TKO head Mark Shaprio spoke at a Goldman Sachs conference on Wednesday discussing the success of the TKO properties. Shapiro gave a post-transaction report on how Paramount+ and CBS earned the rights for UFC.
Shapiro indicated that ESPN was “always in the mix” but when it became clear that the company would double its rights fees for the UFC, TKO started to look elsewhere.
As expected, all of the major players were involved including YouTube (Google) and Warner Bros. Discovery, DAZN and to a lesser extent Apple.
TKO decided to go with Paramount based on the ties to Oracle and its owner Larry Ellison. Ellison’s son, David, owns Skydance Media which purchased Paramount this summer. He touted the belief that the younger Ellison advised TKO that “sports was first” with them. Shapiro gave examples of The Masters, Final Four and UEFA Cup. He also noted its recent acquisition of “South Park.” He liked Paramount’s vision in growing its subscription base, wanted something that was “anti-churn” and year around which UFC fit the bill.
He spoke about the fact that the UFC international rights are still coming up as well as Zuffa Boxing. Shapiro stated that if they did a deal with Netflix, it would have included global rights as well. But, Shapiro inferred that TKO working with IMG to shop the international rights would mean a more lucrative ending for the overseas rights. 150 territories where they sell rights and come up in a staggered way. “We think there’s tremendous upside,” said Shapiro. He spoke of “upside opportunities” with those rights fees.
Shapiro stated that he hopes to have an announcement on the rights to Zuffa Boxing in the coming weeks.
Payout Perspective:
Making inferences from the interview, it sounds like TKO did not go with Netflix due to the fact that they could make more money selling the international rights. While Paramount seems to have first dibs on the bidding of them, I feel that it was more lucrative to sell them. Its reliance on IMG to find the appropriate buyer in the territories shows its faith in them. With that being said, I believe that Zuffa Boxing may be heading to Netflix. This properties is not as built out as the UFC, so it might be the place to go. It also goes with Netflix’s allure to sporting “events.”
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