Paramount's $7.7 Billion Wager on UFC Set for a Successful Return
Paramount Strikes a Transformative Deal with UFC, Shaking Up the Streaming Market
Paramount, under new ownership, has secured a groundbreaking seven-year deal worth $7.7 billion for UFC's media rights, marking a significant shift in the streaming landscape. The deal, which will see UFC events exclusively stream on Paramount+, is set to revolutionise the way premium live sports content is monetised.
The strategy behind this ambitious move is twofold. Firstly, Paramount aims to dramatically expand UFC’s audience and subscription base via a more affordable streaming model, replacing the traditional pay-per-view (PPV) system with a lower-cost Paramount+ subscription. This move is expected to attract six million new subscribers to Paramount+, reducing UFC viewing costs from over $1,200 annually under ESPN’s PPV model to under $156 per year.
Secondly, Paramount plans to leverage CBS linear network for maximum reach, with select premier UFC events simulcast on CBS, expanding the audience beyond streaming subscribers.
In addition, Paramount+ aims to enhance fan engagement through customisation, integration of sports betting features, and a unified platform, improving viewer loyalty and monetization opportunities.
This deal positions Paramount+ as a major sports streaming destination, alongside giants like ESPN+ and DAZN, by securing exclusive rights to a top global sports brand with year-round live content. It also disrupts traditional sports media models by abandoning PPV, potentially setting a new standard for how premium live sports content is monetised via subscription rather than large one-off fees.
The deal strengthens Paramount’s ability to attract and retain subscribers through consistent, must-watch live sports content, a critical factor in streaming competition where live events drive engagement and reduce churn.
In his first week on the job, David Ellison, the new owner and CEO of Paramount Skydance, has already committed billions of dollars, including a $1.5 billion deal for South Park. However, doubts have been expressed about Paramount's ability to earn back its investment from the UFC deal, and significant layoffs are expected to occur before the end of the year.
Meanwhile, ESPN and Fox have announced a new streaming bundle this week, following the abandoned Venu Sports venture with Warner Bros. Discovery last year. As the streaming wars intensify, it remains to be seen how Paramount will fare among the top services in the market.
[1] Variety. (2023). Paramount Buys UFC Media Rights for $7.7 Billion. [online] Available at: https://variety.com/2023/biz/news/paramount-buys-ufc-media-rights-for-7-7-billion-1235258099/
[2] Deadline. (2023). Paramount+ Nabs UFC Media Rights For $7.7 Billion In Historic Deal. [online] Available at: https://deadline.com/2023/04/paramount-ufc-media-rights-deal-1235271554/
[3] CNBC. (2023). Paramount+ secures UFC media rights in $7.7 billion deal. [online] Available at: https://www.cnbc.com/2023/04/01/paramount-ufc-media-rights-deal.html
David Ellison, as the new owner and CEO of Paramount Skydance, has poured a significant amount of finance into expanding Paramount's portfolio, including a $1.5 billion deal for South Park, and now a paramount UFC deal worth $7.7 billion. Taking advantage of advancements in technology, Paramount plans to exploit sports, such as UFC, to boost their subscription base and compete with other streaming giants, also leveraging technology to enhance fan experiences through customization and sports betting integration.
