Paramount buys UFC rights in $7.7 billion, 7-year deal

Days after finishing its merger with Skydance, Paramount has acquired the U.S. rights to TKO Group’s UFC for seven years, starting in 2026.

Paramount is paying a mean of $1.1 billion per yr, totaling $7.7 billion, for UFC’s full slate of 13 marquee occasions and 30 “Combat Nights,” the businesses mentioned in an announcement. All matches and occasions shall be streamed within the U.S. through Paramount+, and choose occasions shall be simulcast on CBS. The deal funds are weighted, with Paramount paying lower than $1.1 billion within the early years of the deal and better values later.

Paramount will not cost customers any extra charges for entry to the occasions, eliminating the pay-per-view mannequin that ESPN+ has used for sure premium UFC occasions. Disney’s ESPN had been paying a mean of $500 million for 5 years of UFC rights. That deal expires on the finish of 2025.

“The pay-per-view mannequin is a factor of the previous,” mentioned Mark Shapiro, TKO Group’s president and chief working officer, in an interview. “What’s on pay-per-view anymore? Boxing? Motion pictures on DirecTV? It is an outdated, antiquated mannequin. So, it was paramount to us – forgive the pun – the place it is one-stop purchasing, particularly for our youthful followers in flyover states. After they discover out, ‘Wait, if I simply join Paramount+ for $12.99 a month, I’ll robotically get UFC’s numbered fights and the remainder of the portfolio?’ That is a message we need to amplify.”

It has been a busy few days for each Paramount and TKO. Paramount formally bought management of the corporate to Skydance Media on Thursday, bringing in new management led by Chief Government Officer David Ellison. Additionally final week, TKO signed a five-year, $1.6 billion cope with ESPN for the U.S. rights to WWE’s premium dwell occasions. UFC and WWE merged to develop into TKO in 2023.

TKO management initially believed it could promote simply the 30 Combat Evening occasions to Paramount and the premium numbered occasions to a different media accomplice, mentioned Shapiro. When the Skydance-Paramount deal closed Thursday, the 2 sides negotiated this deal in 48 hours, he mentioned.

“We have now proven up to now with our ESPN deal that we drive [subscriptions], which is essential to David’s technique,” TKO CEO Ariel Emanuel mentioned Monday on CNBC’s “Squawk on the Avenue.”

It was vital for Ellison to purchase the complete UFC package deal given the shortage of sports activities rights accessible within the coming years, he mentioned in an interview. With Method 1 rights doubtless earmarked for Apple and Main League Baseball ready till 2028 to reorganize its main media packages, there will not be many top-shelf sports activities property coming to marketplace for Paramount to accumulate.

“UFC is a unicorn asset that comes up about as soon as a decade,” Ellison mentioned. He described himself as a UFC fan.

UFC occasions are fascinating for streamers as a result of they happen year-round — retaining followers paying for month-to-month subscriptions with much less incentive to cancel seasonally than with different sports activities. There are 43 dwell occasions yearly, consisting of 350 hours of dwell programming.

Paramount is enthusiastic about shopping for UFC’s worldwide rights to pair with U.S. rights, the corporate mentioned in an announcement. These rights come up on a rolling foundation, with about one-third of them accessible annually. UFC matches are at the moment accessible in additional than 210 international locations.

Paramount could have a 30-day unique negotiating window for every nation’s rights once they’re up for renewal, Shapiro mentioned.

“We’re getting the model, we’re getting the attain, they usually’ll get the signups,” Shapiro mentioned on “Squawk on the Avenue.”