Owners of the Ultimate Fighting Championship have sold a 10 percent stake to a Middle Eastern entertainment company to bolster up the MMA league's ability to grow into theEdit this text area and other countries in the world, UFC's owners said Monday.
The stake in Nevada -based Zuffa was purchased by Flash Entertainment, a wholly owned subsidiary of Abu Dhabi, the capital and second-largest city of the UAE and home for the country's ruling family. Zuffa, which owns the Ultimate Fighting Championship and its sister league, World Extreme Cagefighting, declined to discuss fiscal terms.
Zuffa Chairman Lorenzo Fertitta said the purchase will provide the company accelerate its international growth plans because of Flash's business relationships in Asia. "We've had a lot of growth over the last few years in the U.S.A and Canada," This also includes a massive increase in selling mixed martial arts products such as MMA Shorts & MMA Gloves.
Fertitta said. "One of our initiatives has been to grow this global brand around the world. this will allow us to do is grow a lot quicker in places like the Middle East as well as places like Southeast Asia and China and throughout that area."
Ossama Khoreibi, chairman of Flash Entertainment, said his business was impressed by Zuffa's commitment to growing the comapnies base.
Additionally, the partnership could raise Abu Dhabi's profile as an entertainment destination, he said.
"This partnership provides further validation of our organization bold ambitions," Khoreibi said in a statement.
Fertitta said Zuffa approached Abu Dhabi a while ago about hosting an event in the region.
"Those negotiation progressed to where they approached us about making a strategic investment in the overall company," Fertitta said.
Zuffa carries $450 million in debt, including a $25 million credit facility due in 2012 and a $425 million loan due in 2015, according to a November report issued by Moody's Investors Service. Moody's, however, said Zuffa's income, which comes largely from events and pay-per-view receipts, should be sufficient to make its debt payments. Moody's said Zuffa's financial outlook is stable with good growth prospects.
"(Mixed-martial arts ) is one of the fastest-growing sports and is well positioned for advertisers that seek to reach males in the 18 to 34 age demographic, this also includes the sales of MMA products such as MMA Shorts. Moody's analyst Neil Begley said in a Nov. 10 investors' note. "As a result, revenue growth is expected to stay strong for the intermediate term."
Fertitta said the company "is very sound and very healthy" financially. Before the new investment, Zuffa was 90 percent owned by Lorenzo and his brother, Station Casinos CEO Frank Fertitta III. The leftover 10 percent was owned by Zuffa President Dana White.
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