The 2014 financial outlook for UFC parent company Zuffa LLC is not looking good.
Standard & Poor’s Ratings Services issued a revised profit outlook for Zuffa LLC on Wednesday, saying that the company could be facing a 40-percent drop in profits for the year, which could also lead S&P to once again downgrade Zuffa’s corporate debt rating.
S&P already lowered Zuffa’s corporate debt rating in early October and had previously forecast a 30-percent drop in profits for the year, which includes earnings before interest, taxes, depreciation and amortization.
“A negative rating action could occur if we are not confident that Zuffa’s operations are recovering meaningfully by the first quarter of 2015,” S&P said in its Thursday statement.
The revised projection was due in large part to Cain Velasquez withdrawing from UFC 180 in Mexico, S&P analyst Emile Courtney told Bloomberg. That followed the cancellation of UFC 176 after Jose Aldo had to withdraw due to injury, as well as December events featuring Jon Jones and Chris Weidman being revised due to injury. Another key factor in the lower profits was international expansion costs.
S&P expects UFC profits to return to 2013 levels in 2015 based largely upon the anticipated return of several key fighters.
The UFC has already pulled out the stops to try and bolster 2015 with an early public relations push entitled “The Time is Now.” Several of the promotion’s big hitters are scheduled to fight in the first two months of the year, including Jon Jones, Anderson Silva, Nick Diaz, Conor McGregor, Chris Weidman, Vitor Belfort, and Ronda Rousey.