UFC had a record-breaking revenue year in 2023, but faces potential challenges in 2024 including an antitrust lawsuit from former fighters and upcoming negotiations for a new broadcast rights deal, while also exploring crossover opportunities with WWE.
UFC had a record-breaking year in 2023. But, the future holds both potential boons and pitfalls.
April 15 is a date to circle on your calendar. Why? It’s the trial date for the ongoing antitrust class action lawsuit against UFC. This lawsuit was initiated by several ex-fighters way back in 2014.
The fighters allege that UFC engaged in a scheme to monopolize the market for elite MMA fighter services. They claim the company used acquisitions, exclusive contracts, and coercion to achieve this.
On Tuesday, the bigwigs at UFC’s parent company, TKO Group Holdings, spoke about the upcoming trial. They mentioned that behind-the-scenes talks are still happening between the two parties.
TKO’s CFO, Andrew Schleimer, was pretty confident. He said, “We believe strongly that the facts and the law are on our side.” He’s looking forward to making their case in court.
But, there’s also been private mediation happening alongside trial prep. The fighters are seeking damages between $894 million and $1.6 billion. That’s a lot of dough.
UFC’s TV deal negotiations are about to kick off. The company had a robust financial year in 2023, with revenues hitting $1.3 billion. But, those numbers could soon skyrocket.
UFC’s current contract with ESPN ends in 2025. The new broadcast rights deal will be negotiated soon. The seven-year partnership with ESPN included exclusive rights for all UFC programming, including pay-per-views.
Many think UFC will seek at least double in broadcast rights fees for the new deal. ESPN will likely try to retain UFC, given the success of the current partnership.
But, the sports rights market is ever-changing. The NBA is prepping for a new TV deal that could be worth more than double their current $2.6 billion per year. This could impact UFC’s deal, either positively or negatively.
ESPN/Disney is launching a new streaming service this year with Warner Bros. and FOX. This service will feature sports channels from all three networks. The three studios might be joining forces to avoid bidding wars that inflate sports rights packages.
TKO’s CEO, Ari Emanuel, believes UFC is well-positioned for another huge deal. He’s optimistic about the many potential partners out there.
Emanuel said, “We feel very strongly about that and our partnerships that we currently have.” He mentioned the success of their partnerships with Comcast and ESPN/ESPN+.
Netflix is now a player in this game, and everyone’s watching them. Emanuel thinks their assets will be important in the conversation. He’s optimistic about where sports rights are going.
TKO’s president, Mark Shapiro, also dismissed rumors about the “bubble bursting” with sports rights. He pointed out that various leagues continue to ink landmark deals.
Shapiro said, “We’re blessed by having two great premium content properties in the WWE and UFC.” He believes they’re in a robust marketplace.
Emanuel isn’t worried about more competition for UFC. He’s confident that UFC’s crowds, both in attendance and on TV, can’t be matched by anyone else.
“Just look at the ratings,” Emanuel said. He’s not worried about competition from PFL, Bellator, or even other sports and video games.
There are more UFC and WWE crossover opportunities on the horizon. A successful UFC 298 event was followed by WWE Raw in the same building. This is just the beginning of what TKO has planned.
UFC lightweight contender Michael Chandler appeared during WWE Raw. WWE superstar Rey Mysterio Jr. promoted the UFC Mexico City event.
Emanuel said, “There’s a lot of crossover there and there’s some cross synergies that we recognize.” He hinted at more to come.
As for a weekend-long takeover featuring UFC and WWE events, Emanuel said that’s definitely happening. But, those plans will likely unfold in 2025.