The return of live sports following the pandemic lockdowns of last year has already powered gains for investors in stocks like Madison Square Garden Sports Corp (NYSE:MSGS) and Churchill Downs Inc (NASDAQ:CHDN).
Although MMA only emerged in the 1990s, its growth has been exceptional, ranking it currently as one of the fastest growing sports in the world. If this growth continues over coming years, this once small niche sport could become a major global industry driving billions of dollars in returns for well positioned investors, sponsors, and partners in connected industries like apparel and media, or even sports entertainment plays like Draftkings Inc (NASDAQ:DKNG) and World Wrestling Entertainment Inc (NYSE:WWE).
However, at present, there are only a handful of options for investors interested in this opportunity. We cover several of the most interesting MMA pure-play names below.
Endeavor Group holdings Inc (NYSE:EDR) is the owner of the UFC, the biggest brand name in MMA. The firm operates through the Owned Sports Properties, Events, Experiences & Rights, and Representation segments.
The Owned Sports Properties segment is comprised of a unique portfolio of scarce sports properties, including UFC, PBR and Euroleague, that generate significant growth through innovative rights deals and exclusive live events. The Events, Experiences & Rights segment owns and operates many events, including the Miami Open, HSBC Champions, Frieze Art Fair, New York Fashion Week, and Hyde Park Winter Wonderland. And the Representation segment provides services to talent and corporate clients and includes content division, Endeavor Content.
Endeavor Group holdings Inc (NYSE:EDR) recently announced that it has entered into an agreement to acquire OpenBet, a leading content, platform and service provider to the sports betting industry, from Scientific Games Corporation (NASDAQ:SGMS) for $1.2 billion paid through a combination of cash ($1 billion) and Endeavor’s Class A common stock ($200 million).
“OpenBet marks a strategic addition to our sports betting portfolio as we look to round out our technology and product offering for sportsbook operators and sports brands worldwide,” remarked Ariel Emanuel, CEO, Endeavor. “The combination of OpenBet and our IMG ARENA business will enable us to expand our footprint across the entire sports betting value chain and further capitalize on the tremendous upside we see coming from this fast-growing global industry.”
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action EDR shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -12% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
Endeavor Group holdings Inc (NYSE:EDR) managed to rope in revenues totaling $1.1B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -6.6%, as compared to year-ago data in comparable terms.
B2Digital, Inc. (OTC US:BTDG) is possibly the most interesting name here because its shares haven’t really moved much higher over the past year despite the company’s huge strides in spurring tangible growth at an accelerating rate.
The company recently noted that its September quarter is now conservatively on track for $673k topline, which would represent 18.3% sequential quarterly growth and 395% growth on a year-over-year basis, and would represent a new record for the Company. That also extrapolates to a forward 12-month revenue projection of approximately $3.5 million, which is more than 250% growth from its 12 months ended March 31, 2021.
B2Digital, Inc. (OTC US:BTDG) most recently announced a strong debut for its B2 Fighting Series in West Virginia this past Saturday. It also said it is now heading to Mississippi this weekend for a debut in that state as well.
Brandon ‘Hardrock’ Higdon, B2’s Matchmaker, was quoted in the release as saying, “This coming Saturday will showcase another fascinating slate of matchups in another new marketplace for the B2 Fighting Series. The original main event fighter Joshua Weems was approached to compete for the Dana White Contender Series, so we released him from our contract to support his career as a fighter. Our new main event will feature undefeated Welterweight Rush MMA & ATT prospect Lindsey Jones as he takes on James Freeman, who is looking for his 7th victory as a Pro. Three other pro fights round out the main card, along with six exciting amateur matchups. With four Heavyweight fights in this card fans may want to avoid blinking because we are certain to have some stunning knock outs this Saturday night!”
According to the release, Saturday’s B2FS 136 event will feature 10 professional and amateur bouts – four professional and six amateur. The night will also feature four heavyweight fights, including the 265 lb. amateur title fight between JD Jenkins (4-1-0) and Richard Craig (2-1-0).
B2Digital, Inc. (OTC US:BTDG) CEO Greg P. Bell also noted, “We continue to launch in new markets with successful events, which is an extremely brand-positive dynamic and presents a very strong long-term tailwind with powerful implications on the event side of the business. West Virginia looks to become another very reliable growth market after Saturday’s strong outing. And Mississippi has been on our radar for a while now, given our tremendous brand growth in the South over the years. We look forward to a great night of action this weekend.”
Xtreme Fighting Championships Inc (OTC US:DKMR) is a less developed competitor in the space. While BTDG has already established very strong growth and sizeable revenues along with a budding brand identity, DKMR is still working toward commercializing its model.
But it could become interesting over time and shares have seen a bump in recent interest beginning last month after a protracted downward trend dating back to last summer.
Xtreme Fighting Championships Inc (OTC US:DKMR) recently announced that it hosted XFC 45 and YoungGuns 3 on Friday, Aug. 6 at a packed DeltaPlex Arena in Grand Rapids, MI, LIVE on FOX Sports 2, XFCTV.com and around the world on the XFC’s many global broadcast partners. It noted that the highly anticipated back-to-back events were the most successful in company history, recording the highest gate total and FOX viewership numbers since XFC’s historic relaunch.
XFC President Myron Molotky: “Every single fighter dug deep to put on an unforgettable show for XFC fans around the world. The XFC is raising the bar every time the Hexagon door locks, and we’re going to break some news soon that fans are going to really go crazy about.”
Even in light of this news, DKMR has had a rough past week of trading action, with shares sinking something like -31% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way.
Xtreme Fighting Championships Inc (OTC US:DKMR) had no reported sales in its last quarterly financial data. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1K against $1.7M, respectively).
