Is a tarnished UFC worth the risk to ESPN and Disney Studios?

Mixed martial arts biggest money-spinner can deliver a young, internet-savvy audience. But UFC has been hit by a number of unseemly controversies

On Saturday the UFC will return Rio de Janeiro for UFC 237. The event, which facets a handful of onetime advocates such as Anderson Silva and Jose Aldo, will celebrate the promotion’s second pay-per-view event since announcing an exclusive transaction to host their PPV presents on ESPN’s brand-new streaming service, ESPN +. The agreement means that fighting love in the United Position are required to have ESPN+ dues in order to then purchase the UFC’s tentpole displays. Although the exclusive deal emphasizes ESPN’s confidence in the UFC commodity, there are still several jeopardies is connected with their investment.

In May 2018, the UFC and Disney, in conjunction with ESPN, ratified an exclusive five-year media rights and distribution deal for live UFC content across all ESPN scaffolds. The part freedoms packet would cost ESPN $1.5 bn over five years. The inaugural display took place in January 2019 and featured a champion v champion fighting between TJ Dillashaw and Henry Cejudo. According to ESPN, the event been successful in 568,000 new customers, including 525,000 who signed up on the day of the fight alone. Two months later, the UFC extended its deal with ESPN until 2025 and has declared that their PPV happenings would be purchased directly on ESPN +. However, while the episode was a monetary success and an superb start to the partnership, it wasn’t without its fair share of controversy.

The UFC and ESPN weathered staunch criticism from the media ahead of the inaugural prove due to the promotion’s decision to include onetime NFL defensive result Greg Hardy — a human formerly convicted for assaulting his ex-girlfriend — in the co-main event spot. To oblige topics worse, Hardy was peculiarity on the same card as Rachel Ostovich, who suffered a broken orbital bone after being assaulted by her husband. Hardy went on to a exclusion loss but returned last month- also in a co-main event slot- and scored a knockout victory.

While Hardy likely won’t contend again for several months, the UFC is set to spotlight another alleged domestic abuser on their upcoming UFC 237 contest. The initial segment of the phenomenon will feature BJ Penn, the promotion’s first two-division champion and arguably one of the greatest fighters in the history of MMA. Penn recently saw headlines when his estranged sweetheart filed a restraining order against him, alleging years of physical and sexual abuse. Penn is also under an active police investigation after allegedly threatening another man with a machete in a trespassing spat. Despite this, Penn is still scheduled to compete on the UFC 237 PPV.

The decision to promote Hardy on two separate occasions, as well as lack of prudence to remove Penn from their upcoming poster accentuates the UFC’s tone-deaf approach to treatment domestic violence. It likewise highlights ESPN’s willingness to neglect dispute in return for new customers to its stream programme, especially considering the channel’s well-documented monetary difficulties.

Over the past five years, ESPN has lost more than 13 million readers. This continuous deterioration of paying customers is a problem for all traditional broadcasters and is due to the ” cord-cutting ” vogue of spectators nullifying their Tv cartons and cable dues in favor of internet-based media such as Netflix and Amazon Prime. As a ensue, the company underwent significant changes, which included laying off 150 employees in 2017. In March 2018, Walt Disney Co, which owns 80% of ESPN, hired James Pitaro, the onetime is chairman of media at Yahoo, to serve as president of the plays system. One month later, ESPN unveiled its ESPN+ streaming service and announced its partnership with the UFC.

The UFC reportedly has the youngest fan base among major US boasts owneds, comprised of a high percentage of millennials and adults in the 18 -3 4 demographic. A large proportion of UFC followers are also ponderous internet users and are used to using digital business such as Fight Pass, the UFC’s own streaming service, to watch defends. Theoretically, this should be a good fit for ESPN, a company which is looking to build a young shopper locate to anchor its subscription service. However, when you factor in the declining TV ratings and PPV marketings in 2018, it becomes clear that both entities will be under immense pressure to ensure the deal is successful.

While ESPN still has 86 million customers as of the last quarter of 2018, they continue to lose roughly two million viewers with each passing year , which has greatly altered profit margins, as well as parent company Walt Disney’s stock value. As a reaction, ESPN is under a lot of pressure with its newfound investment in UFC, which in turn, arranges pressing on the UFC to match its media partners’ expectations.

Despite that adversity, the UFC and ESPN have batch of reasons to be optimistic about the agreement. The UFC 234 prelims drew 1.34 million viewers on ESPN and became the most-watched initial poster leading up to a UFC PPV in more than two years. UFC 235 transcended that figure with a total of 1.48 million viewers. However, the UFC 236 prelims pictured a significant drop, averaging 893,000 observers. It was later reported in the Wrestling Observer Newsletter that UFC 236 sucked fewer than 100,000 PPV buys on ESPN +, which is unsurprising given the sudden change of platform.

Another involved facet of the UFC-ESPN deal is the decision to make ESPN+ the exclusive provider of UFC PPVs. While the financial details has not been able to been disclosed, it is believed the UFC will receive a guaranteed revenue stream from ESPN in exchange for exclusivity. The added defence demonstrates the UFC leverage when negotiating with its top adepts. For sample, Brock Lesnar was supposed to realise his long-awaited return from WWE to fight Daniel Cormier for the heavyweight entitlement. When Lesnar attempted to negotiate a flat reward with the UFC to compete under the new ESPN+ PPV transaction, he was turned down by the promotion. Instead, with guaranteed fund from ESPN behind it, the UFC booked a rematch between Cormier and Stipe Miocic — a fight that will draw fewer spectators than Lesnar’s return but become involved in boxers necessitating far less money.

This newfound leverage will likely also impact UFC’s relationship with its most valuable star, Conor McGregor. The Irishman has headlined four of the five highest selling UFC PPVs and, despite losing his most recent fight, remains the biggest draw in the promotion’s history. Yet despite McGregor’s status, the ESPN+ consider locates him at a significant disadvantage during the negotiation process. The UFC’s primary goal is no longer to sell PPVs but to create regular material that will draw brand-new readers to ESPN +, something they are able to arguably achieve without McGregor.

There is also a case to be made that McGregor’s recent brushes with the law start him an even more unappealing commodity for the UFC.While the UFC arguably no longer needs McGregor, ESPN can still profit from his proximity on their streaming service, especially if he is able to draw in a casual public to ESPN +. ESPN’s arrangements with the UFC is the network’s first major administer under Pitaro’s helm and he will want to ensure that it is a successful endeavour. McGregor could be useful in that regard, even if merely for a single oppose. Therefore it is still possible that the promotion will reach an eventual agreement with the former champion.

The UFC-ESPN agreement is an example of how plays the organisations that rely heavily on individual expertise and star power can be beneficial to a broadcaster looking to reestablish itself through new distribution channels. Nevertheless, in order to eventually refund their sizable investment in the UFC’s media freedoms, ESPN will probably have to put aside their progressive ethos and UFC unseemly back, such as the decision to promote controversial athletes like Hardy, Penn and McGregor.

* ESPN and the UFC declined to comment on this article when contacted by the Guardian .

Read more: https :// www.theguardian.com/ sport/ 2019/ may/ 10/ is-a-tarnished-ufc-worth-the-risk-to-espn-and-disney-studios

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