D. Mandel/Sherdog.com
The UFC announced this week that it had, for the first time since Zuffa LLC took over the company in 2001, sold a piece of the company. Flash Entertainment, a subsidiary of the oil-rich Abu Dhabi government, formed in 2008, now owns 10 percent of stock in Zuffa LLC.
Flash Entertainment is helmed by Sheikh Tahnoon Bin Zayed Al Nahyan, son of former United Arab Emirates president Sheikh Zayed bin Sultan Al Nahyan. The move drops Dana White’s ownership share from 10 to 9 percent and the shares of Lorenzo and Frank Fertitta down to 40.5 percent; Lorenzo Fertitta told CNBC that the company issued new common shares to Flash. The deal has been in the works for the past eight months to a year. Speaking to MMA Fanhouse, Dana White described the company as “young hip visionaries” who “love this sport as much as we do.”
Sheik Tahnoon founded the Abu Dhabi Combat Club, which since its inception in 1998 has puts on the most prestigious submission grappling tournament in the world. Tahnoon is a Brazilian jiu-jitsu black belt under Renzo Graice, who is expected to fight Matt Hughes on an April 10 card in Abu Dhabi along with a B.J. Penn vs. Frankie Edgar and Anderson Silva vs. Vitor Belfort title fights. White said the plan is to build an entirely new arena to host the Abu Dhabi event, a logistical challenge that is preventing the company from officially announcing the card. White said there is also a plan to do market-specific reality shows in areas that Flash opens for Zuffa.
The deal is expected to help the UFC make a concentrated, speedy push into Middle Eastern and Asian countries, where Flash has had success promoting other American sport and entertainment events, including a recent Formula One auto race.
The UFC, reportedly worth north of $1 billion, has been consistently approached by private equity firms, bankers and television networks about selling a piece of the company.
The price Flash Entertainment paid for the shares was not disclosed, though the UFC has often been reported as having $1 billion in value as a company. Zuffa LLC has accrued $450 million in debt, due in two payments in 2012 and 2015. A November report from Moody’s Investors Service indicates Zuffa should be able to make its debt obligations with its current revenue streams. Ferttita said money made on the sale of a piece of the UFC would not be used to pay down debt.