Reports suggest the UFC is aiming for a broadcast rights deal worth at least $1 billion annually once its current contract with ESPN ends in late 2025. However, the financial figure is not the sole factor driving the decision on future partnerships, according to Mark Shapiro, President and Chief Operating Officer of TKO Group Holdings.
Shapiro addressed the ongoing negotiations for the UFC`s media rights, confirming the organization is actively engaged in discussions with various networks and streaming services interested in acquiring the broadcast package.
While the exclusive negotiation window with ESPN closed in April without a new agreement, Shapiro stated they are still in contact with the Disney-owned network while also branching out to talk with all other interested parties.
“We are not dismissing ESPN, but we want to have multiple conversations and make a smart, strategic decision that best serves our long-term interests,” Shapiro commented at a conference on Tuesday. He emphasized, “The long term isn`t just about the money.”
Shapiro acknowledged the financial aspect is crucial for shareholders, but stressed the equal importance of finding the ideal marketing partner for the brand. He posed the question: “Who is going to continue to promote what is still a developing sport when compared to leagues like the NFL and Major League Baseball, which have existed for a century?”
A significant benefit of the UFC`s initial move to ESPN was the legitimacy it conferred, with events airing on the most prominent sports network in the United States.
UFC stars frequently appear on ESPN programming beyond just event broadcasts, placing the promotion alongside major sports leagues such as the NFL and NBA.
Nevertheless, Shapiro recognizes that numerous factors contribute to the ultimate decision the UFC will make regarding its next broadcast rights agreement.
“We are in a negotiation window and engaging in multiple discussions,” Shapiro said. “Demand is strong. However, we want to be thoughtful and strategic about who we partner with.” He likened it to the WWE`s deal with Netflix: “When we signed a 10-year commitment with Netflix [for WWE], you`re placing a bet. They`re betting on you, but you are making an equal bet on them.”
Concerning the UFC rights, Shapiro highlighted several considerations: “It goes both ways. Who is likely to remain a partner? Who possesses a long-term strategy? Who is only focused on the short term? Is it possible to divide the rights into various packages? What is the future of pay-per-view? Is pay-per-view even necessary? These are all questions we are currently analyzing and discussing.”
Shapiro also pointed out advantages the UFC holds over other sports properties, including its centralized leadership structure where key executives make decisions, contrasting with leagues like the NFL where numerous owners vote on proposals.
“There is significant potential,” Shapiro remarked. “We operate year-round, unlike most. We are global, unlike most. We lack an owner`s committee, unlike most. We encourage our fighters to feel like part of the team and are finding new avenues for them to earn beyond octagon victories. The platforms recognize this. We are young, diverse, possessing considerable upside.”
Another major factor favoring the UFC is that its rights package is currently the only major sports property expected to become available for renewal in the coming years. This scarcity could incentivize potential partners to pay more, knowing no other comparable opportunities are anticipated until 2028.
Shapiro specifically mentioned ESPN`s planned standalone streaming service, set to launch later this year at a starting price of $29.99. He emphasized that offering exclusive premium content like the UFC is vital for attracting and retaining subscribers.
The UFC previously utilized this strategy to successfully boost ESPN+ subscribers after signing a seven-year agreement that granted the network exclusive rights to all programming, including pay-per-view broadcasts.
“I have never seen the sports media rights market this active,” Shapiro stated. “There might be periods where it cools slightly, but it will never become dormant. That simply isn`t happening. Because it`s a proven success. Again, it counteracts subscriber churn and is a demonstrated method for acquiring subscribers.”
He continued, discussing the new ESPN streaming service: “…it will be special, but you need premium content to sell a direct-to-consumer service these days. You need premium content to keep subscribers on traditional linear channels. So you`re serving both segments, and I can tell you now, regarding premium content, demand exceeds supply, particularly for sports rights. There are no major properties besides the UFC and WWE premium live events scheduled for renewal until 2028.”
Shapiro clearly believes the UFC is currently in a highly favorable position, which likely explains the extensive due diligence and numerous conversations with potential partners before finalizing a new broadcast rights deal.
“We are in a very distinct spot,” Shapiro concluded. “Beyond that, it will remain strong because it has an inherent viewer investment, it`s live, it`s shareable, and the highlights are easily consumable.”
