Emmanuel bullish on UFC product as rights fees come due

Ari Emmanuel spoke in a “Fireside Chat” at a recent analyst summit put on by MoffettNathanson Media & Communications. He stated several things about the landscape of the UFC business which points to the outstanding business for Endeavor.

Emmanuel pointed to the international rights deal being “up over 100% with all our deals.”  He also expressed the position that sports content is popular citing the recent deals struck by Amazon and Apple for the NFL and MLB respectively. 

Emmanuel, in front of sell-side analysts examining the prospects of Endeavor’s business, stated that putting PPVs exclusively on ESPN+ made that business segment less “lumpy.”  Prior to domestic UFC PPVs being sold on ESPN+, they went through satellite and cable operators who took a percentage of the sales.  Per Paul Gift’s Forbes article today, domestic PPV sales made up 43% of the company business in 2010 and 32% of the business in 2015. 

The deal was thought to be risky since the UFC would go behind a paywall at ESPN+ and then sell its PPV on top of the paywall.  This has not prevented the sale of PPVs as Emmanuel remarks were rather bullish on the business.

Another interesting point made by Emmanuel is that viewership of the UFC product is 90% international but account for only 10% of the promotion’s revenue.  With the recent international media rights deal growing exponentially and the demand for content ongoing, there does not seem to be a stop to this stream of revenue.

Payout Perspective:

Clearly the UFC business is doing well and its success overseas is something that other MMA organizations such as Bellator and PFL are trying to replicate.  The purpose of speaking at this Conference is threefold.  First, promote the organization in general and focus on its successes.  Secondly, ensure that the analyst community is aware of the successes with the possibility of enticing sponsors, investors and perhaps future partners to be a part (or may acquire) the company.   Third, make sure that future rights fee bidders will be prepared to open its checkbook when looking to partner with the UFC.