In 2021, the NFL signed an 11-year broadcast deal with several major networks and streaming platforms valued at an astounding $111 billion. Over the summer, the NBA secured an 11-year agreement worth around $76 billion. Meanwhile, the MLB rakes in nearly $12.6 billion annually from ESPN, Fox, TNT and Apple. However, Mixed Martial Arts’ (MMA) most popular league, the UFC, isn’t yet in the same stratosphere as these heavyweights of American sports. It currently has a five-year, $1.5 billion domestic media rights deal with ESPN. For some fans, knockouts aren’t as thrilling as shutouts. But as linear TV attempts to stave off oblivion and streaming services hunt for major audience attractions, the market for sports rights has never been hotter. Capturing a critical mass of eyeballs directly translates to big bucks—a dynamic that bodes well for the UFC’s upcoming media rights negotiations.
The UFC’s current deal with ESPN is set to expire in 2025, and talks about the future of this partnership will start soon. While today’s hot market offers significant upside, the pressure to secure a lucrative deal is equally intense. Last year, UFC’s owner, Endeavor, merged the organization with the WWE to form a new combat sports entertainment powerhouse: TKO Group Holdings. The beefed-up organization is hungry for a big improvement in the UFC’s broadcast partnerships.
UFC CEO Dana White has made it clear that the next rights deal will be significant. “Our rights deal is going to be a big deal coming up here,” he told CNBC in July. “Who knows? We could end up like the NBA and the NFL, where we end up on multiple channels instead of just one. It’s all moving and changing so quickly.”
Desperation, market economics, competition and thrilling sports action are all colliding. But what value does the UFC bring to potential media partners, and which major players are most likely to emerge as contenders for the rights?
ESPN: the current home of the UFC
Both the UFC and ESPN are interested in renewing what has been a mutually beneficial partnership. ESPN’s sports-centric brand provided UFC with a level of legitimacy and visibility that its previous deal with Fox may not have. In return, the UFC helped drive early subscription growth for ESPN+.
“It’s our preference to stay at Disney [ESPN’s owner] because of this history,” TKO president Mark Shapiro said in March. Then again, he also teased that “three different platforms” have inquired about the negotiating window for UFC rights and “we might be able to sit down with them to discuss moving to a different platform, which we will do if we can’t get the right deal.”
Whether Shaprio’s comments were strategic public posturing or a genuine indication of interest is irrelevant. The reality is that Disney faces challenges of its own. Over the last three quarters, ESPN+ has lost more than 1 million U.S. subscribers, about 4 percent of the total. Venu Sports, the joint sports venture between Disney, Warner Bros. Discovery (WBD) and Fox, which was meant to launch before the NFL season, has encountered legal issues that may prevent it from debuting entirely. On top of all that, Disney plans to roll out a full ESPN streaming service next year—a costly but vital effort that will help decide the future of the brand.
Even as ESPN attempts to move away from “The Worldwide Leader in Sports” moniker, it must house a top-tier collection of sports rights to maintain its market position. Facing these obstacles with the UFC will be hard enough; doing so without won’t be easier.
Netflix: an emerging sports player
Netflix (NFLX) has methodically built out its programming catalog and is now patiently turning its attention to live sports to entice new subscribers. It has taken a measured approach, testing the waters with special one-off events such as The Netflix Cup and November’s boxing match between Mike Tyson and Jake Paul. There’s also high visibility/low volume partnerships like airing a few Christmas day NFL games over the next few years.
Its most significant foray into sports entertainment is the 10-year, $5 billion deal to air UFC’s corporate sibling WWE Raw and other WWE programming beginning in 2025. So, the streamer already has a strong foot in the door with parent company TKO. (Dana White also popped up at Netflix’s The Roast of Tom Brady. Make of that what you will). UFC could be a logical next step for Netflix.
The sports league’s ace in the hole in any potential talks is tonnage; the UFC hosts around 40 live events every year. This would provide near weekly programming to any new exclusive home, feeding regular habitual engagement that helps to reduce churn. That’s absolutely vital to Netflix for several reasons.
Popular sports provide a reliably renewable audience with a safe viewership floor, which is often a more efficient content investment than the hit-or-miss waterfall of unknown scripted/unscripted programming. For every unexpected breakout from an unknown like Squid Game and Baby Reindeer, there’s a crater of forgotten titles. Nearly 4,500 TV seasons and 6,900 films on Netflix accrued less than 1 million hours of global viewership over the second half of 2023, per the company’s Engagement Report. While the UFC won’t have the same ceiling as mega-hit Bridgerton, its consistent fanbase provides a steady stream of viewers that can help balance the company’s investments.
Moreover, UFC events would boost Netflix’s ad-supported tier, which is sagging with 40 million monthly active users (which is likely accounting for how many average viewers use one individual subscription as opposed to the total of individual ad-tier subscribers). This tier is crucial for Netflix as it seeks to ramp up ad revenue, a key metric that will partially replace subscriber growth as a main performance indicator beginning in 2025 when the streamer stops reporting subscriber numbers. The company has already been forced to lower the rate it was charging advertisers thanks to its slow start and new competition from Amazon. Supercharging this endeavor is key to maintaining investor confidence. Netflix, like every public media company, needs a growth narrative to sell Wall Street on.
Given the UFC’s existing roster of major sponsors—including Anheuser-Busch, EA Sports, Revlon, and more—its 25-ish non-pay-per-view events per year could provide valuable ad inventory. And since seven of the eight premium streaming services over-index with women in the U.S., according to Parrot Analytics, where I work as a Senior Entertainment Industry Strategist, the UFC’s male-skewing audience should be a welcome addition.
Lastly, Netflix’s global footprint aligns with the UFC’s international popularity. With current champions hailing from countries like Brazil, South Africa, Russia, Mexico, the U.S. and beyond, the UFC’s appeal transcends borders, making it a perfect fit for Netflix’s worldwide ambitions.
Warner Bros. Discovery: a dark horse contender
Sometime this month, WBD wants to begin charging Max subscribers an extra $10 for access to live sports via the Bleacher Report add-on. As a certain Taken villain once famously said with a heavy dose of sarcasm: “Good luck.”
This will be easier said than done, especially with the company losing the NBA after this upcoming season (and trying desperately to replace it with a collection of more niche sports offerings). But with Venu temporarily halted, cable network TruTV rebranded as TNT Sports, and $41.4 billion in debt, WBD has to try something.
Lucky for them, UFC fans are now accustomed to being monetized twice: once through ESPN+ subscriptions and additional pay-per-view (PPV) events, which cost $79.99 a pop.
An average UFC event generates between 300,000 and 2 million PPV buys, per BetMGM, with UFC 229 generating a record 2.4 million buys. In 2019, the UFC was generating around $250 million annually in PPV revenue. Gate revenue hit a record $17 million for a Conor McGregor-led card in 2016, though White is expecting $20 million-plus from Las Vegas’ The Sphere event. From 2021 to 2023, the company held 13 or 14 PPV events annually. The UFC now receives a set fee from ESPN to cover all PPV, but prior to that it kept a roughly 60 percent cut from its deals with distributors. A revenue-share model would likely represent just a drop in the bucket for WBD, but every cent helps, and the UFC is open to returning to that approach.
“The idea of us taking [PPV’s] back in-house or splitting the package, the half-package, and selling to somebody else, we’re up for all of it,” Shapiro said recently. “That’s the biggest message that I can give to all the bidders or potential suitors.”
If only we could get David Zaslav squaring off against Bob Iger as the main event of the next UFC card…
Conclusion: A high-stakes bidding war
Several other major players could sniff around the UFC. Alphabet wants to position the YouTube ecosystem as the future of television and UFC rights would complement NFL Sunday Ticket. Amazon’s dominant e-commerce foundation is most capable of monetizing on-file credit card information in ways beyond streaming content. Apple, which has already secured exclusive distribution to MLS, might love a fully in-house arrangement with the UFC. Any number of legacy media streamers may also see the upside the UFC can bring.
Regardless of who ultimately wins the UFC sweepstakes, the scarcity of major available sports properties and the increasing demand for content tailored to advertising and subscription models position the UFC as a highly coveted prize in today’s media landscape. Whoever wins the sweepstakes will not only secure a valuable asset but also signal the future of sports media consumption.