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Fighting Words - Canelo-Floyd PPV: The $65/$75 Question

by David P. Greisman

As far as pay-per-views go, we’ve never spent more — but we’ve definitely received worse.

In reality, we don’t yet know what we’ll actually receive on Sept. 14 beyond a bout between Canelo Alvarez and Floyd Mayweather. Theirs is a card that pairs the most popular fighters in their respective countries and features them in the headline match of what will be the biggest event of the year.

How big an event, and how good of one, is still to be determined.

Two things are for certain:

First, Alvarez-Mayweather is no different than any other pay-per-view. It is a gamble, with boxing fans hardcore and casual spending their money without knowing whether the undercard and feature fights will be dramatic, entertaining and notable, or dreary, boring and quickly forgotten. But the personalities and pedigrees of the main event fighters alone make the show newsworthy; Mayweather is a future Hall of Famer going for his fourth lineal championship against an undefeated titleholder who is much younger and naturally heavier.

And all of the above brings us to the second topic of conversation: Those involved in the pay-per-view are seeking to break records, and they are pulling out all of the tops — and enlisting us — to try to break them.

It’s already expected to be the most lucrative boxing match ever in terms of the box office revenue. Tickets, priced at $2,000, $1,500, $1,000, $600 and $350, sold out promptly (and a significant number were soon seen on the secondary market). Richard Schaefer of Golden Boy Promotions told Dan Rafael of ESPN.com that the live gate would come out to at least $18,647,000 and could even top $19 million. Either of those figures would exceed the gate of $18,419,200 brought in by the 2007 fight between Oscar De La Hoya and Floyd Mayweather.

While some who are still seeking to experience Las Vegas on a big fight weekend are purchasing tickets to closed-circuit broadcasts at $100 a pop, the majority of us will settle in front of television screens and catch the fights on pay-per-view.

It won’t come cheap. And that shouldn’t come as a surprise.

The cost of the pay-per-view is $64.95 for standard definition. And with flat-screen televisions more prevalent than ever, more people will find it worth their while to spend $74.95 to see the broadcast in high definition. (High definition typically costs $10 more than standard definition.)

That’s the highest price that this scribe can recall ever being attached to a boxing pay-per-view.

“A lot of people said it’s such a big fight [that] it’s going to be a $80 or $90 pay-per-view. $100, I even heard, but we don’t want to do that,” Schaefer was quoted as saying in an article by Luis Sandoval of BoxingScene.com. “We priced the tickets the same way we priced De La Hoya-Mayweather, and for the pay-per-view we are going to go with $64.95.

“The cable systems and satellite operators, when we were meeting and discussing with them the price, they were very surprised that we didn’t go for a higher price,” he said. “But this is not about squeezing out every last dime. This is a fight for the masses and for the people, and I want people to be able to buy that fight and watch that fight.”

That might sound like hogwash to some. This kind of bump in price isn’t unprecedented or unjust, though.

Boxing is always — always — about finding the perfect ratio between profits and expenses. Alvarez-Mayweather is a fight that will easily surpass the 1 million buy rate that Mayweather’s fight with Robert Guerrero pulled in this past May, according to Golden Boy’s projections. There is debate over whether Alvarez-Mayweather could double that, doing more than 2 million, and even whether it could threaten the mark set by De La Hoya-Mayweather, which the promoter now says has reached 2.4 million thanks to the glacial process through which cable companies report pay-per-view revenue.

This is only the second pay-per-view of the year, and likely the biggest in a year that will see two more major pay-per-view shows with Juan Manuel Marquez-Timothy Bradley in October and Manny Pacquiao-Brandon Rios in November.

For several years, most major pay-per-views were offered for $49.95 in standard definition. In the past couple of years, that number rose to $54.95. Mayweather-Guerrero was $59.95.

There’s been a history of prices jumping for the biggest of events involving the most famous pay-per-view headliners. Lennox Lewis vs. Mike Tyson, back in 2002, went for $54.95 at a time when the going rate was no more than $49.95. De La Hoya-Mayweather, in 2007, was $54.95, as were Mayweather’s fight with Ricky Hatton later that year, De La Hoya-Pacquiao in 2008 and Miguel Cotto’s fight with Pacquiao in 2009.

A show selling for nearly $60 instead of $55 would pull in an extra $500,000 for every 100,000 buyers. This $65 show will pull in an extra $1 million for every 100,000 buyers. A buy rate of 1 million would mean an extra $10 million in pay-per-view revenue. If Alvarez-Mayweather does 2 million, that means an extra $20 million. (Half of that goes to the pay-per-view distributors.)

And none of that even considers the additional revenue from those watching in high definition.

Canelo Alvarez and Floyd Mayweather were already rich without this match. This pricing sweetens the pot and allows their egos an easier time of sharing the proceeds.

There’s also the question of whether Mayweather-Guerrero underperformed.

The 1 million mark was less than expectations spoken of beforehand. It shocked no one, then, that there was such a tremendous push for Alvarez-Mayweather to be made, particularly given the reality of Mayweather’s large guaranteed purses for these fights.

And so we’ve seen a ratcheting up of the marketing, beginning with a 10-city, 9-day tour that sought to bring the buzz that this fight deserves, to cultivate interest in the casual boxing fan and perhaps even those folks who will be persuaded to see the fight merely because it is one of the year’s top sporting events.

The $65/$75 price tag also can make up for the increasing ease by which people can watch illegal streams of seemingly any significant boxing, mixed martial arts or pro wrestling broadcast.

Promoters and networks have recognized that it’s now more financially prudent to do fewer pay-per-view shows. Years like 2007 (which had eight major pay-per-views) and 2008 (which had nine) used to be the norm, augmented by smaller independent shows.

Since then we have not had as many instances of $50 and $55 charged being piled on to cable bills that often already included extra fees for HBO and Showtime. We had three major pay-per-views in 2009, six in 2010 (one of which was the Golden Boy-produced, HBO-distributed rematch between Bernard Hopkins and Roy Jones Jr.), and seven in 2011. There were five in 2012, and it would’ve been six had Canelo Alvarez’s planned pay-per-view last September not been hampered by opponents falling out, turning it into a Showtime broadcast.

It helps that many of the previous pay-per-view headliners have either retired or are no longer financially feasible as the A-side. It also helps that some bouts that might have been on pay-per-view in the past instead end up as main events on HBO or Showtime.

The market isn’t there anymore for the good fights that aren’t the truly marquee matches, those shows that were fortunate to do 300,000 to 400,000 pay-per-view purchases. That leaves more money for fans to spend on the gala events, those fights that often approach buy rates of 1 million and beyond. That means those involved on the business end have no problem expecting its base of customers will be OK with higher prices.

The only question, then, isn’t whether we’ll be willing to pay $65 or $75 for Alvarez-Mayweather. We will. We know this show will bring in riches at the box office, at the closed-circuit showings and from the pay-per-view buys.

The question is whether a great night for revenue will coincide with a great fight in the ring.

The 10 Count will return soon.

“Fighting Words” appears every Monday on BoxingScene.com. David P. Greisman is a member of the Boxing Writers Association of America. Follow David on Twitter @fightingwords2 or send questions/comments via email at [email protected]

User Comments and Feedback (Register For Free To Comment) Comment by JoeKidd on 07-09-2013

Those that want to be played the fool, be the fool. Big budget films are bust too. Usually, they hype a boxing match because of the competition. What are we hyping now? Personalities?

Comment by Ringlife on 07-09-2013

I'am buying this card anyway but if Matts vs swift is on this card thats just a bonus.

Comment by jcamarena79 on 07-09-2013

A little steep but gonna have to pay whatever the charge just to see Floyd try to run and clinch....Notice I wrote try cause he's not gonna be able to either run or clinch. Canelo is going to cut the…

Comment by Chuckguy on 07-09-2013

[QUOTE=tibbar;13542271]Another Rip-off in the making by Ploy "Money Rip-off" Maywhiner, Hoaxcar Dela Hoya, Richard Scamfer and Golden Bogus Promotion. tsk tsk[/QUOTE] Love your avi haha that is so true JMM knocked him the fawk out and won. Maybe u should…

Comment by Chuckguy on 07-09-2013

It's an event so I'm getting it for sure. If others chip in great if not the fuk it ill take it! The thing that bothers me is that they hike up the prices and the PPV and of course…

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