David Ellison’s Paramount Skydance is an underdog, but it’s still coming out swinging at Netflix.
Paramount just locked up UFC rights for the next seven years in a $7.7 billion deal with UFC parent TKO, announced on Monday. The news comes less than a week after Paramount’s merger with Ellison’s Skydance. That long-anticipated tie-up was approved by the FCC weeks after Paramount paid $16 million to settle President Donald Trump’s “60 Minutes” lawsuit.
Starting in 2026, Paramount+ subscribers will be able to stream UFC fights at no extra charge. That’s a seismic shift away from the current pay-per-view model, where UFC fans subscribe to ESPN+ for $11.99 a month and then pay $79.99 per match. By contrast, Paramount+ costs $12.99 a month, or $7.99 with ads.
The Paramount-TKO partnership follows Paramount’s $1.5 billion deal for “South Park,” which sees the irreverent animated comedy stream exclusively on Paramount+ globally for the next five years.
The TKO and “South Park” deals “clearly signal how long-term and BIG, team Ellison is thinking,” LightShed analysts wrote on Monday. “They are not playing for near-term earnings outperformance, they are trying to create a long-term imprint on the future of the media industry to ‘win.'”
Paramount and TKO didn’t immediately respond to requests for comment.
Paramount+ isn’t playing around
Paramount wasn’t widely considered a top contender for UFC rights. MoffettNathanson analyst Robert Fishman wrote last week that Netflix, Amazon, and Warner Bros. Discovery were thought to be the most likely suitors, with Paramount as more of a dark horse.
Both Netflix and Amazon have amped up their investments in live sports. Netflix reached an agreement with TKO to stream WWE matches on Monday nights, which started in January, and it also started airing NFL games on Christmas Day. Amazon Prime Video has broadcast NFL’s Thursday Night Football games for years and will show NBA contests for the first time this fall.
While Paramount and TKO’s deal surprised some media analysts, others saw it coming.
LightShed analyst Rich Greenfield told Business Insider’s Peter Kafka in late July that Paramount would be a contender for UFC rights. He said he’d “be shocked if you didn’t see more sports on CBS” and noted that Ellison had made high-profile appearances at UFC events.
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Paramount+ is a top priority for Ellison. The new Paramount CEO said after the Skydance deal closed that he expected the platform to be “a leading, global streaming service.” He’s entrusted Netflix’s former original content executive, Cindy Holland, to help achieve that aim.
Under Ellison, Paramount+ is playing catch-up with Netflix by investing in improving its technology while betting big on live sports like UFC and buzzworthy shows like “South Park.”
Netflix had about 302 million subscribers at the end of 2024, when it stopped regularly sharing its count. Paramount+ had nearly 78 million paying customers as of June 30, the company said in late July.
Paramount+ is far behind Netflix in both size and viewership share, but its new leader has proven so far that he’s serious about trying to close the gap.
However, the Paramount-UFC deal carries risk for both parties.
It’s a huge investment for Ellison and Paramount, whose stock was little changed after the deal was announced.
And while TKO shareholders celebrated the move by sending its stock soaring more than 7%, Greenfield said Paramount+ isn’t an ideal partner, given its relatively limited reach.
“We were hoping for Netflix,” Greenfield wrote.
