John Ourand of the Sports Business Journal reports that sources stated that Endeavor wanted a 65-35 split of the PPV revenue from DirecTV before deciding to sign a deal with ESPN+.
On Monday, it was announced that the UFC and ESPN had entered into an agreement which would place ESPN+ as the exclusive provider of UFC PPVs. The move terminated the UFC’s relationship with its other satellite and cable PPV distributors.
Although not confirmed, the standard revenue split between is 50/50 with the distributor assist in promoting the event over its own platform while the UFC providing the event. It’s been clear that the UFC was seeking a way for better terms or leave altogether.
First, its UFC Fight Pass allowed for fans to purchase the PPV digitally without going through a middle-man. As fans became comfortable with the technology, fans became more confident in the product. It has offered fans the opportunity to purchase it through other means that traditional cable/satellite such as through Amazon.
Rumblings began that the UFC sought better terms from distributors. There was the possibility that DirecTV would not show UFC 234. However, Dana White brokered a last minute deal with DTV so that subscribers would be able to see 234 through the satellite company.
A deal with InDemand seemed set according to Ourand, but was never signed. Per Ourand, he was told that the UFC wanted 65% of the PPV revenue from its events. But, DirecTV balked.
From John Ourand. Endeavor wanted a 65-35 split with DTV. It had a deal with InDemand but nothing was signed. #ufc pic.twitter.com/EhjK8umTK9
— Jason Cruz (@dilletaunt) March 19, 2019
Payout Perspective:
What we can initially glean from this is that the UFC believes it has bargaining power with distributors. There position is likely strengthened from how well its done thus far on ESPN and its recent success with several PPV events. While not every event will draw 500K buys, it still is in the black when it comes to events. It also reflects the belief that there is a shift in viewership. The UFC and ESPN fan base are comfortable with technology and are willing to move to ESPN+ as the sole provider of its content (outside of bars and restaurants that contract with the UFC to air PPVs).
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