The Ultimate Fighting Championship (UFC) is reportedly targeting a minimum of $1 billion annually for its upcoming broadcast rights agreement, set to begin after the current ESPN contract concludes in late 2025. However, the financial figure is not the sole consideration guiding the decision-making process for the promotion`s media future.
According to Mark Shapiro, President and Chief Operating Officer of TKO Group Holdings (UFC`s parent company), the ongoing negotiations are multifaceted. He confirmed that the company is actively engaged in discussions with numerous television networks and streaming services interested in acquiring the broadcast package rights.
While UFC did not finalize a new deal with ESPN during the exclusive negotiating window that closed in April, Shapiro indicated they continue to communicate with the Disney-owned network while also exploring options with all other interested parties.
“We are not disregarding ESPN, but we aim to conduct multiple conversations and make a carefully considered, strategic decision that serves our long-term interests,” Shapiro stated during the J.P. Morgan Global Technology, Media and Communications conference. He emphasized, “The long term isn`t solely about the money.”
“Certainly, the financial aspect is important… it`s crucial for our shareholders. That`s paramount, but simultaneously, we must ask: what`s best for our brand? Who will be our most effective marketing collaborator? Who will help continue to propel what is still a relatively young sport when compared to leagues like the NFL or Major League Baseball, which have existed for a century?”
A significant benefit of the UFC`s partnership with ESPN was granting the fight promotion enhanced legitimacy, with events airing on the United States` largest sports network.
Prominent UFC athletes frequently appear on ESPN shows and programming outside of their events, positioning the promotion alongside other major sports leagues such as the NFL and NBA.
Nevertheless, Shapiro acknowledged that numerous elements influence the UFC`s ultimate decision regarding the next broadcast rights agreement.
“We are in a negotiation period and involved in multiple discussions,” Shapiro said. “Demand is strong. But we intend to be deliberate and strategic about who we partner with. When we signed the 10-year deal with Netflix for WWE, it was a gamble. They placed a bet on us, but we made an equal bet on them.”
“This dynamic applies in every direction concerning these UFC rights. Who is likely to endure? Who has a long-term vision? Who might only offer short-term benefits? Is it possible to segment the rights into various packages and gain the benefits of each? What is the future trajectory of pay-per-view? Is pay-per-view necessary? These are all questions we are analyzing and discussing.”
Shapiro also highlighted several advantages UFC holds over other sports properties, including its leadership structure where key executives make decisions, contrasting it with leagues like the NFL where 32 owners vote on proposals.
“There is considerable opportunity,” Shapiro remarked. “We operate year-round, unlike most. We are global, unlike most. We don`t have an owners` committee, unlike most. We incentivize our athletes to essentially be part of the team, finding new avenues for them to earn beyond just winning inside the octagon. Platforms recognize this. We are youthful, diverse, with significant upward potential.”
Another major factor favoring the UFC is that its broadcast rights package is one of the few significant sports properties available for acquisition over the next few years, potentially motivating partners to offer more knowing that other major deals won`t be available until 2028.
Specifically, Shapiro pointed to ESPN`s planned standalone streaming service launch later this year, expected to start at $29.99. He noted that offering exclusive premium content is the most effective way to attract and retain subscribers, citing UFC`s role in driving ESPN+ subscriptions under their current seven-year agreement, which granted ESPN exclusive rights including pay-per-view broadcasts.
“I have never witnessed the sports media rights landscape this heated,” Shapiro stated. “There might be phases where it cools slightly – warm versus hot – but it will never go cold. That simply won`t happen. Because it`s a proven success. Again, it`s a solution to churn and a proven method for subscriber acquisition.”
“ESPN just announced its new streaming service this morning, priced at $29.99. Although it will mirror ESPN content, it will certainly include numerous enhancements like different camera angles, multi-casts, fantasy integration, and sports betting integration. It will be special, but to sell a direct-to-consumer service these days, you require premium content. To keep subscribers on linear channels, you also need premium content. You`re serving both needs, and I can assure you now, regarding premium content, demand exceeds supply, particularly for sports rights. Aside from UFC and WWE premium live events, no major properties are up for renewal until 2028.”
Shapiro clearly believes the UFC occupies an advantageous position currently, which likely contributes to the extensive due diligence and discussions with multiple potential partners before committing to a new broadcast rights deal.
“We are situated in a very unique spot,” Shapiro concluded. “Beyond that, demand will remain strong because it has built-in fan interest, it`s live, it`s shareable, and the highlights are easily consumed.”
