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UFC highlights growth in media talks

UFC highlights growth in media talks

By John Ourand, Staff Writer

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The UFC’s top executives have met with media companies across the country over the past month trying to whip up interest in the sport’s media rights.

So far, the response from many traditional media companies has been underwhelming, at least at the price the UFC is trying to get.

Multiple sources said the UFC is trying to craft a media rights deal that averages $450 million per year, a huge increase over the rights fee Fox currently pays.

The UFC’s seven-year deal with Fox ends next year. The current Fox deal is worth an average of $120 million per year, with the fee jumping to $160 million in the final year of the deal, sources said.

Fox allowed its exclusive negotiating window to lapse early last month without submitting a formal bid. Sources say the two sides would like to continue their deal, but as of now are far apart in price. Fox Sports President Eric Shanks told Endeavor CEO Ari Emanuel and co-President Mark Shapiro that Fox was prepared to make an offer worth around $200 million per year, less than half of the $450 million per year average the UFC wants.

The UFC’s seven-year TV rights deal with Fox ends next year.
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Talks between the two are ongoing. Shanks has remained in steady contact with Emanuel and Shapiro, sources said.

Executives with CBS, ESPN, NBC Sports and Turner Sports took the UFC’s meetings over the past month, during which UFC executives presented a deck outlining the growth of the UFC and justifying why its media rights should increase.

Turner Sports executives showed the most interest in a potential deal, sources said. But uncertainty over the pending AT&T-Time Warner merger, which currently is experiencing trouble as it moves through the Justice Department, has dampened enthusiasm for a UFC deal. A merged AT&T-Time Warner could let DirecTV handle the UFC’s pay-per-view, AT&T oversee UFC’s mobile apps and Turner use UFC content on its channels and OTT platform.

Every TV network executive interviewed for this story said that any media rights fee increase would have to include better fights that previously would have been showcased on pay-per-view. They also said they expect the UFC to try and split some packages to bring in other interested media companies.

To that end, the UFC has had a lot more interest in the digital arena, having taken meetings with digital providers, including Amazon and Oath, the combined AOL-Yahoo company. It’s not clear whether the UFC would sell its entire package to one of these providers, try to carve out a streaming package for them or just use them as a stalking horse to get traditional TV providers to pay more.

Complicating matters is the fact that WWE’s rights are up in the fall of 2019. WWE’s scripted programming and audience makeup is much different than the UFC’s. But a channel like FS1 could look at WWE as acceptable replacement programming in case it loses UFC rights.

WWE executives met with Fox executives in Los Angeles earlier this summer, with Shanks meeting with the WWE’s top executives, including George Barrios, chief strategy and financial officer, and Paul “Triple H” Levesque, executive vice president of talent, live events and creative.

The meeting was part of a WWE road show where it spoke with various networks, including CBS and Disney, plus digital companies like Amazon and YouTube to show the power of its programming.

Because WWE’s exclusive negotiating window with NBC doesn’t end until the spring of 2018, they did not negotiate contract points or talk about rights fees. WWE will make around $180 million from its NBC deal in 2017.

Ironically, Endeavor has served as an adviser to WWE Chairman and CEO Vince McMahon.


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