Sports Business Journal (subscription required) reports that boxing is set for one of its biggest years on PPV in 2014. The question is whether fight fans will be willing to pay for all of the fights that will occur on PPV this year.
Canelo Alvarez will be prominently featured this year as Showtime and Golden Boy anticipate Alvarez to headline 3 major PPVs starting in March. Showtime and Golden Boy will also have Floyd Mayweather for his customary Cinco de Mayo/Mexican Independence Day PPVs.
On the Top Rank side, it is expected that Manny Pacquiao will be back with two PPVs this year and it’s anticipated Miguel Cotto will fight Sergio Martinez on PPV in June.
The article outlines the boxing PPV market over the past couple years in which it concludes that the PPV market should be reserved for “top shelf” fighters. A prime example of how conservative boxing is with its PPVs occurred last month when Golden Boy decided to scrap an anticipated PPV with Marcos Maidana and Adrien Broner. While the fight was PPV quality, it was likely the smart move for Golden Boy to hold off on putting it on PPV (note: if you didn’t have Showtime, you could have purchased the fight, but obviously we mean the whole card being on PPV).
According to SBJ research, last year, the overall buys for 4 events received 3,975,000 for a total revenue of $252.2 million. The previous year (2012), 4 PPV events received 4,015,000 buys for $238 million. As you can see the $75 Mayweather PPV seemed to help the total for last year. For those wondering, 2011 sported 7 boxing PPVs for a total of 4,540,000 buys and revenue of $262 million.
The article also went into an extensive calculation of what may be considered a “successful” PPV for someone like Canelo which Showtime/Golden Boy would like to have as its top star after Mayweather leaves. According to Golden Boy CEO Richard Schaefer he concluded with 200,000 buys and deducting the “50 percent cut taken by cable and satellite operators and the 7.5 percent paid to providers HBO or Showtime, the promotion would be left with about $5 million.” Schaefer goes on to extrapolate $1million for the undercard payroll, rights fees and foreign and closed-circuit sales which cover the marketing costs for the PPV. In the end, Schaefer predicts a $4 million upside for the fighters which is a little better than if it were to be aired on HBO or Showtime.
Schaefer also noted that for a boxing PPV, its anticipated that 5 people are watching per buy whereas UFC PPVs are close to 9.
Payout Perspective:
The article is an interesting look at the boxing PPV market which is different than the UFC PPV market. There are at least 8 PPV fights anticipated this year. The question will be how fight fans will decide how to spend their entertainment dollar. 2013 saw great strides in quality fights on HBO and Showtime and now see that some of the upper tier fighters will be on PPV. But should there be some concern for the state of boxing PPVs? Manny Pacquiao’s last PPV fight in November was decidedly disappointing buy-wise. Floyd Mayweather’s first fight against Roberto Guerrero for Showtime/Golden Boy in May 2013 was lower than expected. So, with more fights scheduled for PPV, and the new price point of $64.99 (which is likely), how receptive will fight fans be to more boxing PPVs.
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