ESPN and UFC Prepare for Lucrative Television Rights Deal
In a bid to solidify their successful partnership, ESPN and UFC are set to enter negotiations for a new television rights deal. Dana White, President of UFC, confirmed the upcoming discussions, expressing enthusiasm for the talks with ESPN boss Jimmy Pitaro and Mark Shapiro, President and COO of Endeavor, the parent company of UFC.
While specific details of the current deal remain undisclosed, industry insiders estimate that ESPN pays a staggering $300 million annually to broadcast UFC fights. Since 2019, ESPN’s streaming platform, ESPN+, has served as the exclusive home for UFC’s pay-per-view events, a move that has greatly contributed to the platform’s growth. With over 25 million subscribers as of May, ESPN+ owes much of its success to the popularity of UFC.
Matt Kenny, ESPN’s VP of Programming & Acquisitions for Pro Basketball and Combat Sports, emphasized the network’s commitment to the UFC, stating, “We are proud stewards of UFC and the UFC’s business, and we value that relationship tremendously. So we want to do whatever we can to grow our business and also grow the UFC’s business,” in an interview with Sports Business Journal.
The current deal between ESPN and UFC spans seven years and amounts to approximately $300 million per year. The agreement, extended for an additional two years, ensures ESPN’s exclusivity in broadcasting UFC pay-per-view events, a significant revenue stream for both parties.
Ari Emanuel, CEO of Endeavor, acknowledged the burgeoning market for sports rights deals and the potential for multiple interested parties. While expressing his satisfaction with ESPN’s partnership, Emanuel recognized the need to explore various options, given the vast number of buyers in the market.
“We have a great relationship with ESPN, love our relationship with them, and we have a year left until we can start our renewal,” Emanuel shared during the Morgan Stanley Technology, Media, and Telecom conference. “I think it’s going to be a positive outcome for both parties, but there’s a lot of buyers out there.”
The ongoing “streaming wars” have intensified the competition for sports rights packages, creating higher bidding values and raising the stakes for traditional network and cable outlets. For instance, Amazon secured exclusive rights to Thursday night football games with the NFL by paying approximately $1 billion per year. Major League Soccer also recently signed a 10-year, $2.5 billion deal with Apple, resulting in most of the league’s games moving behind a paywall for a subscription service, similar to Amazon’s arrangement.
Endeavor, formerly William Morris Endeavor, has vast experience in negotiating sports rights deals, having previously represented UFC during agreements with FOX and ESPN. Ari Emanuel drew attention to the exponential growth in sports rights deals across various sports, including a $100 billion NFL deal in 2021. With a deep understanding of the market, Emanuel expressed confidence in securing a substantial broadcast rights deal for UFC.
Emanuel said, “You have six buyers in the marketplace. When we made our first UFC deal, there was one buyer and the buyer was Bob Iger actually. He’s the one that actually brought it over. I think we’ve done an amazing job for the growth of ESPN+ and ESPN, and we have The Contender Series. Now they just ordered The Ultimate Fighter that Conor McGregor is on. So all in all, it’s one of the fastest-growing sports out there, that’s demographic, social, and male/female, and age category.”
As the negotiations unfold, the precedent set by the recent Big 10 deal, which earned $7 billion over a seven-year contract with FOX, CBS, and NBC, will likely impact the UFC’s expectations for their next broadcast rights agreement. Considering UFC’s consistent growth, high attendance rates, and record-breaking profits, the organization is poised to secure a lucrative deal that aligns with its continued success.
With the market teeming with potential buyers, the forthcoming UFC rights deal is set to make a significant impact on the future of sports broadcasting. As UFC and ESPN embark on negotiations, fans and stakeholders eagerly await the outcome, eager to witness the next chapter of this dynamic partnership.
