Comments Thread For: Showtime Sports VP Explains Mayweather/SHO Deal

[IMDAZED]

Why you so angry? LOL.

Expenses and PPV profit split are 2 separate things you ABM.

Not angry but you're so clueless it's actually funny. I'm aware they're two separate things, you dummy. Do you not see the correlation? Of course not, because you have no idea what you're talking about.

[Eff Pandas]

The numbers for Guerrero and both his fight with Maidana were never released or made official. Where are u pulling those numbers from?

Lets also not forget Showtime had to split the revenue from the ppv buys for the Floyd/Pac fight with HBO

Google/Boxrec/Wikipedia. They are the most widely agreed upon numbers for each fight by either official releases or industry experts I could find. The Guerrero fight had more disparity then the others so I went with the low & high numbers in that estimate. ~ = estimates, no ~ = official numbers.

And sure there are splits happening & I'm sure because of how things went down with that split the $$$ wasn't as favorable as they'd been if only Showtime was running the show with the Manny vs Floyd fight. Thing is all these fights are the top 2 fights of the year (maybe if Berto outperforms & Cotto/Canelo underperforms that fight is #2, but likely to be #3 for this year imho so that one is slightly lesser than the others) & two of these six fights broke all time boxing history records in revenue. If a company isn't making money with that level of success in the industry they are in these mfers have trouble tying their shoes.

[GTTofAK]

2013Alvarez, 2.2M Buys, $150M Revenue (Best Selling PPV of 2013, Most PPV Revenue in Boxing History)

Revenue 150M

Cable/Satellite Providers Share
150M/2 = 75M

Remaining Money
75M

Mayweather's guaranteed purse 41.5M

Remaining money
33.5M

Alverez guranteed purse 5M

Remaining Money
28.5M

As you can see we are quickly running out of money for Showtime.

Now Mayweather and Alvarez still get their share of the PPV revenue first. Howe much was that we dont really know. But it has been widely reported that Mayweather made in total about 75M in total PPV share and Purse. That leaves no money for Showtime.

[wasporbee]

Doing the math, it depends on how the deal was structured. Meaning, was Showtime allowed to recoup their losses on some fights with the surplus on others. Showtime's 8% (standard) distribution fee on the promotion's half of the revenue (50% goes to cable/satellite providers) is not enough to make this deal profitable without some kind of loss recovery provision. We don't know exactly how many buys Guerrero, Maidana I and II and Berto did, so I'll guess an average of 900K for the first three and 700K for Berto and use the SD/HD mid-point to estimate price.

Scenario A (no loss recovery):

Guerrero: 900,000*65*50%=$29,250,000 in revenue
$2,750,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

Canelo: 2,200,000*$70*50%=$77,000,000 in revenue
$77,000,000*8%=$6,160,000 revenue for Showtime, minus whatever they spent on production, marketing, etc.

Maidana I and II: 900,000*$70*50%=$31,500,000 in revenue per fight
$1,000,000 combined loss for Showtime, plus whatever they spent on production, marketing, etc.

Pacquiao: 4,400,000*95*55%=$229,900,000 in revenue
$229,000,000*60%=$137,400,000 in revenue for Mayweather/Showtime
$137,400,000*8%=$10,992,000 in revenue for Showtime, minus whatever they spend on production, marketing, etc. (**I believe the share with cable/satellite providers was higher than usual for this fight)

Berto: 700,000*$70*50%=$24,500,000 in revenue
$7,500,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

That comes out to PPV revenue of $5,902,000 for Showtime for all six fights combined without factoring in a single cost for production, marketing, All Access, etc. Conservatively, if they spend $1 mil per fight, they almost broke even. If they spent more, they almost certainly lost money.

Scenario B (loss recovery):

Guerrero: $2,750,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

Canelo: $77,000,000 in revenue
$77,000,000-$2,750,000=$74,250,000 revenue after loss recovery
$74,250,000*8%=$5,940,000 in revenue for Showtime, minus whatever they spent on production, marketing, etc.

Maidana I and II: $1,000,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

Pacquiao: $137,400,000 in revenue for Mayweather/Showtime
$137,400,000-$1,000,000=136,400,000 revenue after loss recovery
$136,400,000*8%=$10,912,000 in revenue for Showtime, minus whatever they spend on production, marketing, etc.

Berto: $24,500,000 in revenue
$7,500,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

In this scenario, Showtime made $16,852,000 before the Berto fight. If they had to eat the loss on the Berto fight, they'd end up with $9,352,000 to cover their production and marketing expenses, which would maybe give them a small profit over the course of the deal or maybe a small loss. If they were able to take the full loss of the Berto fight out of the Pacquiao revenue, they'd end up with $17,452,000 to cover their expenses, which is a modest profit. If this is how the deal was structured, they probably didn't lose money but didn't make much given that they risked $192 mil ($32M*6 fights) to make the deal.

[Eff Pandas]

Revenue 150M

Cable/Satelite Providers Shate
150M/2 = 75M

Remaining Money
75M

Mayweather's guaranteed purse 41.5M

Remaining money
33.5M

Alverez guranteed purse 5M

Remaining Money
28.5M

As you can see we are quickly running out of money for Showtime.

Now Mayweather and Alvarez still get their share of the PPV revenue first. Howe much was that we dont really know. But it has been widely reported that Mayweather made in total about 75M in total PPV share and Purse. That leaves no money for Showtime.

Okay so you're saying no one is making a lot of money with PPV then except the fighters & distributors? Cuz these numbers don't change much with any PPV fight. The distributor gets their cut. The fighters get their cut. And usually there is far buys & therefore less revenue to take cuts from.

[GTTofAK]

Doing the math, it depends on how the deal was structured. Meaning, was Showtime allowed to recoup their losses on some fights with the surplus on others. Showtime's 8% (standard) distribution fee on the promotion's half of the revenue (50% goes to cable/satellite providers) is not enough to make this deal profitable without some kind of loss recovery provision. We don't know exactly how many buys Guerrero, Maidana I and II and Berto did, so I'll guess an average of 900K for the first three and 700K for Berto and use the SD/HD mid-point to estimate price.

Scenario A (no loss recovery):

Guerrero: 900,000*65*50%=$29,250,000 in revenue
$2,750,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

Canelo: 2,200,000*$70*50%=$77,000,000 in revenue
$77,000,000*8%=$6,160,000 revenue for Showtime, minus whatever they spent on production, marketing, etc.

Maidana I and II: 900,000*$70*50%=$31,500,000 in revenue per fight
$1,000,000 combined loss for Showtime, plus whatever they spent on production, marketing, etc.

Pacquiao: 4,400,000*95*55%=$229,900,000 in revenue
$229,000,000*60%=$137,400,000 in revenue for Mayweather/Showtime
$137,400,000*8%=$10,992,000 in revenue for Showtime, minus whatever they spend on production, marketing, etc. (**I believe the share with cable/satellite providers was higher than usual for this fight)

Berto: 700,000*$70*50%=$24,500,000 in revenue
$7,500,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

That comes out to PPV revenue of $5,902,000 for Showtime for all six fights combined without factoring in a single cost for production, marketing, All Access, etc. Conservatively, if they spend $1 mil per fight, they almost broke even. If they spent more, they almost certainly lost money.

Scenario B (loss recovery):

Guerrero: $2,750,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

Canelo: $77,000,000 in revenue
$77,000,000-$2,750,000=$74,250,000 revenue after loss recovery
$74,250,000*8%=$5,940,000 in revenue for Showtime, minus whatever they spent on production, marketing, etc.

Maidana I and II: $1,000,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

Pacquiao: $137,400,000 in revenue for Mayweather/Showtime
$137,400,000-$1,000,000=136,400,000 revenue after loss recovery
$136,400,000*8%=$10,912,000 in revenue for Showtime, minus whatever they spend on production, marketing, etc.

Berto: $24,500,000 in revenue
$7,500,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

In this scenario, Showtime made $16,852,000 before the Berto fight. If they had to eat the loss on the Berto fight, they'd end up with $9,352,000 to cover their production and marketing expenses, which would maybe give them a small profit over the course of the deal or maybe a small loss. If they were able to take the full loss of the Berto fight out of the Pacquiao revenue, they'd end up with $17,452,000 to cover their expenses, which is a modest profit. If this is how the deal was structured, they probably didn't lose money but didn't make much given that they risked $192 mil ($32M*6 fights) to make the deal.

Pretty good but you are forgetting the HBO split in the Pac fight and that showtime sucks hind tit in PPV share. TMT gets their shier of PPV revenue first. If their isn't enough left after fighter purses to cover everyones split of PPV revenue Showtime eats it.

[Eff Pandas]

Doing the math, it depends on how the deal was structured. Meaning, was Showtime allowed to recoup their losses on some fights with the surplus on others. Showtime's 8% (standard) distribution fee on the promotion's half of the revenue (50% goes to cable/satellite providers) is not enough to make this deal profitable without some kind of loss recovery provision. We don't know exactly how many buys Guerrero, Maidana I and II and Berto did, so I'll guess an average of 900K for the first three and 700K for Berto and use the SD/HD mid-point to estimate price.

Scenario A (no loss recovery):

Guerrero: 900,000*65*50%=$29,250,000 in revenue
$2,750,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

Canelo: 2,200,000*$70*50%=$77,000,000 in revenue
$77,000,000*8%=$6,160,000 revenue for Showtime, minus whatever they spent on production, marketing, etc.

Maidana I and II: 900,000*$70*50%=$31,500,000 in revenue per fight
$1,000,000 combined loss for Showtime, plus whatever they spent on production, marketing, etc.

Pacquiao: 4,400,000*95*55%=$229,900,000 in revenue
$229,000,000*60%=$137,400,000 in revenue for Mayweather/Showtime
$137,400,000*8%=$10,992,000 in revenue for Showtime, minus whatever they spend on production, marketing, etc. (**I believe the share with cable/satellite providers was higher than usual for this fight)

Berto: 700,000*$70*50%=$24,500,000 in revenue
$7,500,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

That comes out to PPV revenue of $5,902,000 for Showtime for all six fights combined without factoring in a single cost for production, marketing, All Access, etc. Conservatively, if they spend $1 mil per fight, they almost broke even. If they spent more, they almost certainly lost money.

Scenario B (loss recovery):

Guerrero: $2,750,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

Canelo: $77,000,000 in revenue
$77,000,000-$2,750,000=$74,250,000 revenue after loss recovery
$74,250,000*8%=$5,940,000 in revenue for Showtime, minus whatever they spent on production, marketing, etc.

Maidana I and II: $1,000,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

Pacquiao: $137,400,000 in revenue for Mayweather/Showtime
$137,400,000-$1,000,000=136,400,000 revenue after loss recovery
$136,400,000*8%=$10,912,000 in revenue for Showtime, minus whatever they spend on production, marketing, etc.

Berto: $24,500,000 in revenue
$7,500,000 loss for Showtime, plus whatever they spent on production, marketing, etc.

In this scenario, Showtime made $16,852,000 before the Berto fight. If they had to eat the loss on the Berto fight, they'd end up with $9,352,000 to cover their production and marketing expenses, which would maybe give them a small profit over the course of the deal or maybe a small loss. If they were able to take the full loss of the Berto fight out of the Pacquiao revenue, they'd end up with $17,452,000 to cover their expenses, which is a modest profit. If this is how the deal was structured, they probably didn't lose money but didn't make much given that they risked $192 mil ($32M*6 fights) to make the deal.

**** so you confirming TV channels aren't getting much money for PPV fights? I feel like some figures are being missed. Anyone confirm or deny this is a solid if brief estimation of potential profits & losses for PPV cards?

[b00g13man]

So many financial experts here all of a sudden. Guess I know where to go when next I need financial advice.

[GTTofAK]

Okay so you're saying no one is making a lot of money with PPV then except the fighters & distributors? Cuz these numbers don't change much with any PPV fight. The distributor gets their cut. The fighters get their cut. And usually there is far buys & therefore less revenue to take cuts from.

I'm saying that there is not enough PPV money left for everyone to get their cut of the gross PPV after fighters are paid their purses. Showtime only gets their 8% cut after everyone else has been paid. Looking at the numbers there wasn't 8% left or even 0%.

[bigdunny1]

If you look at Showtimes PPV's in a bubble of course you say all these fights were a success. The problem is you are ignoring major facts and it's why you can't just judge it in a bubble. For example like that they guaranteed a huge amount to Mayweather for each fight which many have already outlined. 30 plus mil means they need huge PPVs to make their money back. That is way more then most other PPV cards pay for all the fighters combined. Sure even the failed PPVs on Showtime did more then most other PPVs but that don't mean Showtime made money on them because they grossly overspent those other PPVs. Most big non mayweather PPVs pay half or one third that amount to pay all their fighters. Industry insiders have said that based on the amount of money Showtime was paying out Mayweather alone without including the undercards they needed MORE then 1mil PPVs just to break even. And 3 of the fights on this deal with Showtime has not broke 1 mil (Guerrero, Maidana 1 and 2) and Berto is most certainly not breaking 1mil it will be lucky to get HALF of the avg from Guerrero and Maidana fights. They probably made some money back with the Pacquaio fight but no doubt Berto was a financial failure as well as 4 of the 6 fights on the deal. Mayweather is the real winner because if Showtime fight loses money he doesn't he was already guaranteed 30mil.