UFC seeks over $1 billion per year for next TV rights deal

The Ultimate Fighting Championship hopes to earn more than $1 billion a year from its next media rights deal, more than double what current contract holder ESPN is paying, according to people familiar with the matter.

The UFC’s agreement with The Walt Disney Company’s ESPN expires at the end of 2025, and the two sides will enter an exclusive negotiating window later this month. The MMA league has begun informal conversations, said the people, who requested anonymity to discuss private talks.

TKO Group Holdings, which owns the UFC, is looking to capitalize on the strong sports rights market. Most of the major U.S. leagues have signed long-term deals, making the UFC one of the biggest sports franchises in the market for years to come.

“Discussions surrounding our upcoming domestic rights renewal have not yet begun, so we do not have any expectations regarding pricing,” the company said in an emailed statement on January 7. “By mid-April 2025, we are “We are in an exclusive negotiating window with ESPN and look forward to having productive negotiations when the time comes.”

TKO shares rose 2.8% to $146.38 in New York.

The UFC hopes to continue its business relationship with ESPN, which has a deal to have regular fights with many of the fights aired on its namesake cable network and another deal to air on its streaming service, according to people familiar with the matter. Pay-per-view event. The two deals combined will pay the UFC about $450 million per year. The partnership with ESPN, the most powerful sports media company, has increased the visibility of the UFC, which has been on the fringes of mainstream culture for many years.

“We started working on ESPN seven years ago and it was a rocky relationship at first,” UFC CEO Dana White explained on Bloomberg TV in November. “But now I feel very comfortable at ESPN. Happy, it’s a good relationship and I don’t mind staying with them.”

In recent years, however, America’s largest sports leagues have split their rights among multiple media companies in an effort to maximize revenue. The NFL does business with at least six different partners, and the NBA just struck new rights deals with three partners. TKO has discussed splitting its rights among multiple parties.

The next media rights deal will be the largest ever for the UFC and will be crucial for TKO. The company’s shares are up 74% in 2024 on optimism about the future of sports media.

TKO CEO Ari Emanuel and President Mark Shapiro are leading the negotiations and believe they have at least four to five potential buyers for the rights, people familiar with the matter said. These include Amazon.com Inc., Netflix Inc. and Warner Bros. Discovery, which just lost the rights to the NBA, as well as Google’s YouTube, at least for pay-per-view games.

All of these companies are seeking sports rights to boost their streaming services. ESPN is about to launch a new service, and Amazon has become the biggest buyer of sports rights among technology companies. Last year, TKO signed a 10-year deal worth $5 billion to stream its World Wrestling Entertainment show Raw exclusively on Netflix starting in 2025.

(Update on TKO shares in fifth paragraph.)

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