Tomorrow’s Fortune

Welcome to the action-packed newsletter designed to help you navigate the world of business and investing. If you missed last week’s post, check it out here. 😎 

Today’s Digest: 

• The Business of Fighting: Did you know Dana White bought the UFC for $2M in 2001… 24 years later it’s worth $24 Billion - let’s unpack this epic journey

• What’s Happening in the Markets? Fears of Social Security going away, Hailey Bieber is now a Billionaire, Taylor Swift is Back and NVIDIA crushes earnings

• Wanna Buy a Business? We found a high-profit Pool Cleaning Business in Florida ripe to build a platform ($60K of Cash Flow). Click HERE for the listing

TOP STORY

How Does the UFC Actually Make Money?

Inside the Business Model of the Most Ruthless Cash Machine in Sports…

Every weekend, a cage closes. The lights dim. The music hits. And millions of fans tune in, ready to watch two fighters battle for glory.

But while all eyes are on the Octagon, the real fight—the one Dana White and Endeavor care about—is on the balance sheet.

The UFC isn’t just a fight league. It’s a vertically integrated, PE-backed cash cow, generating $1.3 billion in annual revenue with margins the NBA and NFL could only dream of. It’s not about belts. It’s about monetization per second.

Let’s break down how the UFC actually makes money—and why it might be one of the most efficient media empires ever built.

1. Pay-Per-View: $80 at a Time, Millions of Times Over

Pay-per-view isn’t just the UFC’s largest revenue stream—it’s a masterclass in premium content economics.

• Flagship events like McGregor vs. Khabib generated 2.4 million buys, pulling in close to $200M in one night.

• The UFC takes home ~$80 per PPV sold, even after revenue sharing with ESPN+.

• With 6–8 PPV headliners per year, this single stream can exceed $500M annually.

What Investors Learn: Flagship content scales nonlinearly. The marginal cost of a global digital sale is near zero—but the payoff can be eight figures per event.

2. Media Rights: $300M a Year, Rain or Shine

The UFC’s decade-long deal with ESPN locks in $300M+ in guaranteed annual revenue, providing ballast to an otherwise volatile business.

• ESPN gets year-round content; the UFC gets fixed cash flow.

• The brand is now embedded into sports media culture—highlighted weekly on SportsCenter and accessible through ESPN+ subscriptions.

What Investors Learn: In sports, media is moat. Long-term content deals convert volatility into annuity streams—and anchor enterprise valuations.

3. Sponsorships: Monetize Every Inch

Next time you watch a UFC fight, check out all the logos you see on the Octagon, jackets, shorts, etc. From fighter apparel to Octagon padding, the UFC turns attention into monetizable assets:

• Venum replaced Reebok as the exclusive outfitter—transforming every fighter into a walking billboard.

• Other brands pay to appear on the mat, gloves, banners, and even post-fight interviews.

Sponsorship now contributes 15–20% of total revenue, and climbs sharply during high-visibility cards.

What Investors Learn: Own the attention. When you control the platform, every surface is monetizable—and you don’t need to split revenue with teams or players.

4. Live Events: Scarcity, Spectacle, and Gate Receipts

The UFC hosts 40+ live events per year, ranging from Las Vegas to Abu Dhabi to São Paulo.

• Each event draws 5,000–20,000 attendees, selling out arenas and driving localized buzz.

• Gate revenue varies by card, but top events bring in $5–10M+ per night.

The real trick? The UFC owns everything—no third-party promoters, no venue sharing.

What Investors Learn: When you control the product, every line item flows to you. Vertical integration isn't just about margin—it's about control.

5. UFC Fight Pass: Recurring Revenue from the Die-Hards

For $9.99/month, fans get access to:

• Archived fights

• Early prelims

• Exclusive content and regional cards

While small today (~5% of revenue), this stream offers two things investors love: high-margin recurring revenue and global expansion potential.

What Investors Learn: Even niche media businesses benefit from DTC leverage. When your brand has global resonance, subscriptions scale without friction.

PE-Backed Ruthlessness: The TKO Model

Behind the Octagon is TKO Group Holdings (NYSE: TKO), a public company combining UFC and WWE. It’s backed by Endeavor and Silver Lake—with a clear playbook:

• Extract cash via high-margin media and PPV.

• Use the brands to cross-sell merch, betting, and live events.

• Run lean ops. No teams. No unions. No revenue sharing with athletes.

The result? A sports entertainment giant with private equity discipline and Hollywood-level brand IP.

So—how much does the UFC make per second?

Assuming $1.3B in revenue, it’s about $41 per second.

But more important than the number is the structure: vertically integrated, globally scalable, and ruthlessly efficient. It’s not about fighting. It’s about owning the fight.

That’s the real knockout.

I Went Behind the Scenes on Dana White’s Billion Dollar Combat Sports Empire in this Video…

Find other cool videos on my channel HERE (👈 Click)

WHAT’S HAPPENING IN THE MARKETS?

• Majority of U.S. Workers Fear Social Security Benefits Won’t Be There
  A new survey reveals that 70% of working Americans under 50 doubt Social Security will be available when they retire, underscoring growing concerns around the program’s solvency. Despite recent efforts in Washington to propose trust fund stabilization measures, only 38% of Gen Z and 42% of Millennials believe they’ll receive full benefits. The growing skepticism stems from the 2033 funding cliff when the Social Security trust fund is projected to deplete—at which point beneficiaries would face a 24% benefit cut if no legislative action is taken. From a macro lens, this trend may drive increased retirement self-funding, boost long-term demand for IRAs and private pensions, and fuel the already accelerating growth of retail financial advisory platforms. Political inaction could also become an electoral wedge issue heading into 2026.

• e.l.f. Beauty Acquires Hailey Bieber’s Rhode for $1 Billion

  In a landmark transaction, e.l.f. Beauty (NYSE: ELF) announced it will acquire Hailey Bieber’s Rhode Skin for $1 billion, cementing the value of founder-led, influencer-native brands in the modern CPG landscape. Rhode, which launched just three years ago, has achieved outsized cultural resonance and sales traction through creator-led storytelling and viral DTC distribution. For e.l.f., which already outperforms legacy beauty peers in both revenue growth and gross margin, this acquisition expands its Gen Z footprint while leveraging Rhode’s brand equity in skincare. The deal reflects broader market trends: consumer products increasingly reward cultural velocity over traditional shelf space, and public acquirers are willing to pay steep multiples for brands with rapid brand-audience flywheel effects. This transaction also sends a signal to investors that creator-founded brands with credible distribution and retention economics may now command institutional valuations.

• Taylor Swift's Catalog Strategy: A Masterclass in IP Ownership

  Taylor Swift’s Eras Tour may be breaking records, but the more enduring economic story lies in her complete ownership of her music catalog, a rarity in the music industry. Swift’s strategic re-recording of her albums has effectively regained control over her masters, flipping the industry norm where labels retain lifetime IP rights. Now, she not only captures a larger share of streaming and licensing revenue, but also commands pricing power across media and sync deals. Her move has become a playbook for other artists seeking to reclaim IP in an industry where masters often dictate long-term asset value. For investors, Swift’s approach highlights a broader shift toward IP monetization as an asset class—where control, licensing leverage, and brand synergy matter more than traditional album sales. In a world where content is king, owning the IP throne is a moat.

• Nvidia Earnings Shatter Expectations Again, Q1 Revenue Hits $26 Billion

  Nvidia (NASDAQ: NVDA) posted Q1 revenue of $26 billion, up 262% YoY, handily beating Wall Street expectations amid continued surging demand for AI infrastructure. Data center revenue more than tripled, reaching $22.6 billion, driven by explosive GPU demand from cloud hyperscalers and sovereign AI projects. Gross margins expanded to 78.4%, and adjusted EPS hit $6.12—up from $1.09 a year earlier. CEO Jensen Huang pointed to "global-scale generative AI deployment" as the secular driver, with multiple nations building sovereign AI stacks powered by Nvidia hardware. The company also announced a 10-for-1 stock split and a 150% dividend increase, signaling confidence in durable earnings power. With Nvidia’s architecture now underpinning the AI economy—from model training to inference—its cash flow profile increasingly resembles a high-margin utility with exponential growth. For investors, Nvidia continues to represent the core infrastructure layer in the global AI stack—at a valuation that still defies traditional multiples, but not the underlying demand.

SO YOU WANT TO BUY A BUSINESS… 🏦

Deal of the Week: Pool Cleaning Business in South Tampa – Asking $95,000

Opportunity Overview

This South Tampa-based pool cleaning business offers a micro-entry point into one of the most fragmented—and roll-up ripe—service industries in the U.S.: residential pool maintenance. With 65 ongoing accounts generating $156K in annual revenue and $59K in seller’s discretionary earnings (38% margins), the business operates with minimal overhead, zero licensing requirements, and no fixed real estate. The seller is retiring and open to transition support, making this a candidate for a first-time buyer, E-2 visa seeker, or strategic regional player looking to bolt on a route-based operation in a high-income zip code.

But the real story here isn’t this single operator. It’s the broader opportunity: buying up dozens of these under-institutionalized service providers at 1–2x earnings, standardizing operations, layering in CRM + billing tech, and creating a regional pool care platform that can exit at 5–7x EBITDA. This is the kind of cash-flowing fragmentation that roll-ups are built on.

Cash Flow and Profitability

The business generates $156K in annual revenue with SDE of ~$60K—roughly 38% net margins, which is typical in owner-operated pool cleaning routes that rely on recurring weekly visits and low variable cost (chemicals, fuel, and basic labor). Fixed expenses are near zero: the business is home-based, FF&E is minimal ($1,400 worth of cleaning tools and storage), and no licensing is required for routine service. The implied multiple of 1.6x SDE is low even for route-based service businesses, suggesting a motivated seller or limited buyer interest at the micro-deal level. For a PE operator with aspirations to scale, this type of margin profile and low overhead is attractive—if the recurring revenue base is defensible and capable of being institutionalized.

What We Like

Recurring Revenue in Affluent Geographies
This is a weekly service business in South Tampa—one of the highest-income, year-round markets in the Southeast. The 65 active accounts likely skew residential and premium-tier, meaning high LTV and low churn. Pool cleaning is not discretionary—it’s required to protect an asset—making this revenue sticky in both economic cycles and seasonal slowdowns.

Low-Cost Acquisition with Immediate Cash Flow
At $95K and nearly $60K of cash flow, this is a >60% cash-on-cash return if run owner-operated—or a low-cost bolt-on if absorbed into a larger service route. Deals at this price point with this margin profile are rare, particularly in dense urban/suburban areas.

No Licensing Required = Faster Scale
Unlike HVAC or plumbing, no contractor license is needed in Florida to provide routine pool maintenance. This widens the buyer pool and removes regulatory friction for expansion. It also enables roll-ups to rapidly deploy tech-enabled route optimization across acquired books without being bottlenecked by licensure.

High-Density Route Potential
65 accounts in a geographically compact service area (South Tampa) = route efficiency. Mileage, fuel, and labor costs are minimized when routes are tight—this creates the foundation for gross margin scalability when adding technicians or route consolidations.

Platform Seed for Roll-Up Strategy
This is precisely the type of “seed deal” that roll-up strategies thrive on. Acquiring 5–10 of these books of business across Florida, layering in branded vehicles, centralized billing, customer support, and CRM, and introducing cross-sells (e.g., repair, resurfacing, automation) can drive significant multiple arbitrage on exit.

What We Don’t Like

No Team, No Systems
This is a pure owner-operated business. There’s no mention of employees, route scheduling software, customer CRM, or automated billing. That means operational fragility—if the owner gets sick, the business stops. Buyers will need to build infrastructure from day one to de-risk the operation and prepare for scale.

No Mention of Repair or Chemical Revenue
Most scaled pool service operators make a significant portion of margin on equipment repair, chemical upsells, or reselling smart pool tech. This business appears focused solely on cleaning. That’s fine for cash flow—but limits ARPU and customer LTV unless those services are layered in post-close.

Limited Pricing Power or Escalation Clauses
The listing doesn’t mention whether customer contracts include automatic price escalators or seasonal surcharges. Without structured pricing discipline, inflation in chemicals or labor could eat into margins over time.

Owner Reliance for Customer Retention
In small service businesses, personal rapport often drives retention. The listing doesn’t clarify how sticky the relationships are—or whether customers are loyal to the service or the seller. Retention during transition needs to be managed with care.

Key Questions for Diligence

1. What’s the revenue breakdown by customer—and how many accounts make up >50% of sales?
   Concentration risk is a key concern in small route businesses. If a few large homes drive most of the cash flow, churn could be painful.

2. Are there written service agreements, or is the revenue handshake-based?
   Contracts with defined terms, cancellation notice periods, and pricing tiers add protection. If everything is verbal, transition risk is higher.

3. How defensible is the current route in terms of geography and service density?
   Route optimization is the secret to scaling pool cleaning. Buyers need to assess travel time between accounts and the potential for bolt-on efficiencies.

4. What percentage of customers purchase additional services like filter changes, equipment repair, or chemical deliveries?
   Upsell potential drives ARPU expansion. If the base has been conditioned to only pay for cleaning, margin growth could be capped.

5. What would it cost to hire a technician and replace the owner?
   If the goal is to scale beyond owner-op, you need to know whether the current economics still work when labor is brought in.

Bottom Line

This is a microbusiness with real potential—high-margin, recurring revenue, affluent clientele, and zero fixed overhead. For an owner-operator, it’s a solid income stream. But for a private equity buyer with a regional roll-up strategy, it’s a foundational brick. At a 1.6x SDE multiple and a high-retention customer base, this acquisition can seed a larger platform in a fragmented, license-light industry. Just be ready to build systems, hire techs, and bring order to the chaos—because while the water may be clear, the business beneath it still needs cleaning.

This newsletter is for informational purposes only and does not constitute investment advice. The content is based on publicly available information, and the author makes no representations about its accuracy or completeness. Readers should conduct their own research before making any investment decisions.