Paramount has struck a landmark seven-year deal for rights to the Ultimate Fighting Championship (UFC) in the US, valued at $1.1bn annually. The agreement represents a substantial uplift from the competition’s previous $500m per season contract with ESPN, and elevates the UFC to the joint-eighth most valuable annual sports competition in the US. The package includes all UFC events, with distribution on Paramount+ at no additional cost, effectively dismantling a long-standing pay-per-view model that has traditionally underpinned combat sports’ economics.

Despite the high cost of the deal and the well-publicised challenges streamers continue to face in making sports rights profitable, several strategic factors explain the move. Paramount’s recent merger with Skydance, for example, has strengthened its financial position and created the flexibility to secure tentpole properties capable of driving subscription growth. With Skydance’s production capabilities, UFC’s live product can be complemented by adjacent content, such as documentaries and behind-the-scenes shows, that extend fan engagement beyond the live events in the Octagon.

The UFC has an attractive fan base for a streamer looking to drive subscriber growth. Ampere’s Q4 2024 Sports Consumer survey shows that 61% of UFC fans are willing to pay to watch the competition, putting UFC ahead of many larger sports by proportion of monetisable fandom. While it is the 16th most-popular competition among US respondents, UFC ranks 8th in terms of competitions that fans are willing to pay for, with 6% of all US sports fans prepared to pay to watch it.

The deal therefore has the potential to be a strong acquisition play for Paramount+, given UFC’s highly monetisable audience. Removing the pay-per-view barriers will help to attract fans to the platform, with the competition creating a differentiated content offering at a time when Paramount’s strategic priority will be scaling market share. Having regular live events throughout the year, as well as offering non-live adjacent content, will then help to protect the platform against subscriber churn.

In short, while Paramount’s $7.7bn expenditure across the seven years of the deal is high, it represents a calculated bet that the UFC’s monetisable fandom can become a cornerstone of Paramount+’s growth in an increasingly crowded streaming market.