Ultimate Fighting Championship CEO Dana White touts the new seven-year, $7.7 billion rights deal with Paramount as a knockout for the promotion’s fighters. After all, they’re now set to be exposed to a wider audience of consumers thanks to Paramount’s platform—a 77 million global subscriber base—which will be more accessible for fans who were paying as much as $80 an event for PPV on ESPN.
But in announcing the deal—the first major move by the combined company (coming days after Paramount finalized its merger with production studio Skydance)—TKO president Mark Shapiro apparently put the kibosh on the UFC’s traditional pay-per-view model, which often is tied to the top fighters’ compensation.
So what happens when a fighter loses the opportunity to negotiate percentage points on PPV revenue for an upcoming event, or when a clause that calls for a bigger payout based on a number of buys is eliminated from contract talks? These are the questions that White, who has already faced criticism for allegedly underpaying athletes, will have to answer soon.
Shapiro told CNBC that the PPV model is “outdated” and “a thing of the past,” as this deal spells an end to that blueprint. White, however, contradicted that by keeping the door open for UFC to do potential one-off PPV events in an interview with the New York Post. He even went as far to say that “pay per view is not dead,” which speaks to the UFC side seeing at least some upside with the longtime model.
A representative for White did not reply to a request for comment.
Meanwhile, Monday’s announcement rollout indicated mixed martial arts fans now only need to pay $12.99 a month to access UFC events, with White telling CBS Sports that four “big” annual events are likely to be aired on Paramount’s CBS through the new partnership. This includes a potential Fourth of July fight on the White House lawn next year. While the deal won’t turn the streaming company profitable in the short term, it’s a victory for Paramount+ as it seeks to maintain a seat at the big-sports table.
“The deal is good for everyone, except the fighters,” UFC co-founder and Combate Global CEO Campbell McLaren said in a phone interview. The longtime MMA executive believes the promotion, which has “always traded on the UFC name,” will have even more leverage over the top fighters and their agents during negotiations without the PPV sales pressure.
“If you’re a good promoter, you can build a fight and not necessarily have to spring for the high-priced names,” he said. “They’re (now) less held hostage by the big names. ‘You don’t want to [agree] to it? Fine. We’re moving on. We’ll put on a great card without you’.”
UFC continues to develop cheaper talent through its minor leagues like Contender Series and The Ultimate Fighter (which air on ESPN but will also need new homes since they’re not part of the CBS deal). UFC, which has lacked a superstar draw since Conor McGregor’s slide and Khabib Nurmagomedov’s retirement, could replenish the talent pool while keeping pay scales under control.
Internet sensation-turned-pro boxer Jake Paul, a regular critic of UFC, offered his two cents online after the Monday announcement: “Every fighter in the UFC now has a clear picture of what the revenue is… no more PPV excuses. Get your worth boys and girls.”
But quantifying a fighter’s worth is complex. Ask ESPN. It was in question before this week’s news given PPV performance on UFC events has declined. The UFC has depended less on PPV revenue over the years as a result, which places more pressure for the top fighters to communicate their value during contract negotiations.
Former UFC heavyweight champion Josh Barnett recently pushed back on the wage debate, saying top fighters should be compensated well and lower-profile fighters shouldn’t be allowed to piggyback.
“If you’re not pulling the money in, if you’re not making the people have to watch you, you probably cost a promotion more than you make it,” he said during an appearance on the Ariel Helwani Show. “When [people argue] about the media rights, then that just means guys are less valuable, because they can just rotate anybody in.”
Former UFC executive vice president Marshall Zelaznik is optimistic that top fighters will receive comparable pre-deal payouts, pointing out that Paramount was only for U.S. rights (the company is also interested in acquiring the international rights). Zelaznik believes the new model could call for a “creative” compensation formula based on viewership and historical averages, with more potential guaranteed money.
Zelaznik, now the CEO of the Glory kickboxing promotion, is confident that parent company TKO will maintain competitive market payouts and feels the seven-year pact represents a milestone that UFC is on its way to becoming a “must-have” property—the NFL of MMA.
“It gives fighters clear security that the UFC is around, driving business and events, and you need not worry that you’ll get fights and will get paid,” he added. “That’s not true for every promotion. … This is good news for the fighters. There’s ambiguity, but they’ll find a way to get the top fighters who drive the business compensated. They usually do.”
