Paramount Skydance Corporation (PSKY) is in focus as the newly merged company signed one of the biggest deals of the year. The media giant signed a $7.7 billion deal with TKO Group (TKO) to gain exclusive U.S. media streaming rights to all Ultimate Fighting Championship (UFC) events starting in 2026.
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All games will be shown first on Paramount+, while selected numbered cards will be simulcast on Paramount+ and CBS, giving more visibility to UFC and providing subscribers a compelling reason to maintain their subscriptions. PSKY stock jumped on the news in early trading on August 10 but ended the day down 3.7%. Meanwhile, TKO Group stock surged more than 10% on the news.
The deal follows the recently closed, eventful merger between Paramount Global and Skydance Media. The latter’s CEO, David Ellison, has taken over as the head of the merged company and has vowed to combine Skydance’s tech expertise with Paramount’s media competence. Paramount has also hinted at securing UFC’s international streaming rights once they become available in the future.
Details of the Paramount-UFC Deal
The deal spans seven years, implying an average of $1.1 billion in annual revenue for UFC. Under the terms, Paramount+ will show all 13 major UFC events and 30 Fight Night matches in the U.S., beginning next year. Currently, UFC’s exclusive streaming rights are with Walt Disney’s (DIS) ESPN network, which are set to expire at the end of this year. However, TKO Group was unhappy with their pay-per-view model, and Disney’s deal was also valued quite lower at roughly $550 million annually.
Commenting on the deal, Ellison said, “The addition of UFC’s year-round must-watch events to our platforms is a major win.” He noted that the mixed martial arts franchise is a “global sports powerhouse” and believes that “it will meaningfully drive engagement, revenue growth and subscription acquisitions.”
Meanwhile, TKO President and COO Mark Shapiro stated that he is happy to partner with a company “that is going to put us front and center and not charge extra to get our most premium content that is a game changer.”
Legacy TV networks are facing a high number of cord-cutting subscribers and declining advertising revenues. However, live sports events have remained a major draw for large real-time audiences, making the UFC deal a very lucrative bet for Paramount Skydance.
Is PSKY Stock a Buy, Hold, or Sell?
Analysts currently prefer to remain sidelined on Paramount Skydance stock. On TipRanks, PSKY stock has a Hold consensus rating based on two Buys, nine Holds, and six Sell ratings. The average Paramount Skydance price target of $11.57 implies 14.3% upside potential from current levels. Year-to-date, PSKY stock has lost 2.4%.
