The UFC begins negotiations on a new broadcast rights deal later in 2024 but the promotion’s current partners at ESPN are continuing to face struggles in the ever changing market of sports consumption.
For the second straight quarter in a row and third out of the past four quarters overall, ESPN+ lost subscribers, which is primarily where the UFC thrives, especially through the pay-per-view business that runs on the streaming service. Subscribers dropped two-percent in the second quarter of 2024 with the total number of subscriptions standing at 24.8 million.
That’s approximately the same number of subscribers ESPN+ touted in early 2023.
ESPN+ also reported a $65 million operating loss for the quarter.
As far as why ESPN+ subscriptions dropped, Disney pointed to the usual churn that often happens at the end of a sports season — this time around due to college and professional football both coming to an end until late summer 2024. While those claims could be true, ESPN+ had been steadily climbing with over five years of growth for the streaming service.
On a happier note, Disney reported that ESPN experienced overall ratings success in the month of April, which included the conclusion of the NCAA women’s basketball championship. April also marked the highest ratings ever for a UFC preliminary broadcast after UFC 300 earned record viewership.
Of course, Disney CEO Bob Iger has spoken a lot in recent years about plans to transition ESPN to a more digitally driven business rather than through linear television, which includes launching a direct-to-consumer streaming platform in 2025. Disney also plans to launch a sports streaming service with Warner Bros. Discovery and FOX in late 2024.
“I see sports continuing basically to shine in a world where there’s just considerably more choice,” Iger said during an earnings call with investors on Tuesday. “The other thing that’s really important is the engagement that live generates. I mentioned in my comments, which we really haven’t talked about much, and I guess a lot of the attention has been on the [joint venture] that we announced as well as on flagship, which is taking ESPN direct at the end of [2025] but at the end of this year, we’re going to put an ESPN tile on Disney+, which will have a modest amount of programming but it’s a start in terms of essentially conditioning the subscribers to Disney+ and Hulu that sports is going to be there.
“As I look ahead, I think ESPN is going to make a pivot towards digital but without abandoning linear. It will remain on linear if people want to get ESPN and its different channels through a cable or a satellite subscription, that’s fine or if they want to pivot smoothly, because there will be many different access points to get the digital product to ESPN digital, they can do so as part of a bundle with other sports services, they can do so directly from ESPN with the ESPN app or they can do it part of a bundle with our own services. So I feel very bullish about it.”
Beyond the UFC broadcast rights, ESPN also has a separate negotiation coming with the NBA, which is expected to be a rather expensive package that could be spread across numerous networks.
It remains to be seen how this latest drop in subscribers could potentially affect the UFC when it comes time to negotiate a new broadcast rights deal but those talks are expected to begin before the end of the year. The UFC’s overall deal with ESPN runs through 2025.
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