It’s become blatantly obvious the UFC’s monthly pay-per-view (PPV) cards are becoming purchased less as fighters withdraw from top-level bouts and more events are aired, but UFC president Dana White said that company’s international ventures with online digital subscription service Fight Pass and their ongoing deal with FOX have been making up for the dive in PPV revenue.
Today (Wed., November 19, 2014), however it appears that the opposite may be indeed be true for the struggling promotion. A report from Bloomberg surfaced that Zuffa LLC, the UFC’s parent company owned by Las Vegas casino moguls Frank and Lorenzo Fertitta, will suffer a 40 percent drop in profits as compared to last year.
Building on an earlier report from Standard & Poors, who downgraded the UFC’s credit rating earlier this year, the promotion’s credit could take a further hit if they are unable to bounce back in early 2015:
“A negative rating action could occur if we are not confident that Zuffa’s operations are recovering meaningfully by the first quarter of 2015.”
The finding hardly comes as a surprise as it could easily be argued that 2014 has indeed been the UFC’s worst year, and it came at a terrible time when they were trying to put on by far their most ambitious schedule.
Injuries to countless champions and headliners have left the promotion scrambling to put together marketable PPV cards, and they just haven’t delivered over the entirety of 2014. Some big examples include the all-out cancellation of UFC 176 after Jose Aldo was forced to withdraw from his rematch with Jose Aldo, Jon Jones and Alexander Gustafsson both being forced out of FUC 178 with knee surgery, and heavyweight champion Cain Velasquez’s late withdrawal from his scheduled UFC 180 title fight against Fabricio Werdum last weekend (October 25, 2014) from Mexico City.
The S&P report also stated that UFC profits have fallen because of the costs of their international expansion.
The only bright side to the horrendous year is that fans will be treated to an absolute barrage of huge fights that would have otherwise been spaced out over the course of the year. That should help the UFC boost their S & P credit rating, which currently sits at BB-minus after the first downgrade, back up.
But that doesn’t mean that the overall demand for UFC programming is going to back up to where it was once was, because there just isn’t the same demand for it with so many events being available every weekend.
It was kind of a foregone conclusion that the UFC’s profits dropped during such a trying time. But are these numbers an indication of impending doom to come, or can the MMA giant silence their critics with a strong start to 2015?