News broke this morning that Ultimate Fighting Championship (UFC) had sold itself to a consortium of buyers led by talent agency WME-IMG. UFC is one of the best known providers of mixed martial arts entertainment. UFC President, Dana White and investors Frank and Lorenzo Fertitta purchased the franchise in 2000 for $2 million. Today they’re selling the business for $4 billion, a return of 199,900%! The New York Times explains:
It will be a windfall for U.F.C.’s primary owners, the longtime casino entrepreneurs Frank and Lorenzo Fertitta, though they will stay on as minority investors.
The brothers bought U.F.C. in 2000 for just $2 million at a low point for the league, after the promoter spent years and millions of dollars battling to win approval from state athletic commissions.
Before the arrival of the Fertittas, U.F.C. had begun climbing in popularity, thanks to early stars like Royce Gracie and Ken Shamrock and a reputation for being just shy of civilized. But opposition loomed from Senator John McCain of Arizona, who derided the sport as “human cockfighting,” and former Governor George E. Pataki of New York, who banned the sport from the state.
The early years under the brothers — who run the business through a company called Zuffa, the Italian word for “fight” — were still tough, with million-dollar losses weighing over the enterprise.
But the Fertittas took the brand to a new level, with more advertising, more effective social media marketing and better distribution through partnerships like the one with Fox. Licensing money for video games, clothes and more began to roll in. U.F.C.’s revenue was about $600 million last year.