ONE Championship’s founder Chatri Sityodtong | Photo by studioEAST/Getty Images

Here’s an updated look at ONE Championship’s finances.

Back in October of 2018, Bloody Elbow took an in-depth look at ONE Championship’s finances using the Accounting and Corporate Regulatory Authority (similar to SEC in the US) financial documents filed by the MMA promotion themselves in Singapore.

Despite various claims made by the promotion publicly, their financials painted a completely different picture — one that included accumulated losses of S$92.6 million (the equivalent of 67 million in US dollars) as of 2017.

In the several months since their financial situation was brought to light, the Singapore-based company continued to tout their numbers and make bold proclamations.

ONE Championship Chairman Chatri Trisiripisal, better known as Chatri Sityodtong, again claimed to be equals with the UFC — the MMA leader that reportedly generated about $850 million in revenue in 2019.

“In the world of combat sports, it’s really become a global duopoly,” Sityodtong told Business Insider in 2019. “UFC controls an 80% market share of the western hemisphere, but ONE Championship controls 90% of the market share in the Eastern hemisphere. And we’re the two big 800-pound gorillas in the industry.”

In various interviews, Sityodtong claimed ONE Championship is just one of three organizations in Asia with a valuation of “around $1 billion.” In 2018, Variety declared that revenues of $100 million are imminent.

We have since obtained the promotion’s financial documents they themselves have just filed with ACRA for that very year.

Companies that do business in Singapore are expected to file a financial statement of the previous year with ACRA within 60 days of their annual general meeting. ONE held theirs on July 15, 2019. They apparently received an extension, and did not file their 2018 figures until May 31, 2020.

Here’s a breakdown of these latest financials.

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Note: The filed statements often include amounts for both “the Company” and “the Group.” “The Company” is Group One Holdings (ONE Championship), while the “the Group” is the Company and its subsidiaries, collectively. While ONE often included financial info for both the Group and the Company, for this article focus will be mostly on the Group so as to include all their business, even though the Company represents the vast majority of their business. (For example: where as revenues for the Group where S$37,273,536 in 2018, the Company was responsible for S$37,254,971 of them.)

Since ONE uses Singapore dollars (S$) in their financial statement, we will give amounts in the same currency, identifying United States dollars (US$) when used. The current exchange rate for 1 Singapore dollar is 0.72 US dollar (or 1 US dollar is worth 1.40 Singapore dollars.)

ONE Championship

ONE Championship is the trade name for Group One Holdings PTE LTD, a private company limited by shares that is registered in Singapore. (I will use ONE when referring to either entity.) Group One Holdings also has several other wholly owned subsidiaries. These subsidiaries include:

One Elite Agency Pte Ltd, eSports Pte Ltd, One Championship India Pvt Ltd, and One Championship Japan were new additions to the “Group,” as all were incorporated in 2018.

The Company also acquired 49% equity interest of One Championship (Thailand) for a consideration of $3,173 on October 17, 2018.

As of December 31, 2018, the Company had raised a total share capital of S$361,754,512 with a closing balance of S$189,712,023. Over 60% (S$226,643,380) of this capital was raised in 2018.

On March 6, 2019, the Company issued 221,334 new non-redeemable convertible preference shares to a new shareholder for a total consideration of $10,353,750. This increases the total capital raised by the company to S$372,108,262.

Losses

In our previous look at ONE’s finances, we had commented that one of most noteworthy things contained within their financial reports was the size of their losses. For the three years covered by the balance sheets, each of them shows an annual 8-figure loss. For 2017 they reported losses of S$34 million and accumulated losses since their founding in 2011 of almost S$93 million.

These losses have not only continued in 2018, but have grown in size. In 2018, ONE saw losses of S$82 million. Accumulated losses as of December 31, 2018 were S$175,407,850. In US dollars that’s more than US$126 million.

Revenue

ONE has seen a dramatic increase in their revenues over the last few years. While ticket sales were lower in 2018, overall revenues were up 125% over the previous year, and up 273% from 2015. Unfortunately these increases in revenue have not kept pace with their increases in annual losses. Losses were up 138% in 2018 from the previous year, and up 700% from 2015. Perhaps the most troubling statistic is that while ONE has seen an increase in their revenue every year, their losses-to-revenue ratio has also grown. A trend that shows no sign of abating.

While ONE has seen strong increases in their revenues, by 2018 they still were nowhere close to “$100 million.” Their finances bore little resemblance to some of the more outlandish claims by them or members of the media, such as having a duopoly in MMA with the UFC, or controlling 90% of the Eastern MMA market.

Their total revenues in 2018 were less than the UFC’s Asia and Oceania revenues alone that year.

ONE’s ticket revenue were lower in 2018 compared to 2017, and their online PPV revenue dropped to zero as the company moved to free online streams for events. The biggest increases in ONE’s revenues were driven by sponsorship incomes, and to an even larger degree, by broadcast revenues. We do have some questions regarding these two categories though.

Not only did sponsorship income and broadcast revenue increase in 2018 from 2017, but the 2017 revenues for those two categories were also larger in the most recent statement versus what they were in the earlier statement. The previous filing reported 2017’s sponsorship revenue as S$3,958,928 and 2017’s broadcast revenue as S$812,686. This new filing reported their 2017 sponsorship revenue as having been S$10,777,935 and their broadcast revenue as having been S$4,741,025. This is a difference of S$6,819,007 for sponsorship and S$3,928,339 for broadcast revenues.

The explanation for this difference seems to be a change in their use of “barter transactions,” as this category has been removed in their new filings. In 2017, they reported S$10,747,348 in revenues from these “barter transactions.” This amount is almost identical to the S$10,747,346 difference between what had was reported for 2017’s sponsorship income and broadcast revenue on the last filing and this new one.

ONE’s use of “barter transactions” in their previous filings created some confusion for those that examined their finances. Their removal does little to end that confusion. In their previous filing they described barter transactions as:

The Group enters into transactions that involve the exchange of advertising, in part, for other products and services. When goods or services are exchanged or swapped for goods or services which are of a similar nature and value, the exchange is not regarded as a transaction which generates revenue. When goods are sold or services are rendered in exchange for dissimilar goods or services, the exchange is regarded as a transaction which generates revenue. The revenue is measured at the fair value of the goods or services received, adjusted by the amount of any cash or cash equivalents transferred. When the fair value of the goods or services received cannot be measured reliably, the revenue is measured at the fair value of the goods or services given up, adjusted by the amount of any cash or cash equivalents transferred.

Barter transactions are not in the new filing but much of the definition has been incorporated into the definition of sponsorship income.

Here is how sponsorship income was defined in the 2017 filing (the previous filing):

Sponsorship income is recognised over the term of the contracts in line with the performance obligations included within the contract and based on the sponsorship benefits enjoyed by the individual sponsor. Sponsorship income which is received in advance of a period end but relating to future periods is treated as deferred revenue. The deferred revenue is then released to revenue on an accrual basis in accordance with the substance of the relevant agreements.

And here is how it’s defined in the 2018 filing (the most recent, which was released a few days ago):

The Group provides broadcast, social and digital media platforms for customers to advertise their goods or services through branding in events, commercial TV spots and collateral. The Group collects sponsorship income from customer in return for the services provided to customer.

Revenue is recorded at the fair value of cash and noncash consideration received or promised from the customer. The fair value is measured at the earlier of receipt of the noncash consideration by the Group or when (or as) the Group satisfies its performance obligations. If an entity is unable to reasonably estimate the fair value of the noncash consideration, it should measure the consideration indirectly by reference to the standalone selling price of the goods or services promised to the customer in exchange for the consideration.

The inclusion of “noncash considerations” and “fair value” would suggest that the previous barter transactions were now being included under sponsorship. This is less obvious with broadcast revenue, which was described in the 2017 filing as:

Broadcasting revenue is recognised upon completion of the event agreed in the contract along with the fulfilment of certain conditions such as the number of hours broadcasted.

Broadcasting revenue which is received in advance of a period end but relating to future periods is treated as deferred revenue. The deferred revenue is then released to revenue on an accrual basis in accordance with the substance of the relevant agreements.

Meanwhile, in the most recent filing:

The Group produces live broadcast of martial arts events to broadcast partners across the world. License fees are collected from broadcast partners for the right to broadcast these events and these rights are granted to broadcast the licensed programme via transmission media for a defined period in a particular territory. The performance obligation is defined as the right to access intellectual property.

Revenue related to broadcasting rights is recognized over the rights period measured based on the pattern of broadcasting of the contractual events.

Perhaps barter transactions are not included with broadcast revenues now, but if not, it’s difficult to discern where the additional S$3,928,339 came from or where the remaining barter transactions went.

With the barter transaction revenue now being incorporated into other revenue streams, it’s impossible to determine how much of ONE’s revenues are from “noncash considerations” or involve the exchange of goods or services. In their previous filing, barter transactions made up almost ²?₃ of all their revenue that year.

Other Incomes

Expenses

ONE saw an increase in all their expenses from 2017.

The biggest increases were seen in “marketing expenses,” which more than tripled, from S$15 million to S$49 million. This was followed by “employee benefits” and in “professional fee,” both of which doubled.

Employee benefits went from S$11 million to S$21 million, while professional fees grew from S$4 million to almost S$8 million. Marketing was now over 50% of their expenses, while these three together were almost 90% of all losses.

Included under employee benefits, “salaries and bonuses” climbed from S$8,264,910 in 2017 to S$18,141,290 in 2018.

Interestingly enough, “event production,” which likely included fighter expenses, remained close to flat from 2017 to 2018, costing a little more than S$8 million.

For 2019 financials, we will have to wait until their next filing, which is due later this year.

For years now ONE has boasted of being a powerhouse in MMA, and the only real rival to the UFC, with a massive potential market in Asia. Perhaps this could eventually end up being true, but as of yet there seems to be no evidence that this is the current reality.

Bloody Elbow has reached out to ONE Championship for a comment but has yet to receive a reply as of publication.