Sports Business Journal reports that the UFC has signed a 5-year deal with Draft Kings for $350 million per year although broken down there is $100M in cash for the rights fee and another $250 million in media/marketing obligations. The deal makes the Boston-based company the exclusive sportsbook and DFS sponsor in the U.S. and Canada.
You might recall the two companies entered into a partnership for DFS several years ago.
Notably, the report from SBJ stresses the value of on-camera sponsorship especially during the pandemic. The deal with DraftKings will be new ‘match clocks affixed to the octagon, carrying the DraftKings logo.’
DraftKings will offer “UFC-branded odds and integrations on its sites, and free-to-play UFC games.”
A Request for Proposal was sent out to interested parties in October with DraftKings winning the opportunity. This appears to be one of several other sponsorship areas which Zuffa is seeking to fill. Other industries include an official UFC auto sponsor, home delivery sponsor and CBD sponsor.
Payout Perspective:
The deal is based on an estimate of value added based upon marketing/media visibility. The ESPN deal with the UFC has helped the organization. But, the brand equity that the company has likely is driving companies seeking them out to partner with them. The ratings it pulls on ESPN, especially the A18-49 demo helps with the appeal. With states opening up to sports betting, this deal with DraftKings seems like a win-win. The UFC has been offering odds during every broadcast and DK has been sponsoring events as well so the partnership seemed imminent. We will see how much more the UFC will expand in 2021.
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