Mayweather-Pacquiao destroys PPV, gate records

May 12, 2015

Yahoo! Sports reports that the official PPV buys for the May 2nd fight between Floyd Mayweather and Manny Pacquiao drew an astronomical 4.4 million PPV buys that equates to more than $400 million in revenue.  The numbers shatter the old PPV buy rate record set by Mayweather and Oscar De La Hoya in 2007 and the revenue record set by Mayweather and Canelo Alvarez in 2013.

The live gate for the event also drew more than $72 million which also did better than the previous record set by Mayweather-Alvarez.  According to the NSAC, Mayweather-Pacquiao drew 16,219 for a gate of $72,198,500.  May-Alvarez drew 16,146 for a little over $20 million.

The PPV outdid the 2.2 million PPV buys set by Mayweather-De La Hoya in 2007.

Kevin Iole’s Yahoo! article also indicates that May-Pac sold more than 46,000 closed-circuit seats in Clark County, Nevada which pushed total revenue to more than $500 million.

Mayweather Promotions CEO Leonard Ellerbe attributed Mayweather’s star power as well as social media as well as the mainstream media push.  Of course, Pacquiao’s presence probably assisted in the interest in the fight too.

Payout Perspective:

It’s clear that despite some negativity surrounding the fight did not diminish any of those wanting to purchase the PPV or watch the fight in person or closed-circuit.  Social and mainstream media probably helped with the promotion of the fight but the pro-active nature of the cable and satellite distributors to push subscribers to purchase the PPV ahead of time also helped with the buy rate.  The revenue records were likely considering the $100 PPV price point for HD or $90 for SD.  Also, the high ticket prices and lack of comps were also factors for the record-setting gate.

Class action lawsuit filed against Pacquiao, Top Rank over pre-fight injury

May 5, 2015

ESPN reports that two Nevada residents have sued Manny Pacquiao, Bob Arum, Todd DuBoef , Michael Koncz and Top Rank for not disclosing the fact that he had an injured shoulder going into the fight with Floyd Mayweather.  The class action lawsuit was filed in federal court in Nevada on Tuesday.

The lawsuit obtained by TMZ Sports lists three counts: 1) Fraudulent Concealment, 2) Statutory Consumer Fraud based on NRS 41.600 and 3) Conspiracy to Commit Consumer Fraud.  The allegations relate to violations of the Nevada statutory code by Pacquiao, et al. for  not disclosing a shoulder injury suffered by Pacquiao while in training for the May 2nd fight.  Pacquiao revealed the injury in the post-fight press conference.

The lawsuit cites the Nevada state code related to deceptive and unfair trade practices.  The plaintiffs claim that they either purchased tickets and/or the PPV.  They claim that Pacquiao misrepresented to the NSAC that he was not injured.

Michael Koncz told the NY Times that he filled out the questionnaire incorrectly.  The Pacquiao camp indicated it had told USADA about the shoulder injury but not the NSAC.

Even before the lawsuit was filed, the Nevada State Athletic Commission indicated that it would investigate Pacquiao’s comments and who knew what, when.  Pacquiao did not disclose on an NSAC pre-fight questionnaire that he had an injury although he had one.  Kevin Iole of Yahoo! Sports tweeted out the questionnaire.

Payout Perspective:

In all likelihood, a Motion to Dismiss will be filed by Pacquiao, et al.’s representatives.  This was stated as much by Pacquiao’s lawyers.  It also appears that this lawsuit should be filed in state court since it relates to questions related to Nevada rules.    The lawsuit was bound to occur but this seems like one that will either be dismissed or settled quickly.  While the NSAC may investigate the matter, I would not expect a Pacquiao suspension.  At this point, the 36 year old Pacquiao is slated for shoulder surgery for a torn rotator cuff and is out 9-12 months.  Even then, he’s expected to fight in Macau again so even if the NSAC were to assess a penalty/suspension, I doubt that does much.  But, if you were to be cynical (or practical) about the situation, Pacquiao is a big economic driver for the state when he fights and it’s unlikely the NSAC does anything to prevent Pacquiao from fighting in the state.

Mayweather-Pacquiao Perspective

May 3, 2015

Welcome to a special edition of Payout Perspective.  This time we take a look at what was dubbed as the “Fight of the Century” at the MGM Grand in Las Vegas, Nevada as Floyd Mayweather took on Manny Pacquiao.

Mayweather takes care of Pac Man

It was the likeliest of outcomes despite the wagering line drawing down as many bet with their hearts and not with their heads.  Mayweather muted Pacquiao’s flurries with well-calculated right hands to counter his attacks.  It was a comfortable decision for Mayweather amid many voicing their displeasure for a variety of reasons.  Of course, we could have done without the Pacquiao excuse of injury despite the fact it may have been the truth.

The unholy alliance of Showtime/HBO and Mayweather/Arum will likely never come to pass again.  Yet, the mission was accomplished. Without an official tally, one need only eyeball the dollar amounts with egregious amounts of zeros to know that the fight between Floyd Mayweather and Manny Pacquiao was the highest grossing boxing event in its history.

Attendance and Gate

The goal was $74 million and with the astronomical prices for seats and the decree that there would be no comps, it likely made it.  Even Pacquiao paid $3-$4 million for tickets for his hefty entourage to attend.

Purses

With the 60-40 split of the fight purse, Floyd Mayweather should take in $180 million.  Pacquiao will pocket $120 million.  As we reported, the amount of gross revenue favored the winner between $160-$180 million with 51-49 split.

Promotion of the Fight

The unique co-promotion between rivals was to the benefit of fight fans from one perspective.  It saw a week with past fights from Floyd Mayweather and Manny Pacquiao on cable television.  CBS Sports Network replayed most of Mayweather’s fights under his current Showtime contract and it aired the one Pacquiao fight he did with Showtime – a battle with Shane Mosley.

With the co-promotion, both networks worked with distributors in pro-actively targeting satellite and cable customers that had order past PPVs to pre-order this event.  Essentially, making sure that their customers ordered Mayweather-Pacquiao.  The question is how many people actually pay for the PPVs a day or two ahead of the event?  Yet, it appears that the strategy worked.

Although there was no full blown HBO 24/7 or Showtime All Access 360, both networks aired shows to promote the fight.

The Pac-May press conference did better ratings-wise than the second episode of TUF last Wednesday.

Of course, there were tons of media, both sports and mainstream, too numerous to mention.

Sponsors

Pacquiao’s camp reported that he would receive over $2 million in sponsorship money from ad space on his trunks.  The sponsors included Wonderful Pistachio, Smart Communications, Nike and Butterfinger.  Butterfinger leveraged its sponsorship with a social media campaign which included tweets specifically from Pacquiao.  He also had a deal with Samsung which was a reason why Freddie Roach took a selfie with Manny during the walk-out.

Mayweather, who usually has little if any sponsors aside from his TMT clothing brand, had luxury watch-maker Hublot and Fan Duel on his trunks.  He also wore Reeboks. Also of note was the Burger King walking out with Mayweather.

Freddie Roach forged a sponsorship with Geico.  In addition, Buboy Fernandez, Pacquiao’s second, wore a ton of sponsors on his shirt including the use of long sleeves to include the SoCal Mitsubishi sponsors.

Odds and ends

The dual use of ring announcers and the mixed broadcast team was unique and awkward at the same time.

The replay will be aired at the same time on Showtime and HBO on Saturday night May 9th.  It will be interesting to see the ratings for each network.

What are we to make of the Michelle Beadle and Rachel Nichols credential-gate? The fact that Beadle continues her own story by doubling down with stating she no longer supports WWE because Triple H is a fan of Mayweather one must wonder how much Beadle was a fan of WWE. Why was she unaware that Triple H once walked down to the ring with Mayweather and that he was involved in Wrestlemania?

Jimmy Kimmel dressed as Justin Bieber > Burger King dressed as Burger King.

For the first time, fans were charged $10 to attend the weigh-ins and even those were being sold for more on the secondary market.

HBO Sports confirmed that the fight was delayed “about 45 minutes” to help fix PPV issues.

Seems like the first weekend in May (with boxing, Kentucky Derby and NBA and NHL Playoffs) is bound to be the best Saturday of the year in sports.

For those wondering, the PPV buy record is 2.48 million (Oscar de la Hoya-Mayweather) and PPV revenue record is $150 million (Canelo-Mayweather).  These numbers will fall with ease.

Conclusion

For all of the hype and promotion, this was one event that was too big to fail.  Even though PPV distributors experienced some technical difficulties last night, the overarching issue was that people were trying to get in and order the $100(HD) PPV.  We should see this fight eclipse PPV records.

But do you think it goes over 4 million PPV buys as Kevin Iole predicts?

Despite the last minute decrease in prices and hotel rooms in Vegas, this event drew immense attention and the casual viewer was willing to pay the steep price to see it even though they were not keen on heading to Vegas.  I would tend to think this event drew near 4 million PPV buys but would not be surprised if the reports of surpassing 4 million were true.

Ratings from Saturday night’s events on HBO-Showtime

April 23, 2015

ESPN’s Dan Rafael reports the ratings from Saturday’s boxing events on HBO and Showtime.  The shows went head to head with two intriguing main events.

HBO had the much anticipated fight between Lucas Matthysse and Ruslan Provodnikov drew 1.243 million subscribers and peaked at 1.38 million.

Rafael also reports that the fight between Julio Cesar Chavez-Andrzej Fonfara on Showtime drew 618,000 viewers with a peak of 836,000.  Fonfara upset Chavez in the latter’s return to the ring.  The last time Chavez fought was on an HBO card that drew an average of 1.4 million HBO subscribers.  On the Showtime undercard, the fight between Amir Iman and Walter Castillo averaged 346,000 viewers with a peak at 427,000.

Prior to the Matthysse-Provodnikov fight, Terrence Crawford knocked out Thomas Dulorme.  That fight drew 1.0004 million viewers peaking at 1.084 million viewers.  Crawford’s last fight on HBO in December drew 836,000 subscribers of the premium network peaking at 936,000 viewers.

Payout Perspective:

In addition to dueling boxing events, Saturday night was the UFC on Fox, NHL and NBA Playoffs so there was lot for sports fans to pick.  However, for boxing fans the big event of the night was the showdown between Matthysse and Provodnikov which many thought was a draw despite Matthysse pulling out the victory.  It was also a nice bounce back for Terrence Crawford in terms of viewers as he had disappointing numbers in December despite being backed by a Pacquiao replay.  This time, being linked with Matthysse-Provodnikov likely helped too.  Yet, the average for Chavez Fonfara has to be considered a disappointment based on Chavez’ name value.  Of course, it could be extrinsic factors about JCC that may turn boxing fans off

System set in payouts for Mayweather-Pacquiao

April 18, 2015

The New York Times reported on the unusual need for a central system to be used for the logistical payouts for Manny Pacquiao and Floyd Mayweather with respect to the long-awaited fight coming May 2nd.

The article primarily relies on quotes from Pacquiao promoter Bob Arum with respect to how the gross revenues will be divided between the two fighters and other ancillary entities.

For Pacquiao, he is on the wrong-end of a 60-40 revenue split but should clear over $100 million when all is said and done. Of course, the IRS will take its share from Pacquiao (and Mayweather we assume) right off the top.

Rival networks, HBO and Showtime are co-producing and co-distributing the PPV event. They have dueling shoulder programs on its respective networks and in a unique production agreement, each of the networks’ broadcast teams will participate in the event (including dueling ring announcers). The two sides have created a central accounting system to ensure what one might believe is “integrity” in splitting the revenues from what should be the biggest event in boxing history (at least from a gross profits standpoint).

The central system will distribute the revenue in accordance with the contracts of the two fighters.

All revenue from the fight would be put into the central accounting system. This would include foreign broadcast rights, closed-circuit income, ticket sales, sponsorships, merchandise sales, etc. The estimate of these monies per the NYT is at $130 million. In addition, PPV revenue which could gross $300 million also goes into this pot.

Most of the PPV revenue will go to the fighters minus 15% (7.5% each for HBO and Showtime). You may recall that HBO and Showtime were in vigorous negotiations with the satellite and cable companies regarding the PPV distribution for the event.

A “wrinkle” pointed out by Arum is that the winner of the fight will receive a 51-49 percent split for revenue between $160 million and $180 million. Thus, ideally the winner will receive $10.2 million while the loser gets $9.8 million. The amount over $180 million reverts to the 60-40 split in favor of Mayweather.

Payout Perspective:

Despite the lofty price point for this PPV, it is believed it should break the PPV record. Similarly, the $72 million gate at the MGM will break a record as well. One might assume the same for international rights, closed-circuit money, sponsorships and merchandise. It’s clear that the logistics for splitting up the revenues required a central system (we assume with necessary checks, balances and protocols).

Top Rank to air boxing series on truTV

April 2, 2015

Earlier this week Top Rank Boxing and truTV announced a deal that would put boxing on the Turner Network starting with live fight cards on Friday, May 1st.

truTV is best known for running men’s NCAA Basketball Tournament games during March.  Otherwise, most sports fans would not know of the network’s existence.

The series will hold 8 card this year and will be “in association with Turner Sports and HBO Sports” per ESPN.  For those wondering, HBO and Turner are under the same umbrella owned by Time Warner.

HBO will promote the series and the first three events (May 1st, May 8th and May 15th) on truTV will de facto serve as promotional tolls for bigger fights put on by HBO the next day.

Turner Sports will assist in marketing and producing the series.  The broadcast team is not known at this point although it will be provided by Turner Sports and/or Top Rank.

truTV is in 89.7 million households according to TV by the Numbers.

Payout Perspective:

Another boxing series on television although this was does not involve Al Haymon.  The series may compete with SpikeTV’s lineup of combat sports (which include’s Haymon’s PBC) and the new line of boxing coming up later this year on ESPN.  With all the boxing that has been announced this year, it’s hard to fathom a network not carrying the sport.  Is there a point where there is too much boxing?  While I do see the benefit of running live events to further promote bigger events, one would have to wonder if these truTV cards would be only for the most ardent boxing fan.

May-Pac PPV will cost $99

April 1, 2015

The Wall Street Journal is reporting that May 2nd’s long-awaited PPV fight between Manny Pacquiao and Floyd Mayweather, Jr. will have a price point of $99 HD and $89 SD.  It will be the highest priced PPV ever.

The previous high for a sport PPV was “The One” which featured Mayweather fighting Canelo Alvarez.  The event which drew a record $152 million in PPV also had the highest price point, $74.95 HD ($64.95 SD) for a PPV prior to next month’s event.

HBO and Showtime are handling the negotiations with pay-TV distributors and had sought an advantageous split on behalf of Mayweather and Pacquiao.  With a normal split of 50/50 for PPVs, HBO and Showtime were looking for a 70/30 split of the PPV revenue.  Of course, pay-TV distributors balked at the proposal.

The key distributors involved are iN Demand and DirecTV. The other distributors that the networks must reach agreements with are Dish Network and Vubiquity, the entity that handles negotiations for AT&T and others.

The WSJ report indicates that distributors will concede a split in the favor of the networks but not as much as the 70% proposal.

Estimates claim that the PPV could garner 3 million PPV buys which may almost double the previous PPV record.

Payout Perspective:

It’s unlikely that $100 will deter many wanting to see this fight.  Although the price is steep for a fight that many believe should have happened years ago, it is still an attraction that is unique and features the best known boxers in the sport.  It was no surprise that HBO and Showtime sought a bigger piece of the pie in these negotiations as both are trying to maximize the revenues as they have agreed to partner in this event.

Mayweather-Pacquiao agree to USADA testing

March 13, 2015

The LA Times is reporting that Manny Pacquiao and Floyd Mayweather have agreed to enhanced drug testing by the United States Anti-Doping Agency (USADA). While in previous negotiations for this fight, the parties stalled on the issue, this time around the Olympic-style drug testing was quickly accepted.

One of the reasons why the camps for Mayweather and Pacquiao could never put the fight together was due to issues related to drug testing. Mayweather had accused Pacquiao of taking steroids. This led to a lawsuit in which Pacquiao sued Mayweather for defamation. In addition to a settlement in which Mayweather paid Pacquiao a reported $5 million, he also paid Pacquiao’s lawyers over $113,000 in legal fees and costs for evading a deposition.

Bob Arum, Pacquiao’s promoter, indicates that Pacquiao has submitted to VADA (Voluntary Anti-Doping Association) for years. The organization implements similar drug testing protocol to USADA.

Under USADA, the boxers will submit to urine and blood testing which may happen at any time. Each fighter has agreed to the World Anti-Doping Agency code stipulation which includes a four-year ban from competition if an athlete tests positive for a banned substance.

Payout Perspective:

The drug testing issue is good news and verifies the fact that each fighter should be free of PEDs. The UFC will be looking for a similar drug testing policy by July and an organization like USADA would be very beneficial in cleaning up the sport. Obviously for the UFC, there are a variety of hurdles (legal and political) it must clear before it implements its policy in July.

Rios-Alvarado trilogy scores 1.252M viewers

January 27, 2015

ESPN’s Dan Rafael reports that Saturday night’s HBO boxing card featuring the third fight between Brandon Rios and Mike Alvardo drew 1.252 million HBO viewers.  According to Nielsen the peak of the fight drew 1.315 million viewers.

Per Rafael, it was the most watch fight of the three between Rios and Alvardo.  Also on Saturday, the Gilberto Ramirez-Maxim Vlasov fight which preceded the main event drew 820,000 viewers with a peak at 946,000 viewers.

Payout Perspective:

HBO Boxing on Saturday featuring Rios-Alvarado (which occurred after UFC on Fox 14) outdid the big Deontay Wilder-Bermane Stiverne fight on Showtime the week before.  The ratings for the fights on HBO and Showtime show that boxing is gaining some ratings momentum.  With the news that Al Haymon has secured spots on NBC, NBC Sports Network and SpikeTV, we can see more of good boxing events in 2015.

2014: a look at some of the business issues in boxing

January 2, 2015

MMA Payout takes a quick review of 2014 in the sport of boxing.

2014 was an interesting year for the sport as boxing began to expand with more PPVs than the standard Pacquiao and Mayweather bi-yearly events.

Canelo Alvarez faced Alfredo Angulo in March (the event drew an impressive 350,000 PPV buys), Sergio Martinez faced Miguel Cotto in New York in June (although projected to score 475,000 PPV buys, it drew just an estimated 350,000) and Alvarez returned in July to headline a PPV with Erislandly Lara (it drew an estimated 300,000 PPV buys).  There were also hints of Gennady Golovkin fighting on PPV although that never came to fruition.

Floyd Mayweather fought Marcos Maidana twice this year.  After May’s Mayweather PPV (in which it reportedly drew 900,000 PPV buys), Showtime President Stephen Espinoza informed the media that it would no longer release PPV buy numbers unless the event sets a PPV record.   However, after the second fight in September, it was revealed that the rematch drew 925,000 PPV buys.

Manny Pacquiao’s days as a PPV draw seem to be waning.  Although his rematch with Tim Bradley drew an estimated 750-800K PPV buys, it was down from the near 900K PPV buys in their first fight.  Although nothing official has been released, the Manny Pacquiao-Chris Algieri fight in November drew between 300,000 to 400,000 PPV buys depending on who you asked.  If this number is correct, it’s a huge drop off for Pacquiao.  This would be a likely reason why the push for the mythical matchup with Floyd Mayweather.

In October, ESPN’s Dan Rafael posted the top events in 2014 thus far.  Julio Cesar Chavez vs. Brian Vera 2 drew 1.39 million viewers with a peak of 1.53 million.  The ratings were for only that fight and not the entire card airing on HBO.  HBO dominated the top rated boxing events on cable (premium and/or regular) and Showtime did not crack the top 10.  Still, the competition between the two premium cable channels seemed to heat up in 2014.

With the Kovalev-Hopkins fight, we may see the cold war between Top Rank and Golden Boy softening.  Yet, Al Haymon still is one of the unseen, most powerful men in the business.

There were several notable lawsuits in 2014.

First, Main Events Promotions, the promoter for Sergey Kovalev sued Al Haymon, Golden Boy, boxer Adonis Stevenson and others for backing out of a potential fight between Kovalev and Stevenson.  The lawsuit was dismissed as the parties settled when Kovalev got his big fight against Bernard Hopkins. 

Next, Andre Ward lost a California State Athletic Commission arbitration hearing this past spring against his promoter Goosen Tutor Promotions.  Ward then turned around and sued him in Federal Court alleging violations of the Muhammad Ali Boxing Reform Act.

Mikey Garcia sued Top Rank alleging issues with his contract including violations of the Muhammad Ali Boxing Reform Act.  The lawsuit was transferred to Nevada as Garcia originally filed in California.

Don King was found in breach of contract when his fighter failed a drug test for an event in Russia in 2014.

In addition to these lawsuits, there were major shakeups at Golden Boy with former CEO Richard Schaefer leaving Golden Boy.  But, it appears to be a messy divorce with Golden Boy seeking $50 million in private arbitration.

Just like MMA, 2015 should be an interesting year for boxing.

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