Zuffa Earnings Down 40 Percent in 2014 Due to Fighter Injury, Reports S&P

Dana White Fertitta Brock Lesnar

(Looks like it’s time to start calling some old boyfriends, boys!)

In August of 2011, the UFC inked a multi-year deal with FOX, in what remains the biggest broadcasting deal in MMA history. As per the deal, the UFC increased their amount of events per year from 27 in 2011 to 32 in 2012. What followed was the now infamous year of the “injury curse”, wherein over 105 fights were cancelled due to injury.

It’s been much of the same for the UFC ever since, with most of the promotion’s champions being forced to the sidelines with long-term injuries or other affliction’s in the past two years. Fun fact: There have been just 11 title fights in 2014, with six of those fights belonging to Jose Aldo, Ronda Rousey, and Demetrious Johnson. Fan complaints of oversaturation have reached a fever pitch, and in July, the UFC was forced to cancel UFC 176 in the wake of Aldo’s injury.

READ MORE:  Justin Gaethje is ready to die inside the Octagon at UFC 300: 'Hopefully I'm there on Sunday'

But you already know this. Any MMA fan who has been paying at least half-attention to the sport in recent years has seen the negative effects the UFC’s increased schedule has had on their product. What you might not know, however, is just how bad the injury bug of 2012-2014 is affecting Zuffa’s earnings, and Standard and Poor’s recent assessment of Zuffa (via MMAJunkie) paints a pretty ugly picture:

Standard and Poor’s today issued a report announcing UFC parent Zuffa’s EBITDA (earnings before interest, taxes, depreciation and amortization) is expected to decline 40 percent, 10 percent higher than originally forecasted.

The report said the steeper decline is “primarily due to a change to a marquee fight card in the fourth quarter of 2014, a result of another fighter injury causing anticipated pay-per-view buys and event ticket prices to decline further, as well as higher remarketing expenses for the event, and additional costs related to the company’s international expansion.”

So basically, Zuffa is running before they can walk by attempting to infiltrate to every possible outlet for MMA while failing to generate enough fan interest to support their expansion. They’re holding a press conference to make an announcement that there is no announcement, so to speak, and it’s becoming more and more evident that there might actually be a roof on this MMA thing. That the UFC’s offices in China recently shut down following a season of TUF and the promotion’s big plans for the area is a perfect example of this.

READ MORE:  Jon Jones denies being arrested after threatening to 'kill' a DFSI drug testing agent at his home

The grim news comes just one month after Zuffa’s credit rating was downgraded from a BB to a BB-, and while it was originally predicted that 2015 would be a recovery year for the promotion, the outlook suddenly looks much less hopeful. MMAPayout offers some insight into the figures:

S&P now expects ZUFFA’s cash flow/debt leverage to increase to the “high-5x area at the end of 2014.” In its October 2014 report, it had predicted ZUFFA to be in the 3 range. The cash flow/leverage is based on a scale of 1-6 with 1 being minimally leveraged to 6 being highly leveraged. ZUFFA is now pegged as 5 whereas S&P had forecasted it being a 3.

I can’t wait to hear how the UFC — who has declined to comment on the report as of this writeup — manages to spin this news. Then again, the promotion has been blindly moving forward and acting as if nothing wrong has been happening for years, so why stop now? With a 45 event schedule looming, it looks like we might be in for another rough one in 2015.

READ MORE:  Sean Strickland turned down lowball offer to fight Paulo Costa at UFC 302: 'It's cut throat in here'

-J. Jones