In its first major content deal since launching the ESPN+ subscription streaming service last month, The Walt Disney Company inked a multiyear partnership with Ultimate Fighting Championship.
The deal, which will start in 2019, will offer viewers live matches, shows featuring behind-the-scenes access and up-and-coming contenders, pre- and post-event content, press conferences and access to the UFC archive.
Bloomberg pegged the price tag at around $150 million per year, making it a significant investment .
BTIG Research analyst
Rich Greenfield estimates that ESPN+ currently has approximately 100,000 subscribers. It serves as a premium option for sports fans, providing content not available on ESPN’s linear
UFC, with its young fanbase (the median age is 39, according to the league), is the sort of content partner Disney is hoping will bring in younger, digital-savvy consumers. Of course, with premium DTC offerings from media companies still a nascent business, it is difficult to predict how consumers will respond.
“UFC is pretty unique/differentiated content from the rest of the content on ESPN+. In turn, we doubt there is much ‘value add’ to existing subscribers to limit overall churn,” Greenfield wrote in a research note. “The question becomes how many subscribers can ESPN+ add due to UFC?”
Ultimately, the deal with UFC is likely just the first of many for ESPN+. While it has content from top-tier sports leagues like MLB and the NHL, it will need fresh, premium content all year round in order to entice subscribers to keep paying, and to keep advertisers engaged.
The size of the UFC deal, however, is sure to raise eyebrows at other sports leagues, as it suggests Disney remains willing to pay a premium for sports content, even if it won’t be available on linear TV.