SBJ looks into the finances of PBC on NBC deal

April 20, 2015

The Sports Business Journal (the article is free to non-subscribers) has an exclusive report on how Al Haymon developed his deal to launch PBC on NBC.  Based on public documents obtained by Bill King of the SBJ, it appears that Haymon’s investors have paid NBC over $425 million.

The story begins with the initial pitch to NBC starting in late 2013 where fighters advised under Al Haymon would be showcased on NBC on weekend afternoons and Saturday nights.  To entice the network execs, he offered a time-buy which would front the money for the venture.  But, he also asked for more than the standard pay to play model.  He wanted NBC in on the production of the programs as well as offering “Olympic-level” features to introduce his fighters to the audience.

The financials for the undertaking include a $371.3 million investment by Ivy Asset Strategy Fund, in what King determined to be Haymon Boxing.  A second fund, WRA Asset Strategy. listed an investment of $42.2 million in Haymon Boxing and a third fund, Ivy Funds VIP Asset Strategy showed an investment of $18.5 million.  Waddell & Reed fund manager Ryan Caldwell and Haymon attorney Mike Ring helped facilitate the deal.  Caldwell co-managed a fund that put $1.5 billion into Formula One racing.

The $432 million and the unique structure of the two year deal convinced NBC to invest production costs as well as delivering well-known names as on-air talent (i.e., Al Michaels, Bob Costs, Sugar Ray Leonard) to its broadcasts.

The article differentiates the UFC dive into television as the sport was introducing MMA whereas PBC sees itself as “reviving” the sport.

So far so good for PBC on network television.  In two network telecasts, it scored wins in the valuable 18-49 demo.  And while the second network showing on April 11th drew less than its March debut on NBC, the vibes from fans have been positive.

The obvious question is whether more people will start to tune in.  While boxing fans are bullish on Haymon and the programming, an accompanying SBJ Turnkey Sports Poll to the article indicates that only 10% of those responding to the poll knew of PBC’s debut on NBC and watched.  However, 38% stated they heard of the debut but did not watch and another 51% were not aware of PBC on NBC.  In addition, another Turnkey Sports Poll question indicated that 62% of those polled would not watch the upcoming May 2nd fight between Floyd Mayweather and Manny Pacquiao.

Payout Perspective:

It’s an interesting read (which you can do without the need of a subscription at this point) about the financial backing of PBC.  It also shows the business acumen of Haymon and his financial backers.  While there is risk by Haymon, et al., he was able to convince NBC (as well his other network partners) to take part in the endeavor.  By requesting NBC production help including top-shelf on-air talent, it offered legitimacy to the program.

Will it catch on?  The Turnkey poll appears that there is still room to grow and perhaps boxing has been shelved for a while and out of the minds of the mainstream viewer but with promotion, it could grow.   One thing is for certain, it appears that Haymon and his investors are willing to take an initial financial hit for a long-term return on its investment.

26 Responses to “SBJ looks into the finances of PBC on NBC deal”

  1. d on April 20th, 2015 9:30 AM

    425 million down the drain! HAHAHA!!

    Where is the money for a return? It doesn’t exist. HAHAHA!

  2. saldathief on April 20th, 2015 9:34 AM

    Ouch! yea I would have to agree unless there are other aspects not seen here.

  3. john s. on April 20th, 2015 10:09 AM

    They are expecting TV deal rights to be in the $200-300m a year range in a 2-3 years, which would give them a return on their investment in roughly 5 years.

  4. d on April 20th, 2015 10:46 AM

    Expecting things and achieving them are two very different things. There is no way they will obtain that type of deal with the present ratings they are producing. They would have to at least double the ratings they have now with no indication that the ratings will grow.

  5. Diego on April 20th, 2015 11:33 AM

    It’s a lot of money upfront. I hope they do well. I’ve watched and enjoyed every show so far, but I don’t know how many people like me there are in the US.

  6. FightBusiness on April 20th, 2015 12:00 PM

    d- d shut the fuck up ” they better get better ratings..” WHAT THE FUCK are you talking about!! The UFC’s last 7 events averaged a near identical 18-49 demo and 2.8 million average viewers. so is the UFC on the verge of losing fox money? BAHAHAHA I say yes they are D

    LOL D would always yell. “How are they going to pay for the production cost”. LOL. now we know NBC is covering the bill. BAHAHAHA

    This will make them a wonderful return on investment but regardless haymon is not OBLIGATED to get them a good return on investment. its a risk you dunce.

  7. saldathief on April 20th, 2015 12:11 PM

    Its funny how when the UFC invests 500 million people say its a good thing but when a boxing promoter invest an equal amount the same morons say it’s a complete loss. Its a tremendous amount of money and so far the jury is out on PBC. Haymon has tremendous experience and Im sure he has a good plan. more to come

  8. john s. on April 20th, 2015 12:26 PM

    The value of live sports is at a premium. Look at what the NHL and UFC are getting (and the UFC is probably going to get a big bump up on their next deal) $200m + doesn’t seem that unrealistic right now.

  9. d on April 20th, 2015 1:26 PM

    HAHAHAHAHA!!! Fagbusiness is in panic mode. He’s scrambling for excuses!!!

    The last 7 ufc’s weren’t the first 2 UFC’s which destroyed PBC’s first two shows on NBC. You continue to miss this point and cherry pick stats. The numbers will eventually go down. Your debut is nearly always your biggest show. They could barely get half of the ratings that UFC on FOX 1 got. Also, the UFC went up against stiffer competition. There was no competition for the PBC shows. Plus, if they both were on the same night, with equal billing shows, there is no question the 18-49 demo would be in the UFC’s corner, despite your desperate pleas.

    You are also forgetting, the UFC gets PAID by FOX, so no they are in no threat of losing money to them. PBC has to PAY to get on NBC- 425m dollars worth for 2 years. Do you see how this works idiot? The UFC doesn’t have to pay anything and they do not overpay their fighters like PBC does. The overall cost for all parties involved in the UFC events cost less than half what it costs for a PBC show, so they have to generate much more in revenue.

    “LOL D would always yell. “How are they going to pay for the production cost”. LOL. now we know NBC is covering the bill. BAHAHAHA”

    HAHAHAHA!! You fucking idiot. They are splitting the costs. You should have read the article shit for brains.

    “Eventually, they reached a complex two-year agreement in which Haymon would pay handsomely for air time but NBC would invest as well, paying for some of the production costs, delivering Al Michaels, Marv Albert and Sugar Ray Leonard as on-air talent, and providing promotional assets.”

    Sounds a lot like the UFC on FOX situation with dividing the production costs. Only difference once again is the fact that the UFC gets paid and has a fraction of the overhead considering the purses.

    “This will make them a wonderful return on investment but regardless haymon is not OBLIGATED to get them a good return on investment. its a risk you dunce.”

    Hahaha. Do you even know what you are saying? What will make them a wonderful return? The fact that they are paying NBC 425m plus they are splitting the production costs?

    Also, no one is required by law to have their business a success and acquire for their investors a good return on their investment. That, however is how you stay in business though, you colossal retard!

    Fagbusiness with more of his idiotic angling. HAHAHAHA!!

  10. d on April 20th, 2015 1:31 PM

    Sal, the only difference is the UFC is generating income with that 500m, PBC isn’t.
    The only moron would be the one who would compare the two seeing how one is actually producing, while the other is not.

    The UFC also has revenue from other sources to cover their losses if need be. For Haymon, other than his cut from his management, what other revenue streams does he have? If PBC falls apart, so does Haymon in the world of boxing. If the UFC’s int’l expansion falls apart, the can cover the loss with all of the money they generate from ppv, gates, merchandise, money from the FOX deal, etc.

  11. d on April 20th, 2015 1:33 PM

    “John S”

    200 million wouldn’t cover the cost for PBC on an annual basis unless they altered the purses and brought in lesser talent. They would require closer to the 300m range.

  12. BrainSmasher on April 20th, 2015 2:41 PM

    I don’t see NBC taking the risk of giving them a large deal. The UFC was able to offer a stable of 500 fighters and a model where all the best stay within their company. Haymen doesn’t have as many fighters, doesn’t have the quality of fighters, and when a fighter reaches star status they leave for other promoters or self promote because they have little use for Heymen. NBC has no security with a deal with PBC. If ratings stay where they are they will get a deal. If the numbers fall to around 2.5 million the deal will be very poor which will cause the venture to be a big loss and cause the production of the show and the quality/cost/talent level of fighters to be scaled way back to fit within the budget of the deal.

    The UFC is being paid 90 million each year and PBC is paying 215 million. Big difference! Even with a good tv deal PBC will have to cut back on fighter purses. So these level of events and fighters is just to scam a tv deal but not the level of show that will be typical. In other words it will be watered down.

  13. d on April 20th, 2015 2:56 PM

    Here is something else that is very amusing about this deal from that article- the investors who fronted most of the money for this, wanted to invest in the UFC. So their first choice was the UFC, not the Bush League PBC. The UFC went with the Abu Dhabi Oil investors instead.

    The investment hedge fund ceo also acknowledging they could lose all of the money involved because it is a high risk, high reward investment.

    Also, the expectation for the PBC is to see considerable growth over time in order to secure a deal similar to the UFC. This is not a play for increasing ppv, it is solely to get a big tv rights deal. Their analysis is that there is an untapped audience that they feel like they can go after in that 18-49 demo. They expect this to grow bigger than the debut. The issue though, is that there is no evidence to support that expectation.

  14. Pink Pig on April 20th, 2015 3:15 PM

    “it appears that Haymon’s investors have paid NBC over $425 million.”

    Huh? That makes ZERO sense

  15. FightBusiness on April 20th, 2015 5:23 PM

    my brains been smashed- there deal is for 425 million but no body knows for how many years thats for. its not annally 425 million.

    D- is truly a dumb fuckin creature first off they already recoupin some money with advertising. i already saw over a dozen commercials from companies like McDonalds, chase, several car companies onn their last show. their last event also had a one million dollar gate. thats probably 3 million right there. Vince McMahons XFL got 10 million views its premiere night who gives a fuck. Elite XC or whatever they were called got over 6 million views on several broadcast. how are they doing now. the UFC was new so the first few shows people were literally like what the fuck is this. EVERYONE knows Boxing so there is no curiosity viewing.

  16. BrainSmasher on April 20th, 2015 7:05 PM

    Can you not read Fight Business?

    “The $432 million and the unique structure of the two year deal convinced NBC to invest production costs as well as delivering well-known names as on-air talent ”

    It says there a 2 YEAR DEAL!

  17. BrainSmasher on April 20th, 2015 7:09 PM

    Yes those promotions and leagues got high ratings and declined. Just as PBC is doing and the trend is already going down. Wasn’t you and your cronies claiming PBC will grow from the debut? When you lose 20-25% of the viewers from one show to the next. You better hope those were “curiosity viewers” because turning off hardcore boxing fans would be an even bigger problem. When you get on her talking out your ass its hard to keep your bullshit straight without shooting yourself in the foot!

  18. John S. on April 20th, 2015 7:23 PM

    Just to clarify for people, the $425 million is the amount raised by PBC for their venture. The 2-year deal is what they presented to NBC. That is not the amount they are paying to NBC. Their yearly budget is closer to $100m a year.

  19. d on April 20th, 2015 9:08 PM

    HAHAHAHA!! Fagbusiness is a little upset I killed him with more facts that proved him dead wrong. That production cost split comment really stung, didn’t it. Hahahaha!

    Their first show, they only had 1 national advertiser- Corona. I don’t know what advertisers paid for the 2nd, but to assume that they are recouping anywhere near the costs, is down right retarded. The production cost for that first event was an astronomical figure for tv.

    Their last show, the promoter claimed it did a 1 million dollar gate, that doesn’t make it so. With only a paid attendance of 12k in a building that Garcia did basically the same attendance for with past fights involving bigger names like Judah, Garcia only managed to bring in 800k. They exaggerated. But even considering that, you still have overhead involving the venue as well. They had to pay to rent the promoter, venue, taxes, insurance, licensing, etc. Then look at the purses- you have purses that are probably around 3-4m. You have production costs that are sky high that they are SPLITTING, you have to promote the event, etc. That cost them millions to put on that show. Even though I highly doubt they received 2m for that show in ad money, let’s say they did and let’s say the gate did 1m, (which it didn’t even hit that). This was still a major financial loss. They are making a play for the long run. This is not a short term deal. They are burning through millions to get off the ground.

    Why are you giving examples of things that contradict your entire argument? The XFL and Elite XC folded. The UFC didn’t. Their numbers are still strong and were considerably better than Elite XC. EliteXC never hit 6m viewers for a show’s average, not even close. The highest rated show they ever did was 4.85m viewers and they only had 1 other show go over 4m. Those aren’t UFC numbers. You do zero fact checking and are constantly proven wrong on here with statistics because you are a relentless fucking idiot.

    PBC burning millions with nothing in return. The 2nd choice of their own investors. HAHAHAHA!!! UFC was no.1. HAHAHAHA!

  20. d on April 20th, 2015 9:20 PM

    John S. That can’t be accurate. The cost for these shows is far too much with the time buy, purses, etc. They are planning on doing around 42 shows this year. Are you trying to tell me that will only cost them 100m to produce? Unless you were talking about just the shows on NBC, there is no fucking way. The first show alone cost them probably 10m. Where else is the other revenue coming from? It has to be around 200m per year.

  21. d on April 20th, 2015 9:24 PM

    *Had to pay to rent the venue*

  22. Jack on April 20th, 2015 10:43 PM

    Brainsmasher,

    “When you lose 20-25% of the viewers from one show to the next.”

    Except the last PBC on NBC dropped 15% from the debut as the updated article on this site pointed out.

    Can you not read Brainsmasher?

  23. saldathief on April 20th, 2015 10:48 PM

    There is no way to say one way or another after 2 events on NBC that PBC is losing or making money. We also dont know what there expectations were. But we can see what the UFC has done in the last few years, and all of there numbers are down! you cant find one single number that has increased since Fox ufc 1. oh wait Mexico has increased hahahaha seriously they make up bullshit on a daily basis.

  24. Chris on April 21st, 2015 5:29 AM

    They are gonna look for a big rights fee deal like UFC got, sell the whole thing to one network like NBC and NBC Sports.

    Give them a monthly NBC card and then maybe 25 NBC Sports cards.

    I think it will work, there is a market for combat sports on main networks and sports networks, they are doing solid ratings, not sure what they do on NBC SPorts.

    It will work out, there is a market for it and its pretty cheap programming compared to NBA, MLB, NFL.

  25. d on April 21st, 2015 6:50 AM

    Saldaqueef, we do know without question that they are losing money. Your only argument can be it is a long term play and if they get a tv deal that is big enough to offset those losses, then it doesn’t matter. Until they can prove that with ratings to match, the losses will pile up.

    Sal, the UFC numbers are not down idiot. They had their biggest qtr ever revenue wise q1 this year. The most ppv buys in 1qtr. And they have also expanded with many tv contracts abroad with their expansion whether you like to hear that or not. Moron.

  26. A pyrrhic Mayweather victory for Leonard Ellerbe and Al Haymon? | FightOpinion.com – Your Global Connection to the Fight Industry. on May 2nd, 2015 9:23 PM

    […] ended up as a playground for Al Haymon. Now Haymon and his money marks are (reportedly) insanely paying out hundreds of millions of dollars to broadcast networks, along with cable networks ESPN & Spike TV, for airing events. At this […]

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