Entertainment conglomerate Endeavor’s mixed martial arts business took a hit last week with the cancellation of the UFC 249 pay-per-view and all other upcoming fight cards due to the ongoing coronavirus pandemic. However, UFC president Dana White says that the company has found a way to move forward with its live promotions.
“We built the APEX facility next door just in time to save the day from this pandemic,” White said in an email statement to Variety Tuesday night. “Live fights will be produced out of there starting next month and for the foreseeable future.”
The UFC’s APEX facility is located in Las Vegas, Nevada, next door to the organization’s headquarters. It officially opened last year and is touted on the UFC’s website as a “130,000 square-foot production” hub with “an arena space.” White said in an interview with ESPN earlier on Tuesday that the UFC was planning a fight card for May 9 but did not disclose where it would take place.
Like many U.S. states, Nevada is currently under a stay-at-home order that has shuttered all non-essential businesses. That order was initially issued on March 12 and was extended to April 30 by Gov. Steve Sisolak last week. According to an individual with knowledge of the situation, the UFC is expecting those restrictions to be eased within the coming month to allow for events to take place without a live crowd present. White is also one of several sports executive chosen by President Donald Trump to advise the White House on how to reopen the U.S. economy.
Even if Nevada does not work out, the state of Florida may have provided the UFC with a lifeline. Florida governor Ron DeSantis recently declared in a memo that professional sports can resume production in the state if they take place in a location closed to the general public. WWE has already been given the greenlight to resume tapings at its privately owned Performance Center in Orlando — clearing the way for the UFC to begin operating in the state under a similar arrangement, should it choose to do so.
The possible Nevada venture comes just under four years after Endeavor acquired a majority stake in the UFC in a landmark deal valued at $4 billion. But with all fights in limbo for the foreseeable future, how good is that $4 billion investment looking?
“Let’s not forget all the negativity about Endeavor when they bought UFC,” White said in his statement to Variety. “Media said Endeavor overpaid; that I made so much money on the sale that I won’t care or be focused; that we can’t get a TV deal; etc. But the truth is since Endeavor acquired UFC, we’ve seen growth in every area. In 2019, we had the best year in the history of UFC. Sponsorship, Licensing, consumer products, and media revenues hit all-time highs. The ESPN deal doesn’t even happen without Endeavor. We built the APEX facility next door just in time to save the day from this pandemic. Live fights will be produced out of there starting next month and for the foreseeable future. The whole business has been on a killer run since these guys got involved. Don’t ever bet against Endeavor.”
Representatives for the Nevada governor’s office did not immediately respond to Variety‘s request for comment.
Windy Dees, associate professor of sport administration at the University of Miami, tells Variety that it is too soon to say if the Endeavor-UFC deal has paid off, especially with the pandemic upending all sports in the United States.
“I kind of equate that purchase at the time to buying a house at the height of the market,” Dees says. “They really bought when UFC was having its best year, arguably. They’ve had some struggles since then and have been kind of up and down, so we’ve yet to see the profitability of that. I think UFC will be successful for them in the long term.”
The UFC’s popularity was increasing exponentially at the time of the Endeavor deal, with the fight promotion growing to new heights since. Of the top five highest pay-per-view buy rates in UFC history, three of them have taken place since the Endeavor deal.
Dees also does not fault White for attempting to charge ahead with events, given that every pro sports league is looking for ways to get events back on the air.
“The NBA is also talking about hosting games in the Bahamas in a gym somewhere, so all these executives are putting on their promoter hats right now trying to get sports back in front of people,” she says. “They all definitely have dollars on the brain.”
The cancellation of upcoming UFC fight cards, and indeed all live events, could not come at a worse time for Endeavor. The company, still smarting from the scuttling of its IPO late last year, has also seen its core agency business via WME dry up as the country grapples with getting coronavirus under control.
“They had all these artists working to pay down debts they have taken on through these acquisitions,” one talent agent tells Variety. “Now none of those artists can work so that money has dried up.”
Endeavor had $4.6 billion in debts on its books, according to financial filings from around the time of its IPO. Under the UFC’s current seven-year deal with ESPN and Disney, the MMA organization stands to receive more than $500 million if it can mount 42 events throughout 2020. All 12 annual UFC pay-per-views and around 20 other UFC Fight Night Events air on ESPN Plus in addition to Dana White’s Contender Series.
The ESPN deal, first signed in 2018 and extended in 2019, has proven successful thus far, with industry insiders saying that UFC is the major subscription driver for streaming offering ESPN Plus. UFC events on ESPN’s linear channel averaged 1.1 million viewers in 2019, a 43% improvement over live events on FS1 in 2018, according to Nielsen data.
White has gone to great lengths to keep the events alive, including moving them to a resort and casino on Native American tribal land in California, which would have allowed the UFC to work around the state’s stay-at-home order. That plan was eventually scrapped after White said he received pushback from top-level executives at ESPN and Disney. White has also stated numerous times now that the UFC is working to secure a private island on which it will be able to stage fights in a move out straight out of a kung fu movie or “Mortal Kombat” game.