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The $400 million dollar TV question for UFC: Balls (Amazon 100M subs) or brains (ESPN/Fox)?

By Zach Arnold | April 18, 2018

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Venture capitalists want guaranteed cash. It’s their fiduciary responsibility to keep foreign ownership of company debt very, very happy. It’s why the reported ESPN/Fox dual offer for television rights is so tempting. An offer reportedly worth $400M/year with two stable broadcast television partners.

Betting against Disney is risky. Rejecting $400 million dollars yearly is crazy. Disney is all-in with the new ESPN+ online streaming platform. They need UFC.

The risk for Disney is that they are still renting sports content. They are not owning the content they produce, which is why Netflix has as big a market share as Disney right now. Paying $200 million a year for limited UFC rights is a huge premium for Disney. ESPN+ faces an enormous, uphill climb.

Which is why Wednesday’s memo from Amazon king Jeff Bezos about 100 million Amazon Prime subscribers is a game changer. My argument for a UFC/Amazon marriage was based on 80+ million subscribers. 100 million subscribers is 25% more juice.

ESPN & Fox are offering $400 million in guaranteed cash yearly. Amazon can’t make that offer but what they can offer UFC is the kind of upside on supercharging merchandising sales and streaming of live events that no one else in the world can compete with. I am a believer that Amazon’s marketing power is worth tens of millions of dollars to UFC on merchandising alone. Reebok would be estactic.

Amazon was always a dark horse, at best, to get a foothold in the UFC television negotiations. Amazon can offer potential but no guarantees. Venture capitalists sell potential but take the easy money when it’s on the table.

If Lorenzo & Frank Fertitta still owned UFC, would they take the guaranteed cash or would they gamble and become pioneers by expanding their sports empire with Jeff Bezos in their corner?

If current UFC ownership won’t take the plunge with Amazon, a major sports entity will do so and reap the future rewards.

Topics: Media, MMA, UFC, Zach Arnold | 2 Comments » | Permalink | Trackback |

2 Responses to “The $400 million dollar TV question for UFC: Balls (Amazon 100M subs) or brains (ESPN/Fox)?”

  1. Diaz's packed bowl says:

    How many of the 100 million are fair weather prime members like myself? I try the free trial prime membership for a month every year or so. 100 mil is an inflated #. At least rounded up, similar to danas claim that May Mac was the biggest money maker ever.
    Why would they go amazon when UFC just bought a streaming service nuelion?

  2. OT says:

    Another possibility involves the UFC working with Turner.

    “Turner will launch its own OTT sports service next year and announced Aug. 17 that a new three-year deal with UEFA, the European soccer league, will be a core pillar of that offering.”


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