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Old 07-31-2016, 09:22 PM #1
Motorcity Cobra Motorcity Cobra is offline
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Default A theory on HBO boxing's budget cuts

by Steve Kim | Jul 27, 2016

Much was made recently of the fight between Terence Crawford and Viktor Postol, a junior welterweight welterweight title unification bout that (at least, on paper, looked like an enticing match-up) took place last weekend at the MGM Grand in Las Vegas, being a pay-per-view offering and not on HBO.

A bout that would, in years past, have been shown on the “World Championship Boxing” series instead cost boxing fans another $60 on their next cable bill.



The reason this pairing ended up on pay-per-view was very simple: In order for promoter Bob Arum to get Crawford three fights this year – instead of just two – he would have to risk his own money and stage a pay-per-view card. And HBO Sports’ current budget for boxing means, for the time being, their franchise fighters such as Sergey Kovalev, Gennady Golovkin, Andre Ward, Saul Alvarez and Crawford would need to fight at least once on pay-per-view and/or have a foreign fight (which comes at a reduced license fee to HBO).



While some will accuse Top Rank Promotions of greed, the reality is this was something born out of necessity and could be looked upon as an investment into its future.



There has been a lot of internet chatter and speculation about HBO’s budget regarding its boxing franchise. A time long ago during Seth Abraham’ heyday, the network regularly had over $100 million to spend on the sport as it became the dominant platform in the industry. In recent years, this number has shrunk substantially. For various reasons, this reduced number is now is of great debate and interest to many who follow the sport. Promoters and managers would like to know just how much money is available to them and fans would like to get an idea of what fights they can realistically expect.



But very few actually know the real number. More people might know the formula for Coca-Cola than the actual figure HBO Sports allocates for boxing. It’s clear however that the war chest is not nearly what it once was.



There is concern that the declining amount of money HBO Sports is getting is an indication that the network has one foot out the door, in terms of its commitment to the last and only live sport it televises. But according to a once well-placed source within the industry, “The whole budget crunch is very unusual and temporary and is a product of Rupert Murdoch’s hostile takeover attempt at Time Warner.”



The multi-billionaire media mogul has made advances with Time Warner (the parent company of HBO) in the past and always seems to be lurking.



“It is a one-time only adjustment which took place specifically because of Murdoch’s attempted takeover at Time Warner and Time Warner siphoned $100 million out of HBO to give to the movie studio Warner Brothers and to give some to the other ancillary ventures. It was about broadening the financial base of the comany to be sure that the stock price would hold up,” it was explained. So while it’s tightening its belt and cutting costs, HBO is also investing into its streaming service to try and bolster the value of its stock.



This was all done to resist a potential Murdoch takeover.



In other words HBO is robbing Peter to pay Paul, you could say. And part of that $100 million certainly came out of the HBO Sports budget. The belief is that once Murdoch is fully rebuffed, then, more or less, things will return to normal.



What’s taking place now isn’t the first time budgets were slashed at the network. During the Time Warner/AOL days, as its stock plummeted, HBO had to tighten the belt as the prime asset of Time Warner. In many respects, HBO is akin to the big-time college football program whose revenue has to fund the rest of the athletic department.



As it stands now, as HBO fills out its fall schedule, it has at least three more pay-per-view cards (Sept. 17 with Liam Smith-Saul Alvarez, Nov. 5 with the return of Manny Pacquiao and Nov. 19 when Sergey Kovalev takes on Andre Ward). You could assume that, with much more money to spend (like in the past) perhaps only Pacquiao – who still has a sizable guaranteed minimum – would be on pay-per-view.



Another source says the current head of HBO Sports, Peter Nelson, was saddled with toxic assets left to him by the departed Ken Hershman. It’s clear that Nelson has to be extra judicious in how he spends his network’s money, nowadays. In years past, HBO was the proverbial 800-pound gorilla but it didn’t have Al Haymon and Premier Boxing Champions to deal with – and it had much bigger wallet.



Arum told this reporter in the past that HBO executives told him boxing “was in their DNA.” Who know how true this, still is with the departure of Michael Lombardo, who was its President of Programming? Lombardo was said to be a major advocate of boxing, while others believe he wasn’t all that much of a sports fan. Regardless, as it currently stands, though it’s not the biggest platform in boxing (with CBS, NBC, ESPN and FOX entering into time-buys with Haymon last year), it is still the gold standard. On this network, you don’t just see the sport’s elite but its biggest stars.



The problem lies in that they’re seen less and less on the network and oftentimes against overmatched opposition. For years, boxing has relied on HBO to not only nurture but then showcase its biggest stars. But does HBO really need to rely on boxing as it once did?



As one person in the entertainment industry stated, “The HBO non-sports executives would like to tell you the reason people subscribe to HBO is because of shows like ‘Silicon Valley’ and ‘Girls’ – it’s not true. People subscribe for movies, as dated as that may seem. They subscribe for boxing and breakout programming like ‘Game of Thrones.'”

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Old 07-31-2016, 09:30 PM #2
Eff Pandas Eff Pandas is online now
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Idk wtf is going on with all these articles over the last couple months acting like HBO's boxing budget going down is some new thing. This ain't got **** to do with streaming. I think HBO's boxing budget has been dropping since pre-f#cking internet or at least since the nude pics would take like 7 minutes to fully show up on the screen.

HBO is spending money where the money comes in at. And the money isn't coming in cuz of boxing. Its coming in with all these TV shows & made for TV movies that are getting Emmy nominations & awards.
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Old 07-31-2016, 09:36 PM #3
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Originally Posted by Eff Pandas View Post
Idk wtf is going on with all these articles over the last couple months acting like HBO's boxing budget going down is some new thing. This ain't got **** to do with streaming. I think HBO's boxing budget has been dropping since pre-f#cking internet or at least since the nude pics would take like 7 minutes to fully show up on the screen.

HBO is spending money where the money comes in at. And the money isn't coming in cuz of boxing. Its coming in with all these TV shows & made for TV movies that are getting Emmy nominations & awards.
This is the first article I've seen by anyone trying to explain it. Game of Thrones is ending next season so hopefully they'll have some money freed up
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Old 07-31-2016, 09:36 PM #4
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I mean how can you say it is a one time thing if it is a constant trend downward in spending on boxing at HBO over many years. Generally speaking things go down much faster than the come up (or come back) so even if the slash this year was a one time thing who know how much they get back for next year.

I would hope it is true though and HBO puts more resources in because that is good for the sport.
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Old 07-31-2016, 09:44 PM #5
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He calls HBO the gold standard. No good fights though.
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Old 07-31-2016, 09:44 PM #6
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Originally Posted by Motorcity Cobra View Post
This is the first article I've seen by anyone trying to explain it. Game of Thrones is ending next season so hopefully they'll have some money freed up
Will lose a bunch of subscribers too though won't they ?
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Old 07-31-2016, 09:45 PM #7
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Quote:
Originally Posted by Motorcity Cobra View Post
This is the first article I've seen by anyone trying to explain it.
I've seen a few write ups about the HBO budget lately.

Quote:
Game of Thrones is ending next season so hopefully they'll have some money freed up
Where was the budget increase 5 years before GoT premiered? Where was the budget increase after the Sopranos went off HBO?

This isn't a new thing. The only thing new is that HBO's boxing budget has finally dwindled down to such a low point they can't even put on regular HBO caliber fights like Crawford vs Postol or GGG vs Lemeiux if they haven't planned things out well. This dwindling boxing budget has been going on since the late 90's, early 00's. Its been a long term downward trajectory sadly.
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Old 07-31-2016, 09:47 PM #8
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For whatever reason, it just hit me that Kovalev/Ward is PPV.
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Old 07-31-2016, 09:48 PM #9
Motorcity Cobra Motorcity Cobra is offline
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Originally Posted by Eubankjr View Post
Will lose a bunch of subscribers too though won't they ?
People are lazy when it comes to canceling subscriptions. They'll lose some but not as many as you'd think. People will subscribe specifically for GoT but don't cancel the subscription when the season is over. And a lot of cable companies throw in HBO as part of a package.
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Old 07-31-2016, 09:48 PM #10
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Showtime and PBC (CBS Sports) has dynamic flexibility for growth and a lot of potential. Whomever is justifying to the execs over at HBO that things will be fine have hard jobs... HBO has a legacy, sure, but it's a new era of better programming in general. Budget cuts can only mean one thing, they have no interest in it.
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