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Report: Fed cautioned Goldman over financing UFC buyout


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Report: Fed cautioned Goldman over financing UFC buyout

Goldman Sachs Group Inc. received a warning from FederalReserve bank supervisors over certain risks involved in a deal it arranged to fundthe acquisition of Ultimate Fighting Championship, Bloomberg News reported,citing "people with knowledge of the matter."

Goldman facilitated a debt offering for the $4 billionacquisition of the mixed martial arts promoter by a group led by talent agencyWME-IMG and backed by private-equity firms Silver Lake Partners LP, KKR and theinvestment firm of Michael Dell.

According to regulators, an accounting adjustment was doneto inflate cash flow projections when the offering was being marketed. Such adjustments,known as add-backs, tend to make companies appear more creditworthy, accordingto the report. Regulators have reportedly criticized financing deals in which acompany's debt exceeds six times a measure of its earnings.

Representatives for Goldman Sachs and the Fed declined tocomment on the matter, Bloomberg noted.