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Univision is making a big bet on mixed martial arts.
The Spanish-language media giant is acquiring an equity stake in the MMA firm Combate Global, seeking to own a piece of the burgeoning combat sports marketplace, and giving it an ownership stake in one of its most important content partners.
The companies aren’t discussing the terms of the deal, but it is described as “significant,” with Univision committed to helping grow the firm globally. The investment also comes as Univision prepares to merge with Televisa, creating the world’s largest Spanish-language media company.
“It made all the sense in the world to have a bigger stake in the relationship, because of the size of the growth, and the targets that Combate offers us,” says Juan Carlos Rodriguez, the president of sports enterprises for Univision, who will oversee the combined company’s sports efforts.
“This is the proverbial win-win. Univision becomes an incredible partner that we are just very well matched with,” adds Campbell McLaren, Combate Global’s CEO, who added that Univision CEO Wade Davis is “someone who knows and loves MMA.”
Combate Global, which was founded a decade ago as Combate Americas, already has significant expansion plans, with the addition of a European tournament next month, and the company planning to move some of the fights to Mexico in the coming months as well, developing tentpole live event fights. Univision recently signed a new 5 year media rights deal with Combate, with the equity deal coming on the heels of that agreement.
“Once all of our audience gets to learn Combate, the growth is going to be huge,” Rodriguez says. “Being able to export it to other countries in the world… it will empower the property across all of its revenue.”
It is also betting on streaming video as a means of expansion. ViacomCBS has the English-language rights for its Paramount+ streaming service, and Univision and Combate are beginning to think about how they can incorporate Combate content into the company’s own streaming offerings.
“Number one is creating new content that doesn’t necessarily have to go to linear,” Rodriguez says. “Streaming for us is a priority and will continue to be a priority, so creating Combate content to put into the streaming platform will be key and strategic.”
That being said, Rodriguez adds that “we have to be respectful of our deals. We are not going to jeopardize that. So we’re going to be very responsible for both the actual commitments that we have in linear, and the new opportunities we have to develop content for streaming.”
One way they plan to do so is through La Jaula Studios, Combate’s in-house production company. McLaren says they are already developing a reality series for Univision. “I wish I could tell you the concept, but I think it completely redoes what we have seen in the past with reality shows focused on MMA fighters and MMA athletes,” he says.
Univision’s Combate investment comes amid a fast-growing market for combat sports, particularly as streaming video continues to grow. The investment gives Univision a stake in Combate’s upside as it expands around the world, and as it strikes deals in new markets.
The market leader in MMA is UFC, which Endeavor now owns in its entirety after buying out its other shareholders earlier this year. The holding company, which also owns WME and IMG, is leaning on UFC to drive cashflow for the entire firm, betting that its live events, ancillary businesses and its lucrative streaming deal will continue to deliver global growth.
That streaming deal is with Disney’s ESPN, with UFC events underpinning its ESPN+ streaming service as a premium add-on. Disney has credited UFC’s tentpole events with driving new users to the streaming sports offering. In Disney’s last quarter, it reported an average revenue per user (ARPU) of $4.55, an increase of 7 percent a year earlier, suggesting that UFC is helping to improve its margins.
“The UFC has been on a tear, and it is that ESPN+ deal that has been phenomenal for them,” says McLaren, who previously co-founded UFC, adding that “it has been the two of us, UFC and Combate, we are the ones with real audience numbers.”
“What we have done at Combate, with the help of Univision, is created and developed a new audience,” he adds, noting that only 16 percent of Combate’s audience have watched UFC. “We have found a new audience that nobody was catering to, that nobody was thinking about, and that nobody was appealing to. And so when you combine that with a new platform … that is a powerful force.”
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