S&P: Zuffa outlook negative

Standard & Poor's said it revised its outlook on Zuffa LLC, (doing business as Ultimate Fighting Championship) to negative from stable. All ratings, including the BB corporate credit rating, were affirmed.

The agency said the outlook revision reflects Zuffa's weak operating results over the six months ended June 30, which were meaningfully below S&P's prior expectations. In particular, the company incurred significantly higher operating costs, primarily related to its initiative to extend the Ultimate Fighting Championship brand into the United Kingdom.

The ratings reflect the company's relatively short operating history, potential revenue and cash flow volatility given its primarily event-driven business model and vulnerability to changing consumer tastes, S&P said.

These risks are partly offset by the company's historical success in growing its Ultimate Fighting Championship brand, healthy free cash flow conversion and modest expected debt leverage, the agency said.

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