The Fertitta brothers recently agreed to sell UFCto a combination of investor groups for $4 billion, a huge return on their original $2 million investment. The sport has grown wildly from itsoriginal no-holds-barred beginnings, and rivals other sports franchises in popularity.
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In this clip from theMotley Fool Moneyradio show,Chris Hill and Ron Gross talk about how huge the UFC has grown since theFertittasbought it 15 years ago and where it has to grow from here.
A full transcript follows the video.
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This podcast was recorded on July 15, 2016.
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ChrisHill:Fifteen years ago, Lorenzo and Frank Fertitta boughtUFC, the mixedmartial arts franchise for $2 million. This week,they sold it to a combination of investor groups for $4 billion. It isthe single largest franchise sale in sports history. That is a nicereturn on investment, Ron.
RonGross:Boy, boy oh boy, this is hot. It'san incredible deal.William Morris, probably a lot of people know, is the agency...
Hill:IMG, the big global sports conglomerate.
Gross: So,it was a combination of WilliamMorrisandIMG. They have partners in this.Michael Dell is a partner,Kohlberg Kravis,Silver Lake, all partners. The owners, the brothers had an 80% stake. They'llmaintain a minority stake. Dana White wasanother 10% owner of this;he's going to stay at the presidentgoing forward. But obviously, UFC,very popular. 40 live events a year,156 countries, they have 46million social media followers, which isan important avenue for them to get out their content. For $4 billion, they're expecting big things here.Fox(NASDAQ: FOX)(NASDAQ: FOXA)has the TV rights, but that will come up for renewal in 2018. Look forward to that.
Hill:Yeah, they're getting $100 million a year from Fox. As you said, in two years, that comes up. I'm guessing the bidding will start at $200 million.
Gross:It's going to be big, absolutely. Don't besurprised if weseeWilliam Morris, WME,come out with an IPOin the next year or two,because it looks like they're raring to go with that.
Chris Hill has no position in any stocks mentioned. Ron Gross has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.