Sports Rights Are Paramount

As demonstrated by the company's latest deal for UFC

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Free agency has been crazy this summer, huh? Well. I guess the MLB trade deadline was a little underwhelming. We got some NBA movement, but the real earth-shaker came in February. Couple of NFL starters moved too, nothing crazy.

See, the thing is — this free agency period has not been about players moving teams. It’s been whole sports moving networks. And the latest domino, which I find pretty fascinating, despite (sorry) not being much of a fan myself, is the UFC’s new deal with Paramount.

Most casual sports fans are aware that UFC inherited the pay-per-view model first made popular by boxing many decades ago. They set up big fights and promote them as one-off events that fans need to buy, individually, in order to watch. You couldn’t “subscribe” to UFC.

Now you can. And all it cost Paramount was $1.1 billion annually (on average) for the next 7 years. It’s a nice little chunk of change, and it’s a huge upswing from their expiring deal with ESPN, signed just five years ago. That one was worth $1.5 billion in total. So what we’re looking at is nearly a 4x jump in valuation. In just half a decade, Dana White and co. will take that.

For the sport itself, this presents an interesting test case that we haven’t seen applied to the UFC before. It is quite literally changing its business model. Marquee events will air on CBS now, which is quite the accomplishment for a sport that used to be thought of as a fringe player at best.

UFC isn’t doing anything particularly novel in general — if anything, it’s becoming more like every other league — but it’s zigging in the right direction. Because the truth is, the more mainstream UFC can become, the better everyone involved can do. You know, financially? Which does remain the goal.

This is true, of course, for the fighters as well. Many have been quick to point out that this deal does not guarantee much of any benefit for them as yet. There are some promises being made, but they’re not too different from similar promises made with past deals. The UFC is selling its fighters on increased exposure. They’re saying: this new deal is going to make you guys stars. (Which, by the way, we wouldn’t mind. We need some more of those.)

For its entire history up until now, the sport had operated on a model wherein UFC fighters got points — i.e. percentage points — on their own pay-per-view fights. Those points would vary, depending on their stature in the sport, but you can reasonably assume that a guy like Conor McGregor used to make a lot of money off having, essentially, an equity stake in his events.

That equity is now gone. If I were a UFC fighter — I’m not, sadly; missed my calling there — I would be asking about that! How does the sport plan to make up for that? You just made tons more money on this deal — where’s our cut?

Part of what’s going on here, and part of the reason why the UFC is comfortable backing away from its pay-per-view, model is because it hasn’t made the same kind of money for them lately as it did in the heydays of McGregor and Ronda Rousey. They haven’t had that kind of superstar since.

So UFC’s bet here with Paramount is twofold. Number one: we think the UFC can become more popular by being cheaper and easier for fans to access. Number two: we think that popularity could help deliver us that kind of superstar again.

It’s a funny, sort of paradoxical thing. I said they were zigging earlier, in reference to their decision to “go mainstream.” And that’s true, in the main. These days, though, it’s also kind of a zag? I’ll explain.

Many sports that have historically broadcast their games on the big over-the-air (OTA) channels that any TV antenna would pick up — I’m talking mostly about the NFL now, and ABC/CBS/NBC/Fox — are increasingly moving away from that model.

They’re not as concerned with everyone being able to watch, which was long thought to be an advantage for sports that were trying to garner the broadest possible fanbase. See the uproar in early 2024 when the NFL put a playoff game on Peacock, followed by the same thing this year on Amazon Prime. It’s gotten more expensive to follow the sport, full stop.

(I worked on a video about this for Search Party a few months ago — check that out below.)

The UFC isn’t going full linear, or anything. They are joining up, in large part, due to Paramount’s streaming service. It’s not just CBS. But the fact that CBS is part of it will make it doubly interesting to keep an eye on where the sport goes from here.

Might I become a fan too? I don’t know! I don’t have Paramount. But I know they’re betting on me wanting to change that. And hey, if they keep gobbling up broadcast rights like this, they might just win out.

👩‍🎤 Taylor Swift going on New Heights is the singularity of athlete podcasting. And all we had to do was wait ~2 years of those two dating. Say what you will, but it’s definitely a new way to drop an album. Podcast P could never.

☘️ Turns out Wyc Grousbeck will not, as previously/confusingly reported, continue serving as the Celtics’ president now that the league has approved the sale to new owner Bill Chisholm. We all thought that was weird months ago, so I can’t say I’m surprised this has settled into a more typical arrangement. Bummed for Wyc though. I wonder if he ever believed he’d get to keep running the team.

⚾ MLB is reportedly negotiating with a whole bunch of broadcast partners right now. No word on Paramount, but most of the other big players are there: Netflix, ESPN, Apple, NBC.

🏈 It’s also worth flagging, here in preseason, that some of the biggest NFL news is of the legal variety. Current Vikings DC and former Dolphins HC Brian Flores’ discrimination lawsuit will remain in court rather than go to arbitration, as the NFL had been pushing for years. They can still make one last push: either to rehear the case or appeal to the Supreme Court. But they wouldn’t do that, right? Right.

🤠 Anybody watch this Cowboys doc yet? I’ll admit, I’m intrigued. I don’t always go for that sort of thing, but I’m giving it some thought. Michael Irvin alone has me considering it. Please weigh in in the comments if you’ve got a recommendation, thumbs up or down.

📚 We did it, everybody. The last of the honeymoon reads, and a spiky one to finish. The Love Affairs of Nathaniel P. by Adelle Waldman holds a mirror to many of the Brooklynite writerly folks that — guilty as charged — enjoyed the book too. It’s a quick read in a way that does not at all detract from its quite insightful message about modern relationships. Some things have changed since 2013, when it was written, but the core of it has not. Good book. Get in there.