ESPN+ subscribers are declining again ahead of UFC broadcast deal negotiations

The UFC will begin negotiating a new broadcast rights deal later in 2024, but the promotion's current partners at ESPN continue to struggle in the ever-changing sports consumption market.

For the second straight day and the third time in the last four quarters overall, ESPN+ lost subscribers, where the UFC primarily thrives, particularly through the pay-per-view business that runs through the streaming service. The number of subscribers fell by two percent in the second quarter of 2024, bringing the total number of subscriptions to 24.8 million.

That's roughly the same number of subscribers that ESPN+ touted in early 2023.

ESPN+ also reported an operating loss of $65 million for the quarter.

As for the reason for the drop in ESPN+ subscriptions, Disney pointed to the usual churn that often occurs at the end of a sports season – this time due to the end of college and professional football by the late summer of 2024. While these claims may be true for over Over the last five years, ESPN+ has seen steady growth as a streaming service.

On a more encouraging note, Disney reported that ESPN enjoyed overall ratings success in April, which included completing the NCAA Women's Basketball Championship. April also marked the highest ratings ever for a UFC preview after UFC 300 set a record viewership.

Of course, Disney CEO Bob Iger has talked a lot in recent years about plans to make ESPN a more digital-focused business rather than linear television, including launching a direct-to-consumer streaming platform in 2025. Disney also plans to launch a sports streaming service with Warner Bros. Discovery and FOX at the end of 2024.

“I see esports fundamentally continuing to shine in a world where there is just a lot more choice,” Iger said during a conference call with investors on Tuesday. “The other thing that’s really important is the engagement that the live experience creates. I mentioned in my comments what we really haven't talked about much, and I think that's where most of the attention has been focused [joint venture] We announced that, as well as on the flagship that ESPN is taking over right at the end [2025] But at the end of this year, we'll be putting an ESPN tile on Disney+, which will have a modest programming offering, but it's a start in terms of essentially conditioning Disney+ and Hulu subscribers to have sports there becomes .

“As I look to the future, I think ESPN will make a pivot towards digital, but without abandoning its linear focus. It remains linear if people want to receive ESPN and its various channels through a cable or satellite subscription, that's fine, or if they want to switch smoothly because there will be many different access points to broadcast the digital product on ESPN digitally . You can do this as part of a package with other sports services, you can do this directly from ESPN using the ESPN app, or you can do it as part of a package with our own services. So I’m very optimistic.”

Beyond the UFC broadcast rights, ESPN is also in a separate negotiation with the NBA, which is expected to be a fairly expensive package that could be spread across numerous networks.

It remains to be seen how this recent subscriber decline could potentially impact the UFC when it comes time to negotiate a new broadcast rights deal, but those discussions are expected to begin before the end of the year. The UFC's overall contract with ESPN runs through 2025.