The mixed martial arts organization UFC has been sold to WME| IMG for $4 billion, the New York Times first reported and an announcement Monday from the UFC confirmed. The UFC owns 50 percent of UFC Gym, Santa Ana, California.
The UFC buyers are a consortium of players led by talent agency WME| IMG, Beverly Hills, California, which will be the operating partner of UFC, according to the media release. Silver Lake Partners and KKR will join WME | IMG as new strategic investors, along with MSD Capital, L.P. and MSD Partners, L.P. which will provide preferred equity financing.
UFC President Dana White and casino owners Lorenzo and Frank Fertitta purchased the UFC in 2001 for $2 million. The $4 billion purchase price is the most ever paid for a sports franchise, according to media reports.
"For the sport and the UFC brand, I think this is the start of the next inning of their life, which is going to be more explosive growth," Brent Leffel, CEO of UFC Gym and president of New Evolution Ventures (NEV), told Club Industry. NEV owns the other 50 percent of UFC Gyms.
Leffel said that he spoke to the buyers last week, and no changes are planned or expected in the UFC Gym joint venture between UFC and NEV. White will remain as president of UFC, and Leffel said he expects to continue to work closely with Nakisa Bidarian, CFO of the UFC.
"I feel great about the position we are in," Leffel said. "We currently have 133 stores open and another 250 stores sold both in the U.S. and internationally. As the UFC grows and with the increased firepower they have behind them, that's only going to benefit us."
UFC Gym grew by 81 locations in January 2013 when it purchased LA Boxing and converted those clubs to the UFC Gym brand. UFC Gym not only has clubs in the United States and Canada but also is expanding in seven other markets The sale will be a great selling point for UFC Gym franchise expansion, Leffel said.
"This is the only opportunity that exists in the world to become part of a franchise that is attached to the largest and most successful sports franchise in the world," he said.
Leffel had a meeting with staff at UFC Gym headquarters on Monday to share the news, and he then spoke with many of UFC Gym's partners updating them about the transaction. He plans to send out communication to the company's entire network.
For months, the press had been reporting rumors about a possible sale of the UFC, which created anxiety for some people at UFC Gym, Leffel said.
"What I said to everyone in and around our organization is that it is business as usual, and we need to focus on what we can control, which is building our business," he said. "Regardless of what is happening with the UFC, we are such an important component of it, and we are set up as a joint venture, so it will only benefit us. What we need to focus on is what we can control, which is beating our budget and continuing to grow our brand."
Founded in 1993, UFC produces more than 40 live events annually and is the largest Pay-Per-View event provider in the world, broadcast in more than 156 countries and territories, to nearly 1.1 billion TV households worldwide in 29 languages.
WME | IMG has a portfolio of more than 800 owned, operated and/or commercially represented events.