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In the world of mixed martial arts, a year can feel like a lifetime. Jon Jones made his return to the Octagon after a 15-month United States Anti-Doping Agency suspension to reclaim his Ultimate Fighting Championship light heavyweight strap in December. Two months earlier, MMA pay-per-view records were shattered when UFC lightweight champion Khabib Nurmagomedov defended his belt against Conor McGregor in what may go down as the most anticipated fight in the company’s history. In June, Daniel Cormier became the second man in UFC history to hold two divisional belts at the same time with a first-round knockout of then-heavyweight kingpin Stipe Miocic.
However, in the past year, nothing has made more headlines, raised more questions or had more of an impact in the world of mixed martial arts than one thing: business partnerships.
Starting with the UFC signing a media rights deal with ESPN in May 2018, the past 12 months have seen a series of agreements between MMA promotions and various multi-media providers that reshaped the landscape of the sport. Bellator MMA is now streaming on Dazn; One Championship has a North American broadcast deal with TNT and B/R Live; and the Professional Fighters League has found a home on ESPN -- the same network as its biggest competitor. All of the deals are varying in length but are multi-year and include some form of exclusivity.
Although such partnerships are nothing new, there are two key differences that come into play in the latest rounds of media agreements. MMA is being used as a core piece of content for big-name broadcast providers, and the majority of that content is behind a streaming paywall. If one were to take a stroll down memory lane, he or she might remember when the UFC was a centerpiece of content on Spike TV. “The Ultimate Fighter” reality show was a major success for both the network and the promotion, eventually leading to additional series such as “UFC Primetime,” “UFC Unleashed” and “UFC All Access.” When the UFC moved over to Fox, however, it was far less of a commodity and was overshadowed by larger sports enterprises such as the National Football League and Major League Baseball. As ratings declined over the years, so did advertising and support from the network, though the UFC never had the full weight of FOX behind it due to competing priorities in programming.
With its new deal with ESPN, the UFC is not only a major part of the network’s content offering but the star of its online streaming service: ESPN+. There are constant advertisements for upcoming UFC events on ESPN’s flagship channels and exclusive interviews with the promotion’s champions on SportsCenter, and the Disney-owned affiliate is shelling out major money to have ESPN+ serve as the exclusive pay-per-view provider for the combat sports organization. While the UFC has been an important part of a broadcast partner’s lineup before, it’s a far cry from the when Lorenzo Fertitta had to make a parking lot deal to get programming on Spike TV.
It’s not just the UFC, either. Although Bellator still shows several events on Spike TV successor Paramount Network, its biggest events are hosted exclusively on Dazn, where they are a major part of the platform’s push to gain North American viewership through combat sports. B/R Live has been starved for content, so much so that One Championship events are free to watch through the service in the hopes that consumers see other offerings and subscribe. While the PFL doesn’t receive the same push the UFC does from ESPN, it is still given substantial exposure from the sports broadcast network, including being branded with the tagline “Thursday Night is MMA Night” in its advertising.
The other major change that stems from these newfound partnerships is the fact that much of what is produced by the MMA promotions -- especially premium content -- is behind a paywall. An essential part of the UFC’s old business model was attracting casual viewers to purchase pay-per-views and other content, leading the company to focus on creating superstars and push what were deemed by many as “money fights.” With ESPN now being the sole provider for UFC events, casual viewership is no longer a major concern, as the network instead looks to increase its ESPN+ subscriber count and the UFC happily enjoys guaranteed revenue streams. Bellator is in a similar position with its most recent deal, getting a guaranteed amount from Dazn while the streaming service fights for subscriptions; and though the PFL never held pay-per-views, it too hosts many of its events behind the ESPN+ paywall.
This pivot in strategy will likely result in overall decreased viewership of the product, but a larger share of overall revenue for the streaming services. A perfect example of this is UFC 236, which is estimated to have sold around 100,000 pay-per-view buys -- less than half of what it was expected to have made under the old multiple provider format. That number may seem dismal, but if the assumptions are true that ESPN is getting to keep 100 percent of the money generated through these buys in exchange for a set licensing fee it has negotiated with the UFC, then the actual return on UFC 236 is close to $6.5 million, or 200,000 buys under the old 50/50 split.
There is no doubt that these deals will have unintended benefits and consequences, as most partnerships do. At the moment, it seems that the hardcore fanbase will be further leveraged to pay for content while streaming services continue to put together bundles of programming that seem an awful lot like their cable counterparts. While we will continue to see stunning upsets, emphatic finishes and fighters who will eventually become our new favorites, the way in which we watch them will continue to evolve, along with the deals that dictate the method of consumption.