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Did Disney's ESPN Make a Deal That Threatens Endeavor's UFC?

The sports channel has signed a new deal with the Professional Fighters League.

What’s better than one Mixed Martial Arts league? If you’re ESPN, the answer is two, apparently.

The Disney  (DIS) - Get Walt Disney Company Report owned ESPN brand, which has seven channels in the United States and the popular WatchESPN application, has renewed its contract with the Professional Fighters League for a new season that will kick off on April 20, according to Deadline.

What Is The Professional Fighters League?

The PFL isn’t the most well-known MMA league out there, but it’s been around for a few years now. It began in 2018 after the restructuring of the World Series of Fighting organization, and the PFL is now owned by MMAX Investment Partners.

The league distinguishes itself from its competitors in a number of ways, the biggest of which is that it follows the format of a regular season, complete with a championship at the end, rather than having bouts on a year-round basis. All of the PFL’s matches are held in the SmartCage, a 10-sided mixed-martial arts enclosure, and adhere to the Unified Rules of Mixed Martial Arts, though elbow strikes are banned. 

In 2018, the league signed a multi-platform distribution deal for its first season with NBC Sports Group and Facebook, with the social media platform streaming up to six hours of live coverage for each event. In 2019, the PFL’s events were picked up by ESPN and its outlets for broadcast.

The PFL isn’t as synonymous with MMA fighting as the Ultimate Fighting Championship league, and it’s not exactly been a ratings champion. But Donn Davis, founder and chairman of the PFL, doesn’t view the league as a competitor to the UFC, but more as a complimentary service to fill an audience need. 

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“I saw a big opportunity that was very underserved. There are 550 million MMA fans. It's the third largest fan base in the world, and they're only getting 40 events a year,” Davis told USA TODAY Sports.

Could This Move Threaten ESPN’s Relationship With The UFC?

In 2019, ESPN struck a deal with UFC television for a five-year, $150 million a year deal, as well as a separate digital rights deal to carry 15 UFC fights per year on its new ESPN Plus streaming service. Altogether, it was a $300 million annual deal for linear and digital UFC rights to carry 42 live events per year.

So clearly, the UFC is a big priority for ESPN. Could making a separate deal with the PFL threaten that? 

The PFL doesn’t have the numbers to really threaten UFC’s dominance, but there was a time when the World Wrestling Federation was the only game in town. Things can change over time, and an established brand can sometimes get a bit calcified, and thus vulnerable to a challenge from a hungry upstart. So maybe this is ESPN’s was of serving an audience need, or maybe it can be seen as way to stifle a potential source of competition.

For its part, the UFC has had a rough couple of years. But that’s true of a lot of industries in the COVID era, especially those that relied on live events as a big source of revenue. 

UFC’s owner Endeavor Group Holdings Inc  (EDR) - Get Endeavor Group Holdings, Inc. Class A Report went public last year, and “posted a profit of $2.4 million in the first quarter, compared with a staggering loss of $51.3 million a year earlier,” as reported by The Los Angeles Times. In November, it posted a net income of $63.6 million, so it doesn’t need to sweat anything at the moment, but fighting fans will no doubt be curious to see how this match-up plays out.