The Perils and Promise of UFC's Partnership with ESPN

Scott Harris@ScottHarrisMMAMMA Lead WriterJanuary 16, 2019

Dana White
Dana WhiteJulio Cortez/Associated Press

This Saturday, the UFC holds its first event over ESPN's metaphorical airwaves.

All the ingredients are present for a splashy debut. UFC Fight Night 143—or UFC Fight Night on ESPN+ 1, if you prefer the event's charismatic official moniker—will go down on the Worldwide Leader's new subscription service known as ESPN+.

It's a fascinating deal, with an ESPN statement placing the value at $1.5 billion over five years. That's not as high as the $400 million per year UFC owners originally hoped for, according to MMA Fighting insider Dave Meltzer, but it's still pretty solid.

Thirty events will air on the ESPN TV networks, with 20 coming through the stream. Pay-per-views will remain essentially unchanged.

ESPN president James Pitaro
ESPN president James PitaroMike Stobe/Getty Images

For now, one can only speculate as to the success of the venture. Luckily, I like to speculate—in moderation, of course—so off we go.  

There are two sides to the equation here at the outset of the venture.

On one, you have a massive but troubled network seeking shelter from the cord-cutting storm, with the UFC well positioned to take advantage.

On the other, the UFC has in the world's most powerful sports media entity a potential check on its unchecked authority in the MMA world—something UFC honchos are decidedly unaccustomed to.

Each one carries with it a bit of promise, and a bit of peril, for either side.

The roots of these two entities intertwined well before any ink was on the paper, and it's evident in their mutual histories.

The MMA community is native to the online environment. It started in the days when American fans were forced to follow the sport through bootlegged VHS tapes traded through online newsgroups (remember those?) and other mechanisms.

During the blog craze of the early 2000s, writers and hardcore fans emerged from their basements to build MMA sites with little more than passion and gumption. MMA Junkie, MMA Fighting, Sherdog, Bloody Elbow and a host of others started as humble weblogs.

Simply put, MMA fans were getting their news and content online before that was really a thing.

Today, a good deal of the MMA discourse happens on social media, particularly Twitter. UFC Fight Pass and other streaming services like DAZN, which carries Bellator events, have become an important, if not quite essential, part of the viewing menu. 

This is perfect for ESPN, which has taken well-publicized hits for failing to appropriately adjust its sails to the shifting media winds. The network's parent company, Disney, has absorbed stock value damage more or less directly resulting from ESPN's struggles.

ESPN headquarters in Connecticut
ESPN headquarters in ConnecticutJessica Hill/Associated Press

Now consider the MMA fanbase's reputation as a permanent resident within the advertising sweet spot—males ages 18-34.

There's no way to tell for certain. Reports have shown that the average MMA TV viewer is now 49 years old, but that's a misleading number given that so many young consumers are going digital, both in and out of MMA.

So, if you're a sports media executive looking to recruit digital natives to help anchor your new streaming service, you could do a lot worse than the UFC. With the precedent of Fight Pass and everything else, it's a pretty safe bet that plenty of fight fans will plunk down their $4.99 each month for ESPN+.

Or is it? 

There are warning signs—a lot of warning signs. So much so that there could be peril here for both sides.

There is not just smoke, but a full-burning fire around UFC TV ratings and pay-per-view buys, as well as the long-term viability of the pay-per-view model itself. 

And cord-cutting doesn't fully explain it. In part, it's attributable to MMA as a star-driven sport, and the UFC's troubles cultivating stars that don't simply flop into the rowboat.

Moreover, fewer and fewer fans see the return on investment in spending 85 percent of their Saturday nights watching fight cards that, because of the ongoing emphasis on quantity over quality, don't feature nearly the depth of talent or intrigue they once did. And when the UFC has a truly good card to put forward, it gets lost in the marketing noise of the cards that come before and after it on the assembly line.

If ESPN+ subscription numbers underperform, it won't be solely because of the UFC. But if ESPN determines in its decision-making that UFC fan apathy is a negative force on their bottom line, it could find itself with a bit of an albatross.

With the big five-year deal locked in, ESPN can't afford to simply shrug its shoulders if business as usual out at UFC headquarters doesn't cut it.

This is especially true considering that, when Meltzer recently factored in the financial needs of ESPN+, the UFC will be under immediate pressure to hit home runs for the service:

"If one values the $300 million as half television and half streaming, and the original stream deal—at the time for 15, not 20 shows, was for $150 million—it would require UFC to bring in 2.5 million paying homes just to make up that money. And that's actually quite low, because factoring in costs, that figure would have to be much larger than that."

That's probably not realistic, but it speaks to the high expectations UFC will be pressured to deliver—far higher than what existed with their previous Fox Sports partners, or with their own Fight Pass network.

UFC leaders have always operated like upstarts. What was once pugnacious, though, is now bellicose. In other words, it no longer becomes the business model.

People expected that proclivity to go away in recent years with the company's $4 billion sale in 2016 to the entertainment and sports mega-talent agency now known as Endeavor, but it didn't. Endeavor honchos have been publicly silent and didn't make any big apparent impression in the product. 

Ergo, UFC company decision-making has been assumed by the man who has always assumed them, in the older days and the newer—UFC President Dana White. Don't like the glut of low-level cards? Don't watch it then, dummy. Don't agree with any of his decisions in any way, shape or form? Take a walk, ya bum ya.

This isn't something that could be problematic for ESPN. It already is.

Greg Hardy
Greg HardyChris Unger/DWTNCS LLC/Getty Images

For Saturday's card—again, the first UFC card on ESPN—White and company included an ex-NFL player who was accused and initially found guilty of domestic violence in 2014 before the ruling was overturned after the alleged victim did not appear at an appeal hearing. Alongside Hardy on the card is a female fighter in Rachael Ostovich who filed court documents in November saying her husband, MMA fighter Arnold Berdon, beat her to such a degree that she coughed up blood.

The UFC reportedly shut down questions about Hardy in a recent news conference, with White himself brusquely rejecting those questions in person despite the organization facing criticism. National media still covered the issue, however.

ESPN probably doesn't like this. It can't be the narrative they wanted for this debut. It's an apparent cost of doing business with White and the rest of the UFC. How will White and company react to some dummy—ie, anyone but them—telling them how to roll?

As you know, however, ESPN is not without leverage here. Along with its obvious size and clout both in this situation and in general, ESPN has long been White's unabashed television pipe dream.

It's what he's fantasized about since first taking control of the company. There aren't a lot of voices he'll listen to these days. One of them might be ESPN.

To boil it down, in White's world, nothing moves but the money. That's life. But for White, there's no context, only raw numbers. He's just counting the zeros from the lastest 13-fight card in Grand Forks. He's cutting off his nose to spite everyone else's face. Maybe ESPN is the one to tell him to put the nose back on, or the face, or whatever.

For better or worse, these two are intertwined now. There is peril for both, but there is promise in the notion that these two behemoths can find some true symbiosis. That tide would lift all boats, including maybe, just maybe, the fans. As this thing charges out of the gate, it's what everyone should hope for.

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