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Wed 11 May 2016 11:06 AM

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Abu Dhabi-backed UFC 'in talks over $3bn-plus sale'

Chinese conglomerate believed to be frontrunner to buy biggest martial arts business in the world

Abu Dhabi-backed UFC 'in talks over $3bn-plus sale'
UFC president Dana White. (Getty Images)

The owners of the Ultimate Fighting Championship (UFC) – a global martial arts business that is part-owned by the Abu Dhabi government – are in advanced talks to sell the business, according to reports from the US.

Abu Dhabi subsidiary Flash Entertainment bought a 10 percent stake in UFC in 2010 from Las Vegas-based Zuffa, a company owned by casino heir brothers Lorenzo and Frank Fertitta, who bought the then ailing UFC in 2001 for just $2 million.

The brothers are believed to still hold 80 percent of the business, while friend and investor Dana White owns the remaining stake.

According to US sports news channel ESPN, Zuffa has appointed investment bank Goldman Sachs to oversee a possible sale.

At least four bidders are understood to have submitted bids, including WME/IMG, China Media Capital, US private equity firm the Blackstone Group and Dalian Wanda Group.

Chinese conglomerate Dalian Wanda Group is believed to be the frontrunner – it has slowly been increasing its exposure to the sports industry, last year buying a 20 percent stake in soccer.

The leader in the bid to buy the biggest mixed martial arts business in the world is said to be Chinese-based conglomerate Dalian Wanda Group, sources said. Its chairman, Wang Jianlin, is the richest man in China, worth nearly $35 billion, according to Forbes Magazine.

The company has slowly been getting into sports. Last year, Wanda bought a 20 percent stake in football club Atlético Madrid for a reported $48 million.

In March, the company agreed to sign on as a FIFA partner, the highest level of sponsorship, until 2030.

The winning bid is expected to be for around $3.5 billion and $4 billion, ESPN reported, citing “multiple sources with knowledge of the negotiations”.

Lorenzo Fertitta told CNN in December that the private company grossed about $600 million in revenue last year. The brothers are worth about $1.6 billion each, according to Forbes.

ESPN quoted sources as saying Goldman Sachs had set UFC’s last full-year earnings as between $200 million to $250 million, before interest, taxes, depreciation and amortisation.

Investors have reportedly also been advised that a new television rights deal, scheduled to begin in 2019, could add an additional $250 million in annual revenue.

UFC President Dana White has previously told the Las Vegas Review-Journal that “the UFC is not for sale”.

And UFC spokesman Dave Sholler told ESPN: “As a private company, we don’t discuss speculation or rumors related to our business.”

Arabian Business has contacted the UFC for a response.

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