The Sports TV Landscape, Pac-12 Landmark Deal, & Where MMA Fits

May 9, 2011

The soon to be Pacific 12 conference officially announced last week a blockbuster media rights deal with Fox and ESPN worth $3-billion over the span of 12 years, topping all other current collegiate conference TV deals and quadrupling the worth of their previous TV deal, setting the new standard for sport properties looking forward to upcoming re-negotiation periods.

Although some may wonder what the correlation is between this deal and MMA, you don’t have to search too long to realize that there is a scramble and bidding war going on at the moment to secure  more sport content for networks, many who are either trying to get into the game or just acquire as much content as possible to stay in it.  We are currently seeing a new trend for the sports and TV industry right now, where networks are paying a premium for this type of content, where now the Pac-10 has set the standard going forward.

CNBC’s Darren Rovell wrote, “[sports are the] best bet on entire television landscape. People get sick of sitcoms, reality shows and soap operas, but fans don’t lose interest in a sport. That’s why networks don’t have any problem signing deals that last as long as they do despite the fact that they have no idea what the economic or technological landscape is going to look like”.

Looking at the deal, the Pac-12 will use an equal revenue-sharing plan, which means each team in the conference will be raking in $21 million annually in guaranteed money just from this deal.  The Pac-10 will be bringing in $250 million per year ($60 million in rights with the previous deal), which tops all TV deals by other conferences, including the Big-10 ($220 million per year) and the SEC ($205 million).  As if that wasn’t enough, the soon to be Pac-12 will also start their own Network which will be fully owned by the conference, unlike the Big Ten Network which is 49% owned by Fox, which should bring even more revenue to the conference, which some have estimated could be worth an additional $10 million. The deal would put each team grossing around $30 million a year.  The conference also created the “Pac-12 Media Enterprises” to manage and sell sponsorship and licensing rights controlled by the conference, along with the conference championship games.  To illustrate how big of a deal this is for the schools, Utah – who left the Mountain West Conference to join the Pac-10 – was making about $1.2 million in TV money in the MWC, where in a few years in the Pac-12 could be 20-30 times more with the new deal signed.

According to Sports Business Journal, the front-runners in landing the Pac-10 deal were Fox and ESPN (who got the split deal) and Comcast/NBC, who was trying to pickup the rights for Versus, which will soon be renamed to NBC Sports after the Comcast/NBC merger.  If you recall, just a few weeks ago, NBC/Versus was able to retain the NHL (TBS/TNT, ESPN, and Fox were also bidders) by signing a 10-year 2 billion dollar deal, which pays out at about $200 million a year.  Versus – who currently has a TV deal with the UFC until 2012 – is in the midst of being renamed to NBC Sports as they will do their best to become a competitor in the sports TV market (ESPN). Keeping the NHL was a must and losing the Pac-10 deal was a blow, but it could be the silver lining for the UFC who has positioned themselves in the last couple of years as vital programming who can draw the 18-34 demo and brings in some of the better ratings for Versus. UFC events and playoff NHL games do about the same ratings on Versus (NHL averaged 624k viewers for the first round this year, UFC on Versus 3 on March 5th averaged 681k viewers), but UFC (MMA) outperforms the NHL during the regular season on average.

While the UFC’s deal with Versus is up next year, they are also in a renegotiation period with their other TV partner, Spike TV, who’s deal will also run out next year.  Experts within the industry believe that both parties have been involved in intense negotiations (Spike advertising Bellator events during TNA showings and UFC putting prelims and other specials like Primetime – which were previously exclusive to Spike- on other networks like Ion and ESPN on time-buys. The UFC has also been experimenting airing their own content by utilizing Facebook to provide free preliminary fights.

In the past year, the UFC’s Dana White told MMA Fighting that he expected a network deal to be done by 2011, followed up by possibly starting up their own network in the next couple of years, though he has shied away from those comments recently.  “Sports Business Journal came out with a survey asking big names in the industry with sport could start its own network and 4 out of 5 said us. They are right. I agree” said White.

Other networks that have long been interested in acquiring MMA content or a sport franchise are TNT/TBS/TruTV and Fox channels (FX & Fuel TV).  In the last couple of months, MMA start-up promotion Shark Fights signed a deal with Fuel TV to air their events on the newly created “Friday Fight Night” segment.  Long time Fuel TV VP/GM CJ Olivares stepped down from his role with the network just last month, and was replaced by Fox Sports Network’s George Greenberg who shared some insight if MMA programming will still be in the plans for Fuel TV.

You do not see a lot of MMA on Fuel right now. Will we have a little bit? Yes. Will we have more? Yes, a bit more. Television programming is a diet that needs a bit of everything in it. It’s okay to have some MMA, and it’s okay to have your action sports stars appear in shoulder programming, there’s absolutely nothing wrong with that. At the end of the day, TV is a horse race and we need to get ratings.

 

On the other hand, FX will be a part of the Pac-10 TV deal with Fox, which it has agreed to televise college football games on the network.  Back in December of last year, it was rumored that Bellator was going to sign a TV deal with Fox which would put the MMA promotion on FX, FSN, and Fuel TV, a deal that fell through and ultimately landed Bellator on MTV2.  FX was also said to have some interest in Strikeforce and the UFC in the past, but nothing had gone beyond exploratory talks. It is said that after NBC/Versus and Fox lost rights to sport franchises they were bidding for, both entities could not afford to lose their current programming staples.

NBC/Versus signed a lucrative deal with the NHL and looks to use them as the premier league for their newly created NBC Sports channel, while Fox (losing out the LA Lakers contract in Southern California) needed to keep the Pac-10 programming to keep their stations going in that region. As a note, HBO, Fox, NBC, and ESPN/ABC have been said to be interested in MMA content from the UFC in the past, though nothing ever came to fruition.

Back in January, MMAPayout discussed the “The Sports TV Landscape” and brought up the domino effect of these lucrative TV deals and why a network deal would have to make sense to the UFC due to the PPV vs. Rights to fee trade-off. A move by the UFC to leave Spike TV could generate a chain reaction by Spike to replace them with another promotion if they wanted to keep airing MMA content, which would be no easy task but not impossible either, since many think that Bellator is being groomed just for that reason.  Larry Scott of the Pac-10 said it best when he proclaimed the three main goals for the conference that should apply to any sports entity looking to grow in the current market conditions are to increase revenue, generate exposure, and create your own network. Three key points the UFC has been stressing over the past couple of years and is aiming to accomplish in the near future.

 

Current Sport TV Deals – Collegiate Sports, NHL, MLS, WWE, and UFC:

Pac-10: $250 million/Year (Fox/ESPN/ABC) … previously $60 million (Fox/ESPN/ABC)

Big Ten: $220 million/Year (ESPN/ABC)

SEC: $205 million/Year (ESPN/CBS)

NHL: $200 million/Year (NBC/Versus) … previously $77.5 million (Versus)

ACC: $155 million /Year (ESPN)

Big 12: $130 million/Year (Fox)

WWE: $30-35 million/Year [Meltzer] (USA Network) … With Syfy included, estimated at around $70+ million/Year.

UFC: $35 million/Year [Meltzer] (Spike TV) … TV deals will be up after 2011 with Spike TV and Versus (4 events).

MLS: $14.75 million / Year (ESPN2, $8.5 million/Fox Sports Channel, $6.25 million) … Asked for $20 million/Year (FSC)…. previously $3 million (FSC)

 

16 Responses to “The Sports TV Landscape, Pac-12 Landmark Deal, & Where MMA Fits”

  1. Jose Mendoza on May 9th, 2011 7:25 PM

    Ben Miller of the Wrestling Observer informs me that Dave Metlzer now estimates WWE’s TV deal with USA and Syfy to be $70 million per year.

  2. Jack Frost on May 10th, 2011 2:03 AM

    Thanks for the article, it was very good.

    I think it’s about time for them to leave Spike and it looks like they probably will with everything that’s been going on recently like airing on different networks, plugging Bellator, changing TUF’s time so it competes directly with American Idol which is like the most watched show on TV, etc and not to mention the UFC hasn’t given Spike a real big name fight in quite a while (I think since Couture in 2009).

    Out of your choices I would like to see them end up on TNT/TBS or sign a full deal with Versus with a few cards also airing on NBC per year (like UFC 130 which is clearly not PPV worthy but is above the UFN level).

  3. Jose Mendoza on May 10th, 2011 11:13 AM

    Jack: No problem.

    Some folks are telling me that they expect that unless the UFC gets a huge contract from Spike, they are most likely leaving. Others are telling me that they are leaving no matter what. All TV deals associated with Zuffa should be up by March of 2012, so we will see a lot of extra activity in the next 6-8 months in addition to what has been going on behind closed doors for the past several months.

  4. Sergio on May 10th, 2011 1:31 PM

    Jose
    Thank You for this article n insight! The Tv Deals and network ideas just blow my mind! I remember Dana saying that he wants UFC/MMA to be a major sport with their letters next to NHL/NBA/NFL Do you ever see that happening or do you see the sport of mma floating around the same level as WWE?
    If anyone can make mma a viable sport,its gonna be Dana n Co any comments would be appreciated! Thanks!

  5. Jack Frost on May 10th, 2011 2:39 PM

    That’s good. One more thing, does TUF belong to Spike or would UFC be able to take it with them to another network?

  6. Jose Mendoza on May 10th, 2011 2:50 PM

    Jack:

    Good question. I am not 100%, but TUF is an incredible asset for both Spike and the UFC, and I expect the UFC to have full rights to it. They should be able to take somewhere else if they choose so, but it’s not so easy. Not every network would be willing to show live events and a reality tv show, so it could even stay. Not 100% on that just yet.

  7. Jose Mendoza on May 10th, 2011 3:21 PM

    Sergio:

    I and many that I have spoken to would classify the UFC at around the WWE’s level, currently surpassing them and boxing in many areas but still behind in others. I think if they can land somewhere between MLB/NHL/ and the WWE, in the next few years, it would be a huge step in realizing their goals.

    Thanks for reading!

  8. Jason Cruz on May 10th, 2011 9:53 PM

    Jack, I’m pretty sure that TUF would be owned by Zuffa.

    Great writeup Jose!

  9. Sergio on May 11th, 2011 11:54 AM

    Jose,

    Your response was on par with what I imagined! I think UFC/MMA big push to the main front is gonna come from the European/Asian markets.My European contacts talk about how UFC/MMA has really taken off in their country esp Scandinavia.

    But even with the sports tv media landscape changing for the best in UFCs favor,
    what would it take for UFC/MMA to break into the mainstream via NFL/NBA?…major network deal?..millions in marketing?..another 10yrs?..

    Also you said that UFC is surpassing Boxing/WWE in some areas but still behind in some area…can you expand what areas they are behind in n how? Thanks!

  10. UFC Buzz | Latest UFC/MMA News and Info - UFC, Spike TV at the Heart of Bellator’s Future in MMA on May 11th, 2011 1:06 PM

    […] long-time partner for greener pastures. As MMAPayout.com’s Jose Mendoza points out, we are seeing a new trend as networks fight over sports […]

  11. Jose Mendoza on May 11th, 2011 1:18 PM

    Sergio:

    WWE will always have an advantage in that they can provide tons of live entertainment for TV because it’s scripted, and they can run multiple shows even in the same week and on different networks along with a reality tv show and they already have a pretty big domestic and international fan base.

    Boxing still generates some of the biggest PPV buys and gates for any combat sport. As Dan Rafael said yesterday:

    “Top 3 Nevada gates: Floyd-DLH (the all-time record anywhere at $18.419M), Lewis-Holyfield 2 ($16.860M) & Pacquiao-DLH ($14.380M)

    Fact: The No.1 #MMA gate in Nevada history (Liddell-Ortiz 2,$5.397M) is less than the 36th best #boxing gate in Nevada (Holmes-Ali, $5.766M)”

    In terms of competing with the NBA/NHL… its not going to be easy. The one thing that separates traditional sports from combat sports is that fans will usually support their local teams for generations. It’s why the south is so big on college football and the SEC gets so much attention, Boston Redsox, Yankees, etc.

    MMA & combat sports don’t typically have that (other than GSP and Canada, Pacman and the Philippines, Chavez and Mexico, etc). It’s why the UFC and boxing have to work so hard. Whether a player gets traded away or not in the NBA, NFL, etc, fans will still continue to support their teams and the league.

  12. juan on May 11th, 2011 2:06 PM

    Are those college deals just for football? When I see these deals reported some say just football. Some say football plus men’s basketball. And some say all sports. Just trying to get an apples to apples comparison.

  13. Jose Mendoza on May 11th, 2011 4:07 PM

    juan:

    Most current deals are for multiple sports, conference championships, etc. But it’s better to look at the content the sport can provide and how much the network values it.

  14. UFC, Spike TV at the Heart of Bellator’s Future in MMA | Network-Television.com on May 11th, 2011 7:52 PM

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  15. Alex Dripchak on June 6th, 2011 5:49 AM

    how long are the contracts for WWE and USA/ SYFy as well as how long are the contracts with UFC’s tv partners? Thanks.

  16. Jose Mendoza on June 8th, 2011 4:02 PM

    Alex,

    UFC TV partners are stated above, just signed 1 year deals with both Spike and Versus, which are up in 2011. Not sure on specifics with WWE’s TV deals, but tune in and we will report that info as we get it.

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