At Heitner Legal, we are often asked to conduct diligence on and draft/negotiate contracts for various types of rights deals. One common rights deal negotiation in the world of sports relates to TV rights.
Bleacher Report recently asked Darren Heitner to opine on how/if ESPN layoffs will in any way affect the bidding for TV rights deals, with the UFC looking to negotiate a massive new arrangement in the near future. The article, With ESPN Cutting Costs, UFC Faces Challenge in Meeting Bold TV Rights Fee Goals, includes a few quotes from Heitner.
“It is impossible to ignore the exorbitant fees that ESPN pays for the rights to broadcast a wide spectrum of sporting events, but it is part and parcel of being the ‘Worldwide Leader,’ I suppose,” Darren Heitner, an attorney and founder of Heitner Legal, P.L.L.C., a law firm that specializes in sports law, told Bleacher Report. “ESPN is in this precarious position in which it feels obligated to win bidding wars for important TV rights or else it will shed some of its excellence in comparison to much weaker networks. The key question is: if ESPN reduces its role in bidding, will the fees be reduced in accordance with ESPN’s action?”
“I don’t think rights fees are in trouble, per se, but I think that they may plateau in the near future,” Heitner said. “UFC rights should still be exploited for a very large sum of money, and the multiple of 4x is possible. It is more difficult to value those rights, as the sport is continuously attracting a wider, larger audience over time.”