The big news in Finance land is that Zuffa’s credit rating has dropped from a BB to a BB-. If you aren’t a monocle wearing banker, you might not know what that means. In an effort to pretend to know what we’re talking about, we went to the poor man’s encyclopedia (Wikipedia is da bomb!) to do a little bit more research on Bond Credit Rating. What I read will shock and disturb you to the very core of your being! Or not. It’s actually pretty dull.
The credit rating of a corporation is based on their credit worthiness relative to it’s annual income compared to it’s debt. So that’s how much they make vs how much they owe. Of course, debt is not necessarily a bad thing. Sometimes companies use debt as a reflection of their future purchasing power. Credit Rating Agencies take stock of a company, and assign different ratings based on the relative financial risk of investors … aka is this company gonna tank and keep my cheddah?
Zuffa had a BB rating, which indicated a high risk, or “speculative” rating, but has since been downgraded to BB-. Why? Well, I can only guess that it was do to stagnant growth caused by:
- a string of shitty fucking cards we’ve been handed
- the feces sandwich that is “interim belt” fights due to constant injury or steroid “malfunctions”
- “Contender” bouts (if they give us another “top 5″ fight, I’m personally going to kidnap White’s children and sell their organs to the Chinese).
- Burning a big pile of money labeled “UK Expansion”
- Big stars falling
- New stars stalling
- Dana White being a smelly head
Credit Rating Companies also usually try to also offer guidance as to where the future of the rating might sit. So far, things are looking pretty neutral, which means that unless they change their tune, it’s likely to fall again.
So the summary is this: According to Credit Rating agencies, Zuffa is a high risk company that doesn’t show signs of getting more stable. Fair enough. But before we go shitting all over it, consider that Microsoft doesn’t even have a AAA rating. At the very worst, fewer retards will be lending money to the company. On the positive side, this could stop Dana and Zuffa from thinking that everything they touch turns to pure gold. This could mean more interesting and relavent PPVs and better matches being made more consistantly.