The television station should be proud of the UFC’s success on ESPN+. According to TKO Group Holdings president Mark Shapiro, the total ESPN package makes the organization still appealing to the promotion.

Shapiro talked about the appeal of possibly remaining with ESPN during the JP Morgan Technology, Media and Communications Conference on Monday.

“That’s where we want to be. We love the neighbors on ESPN, those that lead into us and those that lead out of us,” Shapiro said. “Having said that, we have grown into a position where we are now under-monetized. That’s just a fact. Not when we did the deal. It was a record deal, very exciting; it was triple what we were getting at FOX. But we are now under-monetized, given the viewership, given the ratings, given the demos, and we look forward to having those conversations.”

ESPN will have the early opportunity to submit a bid on the rights. The best MMA news sites have reported that ESPN can start negotiating during an early bid process in January.

Is the Era of Pay-Per-Views Done?

One of the more interesting talking points from Shaprio was the evolving idea of how pay-per-view events are streamed. Right now, a UFC pay-per-view event costs around $80. 

What a company could do instead of charging per customer would be to pay the UFC for the cost of the pay-per-view events upfront. 

“If I, for example, were launching direct-to-consumer flagship ESPN, I might think about just buying out the pay-per-view and putting it right on that flagship channel,” Shapiro said. “Like you can only get it, just like ESPN+, if you have the flagship. If you’re trying to launch ESPN flagship and whatever they might call it, that’s the working title, and you’re trying to charge $29, $39.99, whatever it might be, what better than to have a monthly quote-unquote pay-per-view that is exclusive to that platform. Now, we haven’t had those conversations with ESPN, but that’s just an example of the kind of flexibility that we’re going to bring to the conversations.”

When the UFC first went to ESPN, the promotion noticed the impact it had on ESPN’s streaming service. The company claimed ESPN added 568,000 subscribers over a two-day period. Subsequent fight cards saw increased ratings, raising the promotion’s platform on the streaming platform.

Going with ESPN also has the added benefit of other free promotion on air. With ESPN becoming involved with a sportsbook, the network will often talk about the fights during other shows to promote their sportsbook.

Netflix Has Entered the Competition

There was a time when Netflix was a company that allowed customers to order rental DVDs off the internet. But when Netflix became the first major company to pursue streaming content online aggressively, Netflix rapidly built its business into the most frequently used streaming service. MMA latest updates show the WWE, which is owned by the UFC’s parent company, signed a $5 billion streaming deal to bring Raw to Netflix.

Amazon and Apple Have Deep Pockets

Amazon has made a big splash in sports streaming over the past few seasons. In addition to a smaller deal with the WNBA and ONE Championship, Amazon signed a $1 billion streaming deal with the NFL.

Amazon was eager to get in on football broadcasting, the most valuable media rights deal available in the United States. Shapiro said the UFC nearly hopped on the bandwagon in 2018.

“I think speaking for Dana (White) and Ari (Emanuel), I would tell you we’re going to be very flexible in the next negotiation, just like we were in this one,” Shapiro said. “We sold our pay-per-view rights after all those years with the UFC doing month-to-month pay-per-views through DirecTV and cable; we ultimately sold those rights to ESPN. Before that, we were in conversations to do that with Amazon. We ultimately went with ESPN, but we got pretty far down the road with Amazon.”

But a lot has changed since 2018. In addition to Amazon flexing its muscles, Peacock, Paramount+, YouTube, and Apple TV have all emerged as contenders with deep pockets. Apple TV won the streaming rights for the MLS and has a deal with Major League Baseball.

Shapiro doesn’t want the UFC to sign a new deal without getting the best deal in a market that appears to be wide open.

“Now it’s an evolved landscape, as we’ve discussed. ESPN is on the verge of launching its own direct-to-consumer flagship. Peacock is trying to increase its penetration. Paramount+ is using sports to increase its penetration. We’ve talked about Apple, Amazon, YouTube, a lot of healthy places for us to be. But we will be flexible, so we are giving any prospective partner or current partner the best programming for the most ideal windows so that they can grow their base and retain their [subscriptions]. Very important.”