Top Rank hopes for growth in China

October 11, 2014

The Sports Business Journal’featured an interesting article on Top Rank’s attempts to make inroads in China.

The article (subscription recommended) focuses on the boxing promotion’s efforts to gain momentum into China which is described as the world’s fastest-growing economy.  While Manny Pacquiao will make his second appearance in Macau later this year, it takes a glimpse of how the promotion is trying to build an audience with a Chinese audience.

Notably, Top Rank, in partnership with a Chinese sports marketing firm, debuted a weekly tv show on 10 regional sports channels within the country giving it wide distribution in the country. “Fists of Power,” which features fights from the Top Rank library and live events promoted by the company acts as a promotional tool for the company.

Top Rank held its first event this past August in mainland China.  Although not big, and perhaps just breaking even on its endeavor, the long-term goal is to become a mainstay in the country. The event was aired live and on delay on state-sponsored channels which has the potential to reach more than 1 billion households.

Payout Perspective:

Expansion internationally seems like the most logical step for promotions such as the UFC and Top Rank.  The obvious reason is the opening of a new audience.  The relative strength of its economy and the sheer size of the population make China a great growth opportunity. Top Rank follows the same playbook as the UFC does with its TUF series.  Allow people to see its product on television for free hoping that it entices them to patronize the promotion.  Despite Manny Pacquiao’s decline in popularity stateside, Top Rank hopes his appearances in Macau open up the Chinese market. From there, it hopes that the proliferation of local talent (e.g. former Olympic gold medalist Zou Shiming) will propel the promotion in the country.

Canelo Alvarez signs deal with HBO

September 24, 2014

Boxer Canelo Alvarez has signed a muli-fight deal with HBO which will begin on December 6th or December 13th on the network.  The deal is a major move in the world of boxing as Alvarez, considered the future of boxing, and a Golden Boy promoted fighter has joined the network dominated by fighters promoted by Top Rank.

Either date for the Alvarez fight will compete with UFC shows on the same dates.  UFC 181 will feature the newly revamped main event of Johny Hendricks-Robbie Lawler on December 6th and the following Saturday will be the UFC on Fox show on the network.

The LA Times reports that the fight could take place in either Houston’s Minute Maid Park or Reliant Stadium.

Payout Perspective:

The move follows a different path for Golden Boy as Oscar de la Hoya has retaken the helm of the promotion.  Earlier this year, Bernard Hopkins decided to take a fight with HBO fighter Sergey Kovalev over Showtime’s Adonis Stevenson.  Kovalev’s promoters had sued Stevenson, his manager, Al Haymon and Golden Boy as they claim Stevenson had backed out of a potential fight.  Alvarez heading to HBO is good news for HBO as it gets one of the most popular fighters in the sport.  One may argue that Alvarez was one of the main reasons that his fight with Floyd Mayweather set attendance and PPV records.

Main Events dismisses lawsuit against Golden Boy, et al.

August 4, 2014

The parties in the lawsuit involving promoter Main Events and Adonis Stevenson, Al Haymon, Golden Boy, Showtime and Stevenson’s manager have been dismissed per a letter sent to the Court on Saturday morning.

As we reported, the lawsuit filed this past May was based on alleged agreement for Main Events and their fighter Sergey Kovalev to face Adonis Stevenson what was anticipated as a big money fight on HBO.  However, Stevenson signed on with consultant Al Haymon and took a fight under the Golden Boy banner.  After the schism within Golden Boy, it was believed that the fighter left with Haymon.

A lawsuit was filed by Main Events claiming breach of contract, breach of fiduciary duty, fraud, tortious interference and interference with prospective economic advantage premised upon emails between Main Events and Stevenson’s manager. Main Events claimed that the emails constituted a contract while the defendants claimed that the emails were not a contract as other details needed to be hashed out before a contract could be signed.

As one might expect, the defendants filed a Motion to Dismiss based on their theory that the emails did not constitute a contract.  The court allowed Main Events to Amend its Complaint on August 4th but decided to settle the case.

In a letter which looks to be sent on Saturday morning, August 2nd, counsel for Main Events let the court know of a settlement and sought a cursory request to extend the deadline to file an Amended Complaint in the event the settlement fell through.

Memo Endorsement Re Dismissal

As a result of the settlement, Kovalev faces Bernard Hopkins this fall which will be co-promoted by Golden Boy and Main Events.

Payout Perspective:

It appears that all is well that ends well.  It’s clear that Kovalev’s promoters, Main Events, wanted to be made whole based upon the feeling of being left with nothing after Stevenson signed with Al Haymon.  The Hopkins fight is a good substitute for Stevenson.  Moreover, the legal claims made by Main Events were tenuous especially with the theory of a contract based upon emails. Instead of spending money on legal bills, the parties were able to negotiate an alternative.

GGG on HBO: 758,000 viewers

July 31, 2014

ESPN’s Dan Rafael reports that Saturday night’s HBO Boxing event featuring Gennady Golovkin received 984,000 viewers peaking at 1.048 million.  However, the overall night only drew 758,000 live viewers per Nielsen Media Research (via BoxingScene.com)

The co-feature fight featuring Bryant Jennings against Mike Perez drew only 602,000 viewers with a peak of 780,000 viewers.  As noted by Jake Donovan’s Boxing Scene, the ratings are a disappointment for Golovkin as his previous showing on HBO drew more 1.4 million viewers.

Payout Perspective:

GGG’s win over Daniel Geale was impressive although the ratings were off from his previous appearances.  The fact that he is being pushed to be the next HBO fighter to be featured on PPV may raise a red flag.  The fights on HBO competed briefly with the overrun of the UFC on Fox 12 show in some markets as the end of the UFC main event coincided with the beginning of the HBO event.

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.

Cotto-Martinez: 300-315K PPV buys

June 26, 2014

SI.com is reporting that the Miguel Cotto-Sergio Martinez Top Rank PPV event that took place on June 7th only drew between 300-315K PPV buys which is well under the expected 500K anticipated.

After putting Martinez down three times in the first round, Cotto scored a 10th round KO of Martinez.  It was a much anticipated fight fans and well promoted on HBO.

SI’s Chris Mannix writes that multiple sources working with the promotion confirmed the number.  Mannix goes on to attribute the disappointing buy rate to a multiple of factors including the Belmont Stakes and the Stanley Cup which went into double overtime that night and well into the PPV.

In addition, UFC Fight Night 42 from New Mexico took place that night as well with Benson Henderson taking on Rustam Khabilov in the main event.  It was the third most-watched Fight Night on FS1 so far.

Bob Arum admitted to ESPN’s Dan Rafael that, “[t]he numbers were not great.”  He attributed this to “too many” PPVs.

Via ESPN:

“Pay-per-view was always designed, as was closed circuit back in the day, for true super fights, not just very good fights. There have been pay-per-views every month and people resent the fact that they’re asked to pay extra for anything halfway decent. Boxing pay-per-view numbers are down. Look at the (recent) numbers for the (Floyd) Mayweather and (Manny) Pacquiao fights. The UFC pay-per-view numbers are also down.”

Despite the rough numbers for PPV, Arum told ESPN that the gate drew $4.7 million.

Payout Perspective:

Arum essentially blames the low numbers on MMA fans’ favorite word when it comes to ratings: oversaturation.  In fact, Yahoo! Sports Kevin Iole wrote a controversial piece on whether saturation is good for the UFC.  With Canelo Alvarez facing Erislandy Lara in a couple weeks, boxing will have another PPV this year that caters to the steady boxing fan.  Alvarez is still not a top draw and Lara is not known to anyone that does not follow boxing. So, are there too many boxing PPVs at this point?  There will definitely be more this year than last and at a price point between $60-$75, its likely fans will be picking and choosing which to buy.  Perhaps, many combat sports fans will implement a “one week rule,” which is to wait a week for the PPV fight to air on HBO/Showtime.  Even if you were to pay for HBO-Showtime, your cable bill for those premium channels could rival that of you purchasing all the boxing PPVs.  Plus, you would get all of the boxing shows on the networks…and of course the rest of what those premium shows have to offer.

Looking at the fight specifically, it was an under the radar good fight on paper.  Certainly, the Puerto Rican fan base came out for Cotto.   The same for the Argentinian fans of Martinez.  But, was it something that the broader, casual fan would purchase, or wait to see on HBO a week later?

Cotto-Martinez replay on HBO does 954K viewers

June 17, 2014

ESPN’s Dan Rafael reports that the replay of the Miguel Cotto-Sergio Martinez fight on HBO drew 970,000 viewers and peaked at 1.126 million.  It was the opening of the HBO Boxing After Dark telecast which drew 954,000 viewers overall and was the most-watched BAD card of the year.

The live main event which featured Ruslan Provodnikov taking on Chris Algieri peaked at 1,110,000 viewers and overall drew 1,046,000.  Also on the fight card, the Andrade-Rose fight average 882,000 viewers.

Payout Perspective:

The Cotto-Martinez fight went on at the same time as the start of the UFC PPV.  While we have no numbers, we might assume that the HBO subscribers watching at least the first round of Cotto-Martinez were more than those that ordered UFC 174.  HBO had hoped to build up Ruslan but he was upset Saturday night.  Overall, it was an entertaining night of fights started by the replay of the Cotto fight.

Pacquiao-Top Rank renew contract

May 22, 2014

ESPN reports that Manny Pacquiao has signed a two year extension with Top Rank Boxing.  The deal will go through December 2016 and likely ends talk of a possible Pacquiao-Mayweather fight.

Top Rank Promoter Bob Arum indicated that the financial terms were not disclosed due to a confidentiality agreement.  The deal also extends MP Promotions which co-promotes Pacquiao along with Top Rank.  Mayweather is halfway through a six fight deal with Showtime.

Payout Perspective:

The new deal apparently closes the door on the biggest fight in boxing that never happened.  Let’s face it, the fight everyone wanted to see went away years ago.  Pacquiao will be 38 when this contract ends and it would be prudent for him to retire at that point.  Mayweather has expressed interest to walk away as well after his Showtime contract is up.  While Arum has stated that there still may be a chance for a Pacquiao-Mayweather fight, its unlikely we would want to see it at the end of their respective careers.

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