For the last few years I have been tracking ONE Championships finances, posting summaries of their annual filing with the Singapore Accounting and Corporate Regulatory Authority (ACRA.) These previous financial statements showed a company that was losing tens of millions a year while also managing to raise hundreds of millions from institutional investors. (You can see those below.)

Note: ONE Championship is the trade name for Group One Holdings PTE LTD, a private company limited by shares that is registered in Singapore. 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. I will use ONE when referring to either entity. For the sake of simplicity I will also be using the amounts given for the Group instead of differentiating them from the those of the Company, which was responsible for 94% of the Group’s revenues in 2019.

Since ONE uses Singapore dollars (S$) in their financial statement, I will give amounts in the same currency, identifying United States dollars (US$) when used. The current exchange rate for 1 Singapore dollar is 0.75 US dollar (or 1 US dollar is worth 1.33 Singapore dollars.)

The discrepancy between their performance and investors’ faith in the venture is hard to explain using only their financial statements. Instead it seems dependent on the metrics that ONE touts, and faith that these can eventually be monetized. As ONE Championship’s founder and CEO, Chatri Sityodtong, explained in an interview last December:

Five years ago we were at 150,000 views for the whole year. This year organic – not paid, organic – is gonna cross six billion…

…as long as all the most important health metrics grow it’s an inevitability that broadcasters will pay billions of dollars for ONE championship content. It’s an inevitability that brands who want to pay billions of dollars to be associated with one championship.

How “organic” these numbers are have been questioned by others, and it’s hard to confirm with these various clicks, views, and ratings not being available to the public. While their claims may end up being true and that financial success is somehow inevitable, their ACRA financial statements so far tell a different story.

ONE saw record revenues in 2019, generating S$62 million for the year, a 67% increase from the previous year’s S$37 million in revenue. They also also reported a loss of S$130 million. This is a 60% increase from 2018, when they lost S$83 million.

For every year that we have statements for, ONE has seen both their revenues and losses grow. During this time we have repeatedly heard bold proclamations of ONE’s coming success. These have yet to materialize.

In 2017, Chatri Sityodtong told the Financial Time the company was “very, very close to profitability.” Losses that year were S$34 million, and would grow to S$83 million in 2018 and S$130 million in 2019.

In May, 2018 it was reported in Variety in May, that “annual revenues of $100 million are imminent.” They have yet to achieve these numbers as total revenues for the Company in 2018 was S$37 million, growing to S$62 million in 2019.

In 2019, Sityodtong told Business Insider that in the UFC and ONE Championship were a global duopoly in the world of combat sports. According to him, “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.”

The UFC’s revenues in 2019 were over $850 million USD while ONE’s where under $50 million USD for the year.

THE GROUP

ONE Championship is the trade name for Group One Holdings PTE LTD, a private company limited by shares that is registered in Singapore. Group One Holdings also has several other wholly owned subsidiaries. These subsidiaries include:

New additions to the Group in 2018 include One Studios Pte Ltd, One Championship Malaysia Sdn Bhd, and PT One Championship Indonesia. 0.04% of PT One Championship Indonesia is held by One Warrior Series Pte Ltd

In 2018, the Japanese Company Dentsu Inc., was issued 3,368,839 ordinary shares of One eSports Pte Ltd for $13,600,000 and a 19.9 share of ownership in the eSports subsidiary.

The finances of only a few of these subsidiaries have been released, but those that we have show they are operating at a loss.

REVENUES

As mentioned ONE Championship saw record revenue in 2019, generating S$62 million for the Group. This continued their trend of impressive revenue increases as ONE’s CAGR has been 65% since 2012.

Looking at the dis-aggregate of their revenues we see a decrease in sponsorship but an increase in almost all the other categories. The most dramatic increase is seen in Broadcast revenue which increased by S$25 million in a year and represented 72% of all their revenue.

In previous years barter transactions made up almost ²⁄₃ of all their revenues, but they discontinued their use of a “barter” category in 2018’s statement and seem to have incorporated it into their sponsorship and broadcast revenues. It is now impossible to tell how much of these broadcasts revenues are really from cash payments versus “non-cash considerations.” (Paul Gift has looked at their use of barter transactions in the past.)

LOSSES

Losses continue to grow for ONE Championship as in 2019 they reported a record S$130 million (or US$99 million) in losses. Accumulated losses have also grown, reaching S$305 million (or US$229 million) by the end of 2019.

EXPENSES

The largest single item expense ONE has is marketing. In 2018, it was S$49 million (US$37 million) and 130% of their revenue. In 2019, it was S$72 million (US$54 million) and 116% of their revenue. During those two years, marketing costs were approximately 40% of all their expenses.

This is very comparable to what the UFC spends on marketing. In 2015, accord the UFC’s Lender Presentation, the UFC spent US$51 million on marketing. In the 3 previous years, according to their Company Overview, they averaged US$42 million in marketing expenses.

The major difference between the two companies isn’t the amount spent of marketing, but the share of revenue that is spent on it. From 2012-14 marketing was 9% of the UFC’s total revenue each year. In 2015 it was 8%.

In 2019, ONE’s marketing expenses were 116% of revenue. In 2018 they were 130% of revenue.

Unlike most other MMA promotions that have operated at a loss for an extensive period of time, ONE does not hold any debt. Instead of relying on loans to keep them afloat, they have depended on investors, who have put a sizable amount into the Company.

From their funding through the end of December, ONE had raised a total of S$372,181,381 in capital. Of this, only S$83,008,955 was remaining as of December 31, 2019. They have since issued new shares for a consideration of S$99,190,000. How much capital they still have available is currently unknown.

Despite having accumulated losses of about S$305 million as of 2019, Chatri Sityodtong remains very bullish about ONE’s future. “Based on our current trajectory (even with Covid-19), I predict that ONE Championship will be profitable within 12 months and we are on track.”