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.
Payout Perspective:
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.
The reality is FOX had a very favorable deal to begin with. Sports contracts like this are usually much bigger than 100m annually. Not sure if they will get 450m, but it will be at least 2-3x what it was.
Also, part of assuming those production costs is that the network that wins the contract will have those publishing rights which are very coveted along with Fight Pass.
” allure that its demo of young males with disposable income”
What do I always say? The UFC appeals to upper middle class suburban crowd…that is its demographic and as long as the UFC provides at least one star like McGregor, that will not change.
$450m a year isnt happening.
Hahahahahaha…amount computed not because of what ratings in fox(the worth of what ufc brings to fox) but because they desperately need the 4 billion back…4.5 B….dream on
d – I agree $450M is a stretch. I think if they can get 200-300 they should be happy. If WME-IMG were counting on the $450 in order to pay back the 4.5B then there might be some trouble down the line.
You start off high, they start off low and you negotiate, they can also throw in some of the events that are lower drawing PPVs and Fight Pass events.
I still see them going with 2 companies probably Fox & Disney, Fox needs the rights and ESPN want younger fans as they move a lot of their operations to Hulu Live Streaming & Sling TV etc
$1.8B loan they need to pay back, not $4.5.
Agreed Diego.
@Wil – The numbers say otherwise re demos. MMA, in general, skews toward young males. Would be interesting comparing demos with something like eSports.
Rogan out? Because of tv deal….as much as rogan became overtop “repetitive”adjective announcer through the years….he is a big part of the hype formula for the ufc. Its a big loss for the ufc- fans would surely notice his loss when theres no action on the ground-“he is a highlevel brazilian jujitsu black belt”!now theyll say/see– its boring hahahaha
Jason Cruz, moreso on the income level rather than the age. No doubt about it mma appeals to the teen, the college age, etc etc. I was referring more to the location of the demographic rather than age. I don’t think we will find heavy ppv purchases from inner city Detroit, Chicago, New Orleans, Atlanta, etc etc. I equate it with here mma gyms are found, rarely in the inner city due to the price of learning and heavily in suburban areas, where sports like wrestling are more popular at the HS level.
Ie that HBO Boxing commercial with the homeless man saving his pennies in the inner city to pay for his gym membership is not indicative to the world mma fighters come from….and certainly not the fans.