Mayweather vs. Cotto post fight Thread -DON'T make new threads about the fight

[V.WEBB]

Who gives the gurantee? Since Mayweather promotes himself?

I'm not sure how it works, my man. I know that there was an in depth article that goes over the structure of how Floyd does his business. I'll try to find it. But I'm not too business savvy to know all of the particulars.

[savorduhflavor]

Who gives the gurantee? Since Mayweather promotes himself?

Golden Boy. That's what's so crazy about this, they got GBP taking ALL of the risk pretty much and they are set up to make serious cash.

Man if you can afford to do it, being an indepndent is the way to go.

[Pin Galarga]

The money will be made in PPV and Cotto is not fighting for money along, HE was destroyed by the Cheaters in this game and its showing that He is a rare Warrior by getting back to the top and fighting the #1 boxer in the World. If he wins, it would be just icing on the cake.

[Pacquiao'd]

Money May and Money Cotto

[Fetta]

marquez was guaranteed $10 million plus ppv upside.

cotto is screwed.

don't know who is evil now. pbf or arum?

Marquez was to get that if he won and there was a rematch. Maybe thats why he was robbed but either way when all saud and done Cotto will make bank

[shade darkar]

congratulations to all the idiots out there that are giving floyd money to continue avoiding the best.

[Horus]

I'm not sure how it works, my man. I know that there was an in depth article that goes over the structure of how Floyd does his business. I'll try to find it. But I'm not too business savvy to know all of the particulars.

The Business of Boxing (How DOES P.P.V WORK)
http://www.boxingscene.com/forums/blog.php?b=345

[icebergisonfire]

Money May and Money Cotto

This is an unreal business model that Floyd has here. He had a vision and I don't see how it could have not worked any better.

[Horus]

The Business of Boxing (How DOES P.P.V WORK)
http://www.boxingscene.com/forums/blog.php?b=345

It is widely acknowledged that in order for a professional boxer to reach marquee status he must become a pay-per-view broadcast attraction, requiring the boxing (and general sports) fan to actually pay to view a live televised boxing match involving the particular boxer. There is a distinction, at times, between a marquee superstar boxer, and a professional boxer who possesses superstar talent. There are quite a few superstar talented professional boxers, yet only a very few marquee boxers can attract a pay-per-view audience sufficient to warrant the time and expense associated with the promotion of a pay-per-view broadcast.


At the outset, let me inform you that the gurus in the pay-per-view broadcast industry are Jay Larkin of Showtime’s SET and Mark Taffet of HBO PPV. I have been involved in dozens of pay-per-view broadcasts in a promotional and legal capacity, and this note is intended to provide general background information on the mechanics of a pay-per-view promotion. The economics of a pay-per-view event based on theoretical assumptions are likewise illustrated below.

THE PROMOTER AND THE DEAL

Depending on the particular event, the promoter either assumes financial risk in staging a pay-per-view event or secures guaranteed sources of revenue necessary to cover the projected expenses, including purses of the main event participants. The risk arises because there is generally no guaranteed domestic television revenues (such as a broadcast license fee), rather such domestic television revenues are a variable based upon pay-per-view home sales.

The promoter serves as the quarterback of the pay-per-view promotion and enters into various commercial arrangements and customarily undertakes what seems like endless promotional, marketing, compliance, administrative and logistical responsibilities.

1. The promoter enters into a Distribution Agreement with the distributor of the event, such as Showtime’s SET or HBO PPV. While not minimizing the comprehensive and sophisticated technical, marketing, and production efforts undertaken by these distribution en******, they are contractually charged with the responsibilities of marketing and distributing the event to cable operators throughout the United States and its territories (e.g., Puerto Rico). Such distribution by either SET or HBO is undertaken through a variety of pay-per-view affiliates and conduits (such as In Demand), enabling local cable operators such as Cablevision in New York City or Cox Cable in Las Vegas to have the event available for its regional subscribers.

2. As with any boxing promotion, the promoter enters into a site agreement with a venue, broadcast license agreements with international networks and cable stations throughout the World, sponsorship agreements, bout agreements with the boxers for their participation in the bout, among a host of other insurance, travel, production and related vendor and consultancy agreements. Of particular note in a pay-per-view event is that the bout agreement for a main event participant generally provides for the boxer to receive a base “purse” (characterization of the boxer’s compensation for participating in the bout) plus a potential upside based upon the number of pay-per-view home sales and corresponding domestic live television revenues to the promotion (e.g., $5/per home in excess of 150,000 pay-per-view home sales).

3. The promoter and distributor jointly develop a marketing plan to enhance public and media awareness through the (hopeful) creation of a compelling event. They utilize the particular talents and demographic following of the event participants. For example, if one of the main event participants is a Latin boxer there will generally be a focused marketing plan of the event in California, Texas and New York, of which historic pay-per-view data reflects a large Latin population in those states supporting pay-per-view boxing. Promoters also endeavor to supplement the main event with undercard bouts that add diverse elements to attract a broader demographic following so that all bases are covered in attracting the widest fan base.

4. For most pay-per-view events commercial success is achieved by attracting not only the avid boxing fan but also the casual sports fan. For those events that have the good fortune to attract the boxing fan, the casual sports fan and the non sports fan rest assured that everyone involved will be smiling Monday morning as revenues from the event are being tabulated!!

5. Most pay-per-view broadcasts are undertaken in the Spring and Fall for

reasons having to do with broadcast competition at that time (e.g., October World Series and March NCAA Basketball Tournament), holiday season (the consumer is less likely to be focused on or have discretionary dollars around mid-December for a boxing pay-per-view event!!), vacation and social calenders of the average consumer (i.e., most consumers at one time or another vacation during the summer months).

6. Many sponsors prefer to support a pay-per-view event as opposed to a cable televised event because there is customarily a much greater promotional and marketing effort put forward by the promoter, the distribution company and the boxers themselves to “hype” the event. Increased hype and marketing dollars means greater exposure to the public for the sponsor.

7. When a boxing event is a pay-per-view broadcast and revenues are contingent upon the consumer dialing up his regional cable operator and spending discretionary dollars, it is commonplace for the distributor and the promoter to have full-time public relations and marketing representatives working to create awareness for the event.

THE ECONOMICS OF PAY-PER-VIEW; BY EXAMPLE

With the above as background, the following sets forth a fictitious example of the manner in which a pay-per-view promotion operates from a financial viewpoint. The dollar amounts are mere estimates and could materially vary. Certain descriptive budget line items remain the same (although not necessarily the amounts) regardless of whether it is a pay-per-view broadcast or a cable/network broadcast, e.g., site deal, sponsorship, international television rights, etc. The principal variable, of course, is the number of homes that purchase the event generating revenues available for distribution/allocation to the promoter and the boxers.

The following example assumes a pay-per-view broadcast that is estimated to generate between 150,000-200,000 homes (reasonably successful by today’s standards). To provide a framework of just what this means, the July 29, 2001 Roy Jones, Jr. vs. Julio Gonzalez bout and the September 29, 2001 Bernard Hopkins-Felix Trinidad bout reportedly did 185,000 and 450,000 homes, respectively.

While there can be no assurances what a particular event will generate in terms of pay-per-view home sales, there is precedent regarding particular fighters, the compelling nature of certain bouts and other factors which the experts (such as Messrs. Larkin and Taffet) utilize in projecting the contemplated pay-per-view sales and the appropriate retail pricing. Certain aspects, naturally, cannot be projected, such as the weather, current events that may arise and the buying habits of the non-avid boxing fan, and Alan Greenspan’s decision whether or not to cut interest rates!!

[Rip Chudd]

Good for him, that's a ridiculous amount. After PPV he'll prob make around 50 mil, for one fight that's crazy. Dude has a great business team with Haymon and Ellerbe