Mayweather really is Money with business dealings

September 17, 2011

The New York Times reports on the payout Floyd Mayweather is set to receive from his fight against Victor Ortiz Saturday. With all said and done, Mayweather could be paid $40 million.

In addition to his reported $25 million payout for fighting Victor Ortiz, Mayweather will receive a portion of the gate, concessions, souvenirs and PPV revenue.

Richard Schaefer of Golden Boy Promotions explained the structure to the NY Times.

Via NY Times:

To explain the business model, Schaeffer starts with a pie. A little more than half goes to the distributors (Time Warner, DirecTV, etc.). The balance goes to the network, HBO or Showtime, which takes its distribution fees and hands the rest to the promoters.
In this case, Golden Boy has one contract with HBO and another with Mayweather Promotions. But the money, less what distributors and networks take, is under Mayweather’s control; normally the promoter would control it.

In addition, there is the PPV revenue which Schaeffer includes other revenue streams from that:

Those streams include foreign sales for a fight broadcast in 168 territories; closed-circuit revenues (in 2,000 or so bars and restaurants nationwide, in theaters and in rooms at Las Vegas casinos); site revenue (ticket sales, merchandise); and sponsorships.

Its an unprecedented payment structure that rationalizes the opulence Mayweather flaunts.  But for the spoils, there is the risk as Mayweather, or Mayweather Promotions, must put up $10 million in expenses to market the fight.

Payout Perspective:

This is an intriguing structure for payment. It does involve some risk as the astronomical dollar figures would only come at the back end of the fight. Meaning, Mayweather is not guaranteed the reported fight purse until the final numbers are determined. Still, it shows that despite his bombastic persona, Mayweather is a shrewd business person.

Its amazing to see how much money and control Mayweather has over his own fights. It shows how different boxing and MMA is with respect to business model. Even though certain fighters receive a portion of the PPV revenue and/or gate, its not as much as Mayweather will receive for his fights.

7 Responses to “Mayweather really is Money with business dealings”

  1. BrainSmasher on September 17th, 2011 3:40 PM

    Thats what is disgusting about boxing and why money kills the sport. FMJ does everything he can to avoid fighting Pacman and still makes $40 mill taking the path of least resistance. Why would he ever risk these paydays? If he loses these paydays are long gone. So he will take the toughest fight he knows he can win. The only way he will lose is if he starts to decline and underestimates his opponent and makes a mistake during the cherry picking process. That is all boxing is. Cherry pickers protectign their pay checks. Fighters fight because they have something to prove. Money kills fighters. It is never good to let fighters have control of their opponents. It will be a sad day when MMA fighters become bigger than the UFC. They will cut out the middle man, cherry pick fights, book cheap no names on the rest of the card, and get rich screwing the fans.

  2. Machiel Van on September 19th, 2011 7:25 AM

    “It shows how different boxing and MMA is with respect to business model.”

    While this is true in most cases, I don’t like how discussions of Mayweather and Pacquaio’s payouts causes people to universally decree “boxers make more money” across the board. Mayweather and Pacquiao are the highest paid athletes in sports, period. Sure, some athletes in other sports carry contracts that are worth more money, but none of them are making 10s of millions for one event held on one night. It just seems like people make blanket statements that imply anyone can go into boxing and potentially make the same kind of money, when only two individuals are paid that much due to a multitude of factors, some of which can be replicated, but many of which cannot.

  3. Machiel Van on September 19th, 2011 7:28 AM

    The payment structure, in this case, is as unique as the ability for an athlete to put up $10 million marketing their own fight. How many other athletes can afford to do this?

  4. Machiel Van on September 19th, 2011 7:29 AM

    Brain,

    Your description at the end kind of sounds like what happened with Fedor…

  5. BrainSmasher on September 19th, 2011 8:48 PM

    Its a lot like what Fedor was trying. Lucky for the sport that there was UFC and other Fight orgs that housed talent that make it hard for him to cherry pick credible fighters. So it forced into Fight Promotions like Affliction and Strikeforce. Look at him now. He is back slumming picking a fight with Monson who is 40 years old. A fight he turned down to fight Matt Lindland in Bodog.

    If all fighters were their own promoter then Fedor would have been able to cherry pick big names that were good style fights for him and avoid anyone that would stomp him. That is all boxing is. You you are #1 ranked and a guy you think will be hard to beat or everyone claims will beat you steps up. You just claim there is no money it in” He dont sell PPVs, a classic line from boxing. Then when the demand gets to big to ignore they haggle over ring size, glove size, glove brand, tape on hands, length of beard, how high their shorts can be, Fight location, HBO or Showtime, Who gets to promote it, then they have to agree how much each gets paid.

  6. Monte on September 21st, 2011 8:39 AM

    Brian,

    Why do people say Floyd is ducking pacman???? Floyd says if Pacman takes the test, same as Shane did, same as V. Ortiz did, then he will fight. Pac will not acceed, yet it is Floyd’s fault??? Please explain…

  7. BrainSmasher on September 21st, 2011 3:04 PM

    Explanation:

    It is a proven fact that losing blood can weaken a person. Weather or not it would have a big, small, or ni impact at all is unknown. What we do know is in sports, especially combat sports, fighters look for every advantage they can find. There is fighters who do not have sex before a fight and some during training for fear of losing energy even though there is no real scientific proof if bothers your performance. So Pacman has a legit reason not to have blood taken the week of the fight. He has agreed to Olympic style testing.

    Lets look at this from FMJ’s demands. He wants blood testing up to the fight. What is the point of taking blood a week before the fight or the day before the fight? Performance Enhancers make you bigger faster stronger and train harder IN TRAINING. The Olympic style testing and monitoring would assure everyone that Pacman wasn’t on anything during training. Taking TE’s a few days before the fight would have no effect at all. So what if the point of demanding such a meaningless test? The truth is FMJ is looking for any reason he can to avoid the fight without looking like a coward. He is making to much money to risk those paydays and his leverage losing to Pacman.

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