On Thursday night, Amazon will broadcast the first of 11 NFL games on its Prime streaming service. The company paid a reported $50 million price tag to share broadcast rights with either NBC or CBS during the football season.
Amazon bidding on football rights was not only a shocking move by the online shopping giant, but it also signaled a clear change in the way sports will be viewed from now until forever — and that could include the upcoming TV rights deal for the UFC.
The end of September will serve as the closing date for the exclusive negotiating period between the UFC and current broadcast partner FOX. That means, as of Oct. 1, the mixed martial arts promotion can begin fielding offers from other networks on a broadcast rights package that would begin in 2019.
The UFC signed a deal reportedly worth an average of around $115 million per year with FOX in 2011, but the company is looking for a massive increase in rights fees with its next television package. After the UFC sold last year for more than $4 billion, the new owners at WME-IMG promised investors that a significant part of recouping the funds used to buy the promotion would come from the upcoming television rights deal.
In fact, WME-IMG laid out figures north of $400 million per year for the next UFC rights deal that would hopefully last for somewhere around 10 years with whichever network landed the organization.
While the UFC will maintain the option to ink a deal with an individual network, the inclusion of streaming services could shake up how the promotion ultimately ends up deciding on the television rights from 2019 and beyond.
In a report from Variety on Wednesday, Amazon is not just dipping its big toe into the water to test out streaming live sports. They are going to aggressively pursue more deals with rumors already swirling that they will get involved in the bidding for the rights for the English Premiere League soccer matches.
Amazon already won the rights to the ATP Next Gen men’s youth tennis tournament that will stream online through 2018.
Amazon isn’t alone in online streaming services looking to nab top sports franchises. Facebook put in a $600 million bid for the five-year broadcast rights for Indian Premiere League cricket matches. Facebook was outbid by Star India, who paid $2.6 billion for the rights, but it’s clear that other streaming services are willing to pay for premium sports, especially when they can find a worldwide audience.
The same could be said for Amazon, who will broadcast NFL games to over 200 countries with Prime customers paying $99 a year for the service. In fact, Amazon would only need 500,000 additional Prime memberships to justify the $50 million price tag for the NFL rights and that doesn’t even include additional advertising or in game purchases made by viewers online (for instance, team apparel or memorabilia could be made available for purchase for Prime customers watching the NFL games).
That brings us to perhaps the biggest elephant in the room — Apple.
Just a couple of weeks ago, Apple introduced a new Apple TV that will be capable of broadcasting in 4K definition with plans to launch a new sports tab that will include numerous live events. Apple didn’t go into much detail about the sports that will be streamed on the service, perhaps instead just opting to work with already existing applications such as ESPN or FOX to broadcast games through the new Apple TV.
There is the possibility, however, that Apple could decide to get into live streaming exclusive events and that’s where the UFC could become a viable candidate for a broadcast rights deal.
Apple has more than $256 billion in liquid cash on hand, which means it could essentially purchase part of the UFC’s broadcast rights without even denting its current holdings. The UFC is also in an advantageous position because they are the only major sports franchise with broadcast rights coming available before 2021. That means if Apple wants to get involved in live streaming sports sooner rather than later, the UFC might be the best possible partner to work with as it launches this new service.
To add to the speculation, Apple posted for a new job opening for a sports editor “to lead content curation and programming for the recently announced live sports feature in the Apple TV app.”
All of this doesn’t necessarily mean Apple would win the entire UFC rights package, but it could pay for a portion of the broadcast rights alongside a network such as FOX, NBC or even Turner Sports, who would then pick up another part of the deal. Then again, Apple has enough money to outbid virtually anyone if it wants exclusive rights, although it’s tough to imagine the UFC would want to completely abandon network television at this juncture.
As for Amazon, Jim DeLorenzo, who heads the sports department for Amazon Video, isn’t ready to commit to any other broadcast rights deals until they see how successful the NFL will be starting with games this week.
“We’re always looking to see what our customers find compelling,” DeLorenzo told Variety.
Considering the UFC’s imprint online already with UFC Fight Pass, not to mention pay-per-views streaming online, it’s entirely possible that a deal with a streaming giant like Amazon or Apple could be a huge factor in the next broadcast rights deal.
If the NFL is a huge success for Amazon, that could put the heat on other streaming services to sign more live sports sooner rather than later and that means the UFC could cash-in with their rights deal opening up in a matter of days. It also means if Amazon, Apple, Facebook or another streaming service are willing to pay an exorbitant amount of money for even a portion of the UFC rights, then the TV networks could be forced to pay the same if not more to get an equal piece of the pie.
Most experts have predicted due to dwindling subscription numbers and more and more customers cutting the cord that the sports broadcast rights bubble may have already popped, but the inclusion of streaming services such as Amazon or Apple could completely change the game again, and it’s the UFC that might benefit the most.