UFC tells sports broadcasters they’ll have to bid big as company aims for fourfold increase in media rights revenue
Sports broadcasters looking to capitalise on the UFC’s growing popularity will be expected to bid big when it comes negotiating with the mixed martial arts brand after network executives learned that owner WME-IMG is seeking a new 10-year agreement worth nearly four-times its current deal with Fox Sports.
The UFC’s TV rights deal was one of the main talking points when sports promotion outfit Zuffa sold the UFC to WME-IMG for $4bn this summer with the new owners stating they expect an almost fourfold increase in the media rights revenue when it comes to negotiating the next broadcast deal.
Fox Sports’ seven-year deal with the UFC isn’t due to expire until 2018 and if the 21st Century Fox-owned sports broadcaster wants to continue the relationship it can expect to pay around $450m a year, almost four times the $115m which it currently pays annually.
The package offered includes four annual broadcast windows (the Fox shows), six annual cable events, weekly programming currently carried by FS1, and Fight Pass. It will not include the pay-per-view (PPV) events, however the winning bidder will hold sway on which bouts which go to PPV.
Fox has an exclusive window to negotiate a renewal to the deal before formal negotiations begin sometime next year.
A steeper asking price wouldn’t be the only hurdle for potential broadcasters either; the UFC is reportedly handing over production of the television programming to the new partner as part of the deal.
The UFC finds itself in a strong negotiating position given that many of the other major sports organisations are locked up in deals for the foreseeable future and so any broadcaster looking to add live sports have few opportunities. The MLB, NHL, and PGA tour all have tie-ups running until 2021. In addition, the NFL’s broadcast agreements run until 2022 and the NBA until 2025.
As with many other broadcasters, Fox’s UFC broadcasting figures have suffered this year. Regardless, failing to extend the rights agreement with the UFC would see Fox Sports lose one of its biggest rating earners. The views for its 27 August card dipped below 2 million viewers for the first time since its 2011 debut. All four of its UFC events in 2015 averaged more than 2.7 million viewers.