No 24/7 for Canelo vs. Smith! HBO pinching pennies

[BennyBlanco]

So all HBO is doing to market Canelo vs. Smith is a one-episode "Road To" special. That's a long way from the glory days of 4-episode 24/7 and All Access series...and it confirms that HBO isn't committed to boxing anymore.

Not that I really blame them...because that's the natural result of doing PPVs that don't deserve to be PPVs. Here's why:

HBO gets a 10% distribution fee on PPV $ - but that 10% is calculated after the cable and satellite take their half, so HBO is really only getting 10% of 50%, or 5%. So if a $60 HBO PPV does 1 million buys, that's $60 million in gross revenue, of which HBO gets $3 million dollars. BUT out of that $3M, HBO has to pay for TV production, satellite/transmission costs, insurance and T&E PLUS the cost of the 24/7 series, which is usually $400K per episode. All of a sudden that $3M is gone.

So the only way to preserve a profit margin on low-performing PPVs is to cut back on 24/7s, marketing and everything else. That's why HBO isn't doing a 24/7 on Canelo vs. Smith. There's no money in the PPV, so no way for HBO to pay for the 24/7.

HBO's decision to cut its budget for boxing means that we're getting trash programming.

Now that HBO won't spend money on 24/7 series and won't spend money getting decent opponents for its "star" boxers ($30K for Brand to spar with Ward??????), what's the point of paying for HBO?

HBO has become the home of Mismatches and Club Fighters. Not worth it anymore.

[Eff Pandas]

I believe you to be incorrect. From my understanding HBO doesn't take the hit on 24/7's. They will either require the promoter to pay for it or they will front the expense for putting it on (around $1M usually iirc) & get the cost on the backend before any profits are split.

So blame no 24/7 on GBP. HBO is pinching pennies I don't think there is much doubt, but that has nothing to do with this situation.

[CaneloMaidana]

I believe you to be incorrect. From my understanding HBO doesn't take the hit on 24/7's. They will either require the promoter to pay for it or they will front the expense for putting it on (around $1M usually iirc) & get the cost on the backend before any profits are split.

So blame no 24/7 on GBP. HBO is pinching pennies I don't think there is much doubt, but that has nothing to do with this situation.

You're correct, the promoter pays for it, I've never heard they get it back though.

[Eff Pandas]

You're correct, the promoter pays for it, I've never heard they get it back though.

I didn't mean the promoter gets it back. I'm saying the promoter pays or HBO will sometimes pay for 24/7 themselves, but THEY'LL get that money off the top from the PPV revenue so its all the same to them.

For a PPV like this my assumption would be that the potential range of buys is low enough that they wouldn't do it, but for bigger fights its something that could be in play.

[CaneloMaidana]

I didn't mean the promoter gets it back. I'm saying the promoter pays or HBO will sometimes pay for 24/7 themselves, but THEY'LL get that money off the top from the PPV revenue so its all the same to them.

For a PPV like this my assumption would be that the potential range of buys is low enough that they wouldn't do it, but for bigger fights its something that could be in play.

On okay and yeah this fight might not even cover the cost.

[Eastcoast]

Maybe GB is bracing themselves for a poor buy rate? With BJS on the undercard at a premium, it's going to be a fairly expensive show. Granted BJS & Smith combined are likely making less than Khan did.

I still don't know how they'll pay for Canelo/BJS in December if it's off ppv.

[killakali]

So all HBO is doing to market Canelo vs. Smith is a one-episode "Road To" special. That's a long way from the glory days of 4-episode 24/7 and All Access series...and it confirms that HBO isn't committed to boxing anymore.

Not that I really blame them...because that's the natural result of doing PPVs that don't deserve to be PPVs. Here's why:

HBO gets a 10% distribution fee on PPV $ - but that 10% is calculated after the cable and satellite take their half, so HBO is really only getting 10% of 50%, or 5%. So if a $60 HBO PPV does 1 million buys, that's $60 million in gross revenue, of which HBO gets $3 million dollars. BUT out of that $3M, HBO has to pay for TV production, satellite/transmission costs, insurance and T&E PLUS the cost of the 24/7 series, which is usually $400K per episode. All of a sudden that $3M is gone.

So the only way to preserve a profit margin on low-performing PPVs is to cut back on 24/7s, marketing and everything else. That's why HBO isn't doing a 24/7 on Canelo vs. Smith. There's no money in the PPV, so no way for HBO to pay for the 24/7.

HBO's decision to cut its budget for boxing means that we're getting trash programming.

Now that HBO won't spend money on 24/7 series and won't spend money getting decent opponents for its "star" boxers ($30K for Brand to spar with Ward??????), what's the point of paying for HBO?

HBO has become the home of Mismatches and Club Fighters. Not worth it anymore.

why do people saying Brand got 30k? Even Roc Nation said he got paid a lot more than that and that was all that was paid fight night so that the foreign fighter wouldn't be stuck with too much in US taxes

[BennyBlanco]

I didn't mean the promoter gets it back. I'm saying the promoter pays or HBO will sometimes pay for 24/7 themselves, but THEY'LL get that money off the top from the PPV revenue so its all the same to them.

For a PPV like this my assumption would be that the potential range of buys is low enough that they wouldn't do it, but for bigger fights its something that could be in play.

The way it works is that HBO pays for it out of their distribution fee - BUT if the distribution fee is too small to cover the cost of the 24/7, the promoter has to pay for the shortfall.

Bottom line: it reduces HBO's profit margin on PPVs. The only way the promoter pays for it is if HBO didn't make any profit on a PPV.

[The Problem Child]

GOOD!! This is the FIRST PPV i haven't ordered in over ten years!!! **** that coward low life.The only thing thatd put a smile on my face is hearing the next morning the other guy had bricks in is gloves and canelo got ****ed up badly.

[Chuckguy]

No it's just a sh it fight and HBO knows it