Rumor has it that the UFC (Ultimate Fighting Championship) is ‘advanced talks’ to sell the company. This story broke via ESPN on May 10th. For those not aware, the UFC is the premier mixed martial arts (MMA)/cage fighting company in the world and is owned by its parent company Zuffa LLC. In the fighting world it’s equivalent to what the NFL is in football.
The potential purchase of the UFC is a big deal on a number of fronts. For investors, it could be welcomed news because the sport of MMA has been largely a private realm. Outside of a very few penny stocks that exist or once existed, getting some skin in on the game of MMA was close to nonexistent.
For potential investors, what would a purchase by the named parties mean in terms of public investor access to a rapidly growing sport? Let’s take a look.
Blackstone Group – Publicly traded (BX). The company has around $344 billion under management. This is a very large and very diverse company. Though acquiring the UFC might make sense for BX, I wouldn’t expect the UFC’s performance to have an overwhelmingly strong impact on the stock’s future growth. The acquisition would be comparable to throwing a rock into a lake, not like throwing a rock into a small puddle. It would make a splash, but BX’s pool is very large.
China Media Capital – Private company. From what I have read the concept of the company is akin to what Blackstone is, except being based out of China.
WME/IMG – Private company. This company is an agency y focused on the development of sports and media talent. As with China Media Capital, it’s not listed on a public exchange. No luck here if you’re on the outside as an investor.
Dalian Wanda Group – Publicly traded (3699:HK)…Kind of. The company is in the process of delisting itself from the Hong Kong exchange. Trading has been suspended and some news articles point to the company’s management potentially not delisting based on a valuation cap between its public listing and private reception. I don’t follow the stock, so I have no clue. Not much of a chance getting in on this company, even though it’s technically listed on an exchange. What does the company do? They manage a lot of international properties.
In short, if you’re hot to invest in the world of MMA, I would not get too excited about the UFC’s potential sale given the names listed above. All but one is currently accessible via a public market and none provide any form of direct exposure to the sport’s growth.
If you saw the WWE listed among the companies above, then it would be a very different story. That’s not the information we were given to work with. What we have been told are mega companies that have business exposure in a wide array of areas.
Where’s an investor to go, if they want exposure in the world of MMA? It’s a hard call. Some indirectly associated companies like Muscle Pharm (OTC: MSLP) are public, but carry horrible performance records.
Have an idea? Share it below! The MMA investment world would love to hear your thoughts!