Rights deals surrounding rings sports are shaping new directions for ESPN’s direct-to-consumer streaming service and "New Fox," the entity that could emerge in the wake of a proposed sale of myriad 21st Century Fox Inc. assets.
Through a multiyear agreement, ESPN (US) properties will become the exclusive U.S. linear and digital homes to the UFC mixed martial arts circuit, beginning in 2019. As such, ESPN will gain control of all of the UFC content not broadcast in-house via pay-per-view or via its subscription service, UFC Fight Pass.
Starting in January 2019, ESPN+ and ESPN will showcase 42 live events, 30 of which will feature a full card of 12 UFC bouts. ESPN+ linear networks will air 10 exclusive events, plus UFC pay-per-view preliminary fights. ESPN will offer 20 exclusive events, all preliminary fights for "UFC on ESPN Fight Night" programs and various related content, as well including an exclusive all-new season of "Dana White's Contender Series," beginning in June 2019 and exclusive pre- and post-event shows for all 30 of the "Fight Night" cards on ESPN+ and ESPN.
Lee Berke, president and CEO of consultancy LHB Sports Entertainment and Media, said in an interview that the deal, reportedly worth $1.5 billion over five years, could represent "a new paradigm" for the Walt Disney Co.'s sports programmer, since much of the content is directed toward ESPN+. The streaming service launched April 12, offering an array of live event and original programming for a monthly price tag of $4.99 or $49.99 for a full year.
"To build ESPN+, Disney needs thousands of events to attract and retain subscribers," he said. "In the case of UFC, it features year-round programming appealing to a young audience."
ESPN succeeds Fox Sports as UFC's linear partner, with FOX (US), FOX Sports 1 (US) and FOX Sports 2 (US) having served as home to various MMA content since 2011.
FOX, meanwhile, is poised to step into the ring with sports entertainment kingpin World Wrestling Entertainment Inc. for its "SmackDown Live" franchise. FOX, according to published reports, has reached an agreement in principle on a five-year, $1 billion deal that would give it the rights starting in the fall of 2019 to "SmackDown Live," which would serve as the broadcast network's Friday night programming. A WWE deal would mean FOX has wrested away "SmackDown Live" from NBCUniversal Media LLC's USA (US), which will remain the home to WWE's "Raw" on Monday nights, according to reports.
Michael Hickey, an analyst at Benchmark Co., said in an interview that the pending deals legitimize WWE’s move to presenting two live shows.
"If the reports are true, WWE has driven a 3x jump in rights fees, compared with just a 50% rise during the last round of negotiations," he said, noting that the hike evidently "made it difficult for NBCU to digest" both franchises.
FOX Sports declined to comment about "SmackDown." WWE declined to discuss the status of "Raw" and "SmackDown" rights.
Adding "SmackDown" would represent the second big rights acquisition for 21st Century Fox since it reached a deal in December 2017 to sell myriad international and domestic assets to Disney in a stock deal valued at some $52.4 billion. In January, Fox Sports scored a five-year, $3.3 billion deal with the National Football League for a "Thursday Night Football" package, kicking off during the 2018 season.
Under the Disney deal, New Fox would be spun out as a U.S.-centric company favoring news and sports. New Fox's portfolio would comprise FOX, its owned TV stations, FOX News Channel (US), FOX Business Network (US), FS1, FS2, Spanish-language service FOX Deportes, as well as its stake in Big Ten Network LLC. Notably, Comcast Corp. is considering mounting its own $60 billion all-cash challenge for the assets.
The new rights deal, along with its existing football and Major League Baseball rights, makes FOX "well-positioned to draw significant live audiences," Berke said. Impressions aside, the sports programming also holds value because New Fox would not own a TV production studio to help produce entertainment programming to fill its broadcast network's roster.
Hickey said Fox should provide a high level of promotion for "SmackDown" out of "TNF," which would provide further validation for the sports entertainment fare. It could also help push more subscribers to the streaming service WWE Network, according to Hickey.
Berke said the loss of UFC will not hurt FOX that much, as it only airs quarterly cards. UFC fare, however, was a staple on FS1 and a major component of FS2's schedule.
