The UFC reportedly seeks at least $1 billion a year under the terms of the new broadcast rights deal after its current contract with ESPN expires at the end of 2025, but any decision made in the future is not the only driver.
This addresses the ongoing negotiations for the UFC and confirms that the company is currently engaged in conversations with numerous networks and streaming outlets interested in obtaining broadcast rights packages, according to Mark Shapiro, president and chief operating officer of TKO Group Holdings.
The UFC did not sign a new agreement with ESPN in the exclusive negotiation window that closed in April, but Shapiro said he is still talking to the Disney-owned network and is forked to talk to all stakeholders.
“We’re not turning our back on ESPN, but we want to have multiple conversations. We want to make smart and strategic decisions that are optimal in the long run,” Shapiro said Tuesday at JP Morgan Global, Technology, Media and Communications Conference. “Money isn’t the only thing that’s long term.
“Money is important, of course… of course it’s important for shareholders. The most important thing is, at the same time, what’s best for our brand? Who will become our best marketing partner? Who will continue to drive?
The majority of UFC landings on ESPN were to give combat promotions a level of legitimacy at events aired on the largest sports network in the United States.
The UFC stars frequently appear on ESPN shows and program outside of events that air on the network. This will bring promotions to shoulder with other major sports leagues, such as the NFL and NBA.
That being said, Shapiro knows there are many factors that will be involved in the UFC’s final decision on their next broadcast rights deal.
“We’re in the window and have multiple conversations,” Shapiro said. “The demand is strong. But we want to be thoughtful and strategic about who we’re going with. When you sign Line on the dotted line to go 10 years (for WWE), you’re betting. They’re betting on you, but you’re making equal bets on them.
“It’s related to these UFC rights, which one will it go? Who’s around? Who’s stuck? Who’s the long-term strategy? Who’s the good in the short term?
Shapiro also pointed out some advantages to the UFC over other sports properties. This includes a leadership structure in which all decisions are made by a small number of key executives rather than the 32 owners who vote for proposals like the NFL.
“There are many opportunities,” Shapiro said. “We’re barely there all year round. We’re not global. Most don’t have a committee of owners. Most don’t. We honestly encourage fighters to be part of our team. And we’re finding new ways to not only win with the Octagon, but also recognize it.
Another major factor involved in the UFC favor is that combat promotion is the only major sports rights package available for years to come.
Specifically, Shapiro said ESPN will launch its own standalone streaming service later this year at a starting price of $29.99, offering premium content that is not available elsewhere, the best way to ensure that subscribers are paying for it.
UFC used its model to promote ESPN+ subscribers after previously pouring in a seven-year agreement that gave the network exclusive rights to all programming, including Pay-Per-View broadcasts.
“I’ve never seen a sports media rights environment that’s so hot,” Shapiro said. “Like I said, there’s a period when it gets a little cooler and warmer and hot, but it’s not getting cold. It’s not happening because it’s a proven winner.
“ESPN announced this morning (the new streaming service), $29.99. So it will be a mirror for ESPN, but it will clearly integrate many bells and whistles and various camera angles and multicasts and fantasy and sports betting. Currently, demand is outweighing supply due to its connection to premium content, and there are no major properties other than UFC and WWE (Premium Live Events) that will be updated until 2028, especially when it comes to sports rights.”
Shapiro clearly feels that the UFC is in a favorable position at the moment. This is probably part of why the company is involved in so many due diligence and talks to multiple potential partners before they make new broadcast rights deals.
“We sit in a very unique place,” Shapiro said. “Beyond that, it incorporates ingrained interest, it’s live, shareable, and the highlight is snacks.”