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Dana White says Paramount+ will bring new fans to UFC. Adam Stern <\/p>\nTKO Group Holdings and Paramount Skydance Corp. feel good about the start to their new alliance in combat sports, but the sides still appear to have plenty of work to make the deal pay off in the long term.<\/p>\n
From Las Vegas, the Paramount+ streaming service aired the first Zuffa Boxing card on Jan. 23 and UFC 324 on Jan. 24. The sides reported an average minute audience of 4.96 million viewers for UFC 324 in the U.S. and Latin America, and mobile app analytics platform Sensor Tower told Sports Business Journal that its data shows 600,000 downloads of Paramount+ that day and 1 million over the two-day weekend. The signups on Saturday were up 150% from the prior day, Sensor Tower said.<\/p>\n
UFC has become one of Paramount Skydance\u2019s first big gambles in its new ownership era, as the legacy media company works to become a modern-day entertainment behemoth.<\/p>\n
Michael Morris, senior managing director and equity research analyst of media and internet at Guggenheim Securities, said Paramount Skydance is using the seven-year, $1.1 billion per-annum investment in UFC to help age down and diversify its audience. He noted that investors are paying appropriate attention to the significant outlay, but he also said the return on investment won\u2019t come from just one successful night.<\/p>\n
\u201cThe investment Paramount made in UFC is specifically intended to complement the big broadcast business that arguably over indexes to older viewers. The company wants to get younger, they want to have more male viewers, and they want to make sure they\u2019re diversifying their offering to sports fans outside of the NFL season, each of which supports growth at Paramount+. The reported strong audience level and healthy number of Paramount+ signups are both good starts for the product,\u201d Morris told SBJ. \u201cBut I think in the grand scheme of things, the number of say 1 million signups is not the ultimate goal. I think they want to continue to grow and build on this \u2014 so I would say it was a start but not a crossing of the finish line.\u201d<\/p>\n
The weekend began with the debut of TKO\u2019s boxing product, which it is running in conjunction with Sela, a company owned by Saudi Arabia\u2019s Public Investment Fund. A couple hundred people were on-site at the UFC\u2019s Meta Apex for the Zuffa Boxing card, with UFC President and CEO Dana White saying afterward that the fights were \u201cgreat\u201d but have \u201ca lot of work to do.\u201d<\/p>\n
TKO is trying to build its boxing property from scratch by signing largely rising fighters instead of established superstars, as it attempts to reset a market that White has long said is broken and filled with what he derisively calls \u201cgoing-out-of-business sales.\u201d Viewership figures for the Zuffa Boxing card were not shared.<\/p>\n
TKO is in the middle of backing proposed legislation in Congress, which regulates boxing, that would allow for a new model to be introduced to the sport. The bill recently passed a subcommittee in the House, and the next step will be to take it to the floor for a broader vote. White told SBJ that TKO was \u201cobviously very excited and pumped up about the vote,\u201d but he didn\u2019t know when it would advance to the House floor, and that he hasn\u2019t asked President Donald Trump whether he will sign the bill if it passes.<\/p>\n
White said Zuffa Boxing will resemble one of the other combat properties he founded, Power Slap, in that it will start by holding events at the Meta Apex but eventually move to other venues, potentially on the Vegas Strip. He said he is in talks with MGM Resorts International and Caesars about bringing Power Slap to their venues after the property\u2019s current deal with the Fontainebleau Las Vegas expires, \u201cso I would expect boxing to be the same.\u201d<\/p>\n
One of the headlines from the new deal with Paramount was the network agreeing to do away with pay-per-views for UFC\u2019s numbered events. Under the prior deal with ESPN+, a double paywall existed, with PPVs priced near $80 a unit. Now, numbered events can be viewed with a Paramount+ subscription, monthly ($8.99) or annually ($89.99). The cost of watching every UFC event has dropped dramatically for viewers, something White thinks will help bring in new fans. The sides have said some number of UFC events also will air on the CBS linear TV channel, but White told SBJ they are still deciding how many.<\/p>\n
Dana White says Paramount+ will bring new fans to UFC. Adam Stern <\/p>\n
\u201cYeah, I think we\u2019re going to pick up a lot of new fans, a lot of fans that fell off [who] couldn\u2019t afford it,\u201d White said. \u201cBut as far as the [illegal] streaming type guys go, I don\u2019t know, I don\u2019t give a shit about them. \u2026 The cost for the UFC for the year is less than a pay-per-view was last year, and when you pay that, you get so much more \u2014 you get everything UFC, plus you get all their television shows, movies. I mean, you should buy Paramount+ right now just for \u2018Landman\u2019 and \u2018MobLand,\u2019 let alone UFC.”<\/p>\n
Paramount\u2019s stock dropped about 18% over the last month, to $11.01 a share at press time. But that has come amid its much-publicized and pricey pursuit of Warner Bros. Discovery. Paramount+ reached more than 6 million daily active users on the day of the UFC fight, 55% more than the prior day, according to Sensor Tower. U.S. website visits for Paramount+ were up 100% on fight day from the previous day.<\/p>\n
Paramount said late last year that Paramount+ has about 80 million subscribers, and it has described the direct-to-consumer service as its top priority. Still, Paramount paid roughly double what ESPN did to license UFC\u2019s media rights, and Paramount investors are likely to keep a close eye on the deal to see if the network is able to properly monetize it. On the night of the UFC fight, social media was filled with complaints about what some fans felt was a heavy ad load, including ads during the fighters\u2019 walk-outs.<\/p>\n
TKO\u2019s stock is down 9% over the last month to $195.82 a share at press time.<\/p>\n
\u201cDistribution of UFC content is seeing a pivot in the monetization structure from pay-per-view to a more broadly available structure on Paramount+. For fans who didn\u2019t mind the cost of pay-per-view in exchange for an experience without ad interruptions, I understand the complaint of additional advertising interruptions,\u201d Morris said. \u201cBut that is not the fan base in its totality and so I think No. 1, there\u2019s going to be a trade-off in terms of how consumers compensate the company for the product and it\u2019s not surprising for that to come with some friction.<\/p>\n
\u201cAnd No. 2, I would expect Paramount to continue to fine-tune the approach to advertising and to monetization. I think they\u2019ve done a very good job across their other sports properties in terms of balancing that.\u201d<\/p>\n
Paramount promoted the UFC relationship heavily in the buildup to its debut, something that caught White\u2019s attention. The network also has started cross-promoting between its scripted series and movies and UFC, with a costumed character from the next installment of the \u201cScream\u201d movie franchise following some of the fighters during their walk-outs and exits during UFC 324.<\/p>\n
The network also has already added a UFC hub to the service with an archive of past fights, and it quickly uploaded UFC 324\u2019s fights for subscribers to watch as well.<\/p>\n
\u201cI think investors are always sensitive to large expense commitments and have a lot of focus on how any media company is driving return on those investments. That certainly applies to this investment from Paramount, and it applies to just about every other sports contract you can think of across every other partner,\u201d Morris said. \u201cIt\u2019s not exceptional in that regard.<\/p>\n
\u201cNow the magnitude of the step-up in rights cost does put attention on this, and you have a new ownership and management team, you have the potential for a further structural change from here. So it is one of several inputs that I think investors are considering when they evaluate the company and stock idea. This particular investment does matter in terms of that analysis, but I wouldn\u2019t characterize it as over-concerned or excessive concern. I\u2019d call it an appropriate level of consideration.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"TKO Group Holdings and Paramount Skydance Corp. feel good about the start to their new alliance in combat…\n","protected":false},"author":2,"featured_media":441888,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[434],"tags":[49,48,459,82],"class_list":["post-443960","post","type-post","status-publish","format-standard","has-post-thumbnail","category-nba","tag-ca","tag-canada","tag-nba","tag-sports"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/443960","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=443960"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/443960\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/441888"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=443960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=443960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=443960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}