The UFC will begin negotiating a new broadcast rights deal in late 2024, but ESPN's current promotional partners continue to struggle in the ever-changing sports consumption market.
ESPN+ lost subscribers for the second straight quarter and third in the last four quarters overall. ESPN+ has primarily been a growth ground for the UFC, which has lost subscribers, particularly through its pay-per-view business on streaming services. In the second quarter of 2024, the number of subscribers decreased by 2%, bringing the total number of subscribers to 24.8 million.
That's about the same number of subscribers ESPN+ had advertised in early 2023.
ESPN+ also reported a $65 million operating loss in the quarter.
As for the reason for the decline in ESPN+ subscriptions, Disney pointed to normal cancellations that often occur at the end of a sports season. This time, it's because both college football and pro football end until the end of summer 2024. Although these claims may be true, ESPN+ has steadily risen as a streaming service, experiencing growth over its five years.
Even better, Disney reported that ESPN had overall ratings success in April, including the conclusion of the NCAA Women's Basketball Championship. In addition, with UFC 300 achieving record viewer ratings, April set a new record for viewer ratings for a UFC preliminaries broadcast.
Of course, Disney CEO Bob Iger has talked a lot in recent years about his plans to move ESPN away from terrestrial television and into a more digitally-driven business, including launching a direct-to-consumer streaming platform in 2025. It also includes. Disney is also planning to launch one. In late 2024, Warner Bros. Discovery and his sports streaming service with FOX will launch.
“I think sports basically continues to shine in a world where we have a lot more choice,” Iger said during an earnings call with investors on Tuesday. “The other thing that’s really important is the engagement that live shows generate. I mentioned it in the comments, but I haven’t really talked about it that much, but I think it probably gets a lot of attention. [joint venture] We also announced what we announced and our flagship that will take you directly to ESPN at the end of the year. [2025] But later this year, Disney+ will have an ESPN tile. This includes a modest amount of programming, but is essentially a start in terms of conditioning Disney+ and Hulu subscribers to have sports. .
“Looking to the future, I think ESPN will pivot to digital without abandoning linear. If people want to get ESPN and its various channels through a cable or satellite subscription, it will remain linear. But that's fine. Or, if you want a smooth pivot, there are a number of different access points to get your digital products to ESPN Digital, so you can stay linear with other sports services. You can do it as part of the , you can do it directly from ESPN using the ESPN app, you can do it as part of a bundle with our own services, so I'm very bullish on that. ”
Beyond the UFC rights, ESPN is also in other negotiations with the NBA, which is expected to result in a fairly expensive package that could be spread across numerous networks.
It remains to be seen how this recent decline in subscribers may affect the UFC as it negotiates a new broadcast rights deal, but negotiations are expected to begin before the end of the year. . The overall deal between UFC and ESPN runs through 2025.