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ESPN, Fox Sports Team Up for UFC TV-Rights Bid (EXCLUSIVE)

Rivals ESPN and Fox Sports have teamed up to bid for television rights for Ultimate Fighting Championship.

Variety has learned that the two companies have recently proposed to split the UFC TV package in a move that would bring as many as 15 fight events to new subscription streaming service ESPN+.

According to sources with knowledge of the proposal, ESPN has signaled that it would be willing to pay $120-180 million per year to add the Endeavor-owned mixed martial arts league to its collection of live-event rights.

Fox, which currently pays $120 million per year UFC rights, would be willing see that number increase to a little more than $200 million. Fox’s current package includes four Saturday-night fights per year on Fox Broadcasting and a number of fight events on cabler Fox Sports 1 that has increased annually under its current agreement. A joint bid with ESPN would see Fox’s total number of events decline slightly.

Representative for ESPN, Fox Sports, and Endeavor declined to comment.

For ESPN, a UFC deal would provide premium live-event content for the fledgling ESPN+ service not currently available on the company’s linear cable channels. ESPN+ launched last week at $4.99 per month with a mix of content including select games from MLB, NHL and out-of-market MLS games. UFC could mark the first significant deal for Kevin Mayer, who was recently promoted to run a direct-to-consumer unit at ESPN parent company Disney, and the network’s new president, James Pitaro.

Endeavor has reportedly sought $300-$400 million per year in a new television package. The agency acquired UFC in 2016 for roughly $4 billion with private equity firms Silver Lake Partners and KKR — part of an aggressive push into original sports content. While still known as WME, Endeavor bought sports agency IMG in 2013 for $2.3 billion and bought Professional Bull Riders in 2015 for a reported $100 million.

But potential network partners have balked at the high asking price to televise UFC, which also distributes fight events through its own pay-per-view and OTT platforms. UFC has suffered significant ratings declines in recent years. In 2017, Fox’s Saturday-night broadcasts fell 22% in average total viewers from the previous year at just under 2 million. “UFC Fight Night” on FS1 averaged 795,000 viewers, down 17%.

Fox signed a seven-year television deal with UFC in 2011, and late last year put in a roughly $200 million bid to secure those rights — far lower than the Endeavor asking price. A joint deal with ESPN would keep Fox in business with UFC at a time of transition for the company, which is in the process of selling the bulk of its entertainment divisions to Disney.

An exclusive negotiation period between UFC and Fox expired late last year; the MMA league has explored options from handing over the rights to a traditional network like Fox or one of the growing number of tech giants who have displayed an increased appetite for sports rights over the past 12 months. Endeavor CEO Ari Emanuel has also considered holding onto the rights and distributing over the league’s own streaming service, a possibility that received renewed speculation last month when Endeavor spent $250 million to acquire streaming provider NeuLion.

While Fox and Disney have fought each other in years past to secure various U.S. TV sports packages, UFC would not mark the first league to which these rivals have shared rights. Both companies currently split rights to several leagues including Big Ten Conference, MLS and Pac 12 football.

A post-acquisition 21st Century Fox would consist of a slimmed-down Fox Sports, Fox News, and a Fox Broadcasting uncoupled from its lucrative television studio counterpart. The company, referred to as New Fox internally, is expected to be driven primarily by sports and news programming.

 

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