UFC Going Digital in Brazil as Fight Pass Replaces Pay TV
UFC is changing its media distribution in Brazil, a move away from pay TV that the mixed martial arts giant believes could quintuple broadcast revenue in one of its most important international markets.
Starting Jan. 1, the Endeavor-owned company will launch its UFC Fight Pass product in Brazil. The direct-to-consumer digital service will hold all of UFC’s live events, original programming and an archive of every UFC event in history.
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UFC for years has distributed in Brazil via TV Globo’s Combate, but the pay-TV model is quickly losing subscribers, and the promotion believes it is strong enough in the country to stand on its own. The expiring Globo deal paid UFC in the “low eight figures” per year, according to someone with knowledge of the contract. UFC’s expectation for Fight Pass in Brazil is that it will eventually generate roughly five times more, in the “high eight figures,” according to the person, who was granted anonymity because the details are private.
“This opportunity to connect directly with the consumer is really, really important to us,” UFC chief operating officer Lawrence Epstein said in an interview. “Though we have great relationships with broadcasters around the world, the reality is that our fans are customers of the broadcaster, not directly customers of UFC.”
Epstein declined to comment on the financial specifics. A representative for TV Globo didn’t respond to an email seeking comment.
The announcement comes one day before Endeavor (NYSE: EDR) announces second quarter earnings. A high-cash flow business, UFC has been a major boon to Endeavor over the past few years. As much of the entertainment world reeled from the COVID-19 pandemic, UFC was among the first major U.S. sports to resume operations, and business has continued to grow.
Brazil is one of UFC’s most important international markets, alongside Canada, Australia, China and the U.K. The country has a deep history with martial arts such as jiu-jitsu and capoeira, and has produced a number of prominent UFC champions, including Anderson Silva, Jose Aldo, Amanda Nunes and Cris Cyborg. UFC estimates it has 50 million fans in Brazil.
The country is also experiencing a more extreme form of cord-cutting than in the U.S. Brazil had 12.4 million pay-TV subscribers at the end of 2020, down 36% from 19.5 million in 2014, according to numbers from Kagan (the U.S. saw a 32% drop in the same period). Those losses, and the rise of deep-pocketed streaming services interested in sports, have created new challenges for Grupo Globo’s TV Globo, once the dominant force in Brazilian sports broadcasting.
UFC, one of the first major U.S. sports properties to begin selling over-the-top, launched Fight Pass back in 2013. The service is available in many international markets, though not as the primary vehicle for watching live events but rather as an additional service for the sport’s biggest fans. That said, UFC is starting to place more emphasis on Fight Pass. This model in Brazil is similar to the set-up in Japan, where UFC also distributes all of its fights via Fight Pass. Epstein said Brazil is “by far” the largest market where Fight Pass will be the primary method of UFC consumption.
The service operates on technology from Endeavor Streaming, which powers other major OTT sports platforms like WWE Network, NBA League Pass and NFL GamePass.
The Fight Pass service in Brazil will cost about $4.85 per month (24.9 Brazilian reals), with all live broadcasts produced in Portuguese, with Brazilian commentators. The service will carry all 42 live UFC events each year, original series, past events and live fights from more than 30 other combat sports promotions.
In addition to Fight Pass, UFC will offer select fights to Brazilian fans via free-to-air TV for the first time since 2018. Those non-exclusive broadcasts will happen via Band (Grupo Bandeirantes). Epstein also said UFC was in the market for additional mobile and digital marketing partnerships that will further expand the group’s reach.
“We’re creating a new marketing/exposure ecosystem that is broader and more efficient than the current one we have,” Epstein said. “So it’s the perfect situation for us at this time.”
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