts. His facts could not be further off.”

Darren Rovell continues to report that the sale is imminent, unless the brothers have an 11th hour change of heart. For a family which has had cash flow problems in the past few years, it would be hard to walk away from $3.2 billion (the Fertitta share of the revenues).

Ownership of the UFC

Frank and Lorenzo Fertitta, sons of the late-Frank Fertitta Sr., each own 40% of the company. Dana White is thought to own 9%, while an investment firm out of Abu Dhabi is thought to own 10% of the UFC.

In recent years, the UFC has exploded in popularity. If the MMA promotion was sold for $4.1 billion, it would represent a 2000-fold profit in the 2001 investment.