ESPN (DIS) and Fox Sports (FOXA) have submitted a joint bid worth at least $320 million annually, to split exclusive television broadcast rights to the Ultimate Fighting Championship (UFC). Reports indicate that ESPN would contribute between $120 million and $180 million per year, to add +/- 15 premium live-events to its new ESPN+ service; with Fox Sports committed to spending $200 million per year, for the bulk of the TV package. There had been speculation Endeavor would hold on to UFC broadcast rights and distribute them direct-to-consumer following the company’s $250 million acquisition of the digital video broadcasting provider Neulion.
Howie Long-Short: In 2016, Endeavor paid $4 billion for the UFC expecting to cash in on this round of rights negotiations; but, poor ratings (-22% on Fox, -17% on FS1 in ‘17) and the pending availability of WWE television rights, lowered expectations dramatically. Initial reports had the company seeking $450 million/year, but by late 2017 Fox was offering just $200 million/year to extend broadcast rights into 2019.
This deal makes too much sense, for everyone involved, not to be completed. Endeavor could take in as much as $380 million/year, a figure that seemed unfathomable back in December. The Walt Disney Company would acquire some much-needed content for ESPN+ and Twenty-First Century Fox (FOXA) would retain the bulk of the UFC TV package, while holding firm on their $200 million offer. Sure, they’re paying $80 million/year more for less programming; but, they retained live assets (Fox wants to be 80% live sports, news) and are still well positioned to pursue the WWE contract.
Fan Marino: It’s not nearly as rare as one might think for DIS and FOXA to share broadcast rights. Both ESPN and Fox Sports carry Big Ten athletics, Pac-12 athletics, MLS and USMNT matches.
As for the UFC fanatic, this deal means they’ll be forced to spend an additional $4.99/mo. (ESPN+) on fights, that they previously had access to with a cable subscription.
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