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In the words of Bruce Buffer, the voice of the Octagon: “It’s time!”
Dealmaking is the main event in media world these days. And the fight to secure distribution rights took another turn in a fracturing, precarious, eat-or-be-eaten landscape that’s remaking sports and how we consume them.
The UFC is the latest sports franchise to change media hosts. On Monday, Paramount (PARA) struck a seven-year $7.7 billion deal to become the exclusive home of all UFC events in the US. The agreement allows Paramount to stream all 13 of the UFC’s marquee numbered showcases and 30 “Fight Nights” on its platform, Paramount+. Some of the numbered events will be simulcast on Paramount’s sister broadcast network, CBS.
The announcement comes less than a week after Paramount secured a long-awaited merger with Skydance Media, offering an early victory for the new management team and a culturally influential franchise to bolster its streaming platform. The deal represents a significant pay jump for TKO Group Holdings (TKO), the UFC’s parent company. Its previous partnership with Disney’s ESPN to distribute UFC fights was valued at about $550 million per year.
In another changeup that underscores the UFC’s hopes to grow its audience and the viewing dynamics of the streaming world, Paramount+ subscribers won’t have to pay extra to watch UFC fights. This is a big deal: TKO and Paramount are moving away from the previous pay-per-view model. And the shift highlights the desire of streaming companies to beef up their offerings with variety, frequency, and recurring events.
All this is happening as media companies are splintering and recombining to outlast the demise of the pay-TV bundle, leading to a great re-shuffling of sports licensing.
Last week, ESPN reached a landmark deal with the National Football League to acquire NFL Network and other league media properties. Part of the deal, in a blurring of media distributor and sports league, will have the NFL take a 10% stake in ESPN. The NFL also has a content partnership with Skydance, giving it equity in CBS, another rights holder.
The tech giants, always on the lookout for new eyeballs, are using their cash piles to push into sports too. In turn, leagues are pressing their advantage to command massive audiences, in what is arguably the last semblance of mass culture, to extract bigger sums for the privilege of showing their content. (Don’t sleep on the Love Island viewing parties, though!)
Amazon (AMZN), for instance, was happy to oblige the NBA. Prime Video was among the media platforms to score basketball rights after Warner Bros. Discovery (WBD) lost a key media deal with the NBA.
The soaring cost to air games, which ballooned to an overall package of $77 billion over 11 years, proved a crucial factor to Warner Bros.’ loss. The media giant was on a trajectory to break itself up. And now a huge franchise has a new home.
In a never-ending merger and spin-off saga, we can expect more sports media shakeups to come.
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
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