Is it a "reshaping moment" for the streaming media market? Paramount splurges $7.7 billion to exclusively acquire UFC for seven years.

The Hollywood film industry giant Paramount, with a century-long history, has obtained the exclusive broadcasting rights for all Ultimate Fighting Championship (UFC) events in the United States for the next seven years, in a blockbuster deal worth up to $7.7 billion announced by both parties on Monday. The aim of this deal is to drive the further development of Paramount's streaming service platform, Paramount+, and to challenge the two global streaming leaders, Netflix and Disney+, in order to capture a larger share of the streaming market. Paramount will offer 13 major UFC events and an additional 30 "fight nights" that are also popular among combat sports fans through its streaming service, as well as broadcast selected events on CBS starting next year. UFC's major events typically feature top-ranked fighters in championship fights, while the "fight nights" usually consist of up-and-coming fighters or lower-profile matchups. Paramount expects to pay an average of $1.1 billion per year and will explore the possibility of acquiring international rights when they become available. After David Ellison took control of the company last week, he quickly left his mark on Paramount. The amount he paid to the UFC parent company TKO Group Holdings Inc. was more than twice what he had previously agreed to with Walt Disney Co.'s ESPN, hoping that this comprehensive combat sports league could bring millions of new viewers to the company's streaming service. Paramount+ had 77.7 million subscribers as of the end of June, a size far smaller than competitors like Netflix and Disney+. Paramount will offer all matches to consumers without any additional charges, which is somewhat different from UFC's previous operations. The league used to sell its major events on a pay-per-view basis. However, putting these events behind a "double paywall" where users need to subscribe to ESPN+ and pay an additional fee limited the audience size and fueled piracy growth. UFC is providing Paramount+ with a year-round sports program to attract viewers and prevent them from unsubscribing. Paramount+ has also hosted NFL games, college football, golf, soccer leagues, and major college basketball games. However, the sports programming is relatively scarce between April and August. "UFC is a unicorn-level sports asset," Paramount's new leader Ellison said in an interview. "It will be the largest sports property exclusive to any single platform." TKO's CEO Ari Emanuel and President Mark Shapiro have been selling UFC rights throughout the year. ESPN has held the rights since 2019 and has a 90-day exclusive negotiation period. ESPN allowed this period to lapse, leading to a brief negotiation window for streaming giant Netflix due to its existing relationship with TKO's WWE. After this window expired, Paramount, Amazon, YouTube (owned by Google), Warner Bros. Discovery, and Fox Corp. all expressed interest. Many potential bidders, including Amazon and Warner, are only interested in acquiring the rights to numbered major events. Shapiro hopes to find a unified streaming platform for all events. "Our brand vision is to put all matches on one platform, so if you subscribe to the service, you can see all of them. This is too 'monster-level,'" he said in an interview. In the past decade, UFC's popularity has exploded as younger fans turned their interest to mixed martial arts rather than boxing. Despite facing some challenges in building new stars in the past two years, UFC's popularity and fan base have grown significantly. Endeavor acquired a majority stake in UFC in 2016 and then bought the remaining stake. After acquiring WWE in 2023, Endeavor formed a new combat sports company under the name TKO. Last week, ESPN announced an agreement to acquire most of WWE's rights under TKO. Paramount's streaming platform Paramount+ already has a sizable lineup of popular shows, including Yellowstone and various crime dramas. By adding the exclusive broadcasting rights for UFC events for the next seven years in the US, Paramount has combined this with its existing content to expand its market share and increase user retention.