Paramount wins exclusive US rights for UFC in $7.7 billion deal

Yahoo

2 days ago

(Reuters) -Paramount, days after finalizing its merger with production studio Skydance, said Monday it will pay $7.7 billion for exclusive U.S. broadcast rights to the Ultimate Fighting Championship for seven years — the first major strategic move by the combined company.
"The addition of UFC's year-round must-watch events to our platforms is a major win," said Paramount CEO David Ellison, former CEO of Skydance, calling the mixed martial arts franchise a "global sports powerhouse".
Under the agreement with UFC owner TKO Group Holdings, streaming service Paramount+ will from next year carry the complete U.S. slate of 13 numbered UFC events and 30 "Fight Nights."
Paramount+ and Paramount's CBS broadcast network will also simulcast select numbered cards, the companies said. Numbered cards have historically been pay-per-view events featuring top-ranked fighters and championship bouts but now will come at no extra cost to viewers.
Ellison, who oversaw Skydance's run of Hollywood action blockbusters and TV series, committed to increasing Paramount's investment in high-quality exclusive content, which he has called the "single biggest driver of subscriber growth".
As cord-cutting accelerates, live sports have emerged as one of the few formats still drawing mass audiences in real time. Rivals Netflix and Disney preceded Paramount in locking down major sports deals.
Netflix secured a $5 billion, 10-year global deal for WWE Raw wrestling and added two Christmas Day NFL football games. Disney's ESPN extended rights with U.S. professional football, hockey and baseball leagues and the College Football Playoff invitational tournament.
TKO Chief Financial Officer Andrew Schleimer said conversations had been taking place with Paramount since June, though the process dramatically accelerated last week after Paramount completed its drawn-out $8.4 billion merger with Skydance.
"Once the merger closed, we were off to the races," said Schleimer.
Paramount will pay an average of $1.1 billion a year to TKO Group and shift away from UFC's traditional pay-per-view model. It may seek UFC rights in other markets as they come up for bidding.
"They are not playing for near-term earnings outperformance, they are trying to create a long-term imprint on the future of the media industry to 'win,'" LightShed Partners analysts said.
UFC stages about 43 live events a year, reaching roughly 100 million U.S. fans and nearly 950 million households globally. The appealing demographics of UFC's audience, which is diverse but skews toward young men, made bidding competitive, said UFC Chief Operating Officer Lawrence Epstein.
Epstein said UFC chose Paramount for its financial strength, CBS' broad television reach and Ellison's focus on technology and long time horizon.