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Jul 11, 2016

DealBook Today's Top Headlines - July 11, 2016: Ultimate Fighting Championship to Be Sold | Line Prices I.P.O. in Year's Biggest Tech Debut | Chief Executive Who Promised $70,000 Salaries Wins Suit Filed by Brother


MONDAY, JULY 11, 2016
TODAY'S TOP HEADLINES
BY AMIE TSANG
ULTIMATE FIGHTING CHAMPIONSHIP TO BE SOLD Ultimate Fighting Championship has become a global sports empire, with an eye-popping price tag to match, Michael J. de la Merced reports in DealBook.

The league, which promotes mixed martial arts, is expected to announce as soon as Monday that it has sold itself to a group led by the talent giant WME-IMG for about $4 billion, according to people with direct knowledge of the matter. The private equity firms Silver Lake and Kohlberg Kravis Roberts and the investment firm of the billionaire Michael S. Dell are backing the deal.

U.F.C. says millennials make up about 45 percent of its audienceand it is shown in more than 156 countries. As well as headline fights, the new owners will get about 2,000 hours of material each year, much of it streaming on its Fight Pass service.

The deal will be a windfall for U.F.C.'s primary owners, the casino entrepreneurs Frank and Lorenzo Fertitta, who will become minority investors. The brothers bought U.F.C. in 2000 for just $2 million, and spent years and millions of dollars battling to win approval from state athletic commissions.

The league had come up against opposition because of the brutality of its fights, with Senator John McCain of Arizona deriding it as "human cocktfighting," but the Fertitta brothers put in place rules meant to curb the excesses of early fights and get approval from each state's athletic commission. They also pushed promotions and distribution until revenue came to about $600 million last year. This year, New York lifted its ban on the sport.

U.F.C. swallowed up many of its competitors, pushing aggressively abroad and eventually selling a minority stake to an arm of the Abu Dhabi government six years ago. Concerns over its brutality have not completely dissipated, but the company was popular enough to draw interest from a number of suitors. Dalian Wanda Group, which owns the AMC theater chain, and China Media Capital, which owns stakes in teams like the Manchester City soccer club, were reported to be interested.

WME-IMG, which represents the fighter Ronda Rousey, emerged victorious, but it will not get involved in the actual pay negotiations with athletes, said people with direct knowledge of the matter.
LINE PRICES I.P.O. IN YEAR'S BIGGEST TECH DEBUT Line Corporation of Japan set the price of its initial public offering at the top of the targeted range and will sell 35 million shares at 3,300 yen, or about $33, eachBloomberg reports.

It will also sell 5.25 million shares through a so-called greenshow, which allows it to increase the amount of stock sold, bringing the total raised to $1.3 billion. The price values the company at about $6.9 billion and will be the biggest technology debut of the year.

The company's New York traded stock was priced at $32.84, with Line selling 25.3 million shares in the United States, including the greenshoe.

Line had announced its I.P.O. plans before Britain voted to leave the European Union, but delayed establishing its price ranges as markets were roiled by the referendum result.

The company, which made its debut in 2011, pioneered the business model of selling stickers and games, but it has met stiff competition from Facebook Messenger, WhatsApp and WeChat. Sales grew 40 percent last year to 120.7 billion yen, but Line made a net loss of 7.6 billion yen.
ON THE AGENDA Esther George, the president of the Kansas City Fed, will speak at the Mid-America Labor Management Conference in Lake Ozark, Mo., at 10 a.m.
CHIEF EXECUTIVE WHO PROMISED $70,000 SALARIES WINS SUIT FILED BY BROTHER Dan Price, the chief executive of a small Seattle company who promised last year to pay every one of his workers at least $70,000 a year, has won a court battle with his brother, Reed Abelson reports in The New York Times.

Judge Theresa B. Doyle of Superior Court in King County, in Washington State, ruled that Lucas Price had failed to prove his claims that Dan Price had overpaid himself and inappropriately used a corporate credit card for personal expenses. The judge ordered Lucas to pay Dan's legal fees.

The lawsuit showed what the judge called "the volatility and downward spiraling" of the relationship between the brothers, who had founded Gravity Payments, a credit card payment processing company. The brothers had agreed to restructure the company so that Dan would have a majority 60 percent share and serve as chief executive. Lucas would retain a minority 40 percent interest, but would not be involved in the day-to-day management.

The brothers argued over how to compensate Dan and how to pay dividends to shareholders. When Dan announced his plan to pay everyone at Gravity Payments a minimum salary of $70,000, Lucas said he was not informed of the decision until shortly before it was made public.

Lucas's lawyer, Gregory J. Hollon, argued that Dan failed to meet the terms of the brothers' agreement over the restructuring of the company. In a statement on Sunday, Lucas Price said, "I am shocked and disappointed with the decision and I will be considering my options."

Dan Price praised the ruling in a Facebook post, but emphasized his ties to his brother. "My love for my brother is unconditional," he said, noting Lucas's "incredibly valuable role" in creating Gravity Payments.
MERGERS & ACQUISITIONS »
LafargeHolcim to Sell Lafarge India Cement BusinessLafargeHolcim, the Swiss building materials group, said it had agreed to sell its interest in Lafarge India to the local conglomerate Nirma for an enterprise value of $1.4 billion as it adjusts to tough conditions in some of its most important markets.
Southern Expands Gas Footprint With $1.5 Billion Deal Southern Company bought a 50 percent stake in Kinder Morgan's Southern Natural Gas pipeline system in the latest expansion into gas shipping by a power generator.
Chinese Billions Flood Soccer Long a soccer backwater, China has gone on a buying spree unprecedented in the history of the game. Chinese companies have invested $1.7 billion in sports assets, mostly soccer-related, since the beginning of 2015.
INVESTMENT BANKING »
Wall Street Analysts Cut Big Banks' Profit Forecasts Wall Street analysts have cut profit forecasts for the biggest banks in the United States, fearing that the Federal Reserve, spooked by sluggish job growth and the British vote to leave the European Union, will hold off on pushing up interest rates.
Years of Red Ink for Citi's Consumer Business in China Citigroup's difficulty getting traction in basic consumer banking shows how hard it can be to exploit the once-heralded opening of what has become the world's second-largest economy.
Osborne Seeks to Reassure Wall Street George Osborne, the chancellor of the Exchequer, will tell Wall Street investors that Britain will not retreat into a "Little Britain" mind-set after last month's vote to leave the European Union, as part of his tour to bolster trade links with the rest of the world.
Standard Chartered Starts Brokerage Firm in Japan Standard Chartered started its first brokerage business in Japan with 100 employees as institutional investors in the country seek products from emerging markets in Asia, the Middle East and Africa for better returns.
Italian Banks: Essential Repairs Italian bank shares are down by a third, raising doubts over reform and pitting Rome against Brussels.
For the latest updates, go to NYTimes.com/DealBook
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VENTURE CAPITAL »
Karlyn Goetz, a Redfin agent in Seattle, who earns a salary.
A Start-Up Shies Away From the Gig Economy Redfin, a Seattle company that considers itself a real estate and tech company, has challenged the conventions of both by hiring full-time agents.
LEGAL/REGULATORY »
Theranos Chief Stifled Bad News The chief, Elizabeth Holmes, has continued to put a positive spin on her embattled blood-testing company, while keeping employees in the dark on many issues.
Donald J. Trump at a campaign event in Raleigh, N.C., last week. The new tax overhaul plan from House Republicans has more in common with his former opponents than with the presumptive presidential nominee.
What Trump and the G.O.P. Can Agree On: Tax Cuts for the Rich The tax plan shepherded by House Speaker Paul Ryan would fundamentally change the system, but both plans reduce taxes on capital gains and high incomes.
The top of the Tesla Model S that Joshua Brown was driving in Williston, Fla., was sheared off in a collision with a tractor-trailer in May.
Fatal Tesla Crash Draws In Transportation Safety Board In addition to the National Highway Traffic Safety Administration, the transportation safety board will investigate a Florida crash involving a Tesla operating in Autopilot mode.
Bank of England Set to Cut Rates The Bank of England is expected to cut interest rates to new historic lows on Thursday in an attempt to ease the pain of the slowdown that is expected as a result of Britain's vote to leave the European Union.