UFC looking for $450M per year for 10 years in next media rights deal
November 28, 2016
The Sports Business Journal reports that the UFC is angling to ask potential buyers for $450 million per year over 10 years in its next round of media rights fees. The company’s current deal, which ends at the end of 2018 is for $115 million for 7 years.
The article also states that the deal will seek to have the successful bidder to produce the UFC events. In the past, the UFC had produced its shows in-house. One of the under-the-radar things about Zuffa was the control of the brand for the UFC which included the production of the events. You might argue that it’s this control that gave it such a strong brand awareness which may have gone to the eventual sales price for the company.
Via Sports Business Journal:
The package the UFC will take to market will include the rights to four annual broadcast windows that Fox now holds, six annual cable events and weekly programming on Fox Sports 1, plus the UFC’s over-the-top Fight Pass service. It is not expected to include the UFC’s lucrative pay-per-view business, which will likely be retained by WME-IMG. But some media executives believe any winning bidder will have more of a say in what matches will be part of the UFC’s pay-per-view events. Whether a network will share in some of the PPV revenue is a deal point that will be negotiated, sources said.
Despite the retraction in spending by networks such as ESPN and the lukewarm ratings for Fox events this past year, the UFC is banking on the allure that its demo of young males with disposable income and the somewhat DVR-proof live sporting event will give it leverage in the new negotiations. But will the UFC be able to broker a 75% increase over its first media rights deal. The deal would include additional cost to the network that purchases the rights as it will need to provide production costs for the events. However, the article indicates that the network may have more influence on what events it may have. This might provide some incentive for potential buyers. I am surprised that Fight Pass will likely be included in the deal as there might have been opportunity to sell those rights on its own as is contemplated by the NBA’s LA Clippers.