00:00Today on Forbes, inside Dana White's $20 million plan to bring UFC 306 to the Sphere.
00:09For all the grandeur of the Sphere, with its state-of-the-art $2.3 billion dome and its
00:14160,000 square foot screen, Ultimate Fighting Championship CEO Dana White's plan to bring
00:20the first sporting event to the entertainment venue came together some 7 miles away on the
00:26dusty outskirts of Las Vegas in a storage closet.
00:30The 55-year-old White says he sets up specialized rooms for all his ventures so he can visualize
00:36the information.
00:38He wanted to rent an external space and build a replica of the Sphere he could walk through,
00:42but his team advised him that spare space inside UFC headquarters would be more budget-conscious.
00:49Within a week, a closet was cleared out and filled with schematics, renderings, and storyboards
00:54that would lay out the most extravagant event in UFC history.
00:59White granted Forbes exclusive access to the closet and detailed his ambitious plan for
01:03UFC 306 happening tomorrow, Saturday, September 14th.
01:08He says, quote,
01:09�This is a completely different animal than anything we've ever done.
01:13I knew this wasn't going to be cheap, but I literally said I don't care what this costs.
01:18This is, on Mexican Independence Day, my love letter to the Mexican people.�
01:23Initially, no one at the company, including White, had any idea how expensive it would
01:28be to stage a promotion at the 18,600-seat venue.
01:32When the CFO at TKO Group Holdings, UFC's New York City-based parent company, asked
01:38what the budget might be for the event, UFC Executive Vice President and Chief Content
01:42Officer Craig Borsari estimated $8 million.
01:47Considering the most expensive UFC pay-per-view to date had cost a little over $2 million
01:52to produce, he says, quote,
01:54�I guessed high.
01:55I thought it would easily be covered.�
01:58In the end, it cost White and Borsari more than $20 million to realize their vision for
02:04UFC 306.
02:06Each UFC pay-per-view event is numbered, going back to UFC 1 in November 1993.
02:13Today's spectacle will include six short film segments before each fight, tracking
02:18Mexican history from the dawn of man through to hundreds of years in the future, each with
02:22its own animated graphics, practical effects, and elaborately costumed octagon girls.
02:29All told, it's the work of more than 300 creatives and another 150 on fight night, including
02:35multiple Emmy winners, Golden Globe winners, and Oscar nominees, all hoping to prove that
02:40live sports in the sphere is viable, and perhaps even spectacular, both for attendees
02:46and viewers around the globe.
02:48TKO's President and Chief Operating Officer, Mark Shapiro, says, quote,
02:53�Obviously, this whole plan was conceived with a path to profitability.
02:57But having said that, that's secondary when it comes to this one-and-done event.
03:02Sometimes you'll make an investment that financially doesn't pencil out, but long-term it ends
03:06up delivering all kinds of upside.
03:08And that's really the logic and rationale behind our strategy with the Sphere event.�
03:13For TKO, a company founded last September when Ari Emanuel's Endeavor merged UFC and
03:19WWE into one $20 billion publicly traded entity, the real money is made from media rights.
03:27Some two-thirds of TKO's $851 million in revenue last quarter came from the category, including
03:33UFC's current pact with ESPN, which expires at the end of 2025.
03:39Negotiations are expected to begin early next year.
03:42In other words, now is the perfect time for a noisy, attention-grabbing event.
03:48In a stock report dating from early August, Moffett-Nathanson projects UFC's next media
03:54rights deal could fetch roughly $450 million per year, up from $300 million on the current
04:01deal.
04:02The rights to pay-per-view events, which ESPN currently pays UFC an additional $260 million
04:08per year for, according to the report's estimates, could be worth another $450 million in the
04:14next cycle.
04:16If UFC 306 proves to be the so-called brand-builder that Shapiro believes it will be, then it
04:21could serve as a strong signal to media partners, sponsors, and other venues across the world.
04:28For full coverage, check out Matt Craig's piece on Forbes.com.
04:34This is Kieran Meadows from Forbes.
04:36Thanks for tuning in.
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