Last week, UFC President Dana White took to social media to react to mounting criticism of the UFC’s slow response to the coronavirus pandemic, which included hosting a UFC Fight Night show in Brasilia, and ongoing plans to push through with the UFC 249 Pay-Per-View show.
Speaking to UFC champion Kamaru Usman on Instagram Live, White claimed that the vast majority of media members covering the UFC are “the weakest, wimpiest people on Earth.” He went on to brag about how his promotion has not laid off any of its staff.
“I have over 350 employees who work for me,” White said (h/t MMAJunkie). “Multi-billion-dollar companies are laying off all their employees right now. We haven’t laid off one person at the UFC. And every fighter that fights for me will fight three times this year. Our schedule will go on. Everybody’s gonna get paid, and we will figure this out, and we will be the first sport back on. And, uh, f— that s—. Everything will go on.”
Despite White’s proclamation that UFC employees are safe from potential layoffs, it appears his statement might not hold up for much longer. According to a report from Variety, the UFC’s parent company, Endeavor, has laid off 250 people across the company, including “support staff at businesses including talent agency WME.”
Endeavor CEO Ari Emanuel revealed the cuts in a Wednesday memo, which can be read in full below (h/t variety.com):
I don’t think any of us could have imagined we’d be in the place we are today.
As we all focus inward to protect our personal health and safeguard our families, every company around the world is simultaneously faced with safeguarding the health and future of its business. We are no different. All parts of our company are feeling the effects.
With that in mind, we are in the process of assessing our operations globally to develop a plan that will protect the business while limiting the impact on as many employees as possible. In addition to the cost-cutting efforts outlined a few weeks ago, we will be implementing a number of additional measures beginning this week and through April that will affect compensation and some jobs across the company. The effects on each business will vary, and you will receive more specifics from your respective leaders, to the extent any of these decisions may impact you. As part of this, Patrick and I will not be taking a salary for the remainder of 2020.
These decisions are not being made lightly, knowing the impact they may have on you and your families during these uncertain times. We appreciate the strength and compassion that you continue to show for one another as we navigate this challenging situation.
While it remains unclear whether the layoffs included any UFC staff, there is reason to believe that the promotion may be impacted by its parent company’ financial woes — woes that stem from Endeavor’s recent decision to pay out $300 million in dividends to some of its celebrity investors.
Back in February, the UFC paid out $300 million in dividends to some of its biggest investors, including celebrities such as Mark Wahlberg and Charlize Theron, Gisele Bündchen, Ben Affleck and tennis stars Serena and Venus Williams. Other beneficiaries include UFC president Dana White and Endeavor CEO Ari Emanuel, each of whom reportedly pocketed more than $3 million each.
There is also reason to suggest that Endeavor decided to dole out $300 million in dividends because of its failed effort to raise $600 million in an initial public offering (IPO) last year. In September 2019, Endeavor pulled its plan for a public offering of shares amid concerns from investors regarding the company’s financials, as well as market instability. The company’s IPO filing showed staggering debt up to $4.6 billion and an operating loss of $107 million. When Endeavor finally pulled its IPO offering, insiders speculated that the company “may have to pay out some retroactive bonuses to calm the waters.”
The UFC is one of the most profitable additions to Endeavor’s portfolio, having reaped a reported $900 million in revenue in 2019 (only 16% of which was paid out to fighters). However, since the company has now drained the UFC’s cash reserves, the promotion is in a tight position to recoup in 2020, and that was before COVID-19 became a global pandemic that shut down much of the market. Matter appear to be far worse now.
According to reports, S&P Global Ratings placed Endeavor its subsidiary UFC Holdings on credit watch negative last week due to the recent string of live event cancellations during the coronavirus outbreak. S&P Global also predicted that Endeavor’s revenue from events could drop this year by “mid-teens” percentage and that its debt will reach a ratio of seven times its EBITDA (earnings before interest, taxes, depreciation and amortization).
Given Endeavor’s financial mismanagement of the UFC’s cash flow and their ensuing debt pressure, it is little wonder that Dana White remains desperate to go on with the show.