Sports media professionals don’t agree on much, especially not lately. But one area they did find a solid consensus was in the widely held belief that Paramount wildly overpaid for UFC rights last summer. Almost as soon as David Ellison’s acquisition of Paramount gained regulatory approval, he announced a $7.7 billion deal for UFC. It certainly made a big splash—but, critics wondered, at what cost? Then just a few months later, Formula 1 took its rights to Apple in a deal that also drew skepticism of the $4.5 trillion company’s strategy for live sports rights.

But Peter Supino, one of the media industry’s most respected analysts, offered a different assessment of these deals. In an appearance on the Varsity podcast, he defended both, saying that UFC “could have an unusually bright future” and describing F1’s Apple deal “as a win.” The podcast posts tomorrow, but we’re giving you a sneak preview tonight. As always, this transcript has been lightly edited. Enjoy!

John Ourand: For as long as I’ve been writing about sports media, people have pressured me to say that sports rights is a bubble that’s about to burst. After two decades, it’s clearly not a bubble, but it does appear like the market is changing. How do you see it?

Peter Supino: Sports rights are about 20 percent of the total revenue of the whole paid TV business, broadly defined to include linear television, cable, satellite, and streaming. It’s an even greater proportion of viewing. Stepping back and focusing at the widest expanse on what’s happening in media, these mega-trends are amplifying the most high-value stuff, whether it’s an athlete, a team, a musician, a creator. If you’re great, you’re in somebody’s pocket all day, every day. It creates greater value for the extremes of mainstream superstars and niche high-value-added talent. Those same forces gut the middle. Sports is very much on the right side of that trade, in the same way that Taylor Swift is on the right side of that trade, and MrBeast is on the right side of that trade.

Who’s on the wrong side of that trade?

I worry that Major League Baseball could be on the wrong side of that trade. But the more obvious answer is broadcast primetime scripted dramas, low-value-add game shows, things that people might have watched because they were on TV or because they were on a portal page of a website.

Let’s talk about individual rights deals. Much of the business, myself included, was surprised when Paramount agreed to pay UFC $7.7 billion over seven years. What did you make of that deal?

Overall, we were positive on the UFC having a successful outcome selling its media rights. We viewed the right estimate as $900 million, which was a little above consensus, but way below the $1.1 billion that it got. We felt that the decline of the pay-per-views was misleading because of piracy. The audience was many multiples of the pay-per-view audience, and really misunderstood because people would watch the pay-per-views in groups because of how expensive they were. Then the sport itself has a couple of attributes that made it absolutely mission critical to streamers: It’s a year-round sport, it’s young, and it’s global. And it didn’t hurt that Ari [Emanuel] and Mark [Shapiro] were representing it.

I hear from rival networks and streamers all the time, whispering that Paramount really overpaid for this. What I’m hearing from you is that they didn’t.

Let’s talk about what overpaying is. If the right price to pay is the price that an asset is worth based on its historical performance, then I would get behind the view that Paramount overpaid. Investors—and I bet David Ellison thinks of himself as an investor—have high-risk, high-return jobs because they try to imagine the world as it will be instead of the world as it is. David Ellison is making some big bets, and I think the UFC is an asset that, if managed correctly by both TKO and its distributor, could have an unusually bright future. If that vision plays out, Paramount+ will benefit by more than the value it overpaid by.

Four years after Apple did its MLS deal, most of my sources don’t consider it to have been a very good deal for MLS. So when F1 went to Apple TV this year, I was a little concerned. You seem positive about that deal, though. Explain why.

We think F1 loses very little in going to Apple. In fact, it stands a good chance of netting out evenly—or even positively—from an audience perspective, while getting about a 7 percent annual value growth rate for its rights fees. The headline was $140 million between F1 and Apple. ESPN was paying $90 million, but that’s an apples-to-oranges comparison. That’s because the Apple deal required F1 to hand over the F1 TV business and the premium streaming revenue that goes with it. Really we should compare $140 million to about $110 million, which amounts to a high single-digit growth rate, which is similar to the normal growth rate of sports rights in the United States.

There are a few reasons why we’re comfortable with this deal. First, F1 is unique in that its schedule is global and inconvenient for most U.S. households, so the normal benefits of being on broadcast haven’t accrued to F1 the way they would for a sport that shows up Saturday or Sunday afternoons. Second, it turns out the F1 audience is a premium audience with a much higher propensity to use iPhones and Apple products than the rest of the market.

Third, F1 races lend themselves to shoulder content like few other sports assets. We saw that with Drive to Survive. So we’re excited about the way Apple can merchandise and energize F1 fans around the races, which are only on about once every two weeks. So to flip a negative into a positive, a sports media distributor can retail that sport and add on to audience engagement if they’re smart.

What we know so far is that the audience on Apple is of similar size on average to what F1 got on ESPN last year, and it’s younger and more female—both important strategies for F1. We’ve heard from several people that there have been instances where the viewership was down on Apple year over year, and F1 has told me that those events, if you’re trying to compare apples to apples, were the races in 2025 when ESPN simulcast with ABC. A broadcast audience inevitably gets additional viewing. The message from F1 about the Apple deal is that so far, things are a little better from an audience perspective, but it’s choppy, and we’ll have to see how the season plays out. If all they do is maintain a flattish audience and get more money, create more digital optionality, we think it was a win.

My item on Apple producing an MLS game using only iPhone 17 Pros clearly touched a nerve…

On the cost of TV production: “I was thinking about this the other day when McAfee was on in my gym. He was standing in his cheap and basic set, and he was interviewing Schefter, who was sitting in his car and was using, I assume, a cell phone. No one cares. It did the job just fine. Spend the money on talent, not all the stupid bells and whistles.” —A broadcast executive

More on the cost of TV production: “Sports media production is getting cheaper? I need to listen to that. The cost of gas has doubled for all of the trucks that travel to these events, and the generators and backup generators are also double the cost. NFL production costs for Fox and CBS are going up this fall.” —A Varsity subscriber via X

Even more on the cost of TV production: “Noting that broadcast executives like to talk about how spectacular their production is, how many even broadcast in true 4K? What holds them back?  Even the Super Bowl was upscaled 1080 claiming to be 4K on the stream. They have all had 4K cameras for years. That’s a story I would love to read.” —A Varsity subscriber

Still more on the cost of TV production!: “The list of innovations in remote television production is long and deep. Think of the iPhone 17 Pro as a specialty camera, like skycams, pylon cams, spydercams, and track cams. The only difference is you can Google great meatball recipes or call your mom with the iPhone. This is your reminder to call your mom!” —A former production executive

See you Thursday,
John

This newsletter was assembled with the help of Maya Tribbitt.