WWE $1 billion Smackdown deal with FOX could be good or bad for UFC

The WWE is reportedly going to receive $200 million per year for the next five years from FOX for its Smackdown television rights. That’s a cool $1 billion deal. The show will reportedly move from Tuesday night to Friday night. This is the first time that WWE has truly cashed in on their live television rights with a Big-Four –ABC, CBS, NBC, FOX — broadcasting partner. The new deal shows that there is still a market for live television programming. That sports media rights bubble that’s been talked about has not burst — at least not yet. This deal is three-times increase over WWE’s previous deal with USA Network. DVR proof content is still king. It will still be bid on. So what does this mean for UFC?

Endeavor — formerly WME-IMG or other multiple name changes — bought UFC from the Fertitta brothers for $4 billion with the idea that the company’s impending media rights deal would allow Endeavor to cash in. Endeavor is on its way to leveraging its content. The first step was with its $150 million ESPN+ deal, but the crown jewel is surely its linear television broadcast content rights which are still up for grabs. The FOX deal shows that there is money to be made if live and engaging content is available. So this should be good for UFC . . . right?

Well, maybe. The deal does set a market for a combat sport. Yes, wrestling is fixed, but it’s live entertainment that is focused on two men or women fighting each other for a belt. For years, WWE has pitched itself as the same thing as sports entertainment. Both companies have similar revenue streams which are pay-per-view, broadcast/cable events, scripted or reality shows, and a digital subscription offering. The WWE doesn’t have to worry about injuries ruining main events nearly as much as UFC. Conor McGregor’s recent antics were more WWE than UFC, but that’s where the similarities end when it comes to building up rivalries — with UFC its done on the mic and in the ring and with WWE it’s scripted. There are two views on whether the deal is good or bad. Let’s lay out the optimistic and pessimistic sides for Endeavor and UFC.

Optimistic: There is still money out there for live sports programming. The WWE had a huge increase in their rights, which means Endeavor and UFC should see an increase for their rights as well. FOX still has money to spend and may want to corner the market on combat sports. ESPN is always there as a bidder and just invested in the UFC/ESPN+ product as well as shoulder programming. That could create a bidding war or a partnership. As long as the dollar amount increases on the current deal, then it’s a win for UFC and Endeavor.

Pessimistic: FOX spending that amount of money on WWE takes the company out of the running when it comes to UFC rights. ESPN could be a bidder but maybe only wants to be involved in digital distribution without fully investing in UFC as a brand partner on linear. ESPN may also want to start tightening its belt when it comes to distribution rights. They aren’t completely out of the woods with sub-fees dropping and more cord cutters coming in the future. That means Endeavor and UFC will have to settle for far below than what they were projecting when they bought the company. UFC and Endeavor could go elsewhere, but if other distribution partners know that ESPN and FOX are both out, it puts UFC/Endeavor in a tougher position.

Honestly, the final answer is probably a little bit of both. The UFC should be happy that WWE has set the market. It allows the company to anchor when negotiating with multiple parties. ESPN has already invested in the UFC so it doesn’t make sense for them to stop now. But ESPN’s investment could come at a lower price than expected. So the WWE/FOX deal is good news for UFC and Endeavor but could be bad news as well. We’ll find out over the next coming months.

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