When FOX deal ends in 2018, UFC to ask for 450 million per year
In 2011 the UFC entered the mainstream, via a seven-year deal with FOX. That deal reportedly averages around $115,000,000 per year….
In 2011 the UFC entered the mainstream, via a seven-year deal with FOX. That deal reportedly averages around $115,000,000 per year.
WME-IMG paid around $4,000,000,000 for the UFC, and need to make a return on their investment. An investor document last month revealed that the new owners planned to increase revenues from FOX. According to a new article by John Ourand and Liz Mullen in Sports Business Daily, when the current deal ends, the UFC will be looking for $450,000,000 per year, for ten years.
While the jump appears astronomical, most major sports are tied up for many, many years, and the UFC has fervent fans in the much sought after but hard to reach age group.
Negotiations are expected to begin next year, and FOX has a window of exclusivity, late in 2017, and is believed to be the front-runner. FOX put together a $3,600,000,000 losing bid for the UFC earlier this year. WME-IMG co-CEO Ari Emanuel is expected to be in the blue corner, with FOX Sports president Eric Shanks in the red.
The package the UFC will take to market will include the rights to four annual broadcast windows that Fox now holds, six annual cable events and weekly programming on Fox Sports 1, plus the UFC’s over-the-top Fight Pass service. It is not expected to include the UFC’s lucrative pay-per-view business, which will likely be retained by WME-IMG. But some media executives believe any winning bidder will have more of a say in what matches will be part of the UFC’s pay-per-view events. Whether a network will share in some of the PPV revenue is a deal point that will be negotiated, sources said.
The new package also could include the significant change of having the networks produce the events, sources said. The UFC now pays all production costs, so that change would increase costs for the media partner.
While networks pay more for exclusivity, the UFC also is considering splitting the package among two or more TV networks.
Leading contenders were identified as:
•FOX Sports
•ESPN
•Turner Sports
•NBC Sports Group, which owns VOX media, parent to SB Nation, which runs a number of popular MMA sites.
•There is also the intriguing possibility of a digital media company Amazon, Facebook, Google, and Twitter each of which has a continuing interest in sports rights packages.
All the potential changes are intriguing but one – having the network produce the event. Like Apple Inc, the UFC enjoys a tremendous advantage over competitors in the enormously compelling but hard to define look and feel. The painstaking creation of the look and feel in the early years under ZUFFA is one of the central if unheralded cornerstones of the UFC’s monumental success. Any effort to foist that off on another company is like a company buying Apple, and then cutting a deal where a third party develops the user interface.