LAS VEGAS - An Abu Dhabi-owned entertainment promotion company has bought a 10 per cent stake in the UFC.
UFC co-owner Lorenzo Fertitta told The Associated Press that the deal with Flash Entertainment, a subsidiary owned by the emirate's government, was done to create increased value for UFC and help the mixed martial arts juggernaut expand in the Middle East and Asia.
Neither Fertitta nor Ossama Khoreibi, chairman of Flash, would estimate UFC's worth or say what Flash paid for the newly issued shares in Zuffa LLC, its parent company. Fertitta says terms of the deal are confidential.
A Forbes story in May 2008 estimated the privately held company was worth perhaps US$1 billion. Fertitta said then that several investors have offered more than that for the company
The Fertittas bought the ailing organization in 2001 for $2 million, pouring more than $40 million into it before it started to turn around.
The UFC is expected to hold a show in Abu Dhabi in April and entertained members of the royal family at UFC 103 in Dallas in September. A show is slated for Australia next month.
"We're building a global brand," Fertitta said. "It's never been done before in the fight business."
Fertitta told the AP that the new offers have come from many private equity funds, as well as several media companies and hedge funds.
"We made the decision early on that if we were to bring on a partner, it wasn't for financial reasons," Fertitta said. "We didn't need to raise any money, that wasn't the purpose. If we were going to bring somebody it was going to be with someone that could really be a true strategic partner and could help create an increased value for the company long term."
Fertitta said he believes Flash -- a promoter known for bringing high-profile concerts and other events to the Middle East -- can accelerate UFC's growth there and in China, India and other countries.
Flash's new shares mean Fertitta's 45 per cent stake in Zuffa dropped to 40.5 per cent. His brother, Frank Fertitta III, owns the same amount.
UFC president Dana White saw his stake go from 10 per cent to nine per cent after the deal.
Fertitta would not say what would be done with the money Flash invested or whether it would stay in UFC. Station Casinos Inc., where Frank Fertitta is chairman and CEO and Lorenzo Fertitta is vice chairman, has a pending bankruptcy case in Nevada that is separate from UFC.
Fertitta said day-to-day operations at UFC would not likely change.
Khoreibi said in an email that its role will be to support UFC as it keeps growing.
"The sport has incredible potential and the commercial opportunities were very obvious to us," Khoreibi said.
UFC makes money with pay-per-view and live fighting events, as well as TV deals, merchandise, licensing and DVD sales.