Dana White On How UFC Landed Its Blockbuster $7.7 Billion Streaming Deal With Paramount

Key Concepts

• UFC media rights deal
• Paramount Plus streaming
• Pay-per-view model elimination
• Sky Dance Media acquisition of Paramount
• Average Annual Value (AAV)
• Media rights revenue comparison (UFC vs. MLB, Olympics, etc.)
• International rights sales
• UFC broadcast production control

UFC's Blockbuster Deal with Paramount

• Deal Announcement: The UFC announced a 7-year, $7.7 billion media rights deal with Paramount to stream all fights on Paramount Plus in the United States, with select events simulcast on CBS.
• Dana White's Perspective: UFC CEO Dana White stated he had a pre-existing relationship with Larry Ellison and spoke with David Ellison, CEO of Sky Dance Media, at UFC events. White noted the Ellison's "aggressive" and "all or nothing approach" to securing the deal. Quote: "These guys came in aggressive with an all or nothing approach and said, we want the whole thing. The Ellison's are brilliant businessmen and have a whole game plan behind this thing. I can't wait to be in business with them."
• Timing: The deal was finalized within 48 hours after Sky Dance's acquisition of Paramount was approved.

Financial Implications and Comparisons

• Average Annual Value (AAV): The deal is worth $1.1 billion per year in AAV.
• Comparison to Other Sports: The UFC's media rights revenue will now be nearly as much as MLB ($1.8 billion), the Olympics ($1.3 billion), March Madness ($1.1 billion), and NASCAR ($1.1 billion), surpassing the NHL ($635 million) and the PGA Tour ($700 million).
• International Rights: The UFC will continue to sell its international rights territory by territory through IMG, estimated at $250 million per year.
• Current ESPN Deal: The existing deal with ESPN, which continues through 2025, pays the UFC $350 million per year for 30 UFC fight nights on ESPN Plus.
• ESPN Pay-Per-View: ESPN also pays $250 million per year upfront for the UFC's 13 numbered events, offering them to ESPN Plus subscribers for an additional pay-per-view fee, with ESPN keeping all pay-per-view revenue.

Control Over Broadcast Production

• UFC's Stance: The UFC funds its own broadcast productions to maintain control over the look and feel of its events.
• Dana White's Commitment: White emphasized that the UFC will maintain control over its broadcast production until he leaves. Quote: "It's going to be like that until I leave."

Elimination of the Pay-Per-View Model

• Rationale: The major change is the elimination of the pay-per-view model, a staple since 1993.
• Mark Shapiro's Explanation: Mark Shapiro, president and COO of TKO Holdings, stated the UFC wanted to ditch the pay-per-view model due to its high cost (nearly $100 per month for both tiers of events), leading to increased piracy.

Negotiation Process

• Initial Strategy: The UFC initially considered dividing its media rights package among multiple partners, potentially up to five distributors, including Netflix and Warner Brothers Discovery.
• Paramount's Emergence: Paramount emerged as the likely partner for fight nights.
• Ellison's Role: David Ellison's Sky Dance finalized the deal for the entire package shortly after acquiring Paramount.

Conclusion

The UFC's $7.7 billion deal with Paramount marks a significant shift in its media strategy, moving away from the traditional pay-per-view model and consolidating its streaming rights with a single partner. The deal, facilitated by the Ellison's acquisition of Paramount, positions the UFC's media rights revenue alongside major sports leagues and underscores the growing value of MMA content in the streaming era. The UFC will maintain control over its broadcast production, ensuring the quality and consistency of its events.