TKO in Talks to Put UFC on Netflix, Latest on UFC, ESPN relationship

:tko:

TKO, the parent company of Ultimate Fighting Championship, is negotiating with Netflix in a potential deal that could land the mixed-martial arts promotion on the world’s most popular streaming service, according to sources familiar with the negotiations.

UFC is nearing the end of its 7-year, $1.5 billion deal with ESPN. The exclusive negotiation period between ESPN and UFC ended on April 15.

While both Netflix and UFC are talking, there are major hurdles that could impede a deal.

TKO wants $1 billion per year for UFC, a massive increase from the seven-year, $1.5 billion deal the promotion had with ESPN. UFC’s regular pay-per-view and weekly show model doesn’t line up with Netflix’s strategy laid out last month by co-CEO Ted Sarandos, who proclaimed a focus on big events.

Netflix doesn’t want to add a pay-per-view model to its current service. The streamer said it’s well aware of how increasing subscription prices may push viewers away. A multi-year, multi-billion dollar deal would force Netflix would apply pressure to raise its subscription rate again.

A source said Netflix could take on UFC Fight Night as regular programming or add another tier specific to UFC to keep subs low for general subscribers.

TKO would like to keep UFC on ESPN in some capacity, including UFC President Dana White. But interest from ESPN may be simmering as Disney has begun focusing on long-term, larger sports leagues with more guaranteed ratings like the NFL, NBA and college football.

TKO sees UFC’s five years on ESPN as an important high mark for making the company and MMA a legitimate big league sport. Other sports, like the NHL and NASCAR, saw negative effects in the past after leaving ESPN for other networks because the network stopped nearly all of its coverage once those leagues left the channel.

ESPN and UFC were reportedly very far apart when their exclusive negotiation window ended, but adding Netflix to the mix as another outlet would give UFC more exposure on two major platforms and a chance to hit TKO’s goal of $1 billion per year.

TKO negotiated a five-year deal with Netflix for WWE Raw, which began airing on the streamer in January.

After Warner Bros. Discovery lost its rights to the NBA, the company began considering UFC with those suddenly free billions in NBA dollars. That strategy changed and WBD’s interest in UFC dropped considerably after it changed its focus to current IPs and making MAX (now HBO MAX, again), a high-level, but niche player in the streaming market. The company is also waiting out the new Superman movie set this fall, directed by James Gunn, which is another re-launch of WBD’s DC Comics on Cinema.

NBCUniversal could be a possible home for UFC, but NBCU has been on a spending spree following its latest deal with the NBA. NBCU is a favorite to land the Major League Baseball package after the relationship between ESPN and MLB soured, causing the two sides to split in the middle of their deal.

One upside, TKO is already familiar with NBCU due to its long-time relationship with WWE. The Peacock streaming service already airs WWE “PLE” shows.

Amazon Prime Video is another consideration for UFC PPV, especially if the promotion were to partner with another studio for its Fight Night and regular showings.