Despite suggestions that ESPN might be lukewarm about re-upping its media rights deals with UFC and Formula One, the network seems to remain interested at the right price.
According to a report by CNBC’s Alex Sherman, ESPN would like to retain rights for both properties, but perhaps on a limited basis. Currently, ESPN owns exclusive rights to both the UFC and Formula One. As negotiations continue, it seems like ESPN is keen to pare back its inventory on both properties.
Per Sherman, “ESPN still wants UFC rights, but not for the mixed martial arts league’s roughly $1 billion per year asking price. ESPN currently pays about $600 million for UFC, I’m told. That may lead to a situation where UFC splits its rights between multiple media partners.”
It has long been assumed that UFC would like to split its inventory between multiple media partners to maximize the promotion’s potential rights revenue. Netflix could be a logical landing spot given the streamer’s prior relationship with UFC parent company TKO through its WWE deal.
Formula One is a “similar story,” Sherman writes. “Despite some speculation ESPN was no longer interested in F1, I’m told that’s not true. ESPN is specifically interested in the U.S. streaming rights for F1, given its younger audience and the lack of commercial breaks once a race begins. But I’m told the media company may only want a portion of a package – select races rather than the entire circuit.”
That type of partnership might make more sense for ESPN. Formula One is seeking a reported $150-180 million per year for its full slate of races, about double the $90 million ESPN currently pays. Much of the global racing circuit’s schedule airs at odd times in the United States, making it challenging to attract viewers. A package of races that air at favorable times stateside for ESPN and another package, perhaps on a streamer, for more hardcore fans could make sense and allow Formula One to inch closer to its revenue goals.
ESPN has clearly become more conservative in its purchasing of live sports inventory. Of course, the network recently opted out of its $550 million per year deal with MLB, citing the prohibitive cost considering the ho-hum audience figures. Shrinking its relationships with UFC and Formula One would continue this austerity trend.
But that doesn’t mean ESPN doesn’t value live sports. It just means the network is becoming more price-conscious and selective about what it buys.
