ESPN+, the streaming service where UFC primarily thrives, has lost subscribers for the second straight quarter and reported a $65 million operating loss for Q2 2024, potentially impacting UFC’s upcoming broadcast rights negotiations.
UFC’s set to kick off negotiations for a new broadcast rights deal in 2024. But there’s a hitch. ESPN, the current partner, is having a tough time navigating the ever-evolving sports consumption market.
In a bit of a slump, ESPN+ lost subscribers for the second consecutive quarter. It’s the third time in the past four quarters. The UFC’s main stomping ground, especially for pay-per-view, is ESPN+. The second quarter of 2024 saw a 2% drop in subscriptions. The total? A cool 24.8 million.
Sounds familiar? That’s because it’s roughly the same number ESPN+ was boasting about in early 2023.
Financially, it’s not all sunshine and rainbows either. ESPN+ reported a $65 million operating loss for the quarter.
Why the drop in ESPN+ subscriptions? Disney, the parent company, blames the usual end-of-sports-season churn. This time, it’s due to college and pro football wrapping up until late summer 2024. But here’s the thing: ESPN+ had been on a steady upward trajectory for over five years.
But hey, it’s not all doom and gloom. Disney reported that ESPN had a good run in April. The NCAA women’s basketball championship concluded, and UFC 300 pulled in record viewership. So, there’s that.
Disney CEO Bob Iger has been pretty vocal about shifting ESPN to a more digital-focused business. The plan? Launch a direct-to-consumer streaming platform in 2025. And that’s not all. Disney, along with Warner Bros. Discovery and FOX, plans to roll out a sports streaming service in late 2024.
Iger’s optimistic about the future of sports in a world with a ton of options. He’s big on the engagement live sports generate. He mentioned something interesting during an earnings call. An ESPN tile is going to pop up on Disney+ by the end of the year. It’s a small start, but it’s a start.
Looking ahead, Iger sees ESPN pivoting towards digital without ditching linear. If fans want ESPN through cable or satellite, that’s cool. If they want to switch to digital, there’ll be plenty of access points. He’s feeling pretty bullish about it.
But there’s more than just the UFC broadcast rights at stake. ESPN’s also got to negotiate with the NBA. That’s expected to be a pricey package that could be spread across multiple networks.
How will the drop in subscribers impact UFC’s new broadcast rights deal? That’s the million-dollar question. Talks are expected to start before the year’s out. The current UFC-ESPN deal runs through 2025.