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4. Huge Debt
WME-IMG is not nearly as financially stable as most MMA fans hope. The company, which focusses mainly on being a talent agency, was already in debt $425 million, yet were able to convince lenders to give them another $4 billion.
This would be fine provided the UFC revenue brought in allows the talent agency to pay off their debts in a reasonable amount of time. It shouldn’t feel anyone with confidence that the Federal Government actually warned the company’s lenders that this was a risky move however.
Goldman Sachs, who helped WME-IMG arrange the finances for the purchase to the tune of $1.8 billion, received a formal letter of caution from the Federal Reserve bank supervisors. According to the supervisors, the numbers used to show the investment as sound were flawed and over-estimated the future earnings of the company. And that was even before Conor left!
