No One Interested In Bidding Against Fox for UFC TV Deal?

Discussion in 'UFC Discussion' started by P⊚WER², Nov 22, 2017.

  1. P⊚WER² Here for the Lulz

    P⊚WER²
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    The next phase in the UFC’s plan to ascend to a higher plane of profitability may have hit a snag. According to a report from “Sports Business Journal,” the exclusive negotiating period between the UFC and current TV partner FOX has ended, and the UFC has thus far failed to attract a flood of interest from other potential bidders.

    Part of it is the price tag. As outlined in investor documents last summer, the UFC’s new owners are banking on a huge increase in rights fees to help justify the company’s enormous price tag.

    The current deal with FOX, which ends in 2018, brings in an average of $120 million a year, with the price jumping to $160 million in the final year.

    For its next deal? The UFC reportedly wants $450 million per year – a nearly threefold increase of the peak price under the current deal. At present, FOX, according to SBJ, is prepared to make an offer of $200 million a year. Not quite the leap the UFC’s owners at Endeavor were hoping for.

    So what does the UFC of the very near future stand to offer a TV partner? And how could the drive for a huge price increase affect the way fans watch UFC fights once the FOX deal expires? Perhaps unsurprisingly, the answers to these two questions could have a lot of overlap.

    With the UFC comes tons of content and a very loyal audience

    If we’ve learned anything from the UFC’s wandering broadcast positions over the years (hey, remember Versus?), it’s that hardcore fans will follow the UFC wherever it goes.

    Seriously, make up a new channel. Call it whatever you want. Put it way out there on the cable TV hinterlands, sandwiched between car shows and the network that only plays ’80s miniseries. MMA fans will grumble about it and mock it relentlessly, but come fight time we’ll find our way there. And if you’re lacking programming, just dig into the UFC’s vault. If there’s an upside to the UFC over-saturation of recent years, it’s the accumulation of hours and hours of content.

    All of that is appealing to any broadcast partner trying to draw eyes to a new network or streaming service – or both. Which leads us to the next point…

    UFC fans are already accustomed to a variety of viewing platforms

    An online stream, a cable TV channel, and a pay-per-view broadcast? That’s a fairly normal Saturday night for an MMA fan, jumping from one platform to the next. The UFC has already gotten its fans used to streaming live content (case in point, Saturday’s UFC Fight Night 122 event from Shanghai), and for the right broadcast partner, that’s a big boost.

    Maybe that explains why Turner Sports is said to be one of the more interested parties so far. Turner is a subsidiary of Time Warner, which is at the center of a suddenly troubled merger with AT&T. If the merger goes through, as the Sports Business Journal report notes, the new company “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 (over-the-top) platform.”

    The big problem there is the Justice Department’s lawsuit to block the merger. Critics say it’s a sharp shift in antitrust policy from the U.S. government, and point to President Donald Trump’s frequent criticism of CNN, which Time Warner also owns, as the real explanation for the pushback.

    The uncertainty over that merger may take a key player out of UFC negotiations, at least for a while. If AT&T has to sell DirecTV, or Time Warner has to unload Turner in order to get approval, suddenly the ability to leverage the UFC across multiple platforms might seem less attractive.

    But what, exactly, would you get if you spend hundreds of millions on UFC broadcast rights?

    Here’s where it gets really tricky. The UFC has the power to draw many millions of viewers with the right offering, but there are several tiers to UFC programming, and just because you pay for TV rights doesn’t necessarily mean you’ll get the good stuff.

    Look at the FOX deal. Events on the big FOX network started with a UFC heavyweight title fight that drew nearly 9 million viewers, but the quality of the cards soon dipped and ratings fell with it. The most recent UFC on FOX event, in July, drew some of the lowest ratings in series history. And while the UFC Fight Night events on FS1 are far more frequent, they clearly don’t represent the best content the UFC has to offer.

    As of now, the UFC still relies heavily on pay-per-view, which is the company’s single-biggest driver of revenue. The investor pitch didn’t call for a new TV rights deal that would replace that revenue, but rather add to it. That makes you think that the UFC has no plans of putting its few reliable pay-per-view draws on regular old TV, so why would a network spend $450 million a year just to get the UFC’s leftovers?

    Earlier reports have suggested that a new deal might have to come with a share in pay-per-view revenues, or at least more of a say in which bouts go where. That could be good news for fans who are feeling the financial strain of buying all those pay-per-views, and it could also help the UFC’s growth if its best and most interesting fighters get seen by more potential fans.

    The problem is finding the right deal that makes the best use of all that the UFC has to offer – and for the exorbitant price Endeavor is asking.

    As you may recall, one of the justifications for the huge bump in price was the lack of other available sports properties up for grabs in the next few years. In other words, UFC owners were expecting a lot of competition among networks, and with more bidders and fewer items up for sale, they expected prices to skyrocket.

    So far, however, it doesn’t seem like the bids are flowing quite as expected. If that doesn’t change it might mean it’s time to adjust the price – or the offer that goes along with it.


    For more on the UFC’s upcoming schedule, check out the UFC Rumors section of the site.
     
    #1
  2. chitoortiz Red Belt

    chitoortiz
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  3. Coolidge Afro-Centric At Heart

    Coolidge
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    UFC is dying.
     
    #3
  4. Coolidge Afro-Centric At Heart

    Coolidge
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    Looks like Lacey Duvalle. She did some good work.
     
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  5. chitoortiz Red Belt

    chitoortiz
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    Will Brooks' UFC career as well. :)
     
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  6. P⊚WER² Here for the Lulz

    P⊚WER²
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    [​IMG]
     
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  7. P⊚WER² Here for the Lulz

    P⊚WER²
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    I think it bet wrong when it assumed "more was better".

    They also continue to do a terrible job of introducing new fighters and making us care about them before they become famous.
     
    #7
  8. Toco Yellow Card

    Toco
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    I think I will throw in about tree fiddy
     
    #8
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  9. Toner Double Yellow Card

    Toner
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    Ferttitas conned WME.

    :)
     
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  10. KB Warrior Purple Belt

    KB Warrior
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    Put all events on fightpass and charge $500 per year.
     
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  11. MacGregor Blue Belt

    MacGregor
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    Just stream it all online, charge per event. Fuck tv.
     
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  12. Aforo88 Green Belt

    Aforo88
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    I remember reading that the 450 was a artificial number and that 250 was the real goal. Not sure if UFC is as doomed as reporters and fans makes it out to be.
     
    #12
  13. BrianC18t White Belt

    BrianC18t
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    What!?! Maybe $20 a month tops! Most people don't buy all of the PPV's. At $500, that is close to what it costs to buy all of them.
     
    #13
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  14. Verace Black Belt

    Verace
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    Is she blasian?

    I thought the girl on TS avatar was mostly asian
     
    #14
  15. PeterGriffin Brown Belt

    PeterGriffin
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    This should come as no surprise to anyone. Back when Fox tried to buy the UFC @ $3.6b, they wouldn't go higher because they felt the UFC/Zuffa overvalued their product and brand.

    The UFC tried using the quantity of their previously recorded content as a supported selling point, but to be honest, after I've watched a fight, I rarely go back and watch it a second time. Re-airing a random event from 5-6 years ago is all but useless to me. Maybe 1 in 25 fights might actually be worth watching a second go around, and I'll likely never sit down and watch a rebroadcast of an entire event. Not to mention, the people that do go back to watch stuff again, most likely aren't doing it on cable either.
     
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  16. ineverpost Brown Belt

    ineverpost
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    The fighters openly engage in behavior that the straights would label as homophobia, racism, and American imperialism. that certainly isn't helping
     
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  17. Dirge Brown Belt

    Dirge
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    ? The fight library isn't aimed at you and I but rather fans new to the sport. You get that MMA is constantly adding new casual fans rather than us guys that have been watching since 93 right?

    I don't got back and watch past fights except very rarely but I frequently run past fights when I have friends over that aren't hardcore fans to watch a PPV event and want to show them a lead up fight.

    When you consider the demographic for the UFC is 18-27, how could an 18 year old today have seen all the original Pride events? That's where the library shines.
     
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  18. skylolow Silver Belt

    skylolow
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    Usually most these TV deals get done at the eleven hour.

    Right now you submit a bid and all your doing is letting them use that against you to secure a higher bid.

    I think 450 million is high. I think it will settle around 250 and maybe 300 million max.
     
    #18
  19. fractal 93andbeyond.com

    fractal
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    That's a lot of money when 80% of the events are watered down drastically. $250 would make more sense.
     
    #19
  20. P⊚WER² Here for the Lulz

    P⊚WER²
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    No one is writing a check for $500 a yr for UFC. Besides, they'd lose money on that arrangement.

    What they need is season passes to UFC events, that allow you to a certain grade of seats in multiple states over a calendar year.
     
    #20

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