UFC's White House Fright Night

0:04Sara Fischer:Congratulations! You made the Varsity podcast. My name is John Orand and I'm Puck's sports correspondent and the host of this pod. And today, Sara Fischer returns to the Varsity. Sara is the great media correspondent for Axios. She spent last weekend attending a Formula One race in Monaco, so we're going to talk a little bit about that. It's always great to have Sara on. But before we get to Sarah, today is Sunday, June 14th, and here's what I'm watching. The World Cup. It's finally here. And according to research from my friends at the equity research firm Moffitt Nathanson, the event is expected to draw$60 billion in wagers through legal sports books.

0:45Sara Fischer:That's billion with a B. And that number is a global one, not just the U.S. And here's what I found breathtaking about that number. It represents a 71 % increase from the last tournament just four years ago. And it's a, get this, 185 % increase from 2018. What a perfect illustration for a decade where sports betting went from a mostly illegal vice to an inescapable American pastime. Speaking of the U.S., expectations are that it will account for$3 billion in wagers. FanDuel, it's predicted to book$1.2 billion in bets, DraftKings,$1 billion. Incredibly, none of these figures even include the younger prediction markets like Calci or Polymarket.

1:31Sara Fischer:Those are the companies that have mostly been able to skirt lawmakers in the 20 or so states and still prohibit the gambling apps. In May, Calci's total trading volume hit$18 billion, and that includes$10 billion on sports. So you can imagine the activity here around the World Cup. Of course, the World Cup arrives at an interesting moment for these markets. Regulators have shown increasing appetite to clamp down on predictions markets, but it's plainly obvious that they're exploding in popularity. I mean, FanDuel and DraftKings have both taken notice and are launching their own predictions for products.

2:08Sara Fischer:So I'm going to end here by quoting Moffat Nathanson's Robert Fisher. He wrote, Both operators have pointed to the World Cup as a key milestone for scaling their nascent offerings. Indeed, they are. Okay, now let's get to Axios' Sarah Fisher. Sarah Fisher, it is great, as always, to have you back on the varsity. You and I are both in the DMV. In fact, we're both within the district where today, when this podcast posts, uh the white house lawn is gonna have uh fighters uh mixed martial arts mma fighters uh fighting um that we've been seeing the uh erection of the set uh going up over the past you know several weeks and it's you know it's uh it really is something to see it's like something we've never seen before here in dc uh you had an interesting scoop actually about some last minute snafus going on with some of the press passes there which might sound a little bit boring but i i think this is illustrative of of sort of like this the uniqueness of this event yes john and it's so good to see you virtually in dc we just were with each other at a conference in New York.

3:26I feel like I always see you on the road in person. But the UFC thing is really important. So anytime there's a major sporting event, whether that is the NBA, you know, final games, whether that's the Super Bowl or a regular UFC match, the league is responsible for distributing some of those press passes. That is not unusual. What makes this event very unusual is that the The UFC is responsible for distributing some of those press passes, but the event is being held on the White House lawn. And now typically, members of the White House Correspondents Association Press Corps, they, with their pass, get carte blanche access to the White House, and not all the White House, but the press areas.

4:16And that matters because when there's a big event like the UFC, they need to have access to their offices, their press booths, their camera slots, so that they can cover it and be there all day. Now, you might be wondering, John, well, why does the press need to be there covering this fight, right? Can it just be trade reporters covering the UFC thing? And the answer is, you never know what newsy event will occur at the White House, right? Remember when there was a shooting at the White House in the James Brady press briefing room? There have been many incidents It is a government building. So you need to have full coverage and full access for those reporters.

4:56And essentially what's happened is the White House has stood by the UFC and Paramount. As they have said, we cannot accommodate White House reporters to have their typical access because they say security reasons. It's causing a major, major blow up within the press corps in Washington. him. And so what we should expect the day of is that the UFC's credentialed reporters, of which there are around 20, those include magazine reporters like Rolling Stone and Time, they are going to have access. The White House press pool will have access, but the pool that's assigned for Sunday is only a limited number of outlets.

5:35The broadcast pooler is Fox News, so they will have video footage of the president and the political side of things, not the match itself. And then there are other outlets that have been assigned the pool that day like Scripps. But there's a lot of tension. You know, if you're a regular reporter within the press pool and you want to go to the White House that day to be able to cover what's going on, the fact that you're not going to have access is very unprecedented. And the fact that the UFC is picking a handful of reporters to instead get that access is ruffling people the wrong way.

6:11Sara Fischer:If you talk to people at the UFC, they will say, how many people have that? I think it's called like a hard card, right? For the White House press corps, how many people are we talking about here? Oh, I mean, hundreds. You know, there are dozens of outlets that are a part of that pool. And And remember, it's been expanded because this administration has added a bunch of new media to the press core. So it would be a lot. And it's not just reporters. It's not just on air talent. It's their producers and there's camera operators. So I understand. And by the way, of course, they're all going to want to be there for the fight.

6:52So I understand exactly why the UFC is saying that this could be a security challenge. There's too many people, but it is an unprecedented and historic event. And so we have this unprecedented and historic press access problem. And for the UFC, which has made such inroads in Washington and in big industry, you know, Dana White is on the board of Meta, for example. They're hosting a big event tonight in D.C. that I'm going to go to. You know, this puts sort of an onus, a responsibility for them to be selecting in part which outlets are going to be there for this historic event on the government grounds.

7:29It's very, very fascinating how this has all turned out.

7:33Sara Fischer:Yeah, I want to spend a little bit of time on UFC because you talked about the inroads that it's made in D.C. And what bigger inroad than actually staging a fight on the White House lawn? I mean, it was just a decade ago, Sarah, that New York, the state of New York, it was illegal to stage MMA fights in New York. And now, you know, 10 years later, it's part of the, you know, cultural zeitgeist, you know, of sorts. I went through before before this event, you know, because I'm a journalist, I'm just trying to get a negative story up. And I was talking to a bunch of analysts about, OK, it's doing well now.

8:16Sara Fischer:President Trump's in office. Dana White is very close to President Trump. What are the red flags that exist for UFC as it moves forward? And not one financial analyst. I couldn't find one that was negative about UFC. Everybody sees it as a really big growth prospect moving forward. And so just kind of going from where we were 10 years ago to where we are now to where the people following the money expect it to go is just it's one of the most amazing success stories that I've covered in sports business. And one of the reasons for that, John, if you were to zoom way out and take a look at what's performing well on Wall Street, live event and experiences companies are doing very well.

9:04If you take a look at Live Nation Ticketmaster, which is facing an unbelievable state effort to break it up, stock is still performing very well. Cinemark and AMC and IMAX, movie theater companies, John, even though they are down from the pre-pandemic levels, they're still way up. Because live events and experiences, as we're coming to find in the AI era, are warranting such a premium from investors because consumers are feeling overwhelmed and oversaturated by screens and streaming at home. So part of this UFC success, yes, is cultural. Yes, the big podcasters like Joe Rogan who are into MMA and fighting, there's all of that.

9:53But a huge part of that boom is that they are riding a broader halo around live events, as is its parent TKO, which also owns WWE. And that is not going to go away anytime soon.

10:06Sara Fischer:when it comes to uh the event on sunday at the white house is there any specific storyline that that you're looking at like is there any is there any kind of metric that would decide whether it's a success or or not in your mind well paramount will have to let us know about the pay-per-view viewership and i'm sure if it does well for paramount plus they will give us some details around that. The big storyline I'm actually looking at is Joe Rogan caused such a stir by dismissing this event. He did say it was weird to be hosting something like this at the White House amid the Iran war. But he also called out the fact that you never have fights like this outdoors.

10:53DC right now is sweltering hot. There is mosquitoes everywhere. You know, John, we live in the swamp. Bugs, sun, sweat. This will be a huge test as to whether or not the UFC can do more outdoor events. So that is something I'm actually following very closely. And then also the broader halo that this is creating in DC for the UFC and the White House is fascinating to watch. You have corporate lobbyists who are begging administration officials to get access and tickets. Remember, the vast majority of these tickets are going to veterans and their families, military and their families. But who gets to sit close to the president to watch this fight is the ultimate indicator of your power in D.C., whether or not your lobbying shop was able to get your CEO access.

11:46I said that Meta's having a big event tonight with Dana White and the UFC in Washington. Tomorrow night, the hot sort of MAGA club in D.C. is also hosting a super exclusive event with a musical guest leading up to this fight. So this is now a big storyline, too, is has the USC created like another mini moment for corporate Washington? It looks like they successfully have.

12:15Sara Fischer:Yeah, that's a that's a great storyline that I haven't paid a ton of attention to. The tickets are so tight. And I know people in the sports business, in fact, in the sports business, there have been a couple of events, starting with the NBA finals in Madison Square Garden, which was the hardest ticket. I was actually talking before game three with Adam Silver. I was talking about just the number of people who have reached out to try to get tickets. you know it has uh been beat beyond and and this event just because uh it's it's such a small i almost called it an arena but it's a it's a you know it's on the white house one it's only like about four thousand people you know and and like you said many of the tickets are going to military and military families who who gets to sit in those seats is going to be especially uh interesting to me um i think there's nothing to look forward to to look for at this event i think it's already happened uh i think the fact that the the ufc is staging this event at the white house the i i don't see a downside for the for ufc it's it's already a success yeah i guess the only potential downside is if there's a storm and lightning or uh and and and something happens to to make it not happen But you talked about Saturday night at the MAGA Club, Friday night with Meta.

13:42Sara Fischer:On Thursday night, I was at the Meridian House for another event where Dana White was getting an award. I mean, the UFC and TKO, which owns UFC, this is a three-day run-up. It feels not quite like a Super Bowl, but it feels like a big all-star event almost surrounding UFC. And I never thought I'd see that. No, it feels like their own White House Correspondents Dinner. That's what it feels like to me. Yeah, actually, that's perfect because we are in D.C. It is great having you back stateside. I wanted to get you on the pod last week and we couldn't make the timing work because you were in Monaco at the Formula One event.

14:27Sara Fischer:And walk us through what I wanted to talk about the state of Formula One. But Monaco, what is that like? It seems like Formula One fans don't love that race because there's not a lot of passing. But it is a big race for executives to attend. And it's a big sort of sports business type of place where sports business executives meet and set up a ton of meetings and love to go to. What was your experience there like? Well, first on the race experience, John, you're right that the fans don't love it because there aren't a lot of opportunities to take over. But what was fascinating is that the car junkies love it because it puts a lot more of an emphasis on the pit stops.

15:21You know, if you can't optimize through takeovers because of the limitations of the historic track, the place to optimize is your pit stop. And so there was a lot more conversation around the engineering involved and how the mechanics of that work in a place like Monaco than I've ever heard at tracks I've been to in Miami and Vegas and Austin. So that was fascinating. I did interview Jensen Button and I asked him, you know, you know, F1 champion. I asked him if F1 were to start today, would Monaco be on the list of tracks? And he said, no. You know, this is a place that brings so much pomp and circumstance.

16:02It's historically relevant. But from a racing perspective, it's not something that the drivers consider to be the mecca of quality driving. to your point though John it has become the business and deal-making center within F1 so just to give your audience a sense of what it looks like and what it feels like Monaco is a small city town that rests in southern France but it's its own territory so to get into certain venues within Monaco you need to bring your passport for example the famous Monte Carlo casino that everyone goes to throughout the race you have to bring your passport to get in it's ultra wealthy.

16:40It's ultra classy. I mean, Prada and, you know, Gucci, these are the types of stores that line the streets with very expensive restaurants. And it's all on a big mountain hill. The racetrack comes down the mountain hill and it does pass sort of the coastline where the boat harbors are. All the big parties and meetings, therefore, happen in the boats because you really can't get into that many venues on the actual city hill it's just too much is closed off to make room for the track itself so what did the boats look like very very rich people will bring their own boats like billionaires and some of them will have private parties but increasingly john brands see this as an opportunity for marketing so aloe which is a sports athletics fashion company had a massive yacht and they brought a bunch of influencers like Alex Earl into the yacht to do yoga and to do TikTok and to have parties.

17:44And then some of the other entities around like Carlisle, which was the group that the private investment firm that Axiosworth was to do some programming, Aston Martin, which as you know is a team sponsor. CAA Sports, they all have their own yachts and they're hosting parties, they're hosting dinners, and you go into those boats for the parties and there is food and lobster and champagne and famous people. You know, the Kardashians are there and they're mingling and famous drivers and their families are there and they're mingling and influencers. And it's one of the most high level, high touch events that I attended, except probably the Super Bowl.

18:24So that's what it's like culturally. And I think it was less about the race itself, although obviously that's a highlight, and more about if you're a rich celebrity, could you be seen there? Could you make a deal there if you're a big company? That's kind of what this has become all about.

18:43Sara Fischer:I've never attended the race. Take me through the mind of a Axios media reporter what what made you decide to head over there for this well i have a lot of vested interest in understanding how apple and netflix are managing the distribution of these events and one of the reasons that matters is because once they remove the relationship with espn and cable and they went to streaming the concern is does the audience shrink because there's fewer people with access as you know, John, ESPN still reaches, you know, well over 60 million households in the US. Apple TV is mum about how many subscribers they have and what their reach is, but presumably it's not as many.

19:27The reason, though, that you would do it if you're F1 is because these are more passionate fans. These are people who can get more out of the race watching it through Apple TV and all the add-ons that come with it and Netflix than they could necessarily from ESPN or cable. And these platforms have proven successful in creating ancillary programming that has attracted more casual fans. Typically, people who watch ESPN are sports junkies. But people who watch Netflix are not necessarily sports junkies, but they love Drive to Survive, or they absolutely loved the F1 movie that Apple did. So the idea for F1 is this empowers you to reach a wider set of people.

20:09And for me, going to Monaco and having conversations with brands and executives and drivers around what the opportunity is for a new media landscape and new media deals is very valuable. And then I also think for me, seeing the sponsorships and seeing the brands come around this race the way that I used to watch them coalesce much more around things like the Masters and the Open, which they still do. But this has become a much bigger priority for the advertising market in a way that I was not expecting. In fact, I thought that Monaco in some ways rivaled the sort of ads, marketing and influencers vibe that you get at the Super Bowl, which is pretty impressive.

20:52Sara Fischer:So let's talk a little bit about the F1 Apple deal. We're just a couple of races into that deal. But as you talk to the brands there, how do they feel about getting behind that Apple paywall? because we know you and I have written a ton about Major League Soccer going behind that paywall and how it really hurt the distribution of soccer games. Baseball is just kind of a test on Fridays. And I'm particularly interested. F1 is different because F1 is international. And F1 has a devoted fan base at odd hours. So you can kind of, you know, that 2 a.m. race on the East Coast, that's occurring in Asia somewhere, you can just pop onto Apple and just watch it at any time.

21:45Sara Fischer:Are brands happy so far? Are they saying it's too soon to give any kind of real opinion on it? What was the sense that you got over there? The types of brands that care about F1 are highly, highly premium. So you're talking about you know the Gucci's of the world and again Aston Martin luxury vehicles they want a premium experience to align their brand messaging with and that is definitely something they get with Apple and so they actually like that a lot the viewership numbers are important to them But being in an environment where the user experience is premium and the advertising opportunity feels luxe and curated matters a lot.

22:38So I think they're pretty excited about the Apple opportunity. They see what Netflix has with Canada and the Canada Grand Prix as a possibility to introduce more streaming in future negotiations. Like they see the F1 folks testing this in smart ways. And they recognize that part of the appeal for F1 has become what the experience is like if you're not watching the race or not at the race, but you're following alongside the players and their wives and the culture on social. And so for them, as long as F1 remains premium, they're happy.

23:16Sara Fischer:yeah and one of the things that i'm particularly interested in is frankly just apple because you know as these international rights start to come up um i i can envision apple wanting to grow the sport that way i mean i i guess everyone just did uh renew a deal uh with sky in in the uk you know which is a a big market so you but but there are plenty of other markets that that are out there that you know where apple can can go because all the uh can go and pick up the rights because all of these streamers like the the main thing that that they're looking for a a main thing one of the main things that they're looking for is the ability to grow internationally which is what you saw with netflix when it when it bought uh the japanese rights the world baseball classic you know uh way back when so i'm just looking to see what kind of opening apple or pops possibly Netflix can see internationally.

24:16But the challenge with Apple is that they don't have the same level of international distribution that a platform like Amazon has. And if they do, they are not, you know, great about revealing numbers and reach. I'm sure those are conversations that are being had right now. You know, Hulu has always starkly struggled with that as well. They've had obviously a huge presence in Japan, but Hulu is not an international streamer the way that Disney pluses part of why i think you're having a merger between those two streamers and so if there ever is an international sports opportunity that comes the way of disney espn unlimited is also not like the most international product you need to have international reach and i think apple in the us is endemic but if you look outside the us particularly like mobile apple is not the number one in reach you know samsung google these other platforms are broader so i'm very curious if apple wants to take f1 more global we need to see some numbers that suggest that apple tv subscriptions and access is global and that global well your answer is so fascinating to me because it is

25:24Sara Fischer:it's luxury brands and i consider apple to be pretty close to a luxury brand and so so the idea of the thing that ESPNers and TV executives told me was the sponsors are not going to be happy about going to Apple. But so far they are because the brand of Apple seems to match the brand of sponsors.

25:57Sara Fischer:One thing that I especially like about you, Sarah, is you said like we saw each other last week at a conference in New York. It wasn't in New York. It was on the Hamptons. You went from Monte Carlo to Montauk. And you actually had it was at Jessica Reef Ehrlich. She's a B of A Securities, a fantastic analyst there. She has an annual media and Montauk conference. And you moderated a panel there with my boss, Puck CEO, Sarah personette um that that i it was about sort of advertising in new media what did you get out of that panel and you also had a really fascinating panel too john which was all about sports i think the number one thing is that advertisers have been skittish around news but they recognize that if you want to reach an affluent and highly engaged audience, news is likely your best bet.

26:56And so they need to figure out a way to cross that bridge to get comfortable with marketing around news, even when some of the news content can be a little bit thorny. And I think for B2B publishers, such as Puck and Axios and others, we don't have as much of a risk. Where it can be really challenging is if you're a big national or international news outlet covering war, covering thorny trade issues, like that's where advertisers can get really skittish. The other big takeaway was that certain brands and certain verticals are hot in terms of the ad market right now. Big tech came up numerous times as being interested and willing to place their bets on news content because they want to reach decision makers.

27:43Same thing with financial services. I think where we all sort of mutually agreed there's opportunity, but it's harder to figure out how to tackle it is local news. There was a woman that we spoke to there from a big auto company. And one of the things that she was just saying was local is so trusted and in particular autos, they need to sell cars. Local dealerships need that reach. But local oftentimes is covering crime in neighborhoods. It's covering disasters and weather problems. And so advertisers need to navigate the opportunity that comes with the trust that local has with some of the bigger challenges, which is that your messaging oftentimes is going to be aligned with chaos and catastrophe.

28:26and um i think there is opportunity for news to continue to thrive in an ad-driven model but it's gonna it's gonna take the willingness of marketers and the um innovation and sort of creativity and news outlets and figuring out what uh ad inventory they can offer what products they can offer that's going to make them feel like it's worthy of their investment is this a new uh way of thinking

28:53Sara Fischer:Has anything changed in terms of the way that the sponsors or advertisers are viewing sort of hard news versus, say, five years ago? It's definitely more polarized now than it ever was, especially some of these big national brands like CNN or NBC. You know, these used to be considered pretty nonpartisan and pretty brand safe. And now because the president has such strong opinions about those brands or their owners, less so. I also think we are having a wall in terms of these wars. You know, we had the Russia-Ukraine invasion in 2022 really did damper ad spend, in part because brands just didn't know what to say.