The UFC’s massive new broadcast deal hasn’t even gone live yet, but it’s already causing friction well beyond the Octagon. While fans are still debating what seven years on Paramount+ would look like, executives elsewhere are viewing the same figures with a completely different emotion: concern. And unlike the usual cases where the buzz is sourced from some leaks, this conflict has come to light after it was filed with the SEC.

In the filing, Warner Bros. did not comment on fight quality or audience reach. It was explaining, both formally and publicly, why it had rejected Paramount as a potential acquisition. And buried inside that explanation was an obvious dissatisfaction with the kind of spending that secured the UFC deal in the first place.

Warner Bros. viewed Paramount’s UFC deal as a financial risk

In the letter, Warner Bros. cited “above-market, multi-year programming and sports licensing deals” negotiated by the newly established Paramount Skydance entity. Although the UFC was never mentioned directly, the message was clear. A seven-year, $7.7 billion commitment to combat sports is precisely the kind of fixed cost that raises eyebrows in boardrooms.

The concern was not with the UFC as a product. It was about timing and commitment. Warner Bros. pointed out that Paramount has limited visibility into how these deals will perform in the long run, but will still be forced to pay massive annual fees regardless of the outcome. There is no flexibility once these payments begin. The bill is due whether subscriber growth meets expectations or not.

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This concern grows when viewed alongside Paramount’s overall financial picture. Warner Bros. referenced Paramount’s lower credit rating and funding uncertainties as significant difficulties, prompting Larry Ellison to personally guarantee portions of the financing. From the outside, the mix of excessive expenditure and unstable balance sheets appeared to be more indicative of overextension than of bold confidence.

The UFC deal stands out due to its scale. Paramount agreed to pay more than double what ESPN paid under its previous agreement while also incorporating pay-per-view events into its streaming platform at no additional expense. That is a gamble not only on UFC popularity but also on long-term growth throughout the ecosystem.

Warner Bros. saw it as a risk they didn’t need to inherit. With Netflix already on the table as an alternative, the choice became between stability and ambition. Even if Paramount’s strategy ultimately succeeds, Warner Bros. made it clear that it did not want to be tied to that uncertainty. For now, the irony is hard to ignore.

The Dana White-led promotion’s biggest media win in history has also been noted as a warning sign in corporate filings. Whether it becomes a masterstroke or a cautionary tale will not be known until the deal actually begins, but the nerves are already showing. And to make things look more concerning from a financial standpoint, the UFC expanded the Paramount broadcast deal to Australia and Latin America.

Paramount’s decision to expand the deal only makes things look worse

Paramount hasn’t even aired its first UFC event yet, but the commitment has already grown. What began as a massive U.S. rights deal has now expanded into Latin America and Australia, securing even more long-term obligations before the original investment had a chance to pay off.

From a growth standpoint, the decision makes sense. UFC is popular in Brazil, Australia is an established combat-sports market, and increased distribution matches with the company’s goal of making Paramount+ a worldwide destination. However, from a balance-sheet perspective, it exacerbates the very concern Warner Bros. raised.

Each extra region adds new fixed expenses, guarantees, and expectations to an already aggressive structure. This difference explains why Netflix seemed safer in comparison. Netflix expands cautiously, aided by steady cash flow and fewer restrictive sports contracts that tie future revenue to performance. Paramount, on the other hand, is betting heavily on long-term investments all at once. It is going for the UFC, worldwide expansion, and even new fighting ventures, without the cushion of proven stability.

Ambition can drive progress, but it can also increase pressure. However, none of this guarantees that Paramount’s strategy will fail. UFC continues to grow, and its worldwide reach could justify every dollar spent. However, Warner Bros. saw the expansion as an increase in risk rather than a display of confidence. In corporate decision-making, perception is often equally as important as potential.