Showtime halts releasing PPV buy rates

July 21, 2014

Showtime’s Stephen Espinoza has announced that it will withhold upcoming PPV buy rates due to the controversy surrounding the Floyd Mayweather-Marcos Maidana PPV.  Espinoza told BoxingScene.com that the buy rates will only be released if the event sets a PPV record.

The Mayweather-Maidana PPV reportedly received 900,000 PPV buys although ESPN’s Dan Rafael reported it sold between 800K-900K PPV buys.  It should be noted that Espinoza and Rafael have had twitter beef in the past but that does not necessarily mean that Rafael’s report is off.

Espinoza explained his rationale in saying that the PPV buy rate speculation seemed to become “bigger than the event itself.”  Basically, Espinoza believes withholding the numbers would reduce misrepresentations about the PPV performance and that certain figures would indicate some sort of failure for the event.

At a time when boxing is starting to feel the PPV strain, it’s an interesting move on the part of Showtime.

Payout Perspective:

Imagine the outrage if Dana White were to tell media that they would not release PPV buy rates or even talk about that speculation.  What do you think of the move by Showtime?  Does it stop talk about PPV buys?  While the move helps control the message, it also doesn’t end speculation.  Certainly, not releasing information allows the blanket “you’re wrong” when it comes to any reports of PPV buys.  Yet, this tact seems like the company is hiding something as well.

Boxing asks what UFC fan has been for a while: are there too many PPVs?

July 14, 2014

Boxing writer Steve Kim of the new Undisputed Champion Network web site wrote an article on whether boxing has too many PPVs on the eve of Canelo Alvarez’s third appearance on PPV within 12 months.  The question is not new to UFC fan as they have been asking the question for some time.

For the UFC fan, UFC 174 exemplified the thesis that there are too many PPVs.  Preliminary reports have that PPV featuring Flyweight champ Demetrious Johnson anywhere between 95,000 to 125,000 PPV buys.  Regardless of where that number ended, it was the lowest output for a UFC PPV since 2006.  It reflects the new market for PPV in the UFC.  Fans will pick and choose which cards they want to purchase and it’s unlikely we’ll see 1 million PPV buy main events in the near future.

Kim talked to Showtime’s Stephen Espinoza prior to Canelo-Lara:

“I think we’re having a confluence of pay-per-views really, simply because we have three or four fighters who can legitimately carry a pay-per-view and they’ve decided to make the decision to go there,” said Stephen Espinoza, Executive VP and GM for Showtime Sports and Event Programming, whose company is distributing this weekend’s event. “As for the network, we’d always prefer to have everything on the network. There’s certain realities which make that unrealistic but ultimately, it’s the fighter and the promoter that make that decision of when they want to go pay-per-view, when they don’t.

Kim also questioned whether boxing can go down the UFC road:

Still, a pay-per-view a month? What is this, the UFC? Does boxing really have that many fights worthy of such a designation?

The cynical MMA fan would say that the UFC doesn’t have that many PPV-worthy cards yet the UFC offers monthly cards on PPV for $55 per event.

Payout Perspective:

For those that follow us, we touched on boxing beefing up its PPVs back in April.  If you were to replace boxing with MMA in the article, the issues would be the same with the exception that Espinoza comments place the issue on the fighter/promoter rather than the network.  In the UFC, the decision is all on the company whether it runs a PPV event and who will be on the card.  In my opinion, a reason for more PPVs in boxing is a trickle-down theory in combat sports. Fighter/promoter payouts can be mitigated if a fight is put on PPV.  Essentially profit margins are wider if you charge fans $60 for a fight rather than put it on subscription based television.  It seems like this is the strategy rather than the previous strategy of waiting for a big fight with two top names.  Certainly fighters have fought on HBO and Showtime in hopes that their career would ascend to a PPV.  In recent weeks, boxing has put on some exciting fights on both premium subscription networks.  So, the question is whether boxing fan will shell out $60-$75 for a fight that used to be on the networks.

 

Crawford-Gamboa on HBO Saturday receives 1.2M viewers

July 1, 2014

ESPN reports that Saturday night’s HBO live boxing event featuring lightweight Terence Crawford defeating Yuriorkis Gamboa scored a rating of 1.208 million HBO subscribers with a peak at 1.286 million.

The Crawford-Gamboa fight was a back and forth action-packed fight.  It was the second week in a row that had an entertaining fight as Robert Guerrero and Yoshihiro Kamegai put on a slugfest on Showtime the preceding week which drew 614,000 Showtime viewer average.

As reported by ESPN’s Dan Rafael, only Chavez, Jr-Vera II did better this year.

Payout Perspective:

The fights on HBO Saturday coincided with UFC Fight Night 44 which received just 702,000 viewers on FS1.  The HBO fights featured Terence Crawford fighting in his hometown of Omaha, Nebraska.  According to Rafael’s report, it drew 10,943 for a gate of $500,000.  It was a good draw for the hometown crowd.  This makes it two weeks in a row in which boxing had two “Fight of the Year” fights.  Although Guerrero-Kamegai may have drawn less, it was nonetheless a hard fought fight.

 

Main Events sues promoter, Schaefer and Stevenson

June 30, 2014

MMA Payout has obtained a copy of the lawsuit filed by promoters Main Events as it is suing the promoter for Adonis Stevenson for bowing out of an intended fight with Sergey Kovalev.  The lawsuit centers around the involvement of boxing insider Al Haymon.  It was filed last month with little occurring in the lawsuit so far.

The lawsuit was filed last month and has not seen much movement in the initial filing at this point.  The plaintiff is New Jersey Sports Productions, Inc. which does business as Main Events.  The promotion is owned by Kathy Duva.  As MMA fans may recall, Duva filed a Declaration in Support of Bellator in the Eddie Alvarez lawsuit.

The defendants include Yvon Michel, his promotion, GYM; Golden Boy Promotions; Showtime Network, Inc. and boxer Adonis Stevenson.

To set the stage, Main Events’ Kathy Duva claims that it had an agreement for her fighter, Sergey Kovalev to face Yvon Michel’s promoted fighter Adonis Stevenson.  The deal was allegedly sealed with emails in late January 2014 between Duva and Michel.  The deal included a co-promoted fight on HBO which carried a $2.4 million rights fee.  The fee was offered by HBO executive Peter Nelson which Main Events contends was accepted by Michel on behalf of his fighter.

However, Main Events learned that Al Haymon became involved and Main Events’ attorney sent a letter to Haymon confirming the Stevenson-Kovalev.  Presumably, the letter was to prevent an anticipated breach on the part of Stevenson.

The Complaint paints Haymon as an individual with “a relationship with Showtime wherein certain promoters rely…for allocation of television dates and rights fees rather than negotiating those dates and fees directly with Showtime.”  It also alleges that Haymon has an alliance with Richard Schaefer (then CEO of Golden Boy) and they had planned to “wrest control” of Golden Boy.  As we know now, Schaefer and others have left Golden Boy and it’s not clear whether Schaefer and Haymon are entering into a venture together.  The Complaint alleges that Haymon violates the Muhammad Ali Act as he acts as a manager or advisor to boxers despite not following the rules related to the Ali Act.

Main Events claims that Showtime interfered with the negotiations between HBO and the Kovalev/Stevenson fight despite Haymon pushing for a Stevenson-Bernard Hopkins fight with Showtime.

The legal claims:

Breach of Contract

Main Events claims that Stevenson’s management group, GYM, breached its contract to co-promote a bout between Stevenson and Kovalev.

Breach of Fiduciary Duty

Main Events claims that GYM breached a fiduciary duty premised upon the co-promoted agreement as the two sides were to have split revenue on the proposed fight. It goes on to claim that since the co-promotion is considered a joint venture, GYM breached a fiduciary duty to Main Events for not going through with the co-promotion.

Fraud by Stevenson’s Promoter

Main Events has sued Stevenson’s Promoter, Yvon Michel, personally for fraud as it is alleged that he represented to Main Events that it “had nothing to worry about” regarding the agreed Stevenson-Kovalev fight and Haymon’s involvement was a mere way to “increase the rights fees for the unrelated interim bout.”  The interim bout that is being referred to was a fight in Montreal between Stevenson and Andrzej Fonfara.  Stevenson fought Fonfara in late May on Showtime.  In that fight, Stevenson hit the canvas once, but eventually won a decision over Fonfara.

Tortious Interference with Contract

Main Events claims that Haymon, Golden Boy, Stevenson and Showtime based upon the set of events, claims it had a deal for Stevenson-Kovalev, but the defendants interfered with that contract.

Interference with Prospective Economic Advantage

Premised upon the alleged agreement for a fight between Stevenson-Kovalev, Main Events contends that Haymon, Golden Boy, Stevenson and Showtime interfered with an existing contract for the fight and that there was “a reasonable expectation that plaintiff [Main Events] would have economically benefitted from the business relationship.”  Essentially, Main Events claims that it would have benefited (and it would have) from the fight between their fighter and Stevenson.  But there was interference which caused Stevenson to back out of the agreement.

Payout Perspective:

This is another example of the competitive nature between HBO-Showtime and Top Rank-Golden Boy.  Actually, here its Main Events.  Since the lawsuit was filed, Schaefer has left Golden Boy and the move may impact this lawsuit as it relates to the accusations between the companies.  The latest has a Summons issued to Schaefer in Laguna Beach, California.  A  pretrial conference that was to occur last week has been pushed to July 11th.

As for the legal maneuvering, it’s likely that Haymon, et al. will file a motion to dismiss the Complaint premised upon the argument that there was no binding contract between Main Events and GYM, and as such, there was no breach.  Premised upon the fact that there was no breach, there would be no fraud by Michael or interference with a contract.

The lawsuit underscores the power of Al Haymon in the boxing industry.  It’s clear that he has a powerful stable of fighters and has had working relationships with Showtime.  As many know, Haymon advises Floyd Mayweather.  Main Events alleges that Haymon acts as manager to his boxer which circumvents the Muhammad Ali Act which attempts to protect fighters.  The Complaint does not delve into this violation as it is not a plead cause of action at this point.  However, if discovery commences in this lawsuit, we may see allegations of specific violations.

It will be an interesting lawsuit to follow and MMA Payout will keep tabs on it.

Golden Boy and Schaefer heading to arbitration

June 26, 2014

ESPN reports that Golden Boy Promotions has requested arbitration against former CEO Richard Schaefer.  According to the report, De la Hoya and Golden Boy are requesting $50 million in damages from Schaefer although no allegations have been reported as to the claim.

The case is being sent to private arbitration per the terms of Schaefer’s employment agreement with Golden Boy.  It likely had a clause that if there was a disagreement, in lieu of filing a lawsuit, the parties would agree to go to arbitration which is theoretically faster and less expensive.  Thus, no lawsuit and it is unlikely that the general public will not know much of the evidence and testimony unless it is leaked.

Payout Perspective:

While we may not know the claims against Schaefer, the speculation that Schaefer and Al Haymon may go into business together may be one of the claims Golden Boy is making.  Golden Boy might claim that Schaefer breached his fiduciary duty as CEO by not acting in the company’s best interests.  The recent Main Events lawsuit filed against Al Haymon paints the picture that Schaefer and Haymon have worked together (more on this lawsuit in the coming days).  The legal action is not surprising considering the public departure of Schaefer and other staff as well as Floyd Mayweather.

Alvarez-Lara PPV also in theaters July 12

June 16, 2014

The July 12th PPV between Canelo Alvarez and Erislandy Lara will be shown in movie theaters as well as on Showtime PPV.  In conjunction with Fathom Events, the Showtime/Golden Boy card will be in over 200 theaters across the country.

Fathom Events is the company that has worked with putting UFC PPV events in theaters in the past.  Tickets in my area are going for $18 per ticket.  It provides fans another option to ordering another $60 PPV.

Canelo-Lara

Payout Perspective:

The move to put this PPV in theaters reflects an effort to promote Canelo Alvarez as the top star in its stable.  Alvarez-Lara does not sound like a huge selling PPV event to the casual boxing fan despite the popularity of Alvarez.  However, giving Alvarez as much exposure as possible is the likely reason for the extra investment.  With more boxing PPVs this year, the theater option gives some fans an option in watching this fight.

Schaefer, Mayweather leave Golden Boy

June 4, 2014

ESPN reports on the news of a jolt within the boxing world as Richard Schaefer tendered his resignation from Golden Boy Promotions on Monday.  As a result, Floyd Mayweather left Golden Boy to join up with Schaefer and Al Haymon.

A Michigan newspaper reports that Mayweather will promote his September 13th fight on his own.   Golden Boy had provided promotional assistance to Mayweather fights since 2006.  Mayweather Promotions has co-promoted the undefeated fighter and this will be the first time in 7 years that Mayweather’s company will go at it alone.

The resignation reflects the known tension between a returning Oscar de la Hoya from alcohol rehabilitation and the company’s CEO, Schaefer.  During the Maidana-Mayweather fight hype, de la Hoya made news by calling for Golden Boy to return to work with Top Rank and Bob Arum.   It is widely known that Mayweather does not get along with Top Rank and/or Arum and he has had a less than amicable relationship with de la Hoya.

As Steve Kim of Maxboxing points out, litigation over whether Schaefer breached fiduciary duties as the company’s head could be forthcoming.  What is also interesting is that Schaefer indicated that remains a shareholder of the company.  So, it’s unclear whether he could work for another promotions company as that might be a conflict of interest.

Payout Perspective:

The news of Schaefer and Mayweather’s departure may reflect a shift in power in the boxing business today.  While Golden Boy still has Canelo Alvarez under contract, Al Haymon fighters would seemingly fight under the Mayweather Promotions banner and would thus create another wall from potential fights taking place.  Obviously, all of this is still up in the air but one would think with the news that Mayweather will be promoting his own fight that only Haymon fighters would be on the September card.

Mayweather-Maidana does 900K PPV buys

May 29, 2014

Sports Illustrated reports that the Floyd Mayweather-Marcos Maidana fight on May 3rd received 900,000 PPV buys.  According to the Chris Mannix article, the PPV buy rate is from multiple industry sources.

ESPN Dan Rafael had previously reported that the fight sold between 800-900K PPV buys.  Thus, the estimate was right on track.  The SI article points to the lack of promotion for “The Moment” as opposed to “The One,” the September 2013 fight with Canelo Alvarez which drew 2.2 million PPV buys.  This time around, there was no press tour which was due in part to the fact that Maidana was not a known boxing name for the casual viewer.  If a rematch were to happen this September, we could expect more promotion surrounding a second fight now that fans know of Maidana and his style.

Payout Perspective:

900,000 PPV buys is nothing to be upset about but Mayweather fights have an expectation of lofty PPV buys.  It could be the lack of known opponents that is hurting the Mayweather PPVs.  Canelo Alvarez is a widely popular star in Mexico and thus his drawing power plus the promotion for their September 2013 fight equated to the huge buy rate.  So, the question is who out there is a big enough star that fans would pay $75 to see fight Mayweather.

Preliminary indications show that Mayweather-Maidana drew 800K-900K PPV buys

May 18, 2014

ESPN’s Dan Rafael indicated in a Sportsnation Chat with fans  that the PPV buy rates from the Floyd Mayweather-Marcos Maidana fight sold between 800,000 to 900,000 PPVs.  Golden Boy and Showtime have yet to make an official announcement.

The news of the buy rate based on Rafael’s sources are disappointing considering it’s a Mayweather fight.  It is also a departure from the 2.2 million buys this past September.

While no official announcement on the PPV has been made, Rafael’s comments during the fan chat make sense.  If the buy rate news was good, Golden Boy and Showtime would have made an immediate announcement.  However, with no information given since the May 3rd fight, one might assume that Rafael’s estimation would be correct.

Payout Perspective:

The 800K-900K is still an impressive number but not the 1 million PPV buys that Golden Boy/Showtime and Mayweather had hoped.  If there’s any positive from the promoters’ perspective, the figure shows that Canelo Alvarez is a legitimate PPV draw. The 2.2 million buys was due to a huge contingent of Mexican fans cheering Alvarez.  Marcos Maidana is an entertaining fighter but does not have the broad appeal of Canelo Alvarez.  Then, there’s the fact that there was less marketing push behind this fight in comparison to the Alvarez fight.

With Manny Pacquiao producing another Pacquiao PPV “disappointment,” we may have to start to re-calibrate what a successful big event boxing PPV draws.

Mayweather (of course) tops payouts for “The Moment”

May 3, 2014

Kevin Iole of Yahoo! Sports reports the fight purses for Saturday’s Floyd Mayweather-Marcos Maidana fight at the MGM Grand in Las Vegas, Nevada.  Mayweather will make $32 million without factoring other streams of revenue.

Mayweather’s opponent, Marcos Maidana will make $1.5 million. Maidan will also receive a portion of the television rights from Argentina and a share of the PPV revenues according to the ESPN.  As for the undercard, Adrien Broner will make $1.25 million while his opponent Carlos Molina will make $150,000.  Amir Khan will make $1.5 million and his opponent Luis Collazo will make $350,000.   In the first night of the evening, J’Leon Love will make $100,000 while his opponent Marco Antonio Periban will earn $35,000.

Payout Perspective:

The first Saturday of May is always jam-packed with sports (3 NBA Game 7s and the Kentucky Derby) and is capped by the Mayweather fight.  Mayweather’s pay is not surprising but the undercard fighter makes this payroll pretty hefty.  Certainly the undercard has much more interest than an HBO PPV and we will see if it will do better than the Pacquiao-Bradley II fight last month.

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