The UFC is reportedly in search of not less than $1 billion per 12 months beneath phrases of a brand new broadcast rights deal after the promotion’s present contract with ESPN expires on the finish of 2025, however cash isn’t the one driving issue behind no matter determination is made for the longer term.
That’s in accordance with TKO Group Holdings president and chief working officer Mark Shapiro, who addressed the continued negotiations for the UFC whereas additionally confirming that the corporate is at present engaged in conversations with quite a few networks and streaming shops involved in acquiring the printed rights bundle.
Whereas the UFC didn’t strike a brand new cope with ESPN throughout an unique negotiating window that closed in April, Shapiro says they’re nonetheless talking with the Disney-owned community and branching out to speak to all events.
“We’re not turning our backs on ESPN however we need to have a number of conversations and we need to make a sensible, strategic determination that works finest for our long run,” Shapiro stated on the J.P. Morgan International, Expertise, Media and Communications convention on Tuesday. “The long run isn’t just the cash.
“After all the cash’s necessary … in fact it’s necessary to our shareholders. Most significantly however on the identical time, what’s finest for our model? Who’s going to be our greatest advertising associate? Who’s going to proceed to drive, what remains to be a nascent sport whenever you examine to leagues like NFL and Main League Baseball, who’ve been round for 100 years?”
An enormous a part of the UFC touchdown at ESPN was giving the battle promotion a stage of legitimacy with occasions airing on the most important sports activities community in the US.
UFC stars incessantly seem on ESPN reveals and programming exterior of the occasions that air on the community, which places the promotion shoulder to shoulder with different main sports activities leagues just like the NFL and NBA.
That stated, Shapiro is aware of that there are quite a few components that play into no matter determination the UFC finally makes concerning the subsequent broadcast rights deal.
“We’re in a window and we’re in a number of conversations,” Shapiro stated. “Demand is robust. However we need to be considerate and strategic about who we enroll with. Once we signed on the dotted line to go 10 years with Netflix [for WWE], you’re betting. They’re betting on you however you’re making an equal guess on them.
“It goes each which means because it pertains to these UFC rights. Who’s going to be round? Who’s going to stay round? Who’s bought a long-term technique? Who’s going to be good in simply the brief time period? Are you able to divide it up into a number of packages and have your cake and eat it, too? What’s the way forward for pay-per-view? Do you want pay-per-view? That is all stuff we’re analyzing and having conversations on.”
Shapiro additionally identified some benefits the UFC has over different sports activities properties, which incorporates the management construction the place all selections are made by just a few key executives quite than 32 house owners voting on proposals like within the NFL.
“There’s a variety of alternative,” Shapiro stated. “We’re 12 months spherical, most aren’t. We’re international, most aren’t. We don’t have an proprietor’s committee, most do. We incentivize our fighters to be part of the workforce, frankly, and we’re discovering new methods for them to money in past simply successful within the octagon. The platforms acknowledge that. We’re younger, we’re various, simply a variety of upside.”
One other large issue taking part in into the UFC’s favor is that the battle promotion is the one main sports activities rights bundle out there for the subsequent few years, which can incentivize a possible associate to pay extra understanding that nothing else turns into out there till 2028.
Particularly, Shapiro talked about that ESPN is launching its personal standalone streaming service later this 12 months with a $29.99 beginning worth and the easiest way to make sure subscribers are paying and staying there’s by providing premium content material not out there anyplace else.
The UFC used that mannequin to assist drive ESPN+ subscribers after beforehand inking the seven-year deal that gave the community unique rights to all programming together with pay-per-view broadcasts.
“I’ve by no means seen the sports activities media rights surroundings this scorching,” Shapiro stated. “There might be durations the place it cools off a bit and as I discussed, heat versus scorching nevertheless it’s by no means going chilly. That’s simply not taking place. As a result of it’s a confirmed winner. As soon as once more, antidote to churn and on the identical time a confirmed method for subscriber acquisition.
“ESPN simply introduced this morning [the new streaming service], $29.99. So although it will likely be a mirror of ESPN, it’ll clearly have a variety of bells and whistles and completely different digicam angles and multi-cast and fantasy and sports activities betting built-in, it will likely be particular however you want premium content material to promote a [direct to consumer service] as of late. You want premium content material to maintain subscribers on linear. So that you’re feeding each beasts and I can let you know proper now because it pertains to premium content material, demand is outstripping provide and notably almost about sports activities rights, there’s no main properties exterior of the UFC and WWE [premium live events] that’s up for renewal till 2028.”
Shapiro clearly feels the UFC is in an advantageous place proper now, which might be a part of the rationale why the corporate is partaking in a lot due diligence and talking to a number of potential companions earlier than inking a brand new broadcast rights deal.
“We’re sitting in a really distinctive spot,” Shapiro stated. “Past that, it’s going to remain sturdy as a result of it’s a inbuilt rooting curiosity, it’s stay, it’s sharable, the highlights are snackable.”
