From Russia with love: UFC reveals big M-1 Global payoff?

Hello, Vadim! Plus, five really big things in TKO's new SEC filings.

I’m old enough to remember when Dana White blamed supposedly incorrigible “Russians” for not helping facilitate a UFC signing of legendary MMA Heavyweight champion Fedor Emelianenko.

It’s become its own kind of Zuffa Myth, as Joe Rogan recently highlighted on his podcast with Ilia Topuria.

Someone should tell Joe that Ari Emanuel’s version of UFC has had no problem doing business with Vadim Finkelchtein and M-1 Global.

In July of 2018, a subsidiary called UFC Russia was created as a joint venture by M-1 Global + Mubadala (Abu Dhabi) + UFC. M-1 was going to scout talent and send a bunch of contenders to fight in the UFC. The Russia-China Investment Fund backed it.

We’re not sure what exactly happened to the project, but we learned this week in TKO’s newest SEC filings that UFC’s Russian partners are in a position to get paid handsomely for their investment. Just don’t expect UFC to actually name names in their filings. A little homework is required to put the puzzle pieces together.

So, we did. And what we found is one of many fascinating developments in Endeavor’s business world for their WWE & UFC machines.

Redeemable Non-Controlling Interest in the UFC

In July 2018, the Company received an investment of $9.7 million by third parties (the “Russia Co-Investors”) in a newly formed subsidiary of the Company (the “Russia Subsidiary”) that was formed to expand the Company’s existing UFC business in Russia and certain other countries in the Commonwealth of Independent States. The terms of this investment provide the Russia Co-Investors with a put option to sell their ownership in the Russia Subsidiary five years and six months after the consummation of the investment. The purchase price of the put option is the greater of the total investment amount, defined as the Russia Co-Investors’ cash contributions less cash distributions, or fair value. As of March 31, 2025 and December 31, 2024, the estimated redemption value was $21.9 million.

Why was TKO willing to name their “Russia Co-Investors” in 2018 but not willing to name them in SEC paperwork in 2025?

Do these “Russia Co-Investors” have any connection to the ALF Global Reality show that Jon Jones and Nate Diaz are scheduled to appear on?

Are any of these “Russia Co-Investors” on the OFAC sanctions list?

This discovery from TKO’s SEC filing and recent investor conference call is one of many interesting news items we learned about this week.

Don’t you dare call Turki Boxing ‘TKO Boxing’

On last week’s TKO conference call, we observed Mark Shapiro sounding a little nervous. Hedging his bets, perhaps?

When it came time to talk Turki about the new TKO Boxing venture, there were a couple of very clear parameters.

First, Mr. Shapiro says that they will be revealing a new name for the venture. He’s not exactly a fan of the TKO Boxing name.

Second, Mr. Shapiro stated that current goals for Turki Boxing in the new media rights negotiation package would ask for 12 basic events a year, over 5 years. 60 shows. “Inventory,” as he likes to call it. Then there would be 1-to-4 “big” Kingdom-backed events.

It doesn’t take a genius to see a potential C-level content plan for ESPN after Netflix gets an A-package from TKO. On paper, it makes sense for TKO to offer 12 APEX warehouse boxing events plus 15-20 UFC APEX warehouse MMA events to ESPN. If they can hypothetically get $10-15M per warehouse show, that would make TKO management very happy.

The terms of the KSA/TKO boxing arrangement became clearer in TKO’s most recent SEC filings.

"In March 2025, the Company entered into a joint venture with Sela Company and Ruby PR to launch a global boxing promotion business. Sela Company and Ruby PR collectively hold a majority of the common equity units, while TKO was granted profit interests, subject to vesting upon the achievement of certain future milestones. TKO will also provide executive and operational services to the joint venture under a services agreement with an annual fee over an initial five-year term. No amounts were recorded as of March 31, 2025, related to the investment in this joint venture."

Based on recent CNBC reporting, we know that the two law firms involved in finalizing this partnership were Latham & Watkins and Clifford Chance.

Dirty debt dogs

TKO currently owes $2.7+ billion in debt.

Remarkably, Endeavor has generated billions of dollars in revenues and has barely made a dent in its debt spending. The value extractors have cashed in for billions of dollars while paying down very little of their corporate debt.

If anything, they’re increasing their debt in the form of outstanding credit letters, new loans (conventional & margin-based), and revolving lines of credit. And when it comes to paying back old debt, they continue to refinance it and kick the can down the road until 2031. The calculation, of course, is that interest rates will eventually go lower and TKO will refinance its debt again on favorable terms.

They’ve already refinanced their debt load at least five times in the last ten years.

Of course, there is a price to pay for refinancing costs, but it’s a tiny fraction of how much money TKO can borrow against their assets to pay themselves in the process.

The financial picture from TKO in Q1 of 2025 is very clear. They are a Free Cash Flow monster. High debt. Medium-range growth. High monetization targets for value extraction. Full spectrum dominance as a multi-monopoly.

They beat estimates for revenue and increased future projections for both revenue and EBITDA.

There is an important reason that TKO has such a wide moat for market protection, and it all has to do with what TKO is.

TKO is a growing government contractor & political mercenary

Repeat after me: TKO is a government contractor. TKO is a ruthless political mercenary.

Two years after Mark Shapiro telegraphed exactly what TKO was going to do for the rest of this decade, a super-majority of investors, fans, and analysts refuse to acknowledge the hard evidence right in front of their face.

Mark Shapiro and TKO CFO Andrew Schleimer were as blunt as you could be on Thursday’s conference call.

It seemed like every other sentence was about government contracts. You can call them “site fees” if that makes you feel better. Kind of like how hospitals call a morphine drip “Comfort Care.”

Government contracts are everything right now to TKO.

The immediate counter from anyone who pushes back against this point is a proportionality argument. It’s only a few % points of total TKO revenue. Media rights are everything.

To which I respond with the following: You don’t understand these people.

Ari Emanuel and Mark Shapiro are ruthlessly obsessive political animals. Every single waking, breathing moment is about politics and leverage. Every decision they make in their life is political. Everything. Is it healthy? One could argue it’s not healthy but it’s a damn good way to become rich in this world.

The point of TKO gorging on government contracts is simple. They want you as a taxpayer to pay every single bill they have, whether or not you watch or care about their product. It’s cable bundling economics all over again.

TKO’s obsession with government contracts is clear if you view it through the lens of politics and leverage. Make the State your co-promoter. Who cares about a terrible PPV card? Go grab millions of dollars in guarantees. Matchmaking doesn’t matter anymore. Paper a lousy show? So what, it doesn’t matter. There’s always a new mark somewhere else.

And once TKO makes the State their co-promoter? Then they soften the ruling class up for anything they like. Like, say, prospects of amending the Ali Act.

Politicians bend over rather easily because a) it’s not their money, it’s the taxpayers’; and b) they want patronage. They want perceived access to celebrity and favors.

The whole point of TKO’s exercise in growing as a government contractor is to build leverage for all parts of their business empire. This isn’t about a fixed % of revenue from tax cash. It’s political horse trading.

Let me direct you to recent comments from Mark Shapiro on their conference call.

Mr. Shapiro repeatedly discussed TKO’s “conviction in the site fee model” and how it’s boosted Live Events revenue.

“We’re not seeing a sign of slowdowns across our portfolio.”

Mr. Shapiro also emphasized the importance of TKO bundling & tying event weeks (while not using that specific term). They want as much earned media as possible in markets. They want TKO weeks with everything paid for by taxpayers. He calls this “value creation.”

Anyone who thinks government contracts don’t matter to TKO missed a big announcement by Mr. Shapiro on their conference call. He promised investors some “big hires” for TKO’s “government relations side” and “C-Suite activity.”

They’re looking to bring in heavy-hitter lobbyists. They’re looking for Max Baucus-type politicians who can open doors and cut big event deals.

The real clue revealing their obsessive-compulsive personality about government contracts is their continued stance that these types of deals are actively trade secrets that should be guarded from public disclosure. Taxpayers get to pay UFC’s bills but somehow aren’t deemed worthy enough of knowing how much those bills cost.

When an analyst asked Mark Shapiro and Andrew Schleimer about the amount of money site fee deals are generating for TKO, management balked at revealing hard numbers. They wouldn’t reveal the % of events that attract site fees but noted that it involves “a lot of inventory” and “a lot of work that will pay off in the coming years.”

The only general information Mr. Shapiro revealed about site fees was his desire to get all RAW & SmackDown events paid for. With rising production and operating costs for both WWE & UFC (8% average jump), TKO is laser-focused on lowering this number.

This will require a lot of juice to get politicians to pay the bills with taxpayer cash.

World governments are TKO’s business partners

TKO is a government contractor and political mercenary disguised as a fight promoter. A super-majority of the public still hasn’t figured that out yet.

Perhaps a recent SEC filing can provide some clarity.

An SEC filing related to WME Group (formerly Endeavor), which recently went private, provided a glimpse into the type of sovereign wealth funds backing the TKO machine that is controlled by Silver Lake and Mubadala.

The Singaporean government recently disclosed ownership rights to WME Group stock and what their current disposition is. The three entities connected to WME Group are/were:

GIC Private Limited, GIC Special Investments Private Limited, and Jasmine Ventures Pte Ltd.

From WME Group/Endeavor’s recent SEC filing:

Jasmine shares the power to vote and the power to dispose any shares, held directly by it with GIC SI and GIC PL. GIC SI is wholly owned by GIC PL and is the private equity investment arm of GIC PL. GIC is a fund manager and only has 2 clients - the Government of Singapore ("GoS") and the Monetary Authority of Singapore ("MAS"). Under the investment management agreement with GoS, GIC has been given the sole discretion to exercise the voting rights attached to, and the disposition of, any shares managed on behalf of GoS. GIC is wholly owned by the GoS and was set up with the sole purpose of managing Singapore's foreign reserves. The GoS disclaims beneficial ownership of these shares.

The end game for TKO is to make world governments their co-promoters and co-owners.

Abu Dhabi. Singapore. The Kingdom of Saudi Arabia. The Russia-China Investment Fund. The world’s richest players and sovereign funds all have a piece of the action.

Sanctions? What sanctions? Everyone is in bed with each other for TKO action, especially at The White House.

Cynics can now stop denying the reality on the ground.

Zach Arnold is a lead opinion writer for The MMA Draw on Substack. His archives can be read at FightOpinion.com.