The quest to sell the UFC’s and WWE’s media rights featured the top media companies and entertainment agencies going head to head over marquee properties. Here’s how it all unfolded.

WWE’s “SmackDown” provided a tempting target for networks given its broadcasting frequency and avid fan base. Photo: WWE WWE’s “SmackDown” provided a tempting target for networks given its broadcasting frequency and avid fan base. Photo: WWE WWE’s “SmackDown” provided a tempting target for networks given its broadcasting frequency and avid fan base. Photo: WWE

Eric Shanks felt good as he left Fox Sports’ New York office in mid-May. Fox and the WWE had spent two days negotiating a deal that would give Fox the rights to WWE’s popular “SmackDown” — a deal that virtually guarantees big Friday night ratings for a five-year run that would start in October 2019.

The deal basically was done, but the sides had a couple of minor points to hammer out. Shanks figured negotiations probably would spill over into the next day, and he had to catch a flight back to his Southern California home to attend a school event for his daughter.

The Fox Sports president jumped into a waiting car that would take him to New York’s JFK Airport for the cross-country flight. During the ride to the airport, his phone rang. It was Stephanie McMahon, WWE’s chief brand officer.

“Congratulations,” McMahon told Shanks. “We just finished.”

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While Shanks had headed for the airport, McMahon and WWE’s team had kept at it. They had cleared the final negotiating hurdles and shaken hands with 21st Century Fox President Peter Rice and Fox Sports Executive Vice President Larry Jones.

A jubilant McMahon asked Shanks to turn around and go back to Fox’s office for a quick celebration with everyone. Despite the appealing offer and sense of relief over a done deal, Shanks said he had committed to get back to Los Angeles. He would continue to the airport.

A month later, after Fox and WWE put out the official announcement on the deal, Shanks still had not popped champagne corks with WWE executives to celebrate — they have not been in the same town since the deal closed.

Fox’s WWE deal marked the end of more than two years of negotiations among networks looking to land the top-two sports rights acquisitions to enter the market in years: the UFC and WWE. It also featured two top entertainment agencies going head-to-head in strategy and negotiations for their respective clients.

What follows is the inside story about how Endeavor crafted the deal to sell the UFC’s media rights to ESPN for $1.5 billion over five years and how CAA was behind the $2.34 billion deal by NBCUniversal and Fox for WWE.

This behind-the-scenes account is based on interviews with a dozen insiders who were involved in the negotiations.

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The Fight Card Executives who drove media negotiations for UFC and WWE Endeavor Ari Emanuel CEO Mark Shapiro Co-president, WME and IMG CAA Alan Gold Principal, head of sports media, Evolution Media Capital Nick Khan Co-head of television, agent, CAA Sports

UFC Dana White President Lawrence Epstein Executive vice president, chief operating officer

WWE Stephanie McMahon Chief brand officer Paul Levesque Executive vice president, talent, live events and creative

Disney/ESPN Kevin Mayer Chairman, direct-to-consumer and international, Disney Jimmy Pitaro President, ESPN

Fox Peter Rice President, 21st Century Fox Eric Shanks President, Fox Sports

NBCUniversal Bonnie Hammer Chairman, NBCUniversal cable entertainment Mark Lazarus Chairman, NBC broadcasting and sports

Turner John Martin Former CEO David Levy President

Almost as soon as WME-IMG bought the UFC in 2016 for an eye-popping $4.2 billion, executives expected a frenzy when the property’s media rights went to market, especially given the increased importance TV networks placed on live sports.

The frenzy, however, didn’t come at first. In the UFC’s bid book sent to all the networks during the sale process, TV executives saw that the UFC valued its media rights at $450 million per year — nearly four times higher than its current average.

Several networks, including NBC, ESPN and even incumbent Fox, declined to even meet at first. The $450 million number was so high, they said, why waste anyone’s time?

WME-IMG executives were frustrated. They told the networks that the number in the bid book was little more than a place holder. Officials with the agency, which has since been rebranded Endeavor, knew they had to develop a strategy to get two companies interested in the UFC’s rights. With Fox as the incumbent, Endeavor needed at least one more network to step forward to keep Fox’s bid honest.

Fox’s exclusive negotiating window ended in the fall of 2017. Slowly, Endeavor executives were able to get in front of networks and start pitching them on UFC.

Turner showed early interest, but the company’s $84 billion merger with AT&T was under regulatory review, and Turner executives would not be able to negotiate such a big deal while the Department Of Justice was reviewing the merger.

Still, Endeavor CEO Ari Emanuel and WME and IMG Co-president Mark Shapiro were enthused by Turner’s interest and believed they could have a deal if they waited out the approval process. In various meetings with Endeavor executives, Turner President David Levy talked about making UFC part of AT&T’s content offering, having DirecTV carry pay-per-view content, and including UFC content in some of the skinny bundles that AT&T would roll out.

Despite the vision, Turner remained handcuffed as the DOJ filed a lawsuit against AT&T in November 2017 to stop the merger. Still, Endeavor executives were enthused and viewed Turner as the second bidder they needed if UFC negotiations broke down.

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In March 2018, three days after being named to replace John Skipper as ESPN president, Jimmy Pitaro found himself eating breakfast at the Mandarin Hotel with Shapiro and ESPN’s Burke Magnus, executive vice president of programming and scheduling.

Shapiro, himself a former ESPN executive, and Pitaro had never met before, and they hit it off almost immediately. It turned out that Pitaro was renting a house just down the road from Shapiro in Westport, Conn. They gossiped about mutual friends in the business.

Over a bowl of blueberries, Shapiro outlined what UFC had to offer. Pitaro listened intently as he poked at his eggs.

During Skipper’s reign as president, ESPN showed little interest in a UFC deal. Skipper wasn’t a fan of the sport and didn’t believe it fit into ESPN’s schedule.

Watching Pitaro’s reactions that morning, Shapiro — for the first time — truly believed that a deal with ESPN could be possible.

Shapiro, though, didn’t realize that Pitaro wasn’t the one calling the shots, at least not when it came to ESPN+, the streaming service where ESPN envisioned putting most of the UFC fights. Instead, those decisions would run through Burbank and Kevin Mayer, chairman of Disney’s direct-to-consumer and international groups.

Pitaro may have replaced Skipper as ESPN’s president, but he inherited fewer areas of responsibilities. The ESPN+ streaming service that had reported to Skipper was shifted to report to Mayer, along with ESPN’s ad sales group.

Any UFC deal would need Pitaro’s buy-in, of course, but Mayer would run point.

Shapiro’s enthusiasm didn’t wane. He believed that Mayer liked the UFC and would be willing to cut a deal.

Endeavor remained confident that the UFC would remain in business with Fox in some form. But now it started to look like ESPN would be that vitally important second bidder.

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Over at Fox, executives liked the UFC and wanted to stay in business with it, but they decided that they wouldn’t be able to retain the entire package, especially not at the inflated rights fee they were hearing.

Network executives had heard that Endeavor was making the rounds in the investment community, saying they expected to sell media rights for around $400 million per year. Professional investors knew numbers given during presentations always were inflated and they discounted it anywhere from 15 to 25 percent. Even the discounted number, though, still was higher than Fox wanted to go.

Internally, Fox focused on three scenarios.

Endeavor’s Ari Emanuel and Mark Shapiro led the UFC’s sales effort, meeting with executives at multiple networks to drive interest. Photo: Getty Images Endeavor’s Ari Emanuel and Mark Shapiro led the UFC’s sales effort, meeting with executives at multiple networks to drive interest. Photo: Getty Images Endeavor’s Ari Emanuel and Mark Shapiro led the UFC’s sales effort, meeting with executives at multiple networks to drive interest. Photo: Getty Images

The first would see Fox pay more for less content. Under this scenario, Fox would pay an annual average of $200 million (up from the annual average of $116 million). But Fox would give up rights to shoulder programming like “The Ultimate Fighter.” It would reduce the number of events it carried and would make more fights available on broadcast.

The second scenario was more of a NASCAR-style approach. Fox would pay around $150 million per year and split the package with another network. Fox would carry the first half of the year, and another network would carry the second half.

The third scenario contemplated life without the UFC altogether. Fox liked the UFC, but TV ratings and ad sales proved to be a struggle. It was difficult to market the sport’s stars, especially since UFC’s biggest stars, like Ronda Rousey and Conor McGregor, weren’t fighting anymore, and UFC saved its best fights for pay-per-view.

Fox also started looking at spending on other sports rights to fill nights on its broadcast network as part of its new strategy centered on live programming in prime time. In January, it completed a deal for “Thursday Night Football,” paying more than $3 billion over five years. It started to consider the WWE, which would be shopping its rights in mid-2018. Fox insiders were attracted to WWE’s consistently high ratings and passionate fan base.

Mainly, Fox executives thought they had the luxury to wait on the UFC. They had heard that others, like ESPN and Turner, had shown interest. But they didn’t believe either network would be cutting a deal quickly.

In October 2017, Fox allowed its exclusive negotiating window to lapse without submitting a formal bid. Shanks verbally told Emanuel and Shapiro that Fox would renew the whole package for $200 million per year — a number he expected Endeavor to dismiss altogether.

He was right. Upon hearing the offer, Emanuel didn’t even make a counter offer. Shanks still liked the UFC and was friendly with its executives, but it was becoming obvious to Endeavor that at least part of the package was going to move to another network.

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WWE’s negotiation period with NBCUniversal ran until mid-May 2018, but WWE executives started making the rounds well before that through a series of get-to-know-you meetings with various TV executives.

The networks, however, saw one big complication. Endeavor owns the UFC and the agency’s Emanuel is friends with the WWE’s Vince McMahon, who asked Emanuel to rep WWE during its media talks.

Networks didn’t feel comfortable negotiating with the same person for two competing sports properties. Executives at multiple networks viewed it as a clear conflict of interest and were not shy about pointing it out to WWE executives.

During a WWE event in Los Angeles in the spring of 2017, Fox’s Shanks pulled Vince McMahon aside to make that point. Shortly thereafter, WWE hired one of Endeavor’s top rivals, CAA, to handle WWE’s media rights deal.

The fact that Fox pushed for the change annoyed Emanuel and offered another hint that Fox and the UFC would have trouble reaching a deal.

The Deals By The Numbers UFC $1.5 Billion Total value of five-year deal with ESPN, starting in January 2019 $300 Million Average annual value of ESPN’s deal -- WWE $2.35 Billion Total value of five-year deals with Fox for “SmackDown” and NBCUniversal for “Raw,” starting in October 2019 $265 Million Average annual value of NBCUniversal’s deal for “Raw” $205 Million Average annual value of Fox’s deal for “SmackDown”

WWE’s top executives, Stephanie McMahon, executive vice president Paul Levesque and co-presidents Michelle Wilson and George Barrios, met with ESPN four times from December 2017 through the spring.

ESPN had gravitated closer to the WWE over the previous year, and was receptive. It soon became clear, however, that a deal was not in the offing. The problem came down to scheduling. WWE’s “Raw” and “SmackDown” are produced 52 weeks a year. With the rights deals it already has, ESPN cannot afford to give any sport 52 weeks in a year.

ESPN considered WWE programming for its ESPN+ streaming service. But that would compete directly with the WWE’s own streaming service, WWE Network, which has around 2 million subscribers.

CAA’s Alan Gold approached Turner’s Levy at the NCAA Tournament in March to gauge his interest. Just like with the UFC, Levy said he wouldn’t be able to cut a deal while his company’s merger with AT&T was being reviewed. Even if Levy was free to do a deal, he would not want to buy both “Raw” and “SmackDown.” He would consider the smaller of the two — “SmackDown.” But it was a moot point.

WWE targeted Fox, whose interest in the property became public almost a year earlier. WWE staged an event at Staples Center in May 2017 when Shanks was caught on camera sitting ringside alongside other Fox executives.

WWE still was in an exclusive window with NBCUniversal, which ran to mid-May. But WWE executives, including Stephanie McMahon and Levesque, made a point to visit the Fox lot for an informal meet-and-greet. The WWE executives said they couldn’t discuss deal terms until NBC’s exclusive window ended. Still, Fox made it clear that it was interested.

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In late April, ESPN’s Pitaro and Magnus were in Dallas for the NFL draft. But their concentration was far removed from ESPN’s production of the three-day event. They were negotiating a streaming deal that would put UFC fights on ESPN+, the streaming service that launched earlier that month.

Mayer was in Burbank, and Emanuel and Shapiro were in New York.

Pitaro and Magnus took calls throughout the weekend. Oftentimes, Magnus had to leave the suite at AT&T Stadium to take calls because CAA’s Nick Khan, who repped WWE, also was in the suite with his client Jason Witten. Pitaro and Khan were negotiating a deal that would see Witten become an NFL analyst on “Monday Night Football.”

Endeavor and ESPN executives decided to push through a streaming deal that would stream 15 UFC events on ESPN+ for an annual average of $150 million per year.

For ESPN, the deal brought exclusive content to the new streaming service it was trying to get off the ground.

For Endeavor, the $150 million yearly average payout for half the package brought in more than UFC’s annual average payout from its previous deal. Plus, UFC still had half the package to sell.

Endeavor executives felt like they were in good shape.

Emanuel and Shapiro set up a meeting in Burbank with Disney Chairman and CEO Bob Iger, who supported cutting a UFC deal. Emanuel and Shapiro viewed the meeting, scheduled two weeks after they agreed on a deal, as a way to say thanks and celebrate it.

Fox was the incumbent with the UFC, but from the start imagined a scenario in which it could fully walk away from the property. Photo: Getty Images Fox was the incumbent with the UFC, but from the start imagined a scenario in which it could fully walk away from the property. Photo: Getty Images Fox was the incumbent with the UFC, but from the start imagined a scenario in which it could fully walk away from the property. Photo: Getty Images

The two Endeavor executives had dismissed the idea of ESPN picking up a more significant package, especially given how busy its schedule is in the fall with college football commitments. But they wanted to give ESPN a shot to take it all, and they wanted to use that Iger meeting to float the idea.

The group, which included Mayer, bantered for 45 minutes, trading industry gossip. Eventually Emanuel broached the topic, telling Iger and Mayer that he wanted to open the door on the second half of the package.

“Why wouldn’t you want to just control the whole thing and not have to fight with other networks about which fight you’d get,” he asked.

“Because you want an arm and a leg for it,” Mayer responded. “It’s too expensive.”

“You can have it for $150 million per year — the same amount you paid for the first half of the package,” Emanuel said.

That’s when Iger piped in. “Give me three days to run the numbers. I’ll get back to you.”

Three days later, Emanuel and Shapiro were in Viacom’s New York offices pitching CEO Bob Bakish on UFC rights. But Emanuel’s attention was focused on his phone, which had just buzzed.

It was Mayer. He texted Emanuel through the WhatsApp app to say that ESPN wanted to secure all the UFC’s media rights for a total payout of $300 million per year. He was on Disney’s corporate jet at the time, flying cross country to get to New York for ESPN’s upfront presentation the next day.

Emanuel and Shapiro continued with their meeting at Viacom, spending the next 45 minutes walking Bakish through UFC’s offerings.

At the end of the meeting, the two Endeavor executives jumped into a car and continued to text Mayer. They were trying to figure out how many fights in the second package could go onto ESPN+ and how many needed to be on ESPN.

By the time Emanuel and Shapiro got to their office, most of the outstanding issues had been resolved via text, with Magnus helping by phone from Bristol.

Mayer texted Emanuel: “Done. You have a deal.”

Emanuel and Shapiro had never completed a deal via text message before, so they weren’t sure if the deal was actually closed or not.

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Over at NBC, the network’s exclusive negotiating window with WWE ended in mid-May. Bonnie Hammer, chairman of the NBCUniversal cable entertainment group, led NBCU’s negotiations to renew WWE, which had been part of USA’s schedule since 1993 and is considered a valuable programming asset.

Mark Lazarus, chairman of NBC Broadcasting & Sports, oversees all of the big sports rights negotiations for NBCUniversal. But NBC views WWE as an entertainment property, and Hammer ran the deal, while Lazarus was on hand to offer advice and participate in strategy sessions.

ESPN had shown little interest in the UFC, but a change in leadership at the media company made for a more receptive audience. Photo: Getty Images ESPN had shown little interest in the UFC, but a change in leadership at the media company made for a more receptive audience. Photo: Getty Images ESPN had shown little interest in the UFC, but a change in leadership at the media company made for a more receptive audience. Photo: Getty Images

NBC executives realized that Fox was interested, but they also believed that WWE ultimately wanted to stay on USA. WWE is a loyal partner, evidenced by its 25-year run on USA. Plus, they believed WWE fans wanted consistency, knowing where to go on Monday nights to see “Raw” and later in the week to see “SmackDown.”

WWE had been making an average of $130 million per year for both in its previous deal, a figure that network executives considered well below market value, especially considering WWE’s consistently high ratings and passionate fan base.

Historically, WWE’s rights fees had been depressed as ad buyers shied away from the series. In the current media environment prioritizing live sports, however, advertisers now covet WWE’s large and engaged fan base.

NBC also had a clause in its contract where WWE had to give the company a take-it-or-leave-it offer before its exclusive negotiating window ended.

But WWE executives knew they were negotiating from a position of strength, and decided to split its package in two. CAA told Hammer that it wanted $265 million per year for “Raw” and $200 million per year for “SmackDown,” a massive 358 percent increase.

As the WWE’s exclusive window ended on May 16, NBC said it would take “Raw” for $265 million, leaving “SmackDown” available for others to poach.

The following day, WWE executives confidently made their way to Fox’s New York offices for a meeting that Rupert Murdoch attended. The two sides quickly realized that they were close to an agreement and settled on a $205 million-per-year deal that would move “SmackDown” to Fox on Fridays.

Though a formal announcement still was more than a month away, Fox and WWE agreed quickly on the main deal points.

The two major properties that had rights up for bid were done, and after years of jockeying, negotiations and starts and stops, now could plan an eventual champagne celebration.