UFC Links Increase in Piracy Numbers to ESPN Price Hikes

The Ultimate Fighting Championship (UFC) has repeatedly taken a tough stance on piracy, condemning freeloaders and calling for tough enforcement measures. In a recent earnings call, UFC parent company TKO noted that ESPN price hikes haven't made things easier. On the contrary, the company directly links price increases to the "jacked up" piracy numbers.

The Ultimate Fighting Championship (UFC) has promoted mixed martial arts fights for three decades, turning the sport into a billion-dollar industry.

The company is known for its aggressive stance against piracy. UFC President Dana White has repeatedly called out pirates and even got into a keyboard fight with a trolling streaming pirate.

UFC has also called on lawmakers to help them address the piracy problem. In U.S. Congress recently, the company urged lawmakers to consider site-blocking legislation. UFC also wants service providers to take responsibility and process takedown requests instantaneously.

Carrot-and-Stick

Fighting piracy with tough language, takedowns, and technological hurdles can have an effect. However, in addition to making illegal options less desirable, it’s generally a good idea to offer a great experience to legal consumers. The carrot-and-stick approach, if you will.

A few weeks ago, sports streaming services in Greece decided to present fans with a massive carrot by significantly reducing bundle prices in an attempt to combat piracy. This decision resulted in many happy consumers, who now feel that they’re getting their money’s worth.

In America, the link between pricing and piracy is typically ignored by major rightsholders, at least publicly. However, UFC and others are not insensitive to its importance. In fact, UFC parent company TKO Group Holdings highlighted the link during a quarterly earnings call yesterday.

Higher prices, More Pirates

When an analyst asked about recent pay-per-view (PPV) pricing trends and developments, TKO President Mark Shapiro said that ESPN, which is owned by Disney, has been quite aggressive with its price setting. The broadcasting partner raised PPV prices four times after signing the UFC deal in 2019, which isn’t ideal.

“Look, ESPN and Disney were very aggressive, if you will, on pricing the pay-per-view,” Shapiro responded. “Over the period of our partnership, as you’ve asked, they probably went a little quicker and a little higher than we would have liked.”

Raising prices “quicker and higher” could be a good thing if people continue to pay. However, when confronted with repeated price hikes, some subscribers decided to go down the pirate route instead.

ESPN presumably raised prices to increase profits but if subscribers churn at a rapid pace, that could be counterproductive. TKO believes that may be the case here, linking the price hikes to an increasing piracy rate.

Pricing Matters

TKO doesn’t set ESPN’s prices and has no direct influence on them. However, after noticing elevated piracy rates, TKO shared its concerns with the broadcaster.

“We voiced that to them, especially in this kind of era of piracy where we’re seeing our piracy numbers really jacked up and we think that’s driven by them pricing it too high. They were very receptive to that feedback,” Shapiro notes.

Following a meeting in Las Vegas a few months ago, attended by both UFC CEO Dana White and ESPN chairman Jimmy Pitaro, ESPN made some price tweaks, offering a discount to loyal fans.

“[T]hey took their price down […] in terms of offering a new marketing promotion where, if you buy by a certain date well in advance of the numbered fights, you were going to get a discount, and then the price of course increases once you pass that date. And they’re seeing good success with that,” Shapiro said.

While ESPN’s ‘concession’ is certainly not as generous as that of the Greek streamers, it shows that streaming platforms realize that higher prices are not always better. The ultimate goal is to find an equilibrium, where legal services are affordable, while also being profitable.

MMA Fighting notes that the last increase in UFC PPV prices dates back to late 2022, so ESPN is clearly taking it easy on that front. At this stage, it might even make sense to take “a hit” of somewhat lower profits, driving people away from pirate sites and services to undo their piracy habits.

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