The Cost of Business: Why ESPN Increased UFC PPV Prices
The ordering process for Ultimate Fighting Championship
pay-per-views has changed: UFC 246 is only available on ESPN+ in the
U.S.
While late December had its fair share of notable MMA news, one of the most important stories that broke was the fact that the Ultimate Fighting Championship was once again raising its pay-per-view prices. Starting with UFC 246, the price of a UFC PPV purchased through ESPN+ will increase $5, going from $59.99 to $64.99. Those who have not yet subscribed to ESPN+ can now purchase a PPV and one-year subscription bundle for $84.98, an identical $5 price hike compared to the same deal currently set at $79.98. For fans outside of the United States and regions where ESPN+ is not available, it is unknown at this time whether or not an increase will be seen across other distributors.
“ESPN+ is an incredible value to UFC fans,” an ESPN+ spokesperson
said in an interview for MMA Junkie, “and this price
change represents a return to the price that UFC fans traditionally
paid prior to ESPN+ decreasing the price for pay-per-view events
for most of 2019.”
The spokesperson for the sports broadcast company is referring to the fact that, prior to the UFC’s deal with ESPN, which saw ESPN+ become the sole PPV distributor for the United States in March, the price of a UFC PPV was already $64.99. After the deal was made, however, the price was lowered to $59.99 per PPV in order to keep the total cost for UFC fans the same, due to the fact that viewers had to subscribe to ESPN+ for $4.99 per month. By reverting to $64.99, the new total cost for subscribing to ESPN+ and purchasing a UFC PPV within the same month will now be $69.98, a $5 overall increase for fans.
Whereas those price jumps were for the UFC’s benefit, however, the latest increase is almost certainly being directed at their broadcast partners, ESPN.
Even though the financial terms of the UFC/ESPN deal were not fully disclosed, UFC COO Lawrence Epstein revealed back in March that the Disney-owned sports network was paying the promotion an upfront “license fee” for the exclusive PPV distribution rights, reported to be the equivalent of around 500 thousand buys per event under the old PPV model. Given that the highest PPV in 2018 not headlined by Conor McGregor or Jon Jones pulled in an estimated 380,000 buys, the recoupment of that upfront licensing fee may be an issue for ESPN, especially for cards that fail to break the 200,000 mark. Add to that the fact that only 20 percent of UFC 229’s record-breaking 2.4 million PPV purchases were procured online and there is no telling how PPV buy rates have been affected since the ESPN+ arrangement. In order for ESPN to turn a profit on the deal, they either have to rely on the UFC to bring back their established stars, and/or create new stars, or else raise the price of PPV events to get more benefit out of lower buy rates.
For what it’s worth, the UFC is certainly doing their part to help ESPN in at least one way. On Dec. 5, the promotion unveiled a major redesign of its UFC Fight Pass service, touting such modifications as “improved search functionality,” an “updated design” and “improved video quality” for the streaming service. A major change that wasn’t mentioned, however, was the fact that the service now blocks Virtual Private Networks (VPN), a common workaround many Americans would use to trick the service into thinking that they were viewing content from outside the US, thereby allowing them to avoid paying for PPV events. By blocking VPNs, the UFC is hoping to force those users to go through the proper channel of ESPN+ to purchase PPV cards, in turn boosting the PPV buy rates.
Despite this gambit to deter people from finding ways to watch UFC events for free, there are still other methods people can use to illegally stream the sport that don’t require too much effort. Whether it’s a modification to the VPN itself or simply finding the right website and clicking the Play button, those that wish to pirate the UFC’s content will continue to adapt just as fast as the promotion itself when it comes to PPV events. Although a $5 bump may seem like more of a nuisance than a hard barrier to entry for some, there are already fans who have stated on social media and internet forums that they will no longer purchase the world’s largest MMA organization’s content, opting instead to find less reputable means to watch the company’s events.
Exactly how much revenue this will bring in for ESPN and the UFC, or the split of the price increase for that matter, is not yet known. Outside of those that will illegally stream upcoming PPV events, a fair number of fans may choose to watch events at bars and restaurants that carry the promotion’s shows rather than pony up the cash for home viewing. While ratings for recent televised events and preliminaries are high, there is no guarantee that those numbers will translate to more PPV buys. As ESPN attempts to get as much as money as they can out of their new partnership with the UFC, one thing is for certain—this is hardly the last tactic we’ll see from the network.
While late December had its fair share of notable MMA news, one of the most important stories that broke was the fact that the Ultimate Fighting Championship was once again raising its pay-per-view prices. Starting with UFC 246, the price of a UFC PPV purchased through ESPN+ will increase $5, going from $59.99 to $64.99. Those who have not yet subscribed to ESPN+ can now purchase a PPV and one-year subscription bundle for $84.98, an identical $5 price hike compared to the same deal currently set at $79.98. For fans outside of the United States and regions where ESPN+ is not available, it is unknown at this time whether or not an increase will be seen across other distributors.
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The spokesperson for the sports broadcast company is referring to the fact that, prior to the UFC’s deal with ESPN, which saw ESPN+ become the sole PPV distributor for the United States in March, the price of a UFC PPV was already $64.99. After the deal was made, however, the price was lowered to $59.99 per PPV in order to keep the total cost for UFC fans the same, due to the fact that viewers had to subscribe to ESPN+ for $4.99 per month. By reverting to $64.99, the new total cost for subscribing to ESPN+ and purchasing a UFC PPV within the same month will now be $69.98, a $5 overall increase for fans.
This is by no means the first time that the promotion’s PPV prices
have increased. In 2015, the UFC raised its PPV prices permanently
for the first time since February 2008 from $44.49
to $49.99 for the standard-definition broadcast and $54.99 to
$59.99 for the high-definition broadcast. In 2018, the organization
elevated its PPV event prices by another $5, increasing the
overall price to $64.99 for the HD broadcast, starting with UFC
220.
Whereas those price jumps were for the UFC’s benefit, however, the latest increase is almost certainly being directed at their broadcast partners, ESPN.
Even though the financial terms of the UFC/ESPN deal were not fully disclosed, UFC COO Lawrence Epstein revealed back in March that the Disney-owned sports network was paying the promotion an upfront “license fee” for the exclusive PPV distribution rights, reported to be the equivalent of around 500 thousand buys per event under the old PPV model. Given that the highest PPV in 2018 not headlined by Conor McGregor or Jon Jones pulled in an estimated 380,000 buys, the recoupment of that upfront licensing fee may be an issue for ESPN, especially for cards that fail to break the 200,000 mark. Add to that the fact that only 20 percent of UFC 229’s record-breaking 2.4 million PPV purchases were procured online and there is no telling how PPV buy rates have been affected since the ESPN+ arrangement. In order for ESPN to turn a profit on the deal, they either have to rely on the UFC to bring back their established stars, and/or create new stars, or else raise the price of PPV events to get more benefit out of lower buy rates.
For what it’s worth, the UFC is certainly doing their part to help ESPN in at least one way. On Dec. 5, the promotion unveiled a major redesign of its UFC Fight Pass service, touting such modifications as “improved search functionality,” an “updated design” and “improved video quality” for the streaming service. A major change that wasn’t mentioned, however, was the fact that the service now blocks Virtual Private Networks (VPN), a common workaround many Americans would use to trick the service into thinking that they were viewing content from outside the US, thereby allowing them to avoid paying for PPV events. By blocking VPNs, the UFC is hoping to force those users to go through the proper channel of ESPN+ to purchase PPV cards, in turn boosting the PPV buy rates.
Despite this gambit to deter people from finding ways to watch UFC events for free, there are still other methods people can use to illegally stream the sport that don’t require too much effort. Whether it’s a modification to the VPN itself or simply finding the right website and clicking the Play button, those that wish to pirate the UFC’s content will continue to adapt just as fast as the promotion itself when it comes to PPV events. Although a $5 bump may seem like more of a nuisance than a hard barrier to entry for some, there are already fans who have stated on social media and internet forums that they will no longer purchase the world’s largest MMA organization’s content, opting instead to find less reputable means to watch the company’s events.
Exactly how much revenue this will bring in for ESPN and the UFC, or the split of the price increase for that matter, is not yet known. Outside of those that will illegally stream upcoming PPV events, a fair number of fans may choose to watch events at bars and restaurants that carry the promotion’s shows rather than pony up the cash for home viewing. While ratings for recent televised events and preliminaries are high, there is no guarantee that those numbers will translate to more PPV buys. As ESPN attempts to get as much as money as they can out of their new partnership with the UFC, one thing is for certain—this is hardly the last tactic we’ll see from the network.
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