UFC passed on marketing guarantees in negotiating rights deal with ESPN

John Ourand of The Sports Business Journal (subscription required) writes about the UFC and its unique strategy in its negotiation with ESPN in not asking for guarantees in marketing the promotion if it joined ESPN.

Per Ourand, television networks request a minimum marketing guarantee in any rights deal they negotiation with a league or a conference.  It outlines the contractual requirements and how much the networks should promote and where the promotions should run.

When the UFC negotiated its deal with ESPN, UFC execs did not ask for any minimum marketing commitment.

Ourand interviewed Endeavor president Mark Shapiro and he explained that due to the overall financial commitment from the network, there is no choice but to market the brand.  Shapiro stated that this was learned from his days with ESPN and negotiating a TV deal with the NBA.  Due to the premium that ESPN would pay for the rights, the financial investment would mean that it would be a necessity to market the NBA. 

Similarly, Shaprio took this learning tool when negotiating on behalf of the UFC with ESPN. 

Payout Perspective:

Obviously, the negotiating strategy is based on the amount of leverage the UFC had with ESPN.  Shapiro remarked in the Ourand interview that the UFC is appointment viewing.  This would infer that most subscribers to ESPN+ know when the next UFC event and/or PPV is taking place and will tune in.  Based on the great start the UFC has had with ESPN+, its clear that network is willing to spend money to market and promote the company without being obligated by a contractual term in a rights deal.  A lot of this has to do with the strength of the UFC brand prior to negotiating with ESPN.  MMA is the UFC and the promotion has built up its brand and its wealth of the young demo that it does not have to worry about the marketing budget in a rights deal.  A lot has to do with Dana White as well as other UFC stars that have built a following on social media.  Thus, a marketing budget, while important for other properties, is not as needed for the UFC.