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The Anatomy of Non-PPV Mismatch, and who left who
First let's look at a quote from Bob.
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"The people at HBO still don’t understand what makes a fight entertaining,” Bob Arum says. “I have to understand because I’m a promoter...... ‘These are the fights that we’re telling you to want,’ and the public is smarter than that.”
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Back to that in a minute.
While Arums move to ESPN, has been largely heralded as smartest business move of the year, it was probably smarter business for HBO. HBO sided with Top Rank in the war against GBP(2013)/PBC/Showtime, it's boxing ratings have continually declined. Leading them to decline airing Pacquiao vs Vargas, and releasing Pacquiao from his contract.
HBO released this thinly veiled statement.
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"Our fight lineup includes an array of 50-50 competitive fights, culminating with the best fight of 2017 in Canelo Alvarez versus Gennady Golovkin on September 16," Nelson told ESPN.
"We, however, cannot show every fight, though we remain fans of Terence and Vasyl, and proud of what we did for their careers together with Top Rank. We wish them the best( big lols)."
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In other words.... the audiences are tired of the mismatches too. And contrary to what I quoted from Bob, HBO believes they do know what a good fight is.
See, as I said in a previous post. Bob is the megalomaniac. He has to tell everybody how smart that he is.... Well, HBO might be slow but not slower than your average boxingscene poster.
Let's look deeper.....
Hbo paid Crawford 1.2 million and Hank Lundy 150k to stand in front of him. That's at least 2.2 million spent on a bout that drew 980k viewers. That's over 2.3 million every 1 million* viewers, rounded.
Hbo paid Cotto(Arum) 2 million and Yuri Foreman (Arum)750k to stand in front of him. That's nearly 2.7 million spent on a bout 1.9 million viewers. This is an important metric since Rounded, that's a roughly 1.3 million spent per million viewers. In boxing, when the channel pays for the rights to televise broadcast and own the recording it's called licensing fees by the way. I would of assumed that the live gate would have offset the cost to HBO but according to this article, I'm wrong---As Bob is quoted saying HBO paid 2.7 million in licensing fees for this fight.
Source:
1. Basically, for a mismatch HBO pays a 1 to 2 dollar per viewer. For a fight with a 2 million budget the TOP RANK fighter demands nears 75%-90% of the purse-- half of that to ARUM--and the opponent who doesn't belong in the ring gets pennies.
2. Only horrible fighters are going to be willing to fight for such a small piece of the pie
3. 2 million for one fight out of 25 million budget.
In comparison.
Between 2012 and 2015, game of thrones cost about 6million and episode to make. In 2014, Thrones averaged 14.4 million viewers. That's about a million dollars spent every 2.4 million viewers
Trueblood reportedly cost about 3 million an episode and had about 7 million viewerss. That's about a millions dollars spent every 2.3 million viewers. Plus they can peddle DVDs and iTunes rentals/downloads of tv shows. Nobody buys old fights.
HBO basically pays 0.50 per viewer for shows with a larger audience. Bob made boxing cost a $1.00 per viewer at the least.
Think about it-- They have a 123+ million subscribers to entertain. HBO makes about 1.1 Billion a year from subscriber service. Espn makes about 3.9 billion from Ads, and 6 Billion from app subscribers services. While ESPN ad revenue 3x that of the revenue generated by HBO it would be foolhardy to think they will throw money away at constant mismatches either.
ESPN presumably paid 750 k for Lomanchenko to practice his double end bag technique on Marriaga, who was tethered down with a 50k check, a total of 800k. In return they got about 730k viewers. In comparison, Walters vs Lomachenko didn't 760k viewers. But with HBO the pool of viewers was much smaller than cable. So that fells you how bad it is.
See, Loma needs Rigos, after all.
ESPN also worried us boxing fans by not announcing that they were switching it to ESPN2. Neither did they bother to turn off the NFL HOF induction that had about 690k viewers. Possibly because it was doing bigger numbers on the NFL network-- and wanted to spitefully drain them. But, it felt like a bad omen for boxings fresh start. And it definately meant they weren't all-in with Bobs boxing.
The cost of a 30 second commercial is said to average 30k. With 12, 1 minute breaks over as many of three fights; potentially 2.3 million. Plus breaks in between fights, and various things that can be cut out in favor of more advertising time. That looks good but unlike premium channels, cable tv works off viewership rating. In essence, the percentage of total viewers tuned into television at any given period. Low ratings means lower rates for the commercials and so on and so on. 700k viewers may or may not get done. Especially at the price point and purse splits Bob is using to attract opponents.
All of that is to say this, Bob Arums mismatches hurt the brand of HBO. ESPN may have been enticed by the 4.4 million from PAC Vs Horn, but they'll quickly forget if 700k becomes the new norm. Bob took a risky gamble on Horn and if the fans don't respond, he might of done more harm then good for the sport of boxing.
Bob had it too good at HBO, they paid him to make himself money(cut from the fighter and gate)with little to no risk. He used their network to build up hype for real fights that were only available on PPV. And, HBO says the money they can make off PPV is capped, and not much at all, compared to what they get from their subscribers.
I'll end this with Bob.
“In my opinion, they have an obligation to distribute this fight....
The fact that they passed means the contract is over, it seems clear to me.....My feeling is, based on my legal background, is that the contract is terminated,” said Arum.- in reference to HBO passing on televising PAC vs Horn.
First let's look at a quote from Bob.
------------
"The people at HBO still don’t understand what makes a fight entertaining,” Bob Arum says. “I have to understand because I’m a promoter...... ‘These are the fights that we’re telling you to want,’ and the public is smarter than that.”
---------------
Back to that in a minute.
While Arums move to ESPN, has been largely heralded as smartest business move of the year, it was probably smarter business for HBO. HBO sided with Top Rank in the war against GBP(2013)/PBC/Showtime, it's boxing ratings have continually declined. Leading them to decline airing Pacquiao vs Vargas, and releasing Pacquiao from his contract.
HBO released this thinly veiled statement.
------
"Our fight lineup includes an array of 50-50 competitive fights, culminating with the best fight of 2017 in Canelo Alvarez versus Gennady Golovkin on September 16," Nelson told ESPN.
"We, however, cannot show every fight, though we remain fans of Terence and Vasyl, and proud of what we did for their careers together with Top Rank. We wish them the best( big lols)."
---------------
In other words.... the audiences are tired of the mismatches too. And contrary to what I quoted from Bob, HBO believes they do know what a good fight is.
See, as I said in a previous post. Bob is the megalomaniac. He has to tell everybody how smart that he is.... Well, HBO might be slow but not slower than your average boxingscene poster.
Let's look deeper.....
Hbo paid Crawford 1.2 million and Hank Lundy 150k to stand in front of him. That's at least 2.2 million spent on a bout that drew 980k viewers. That's over 2.3 million every 1 million* viewers, rounded.
Hbo paid Cotto(Arum) 2 million and Yuri Foreman (Arum)750k to stand in front of him. That's nearly 2.7 million spent on a bout 1.9 million viewers. This is an important metric since Rounded, that's a roughly 1.3 million spent per million viewers. In boxing, when the channel pays for the rights to televise broadcast and own the recording it's called licensing fees by the way. I would of assumed that the live gate would have offset the cost to HBO but according to this article, I'm wrong---As Bob is quoted saying HBO paid 2.7 million in licensing fees for this fight.
Source:
1. Basically, for a mismatch HBO pays a 1 to 2 dollar per viewer. For a fight with a 2 million budget the TOP RANK fighter demands nears 75%-90% of the purse-- half of that to ARUM--and the opponent who doesn't belong in the ring gets pennies.
2. Only horrible fighters are going to be willing to fight for such a small piece of the pie
3. 2 million for one fight out of 25 million budget.
In comparison.
Between 2012 and 2015, game of thrones cost about 6million and episode to make. In 2014, Thrones averaged 14.4 million viewers. That's about a million dollars spent every 2.4 million viewers
Trueblood reportedly cost about 3 million an episode and had about 7 million viewerss. That's about a millions dollars spent every 2.3 million viewers. Plus they can peddle DVDs and iTunes rentals/downloads of tv shows. Nobody buys old fights.
HBO basically pays 0.50 per viewer for shows with a larger audience. Bob made boxing cost a $1.00 per viewer at the least.
Think about it-- They have a 123+ million subscribers to entertain. HBO makes about 1.1 Billion a year from subscriber service. Espn makes about 3.9 billion from Ads, and 6 Billion from app subscribers services. While ESPN ad revenue 3x that of the revenue generated by HBO it would be foolhardy to think they will throw money away at constant mismatches either.
ESPN presumably paid 750 k for Lomanchenko to practice his double end bag technique on Marriaga, who was tethered down with a 50k check, a total of 800k. In return they got about 730k viewers. In comparison, Walters vs Lomachenko didn't 760k viewers. But with HBO the pool of viewers was much smaller than cable. So that fells you how bad it is.
See, Loma needs Rigos, after all.
ESPN also worried us boxing fans by not announcing that they were switching it to ESPN2. Neither did they bother to turn off the NFL HOF induction that had about 690k viewers. Possibly because it was doing bigger numbers on the NFL network-- and wanted to spitefully drain them. But, it felt like a bad omen for boxings fresh start. And it definately meant they weren't all-in with Bobs boxing.
The cost of a 30 second commercial is said to average 30k. With 12, 1 minute breaks over as many of three fights; potentially 2.3 million. Plus breaks in between fights, and various things that can be cut out in favor of more advertising time. That looks good but unlike premium channels, cable tv works off viewership rating. In essence, the percentage of total viewers tuned into television at any given period. Low ratings means lower rates for the commercials and so on and so on. 700k viewers may or may not get done. Especially at the price point and purse splits Bob is using to attract opponents.
All of that is to say this, Bob Arums mismatches hurt the brand of HBO. ESPN may have been enticed by the 4.4 million from PAC Vs Horn, but they'll quickly forget if 700k becomes the new norm. Bob took a risky gamble on Horn and if the fans don't respond, he might of done more harm then good for the sport of boxing.
Bob had it too good at HBO, they paid him to make himself money(cut from the fighter and gate)with little to no risk. He used their network to build up hype for real fights that were only available on PPV. And, HBO says the money they can make off PPV is capped, and not much at all, compared to what they get from their subscribers.
I'll end this with Bob.
“In my opinion, they have an obligation to distribute this fight....
The fact that they passed means the contract is over, it seems clear to me.....My feeling is, based on my legal background, is that the contract is terminated,” said Arum.- in reference to HBO passing on televising PAC vs Horn.
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