Report: UFC signs long-term deal with Fox
In what Dana White had called the UFC’s most crucial business decision to date, the company signed a long-term deal with Fox that would go into effect next year, Street & Smith’s Sports Business Daily reported Tuesday.
The deal would end UFC’s seven-year relationship with Spike TV, the network that not only put the sport on the map but also very likely saved it in North America.
The story reported that the deal would include live specials on the Fox Network as well as making FX the home of most UFC programming. It would be the first time UFC programming would appear on a major broadcast network.
None of the companies involved has confirmed or denied the story, but it had been strongly rumored within the industry over the past month that Fox had replaced NBC as the most likely candidate to land the deal. The report said bidding had gone as high as $90 million per year in talks with various networks. That figure was confirmed by Yahoo! Sports’ sources as being in the ballpark. The story also said the deal was for seven to eight years.
“We politely decline [to] comment,” said UFC Director of Communications Dave Sholler, regarding the report.
White, the UFC president, did not respond to questions regarding the report. Spike officials said they had nothing to say on the subject at this time, but did note that they hold ownership rights on all UFC programming since 2005 and could air it through 2012.
In the last several weeks, sources said negotiations with NBC had hit a snag. The network had offered a deal with network prime-time shows, and the bulk of the programming (which would include live and taped fights, as well as “The Ultimate Fighter” reality show) would be moved to Versus, which is being rebranded under the name NBC Sports in January. Talks of the UFC purchasing the G-4 network and turning it into a UFC channel also fell through.
The deal is believed to include a number of live specials on FX, along with the reality show. From an exposure standpoint, it looks like a major step up because FX is a top 10 network in ratings. Two weeks ago, FX was the No. 7 rated cable network with a 1.1 prime-time average, nearly double Spike’s average. Versus has significantly lower ratings than Spike, but the belief is that the NBC affiliation and exposure from carrying the 2-12 Olympics will boost that station’s profile. FX draws a more broad-based demographic, while Spike’s main audience is men. UFC is mostly popular with men ages 18-49 and hasn’t developed a broad appeal outside that core demographic. An all-sports station also would figure to strongly hit the UFC demographic and expose the UFC to general sports fans.
Aside from the huge increase in rights fees, airing on higher-rated stations would expose the product to larger audiences, so it’s a double win for the UFC. The previous deal with Spike TV for 2009-2011 was in the $35 million-per-year range.
That deal included four live specials, two seasons per year of “The Ultimate Fighter” reality show, “Unleashed” – a compilation of one hour shows airing old fights, the important “Countdown” specials aired several times per week that build up the major pay-per-view events and other special programming. Shows like “Unleashed” and “The Best of Pride Fighting Championship” were cornerstones to Spike’s programming and as recently as two years ago, UFC programming often took up half of the network’s prime-time hours in a given week.
The reality show is really what put MMA on the map in 2005. Before that, the UFC lost money, struggling on pay-per-view with only occasional glimmers of hope such as Ken Shamrock vs. Tito Ortiz in 2002 and Ortiz vs. Chuck Liddell in 2004. Each topped 100,000 buys. Most shows were doing less than half of those numbers. UFC officials noted they had to pay for production of the reality show’s first season, and had it not been a success, it was likely they would have closed the company. Shortly before brokering the deal for “TUF” Season 1, owners Lorenzo and Frank Fertitta told White that the losses were too high and to sell the company.
At the time, the UFC had no luck on TV. A few taped shows on Fox Sports Net drew good ratings, but it was not a strong enough platform to build pay-per-view, which was the company’s primary revenue stream. The value of the exposure on Spike became obvious by 2006 with a Shamrock-Ortiz rematch that did 775,000 buys, and an Ortiz-Liddell rematch became the first MMA show to crack the 1 million buys barrier.
The success of those shows made the UFC the dominant brand in the sport worldwide and gave them the revenue needed to sign the biggest news in fighting away from the Japanese market, which had been dominant since the late ’90s. Eventually, the company purchased struggling competitor Pride Fighting Championship in Japan in 2007 and earlier this year, the UFC bought Strikeforce, giving the company a roster with all but a handful of the top-rated fighters in the world.
The UFC also purchased World Extreme Cagefighting in 2006, when the company itself was under an exclusive contract with Spike. The relationship with Versus began with WEC programming in 2007. When a new deal with Spike gave the UFC the rights to air programming on other cable channels, the WEC brand was disbanded and a deal was signed for four UFC events this year on Versus.
The Versus deal expires at the end of this year. What appears to be the final show is scheduled for Oct. 1 from Washington, D.C., headlined by the first UFC championship match not on pay-per-view since 2007, with Dominick Cruz defending the bantamweight title against Demetrious Johnson.
Spike programming will continue with the 14th season of “The Ultimate Fighter” beginning Sept. 21, and its final major event would be a live special from Las Vegas on Dec. 3 with the season finale and a fight between coaches Michael Bisping and Jason “Mayhem” Miller.
Even though ratings for UFC programming had declined on Spike in recent years, it was believed the timing of its UFC contract couldn’t have been better. But bidding appears to have gotten too rich for Spike’s blood, plus Spike couldn’t match the exposure of airing major shows on a network.
UFC live events on Spike averaged a 1.7 rating from the inception of live specials in 2005 through 2009. But numbers declined to a 1.26 average in 2010. The three events so far this year have rebounded to a 1.37.
“TUF” has been a mixed bag. The late 2010 season featuring coaches Georges St. Pierre and Josh Koscheck was among the highest rated in its history. But even with the company’s biggest drawing card, Brock Lesnar, coaching against Junior Dos Santos in the spring 2011 season, it was the lowest-rated season in the history of the show.
“Unleashed,” a one-hour taped show, had declined more dramatically as the novelty of UFC programming wore off, dropping from an 0.8 average in the early days to an 0.4 this year. As numbers declined, so did Spike’s prime-time average, falling from a top-15 network to where it frequently struggles to crack the top 25. Over the past two years, the number of prime-time hours devoted to UFC has greatly decreased.
Both the Pro Elite and Strikeforce promotions have aired prime-time specials on CBS, garnering mixed ratings results. Shows that featured Kimbo Slice, Gina Carano and Fedor Emelianenko did decent numbers, and did well with the younger male audience that CBS was seeking. But shows without those fighters did poorly. The last one aired 16 months ago, and there have been no announced plans for future shows since the April 2010 show drew an anemic 1.76 rating and ended with a big brawl inside the cage.