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Can you buy UFC stock? Nowadays, it is possible to invest in virtually anything. From sports to tech, everything is covered. In this article, we will discuss how to invest in Ultimate Fighting Championship (UFC). It is one of the biggest combat sports leagues in the world. The league hosts fight cards almost every weekend in the US, Mexico, Brazil, Europe, and, more recently, the Emirates.
Fans can attend those events in person or purchase their pay-per-view (PPV) subscription for fights and much more content surrounding the athletes and UFC life. Those same fans might wonder if they can own a portion of the UFC.
Since April 2021, it is possible to purchase shares. However, it is done via Endeavor Group Holdings Inc (NYSE: EDR). This company owns UFC, other major televised events, and other entertainment industries.
Endeavor purchased World Wrestling Entertainment (NYSE: WWE) and will create a company worth more than $21B. This transaction combined talent, entertainment, and live sports. Let’s find out more about UFC, WWE, and Endeavor Holdings.
Endeavor Group Holdings (NYSE: EDR)
The UFC was founded in 1993. A group of investors and fighters like Rorion Gracie wanted to create a real-life Street Fighter/Mortal Kombat. They wanted to allow diverse fighters worldwide to show their fighting talents.
Boxing already had a stage, fans, and a very impressive talent pool, such as Mike Tyson and Muhammad Ali, to name a few. UFC wanted to become the next big fighting league. That could make UFC stock more popular to investors.
The first few years were difficult, as with many new companies. Convincing fighters to join a league and compete in front of millions of fans isn’t as easy as it seems. In 2001, the Fertitta brothers purchased the company for $2M.
UFC’s current president, Dana White, became the president. As the company grew in popularity, periodic events were happening. Fast forward to 2016, when Endeavor Group bought 50.1% of the company to become the main shareholder for $4B. The sale represented nearly a 200,000% gain for the Fertitta brothers.
By 2016, the UFC had many global superstars, such as Anderson Silva, Brock Lesnar, and George St-Pierre. It wasn’t as difficult to attract new talent anymore. Back to Endeavor. The group already controls many entertainment companies; in the next section, more on that. Its goal with UFC was to control 100% of it and to go public.
In 2019, it was a few days short of realizing an IPO, but unfavorable market conditions made the owners pull the plug. Two years later, in 2021, Endeavor went public and used the proceeds to purchase the remaining UFC for $1.75B. Many UFC fighters bought shares in the company.
Fun facts: Elon Musk is on Endeavor’s board of directors, and Joe Rogan has been a commentator since 1997.
UFC Stock Network of Holdings
In the previous section, I mentioned that Endeavor (UFC stock) owns many entertainment companies. Are you familiar with any of them?
1. Miss Universe
One of the most popular was Miss Universe. Despite dropping in popularity, the yearly pageant attracts nearly half a billion viewers and is present in 190 countries.
It’s hard to undermine the popularity of this event, but economically, it was less and less favorable by the year. That is why Endeavor (UFC stock) sold the organization for approximately $20M.
2. IMG
Next on the list is IMG, a global leader in managing athletes and fashion icons. IMG represents talent and has a hand in many sports leagues, such as the Premier League, UEFA Champions League, the Euro, Major League Baseball, and others.
It advises and owns teams as well as organizes events and media events. IMG is a very important player in the sports industry. This includes UFC stock.
3. OpenBet
We continue with one of Endeavor’s latest acquisitions, sports betting company OpenBet. The acquisition was finalized in late September for $800M paid to Light & Wonder Inc (NASDAQ: LNW). Endeavor is seeking to develop its sports portfolio thanks to a gambling application.
OpenBet processes bets on behalf of DraftKings, FanDuel, SkyBet and more. During the 2022 FIFA World Cup, more than 200M bets were processed, surpassing $2B. Compared to the 2018 World Cup, it was a 13% increase in bets.
More recently, during the 2023 Grand National Festival, OpenBet recorded more than 400M transactions with a peak of 85,000 bets per minute. This represented an 8% increase in comparison to the previous year. The company is growing and contributing to Endeavor’s (UFC stock) success.
4. WWE
Early 2023, a deal took place between Endeavor (UFC stock) and WWE. In the second half of 2023, a new company under the stock ticker (NYSE: TKO) was formed when all the regulatory hurdles were satisfied.
Endeavor shareholders will represent 51%, and WWE will be 49%. The new company will have an estimated value above $21B. Once the transaction is complete, a one-time dividend will be paid. Dana White, Vince McMahon, and other major leaders will remain in their respective roles.
WWE’s wrestling might not be real, but its revenue was over $1 Billion last year. Celebrities from various industries, such as Snoop Dogg, Bad Bunny, Shaq, Logan Paul, Kim Kardashian, and many others, regularly participate in its events.
The merger will likely allow UFC superstars to perform with them and bring an even bigger crowd. Let’s see what Smackdown events will be like after the transaction.
Is UFC Stock a Good Investment?
Throughout this article, we saw that Endeavor’s network of companies is diverse and complementary. After learning all this and before making an informed decision whether or not to purchase this stock, let’s dig a bit deeper into this company.
Is UFC stock a good investment for the long term? Is it financially stable?
We can still remember the pandemic days around the world when many businesses were closed and patiently waiting to reopen. Some companies like UFC managed to schedule some events abroad, notable on Yas Island in the UAE.
Despite this good thinking, revenues remained well below pre-pandemic levels. What about the other businesses under Endeavor? In 2019, Endeavor as a whole grew by 26%. Unfortunately, in 2020, revenue dropped 24%. Consequently, the bottom line suffered, and the company reported a net loss of $655M.
In 2022, Endeavor had over $5B in debt and less than $1B in cash. This can be worrying in the long term. This resulted from ambitious purchases from IMG, UFC, and now WWE.
In its most recent quarterly report, revenue was $1.26B, led by a record year for UFC. Despite a positive EPS, revenue has been falling. The company is positioning itself as a middleman for streaming services, likely to grow in the upcoming quarters.
Endeavor is looking to bounce back and take advantage of the sports and betting industry to grow quicker and pay off its debts. The next quarters will be crucial for its long-term outlook.
Final Thoughts: UFC Stock
To conclude, if you want to trade UFC stock, you can do so under EDR. Endeavor owns companies that complement each other’s businesses and a recognizable leadership group. We can find one of their events in cities worldwide almost every week. Can its stock become as popular as its events? Time and good financial decisions will tell.
Frequently Asked Questions
The UFC stock parent company ticker is EDR.
EDR owns the UFC and WWE among other sports entertainment companies.
Endeavor owns UFC stock.
