UFC enjoyed another record-breaking year for revenue in 2023 but there’s plenty on the horizon that could help or hurt the company in the next year.
Perhaps the most monumental date to watch will be April 15, which is when the ongoing antitrust class action lawsuit filed against UFC by several former fighters will go to trial in Nevada. The lawsuit, which was first filed all the way back in 2014, has a trial date set in April with both the plaintiffs and the defendant gearing up for a legal fight in court.
The former fighters have claimed UFC engaged “in a scheme to acquire and maintain monopsony power in the market for elite professional MMA fighter services,” and use three components to achieve this goal including acquisitions, exclusive contracts and coercion.
On Tuesday, the UFC owners at TKO Group Holdings addressed the upcoming trial while noting that closed door discussions between the two parties involved are still ongoing.
“As we’ve always said and this is our consistent message since we started talking about this case publicly, we believe strongly that the facts and the law are on our side and we look forward, in terms of timing, to making our arguments to a jury at trial,” TKO chief financial officer Andrew Schleimer said during the call.
“But as is typical in a case like this, we’ve been engaged in private mediation simultaneously with our trial preparation. That’s what we’re prepared to comment on at this time.”
The fighters who filed the lawsuit are seeking damages between $894 million and $1.6 billion.
UFC TV Deal Negotiations Start Soon
When celebrating another robust year financially for UFC with revenues hitting $1.3 billion in 2023, it doesn’t take long to discover those numbers could skyrocket even higher very soon.
UFC will soon begin negotiations on a new broadcast rights deal with the promotion’s current contract with ESPN coming to an end in 2025. That seven-year partnership maintained exclusive rights for all UFC programming including pay-per-views on ESPN and ESPN+, which was a landmark deal at the time it was first announced.
Many believe UFC will be seeking at least double in broadcast rights fees for the new deal. It’s tough to imagine ESPN won’t try to retain UFC, especially given how successful the current partnership has been for both brands.
That said, it’s an ever-changing market where sports rights are concerned with the NBA preparing for a new TV deal right now that could be worth more than double what they currently receive, which sits around $2.6 billion per year. The NBA deal could reset the market for sports rights deals, which in turn could have some adverse effect — positively or negatively — on the UFC.
There’s also the new streaming service that ESPN/Disney will launch later this year with Warner Bros. and FOX that will feature sports channels from all three networks under one banner. It’s possible the three studios are teaming up to prevent bidding against each other to inflate sports rights packages in the future.
That said, TKO CEO Ari Emanuel believes the UFC is positioned for another huge deal once negotiations begin, especially with so many potential partners looming out there but still praising the current relationship shared with ESPN.
“We feel very strongly about that and our partnerships that we currently have,” Emanuel said. “But there’s many players in the marketplace just based on the subs we have at Comcast with the [premium live events with WWE] and what we’ve done for ESPN/ESPN+ with the UFC.
“I think [Netflix is] now a player in this and everybody is paying attention to them and what they’re going to do and now with the new entry with FOX, Warner Bros. and ESPN. That being said, I think they’re all moving toward a linear [streaming] service and I think our assets are going to be really important in that conversation. We’re going to see what happens with the NBA, I think that’s going positively and so we feel very good in general about where sports rights are going. It’s all on an upward trend.”
TKO president Mark Shapiro also pointed out that rumors about the so called “bubble bursting” with sports rights has been swirling for years yet various leagues continue to ink landmark deals. For instance, TKO just recently closed a massive 10 year, $5 billion deal to bring WWE Raw to Netflix.
“For the better part since we bought the UFC, it’s just been commentary about sports rights, the bubble, when’s it going to burst, when’s the cap coming,” Shapiro said. “We certainly faced a lot of those headwinds on the WWE renewals. But I’ll just remind you — the platforms are going to pay for premium content and we’re blessed by having two great premium content properties in the WWE and UFC. When you have premium content and you have several bidders, which clearly are out there, and you have a move from linear to digital but you still have to keep linear alive, you’ve got a pretty robust marketplace.
“Sports, live sports especially when you have what we have, which is volume and year round, we’re sitting at a really good place.”
Emanuel also addressed concerns over more competition facing the UFC ahead of this TV deal with the PFL also having a home at ESPN and recently combining forces with Bellator MMA.
None of that concerns Emanuel or the powers-that-be at TKO because they know without a doubt that the kinds of crowds the UFC draws both in attendance and on television can’t be matched by anybody else in the same business.
“Just do yourself a favor, look at the ratings that just happened,” Emanuel said hinting at the UFC Mexico City card versus the PFL vs. Bellator card from this past weekend. “We’re happy with competition. Not only are the PFL and Bellator competition but football’s competition, basketball is competition, video games are competition, there’s a lot of competition and there’s a lot of competition in the MMA space.
“That being said, we perform significantly better than them as it relates to the ratings that took place recently.”
More UFC and WWE Crossover Opportunities
A successful UFC 298 event in Anaheim was followed two days later by WWE Raw taking place in the same building, which is just the tip of the iceberg for what TKO has planned for the two organizations in the coming years.
Just after the merger was completed, WWE president Nick Khan teased “all-star TKO weekends” with the possibility of putting on a Smackdown card on Friday followed by a UFC event on Saturday and then a major WWE event on Sunday or perhaps an episode of WWE Raw that following Monday.
Add to that, UFC lightweight contender Michael Chandler made an appearance during WWE Raw where he cut a fiery promo aimed at Conor McGregor. This past weekend at UFC Mexico City, WWE superstar Rey Mysterio Jr. made an appearance and helped promote the event in Mexico.
“As you saw in Mexico City, there was a WWE star there. As you saw at the WWE event, [Michael] Chandler was there promoting stuff,” Emanuel noted. “So there’s a lot of crossover there and there’s some cross synergies that we recognize but there will be more because that was just two of our events and there’s more to come.”
When it comes to a weekend long takeover for a city or an arena featuring events from both UFC and WWE, Emanuel said that will definitely happen but those plans will likely unfold in 2025.
