The UFC is not threatened by the merger of PFL and Bellator, with TKO Group Holdings president Mark Shapiro stating that the competition is good for the combat sports industry and can help to boost viewership and media rights.
The PFL’s acquisition of Bellator isn’t causing any sleepless nights over at the UFC. In fact, they’re pretty much welcoming the competition with open arms.
That’s the word from Mark Shapiro, the big cheese at TKO Group Holdings. He’s been chatting about the UFC’s main rival now that the PFL and Bellator have become one big happy family. Plus, the PFL just renewed its deal with ESPN for broadcasting rights. Yep, the same ESPN that airs all of the UFC events and pay-per-views.
Shapiro wears a lot of hats. He’s the president at Endeavor and TKO Group Holdings, the company that’s a mix of UFC and WWE. He reckons that the PFL and Bellator joining forces can only be a good thing for the combat sports industry.
“I’m excited because I think a rising tide lifts all boats,” Shapiro said during some fancy conference. He thinks it’s good for the sport and the media rights equation. He also likes the idea of having more MMA on ESPN. But he’s clear about one thing – they are the ‘B’ squad.
The challenges for PFL post-Bellator purchase are pretty much the same as before. They’re still fighting for viewership and ticket sales for live events, not to mention trying to break into pay-per-view.
PFL recently got a cool $100 million investment from SRJ Sports Investments, a branch of the Saudi Arabia sovereign wealth fund. This will take the promotion to the Middle East starting in 2024. The Bellator purchase was done without any cash, just an all stock deal, with Paramount keeping a minority ownership in the promotion.
Shapiro knows it’s tough to turn a sports property from an investment opportunity into a profitable operation. That’s something the PFL hasn’t managed yet.
“I’m not being politically correct,” Shapiro stated. He respects any entrepreneur that can get a chunk of audience for a sports property. But turning it into a profitable business long term? That’s the real challenge.
He’s in awe of what Dana White has done over the last 25-plus years. White took a struggling brand and turned it into a mainstream major sports property. That’s no easy task.
While the PFL will try to become a real revenue producer, the UFC hasn’t struggled at all in that area. Especially after the organization was sold to Endeavor for just over $4 billion in 2016.
Over the past seven years, the UFC has seen incredible growth in both revenue and profits. Record setting marks in both areas, especially after the global pandemic ended.
Sponsorships have also exploded for the UFC. They’ve inked numerous lucrative deals including a recent one with Bud Light for $100 million to become the official beer of the organization.
Next up will be negotiating a new broadcast rights contract. Talks for the UFC are likely starting in late 2024.
“Look, we’ve got two years left on the UFC deal once we get past December,” Shapiro said. The ratings are strong. The buys for ESPN have been strong. They’re developing new stars and monetizing like never before.
“Our sponsorships up near $200 million. When we bought the UFC at Endeavor we were doing roughly $40 million in sponsorships. So that shows you the kind of opportunity and the size and scale, the breadth of the UFC, the fanbase the way it’s grown and the way we’ve been able to monetize alongside it.”
Shapiro was quick to point out that discussions for the UFC’s broadcast rights deal will absolutely begin with ESPN’s owners at Disney. But he also knows there’s a robust market for live sports.
“Sports rights are urgent, they’re immediate, they’re live, they’re water cooler,” Shapiro said. People like to chatter about them.
“As long as that continues, as long as these media companies, these behemoths are launching their own direct-to-consumer platforms, they’re going to need sports. UFC, we still have two more years of that deal and we’ll have a conversation with Disney first and foremost.”