UFC Vs. WWE

WWE superstar Brock Lesnar’s crossover appearance at UFC 200 has further blurred the lines between what’s real and fake in the combat sports niche. Yet UFC’s blockbuster sale suggests the company is worth nearly three times as much as its fake wrestling counterpart.

It’s the quietest week of the sports year, but that hasn’t stopped UFC from making some major headlines. On Monday it was announced that UFC has been sold to a group of firms led by WME-IMG for $4 billion. The Fertita brothers, who bought the promotion for just $2 million in 2001, have made an absolute killing on what is now the single largest sports transaction in history.

The sale also raises questions about just how much more valuable UFC is than WWE. The competitive sides of UFC and WWE are obviously two wildly different products; the former is a legitimate combat sport while the latter eschews real competition for scripted plotlines. But the two promotions operate in a very similar niche and the lines between them are often blurred – most recently, WWE superstar Brock Lesnar not only made a crossover appearance at UFC 200, but he took a heavyweight victory over Mark Hunt, who after the loss is still ranked ninth-best in his division.

And the two companies have remarkably similar business models. Both UFC and WWE largely generate revenue from live events, pay-per-view buys, cable TV rights deals (UFC averages $100 million per year from Fox, while WWE has a $150 million-per-year deal with NBCUniversal) and their respective subscription-based streaming options. And the two companies are similar in terms of total revenue, with WWE making $659 million in 2015 to the $600 million that Lorenzo Fertita claimed UFC generated last year.

Yet UFC just sold for $4 billion while, as of Tuesday morning, WWE’s enterprise value is roughly $1.5 billion. In other words, UFC is worth nearly three times as much as its fake-wrestling counterpart. And while WWE is trading at just over two times revenue, UFC’s $4 billion sales price means it sold at nearly seven times revenue. One potential reason why is that UFC’s revenue has been growing much faster over the last decade:

Note: Annual UFC revenue figures are estimates compiled by MMA blog Bloody Elbow. WWE’s annual revenue figures are from SEC filings; 2005 and 2006 are for the years ending April 30, while 2007 onwards are for years ending December 31.