UFC Looking to Increase TV Rights Fees by 160%+

The UFC’s contract with Twenty-First Century Fox (FOXA) expires at the end of 2018 and the ultimate-fighting organization is currently negotiating its next television deal (PPV not included) with several broadcast outlets; after turning down $200 million/year, as part of a multi-year extension with FOXA. The UFC, which will receive $160 million in the final year of the expiring 7-year contract, has been looking to increase that revenue stream to between $420-$450 million annually; but with FS1 main cards down 13% YOY (to 866,000) and FOX specials down 30.9% YOY (to 2.1 million), there have been no takers to date. CBS, NBC, ESPN, Turner Sports, Amazon and Oath are potential destinations, should the UFC walk away from FOXA.

Howie Long-Short: Turner (TWX) is most interested, but with the UFC wanting to wrap up negotiations later this month (or early 2018 at the latest) and Turner tangled up in the AT&T-Time Warner troubled merger, the timing may not be right. They also lack the broadcast network necessary to draw UFC’s biggest audiences. It’s certainly possible that the first offer (the Fox offer), is the best offer the UFC is going to receive (in terms of both money and reach). The UFC might hit $420 million in television revenue, but it’s going to come from linear and streaming rights combined.

Fan Marino: NBC (CMCSA) would be a logical destination (NBCSN has a comparable audience size to FS1) as they also own the rights to Al Haymon’s “Premier Boxing Champions” series, but the framework of that deal is far different than what Dana White and Co. are looking for. Haymon isn’t getting hundreds of millions in guaranteed annual payments; he’s purchasing time on NBC (at least $20 million annually) and spending additional money to promote and market the fights. As a boxing fan, I’m glad he is; we’re getting world class fighters (see: Adrian Broner, Deontay Wilder), in prime-time (i.e. not 12:30a EST), for free (i.e. not on PPV).

UFC is facing its most important contract negotiation

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Author: John Wall Street

At the intersection of sports & finance.

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