Pay-per-view sports getting boost from boxing

Despite streaming services eating away at the profits of pay-per-view movies and TV shows, TV providers could see their biggest PPV revenues in history on Saturday as two of boxing’s biggest names fight in front of a worldwide audience. Floyd Mayweather and Manny Pacquiao are set to face each other at the MGM Grand Hotel & Casino in Las Vegas, in a fight that promoter and Top Rank Inc. CEO Bob Arum, who represents Pacquiao, told ESPN could raise $300 million US between ticket sales, pay-per-view sales and sponsorships. Ray Rutter, president of Canadastar Boxing Inc., said Arum’s figure was “a very reasonable estimate” because the matchup is the most anticipated he’s ever seen. “It's the largest pay-per-view boxing event in Canadian history,” he said. “It’s been years. With Mayweather and Pacquiao there’s always been this great argument: who's the better fighter, pound for pound?” Rutter, through his company, distributes pay-per-view boxing and martial-arts events to bars, nightclubs and casinos across Canada, making individual deals with promoters outside the PPV negotiations that happen with TV-service providers. The match transcends the popularity of the sport, Rutter said, because of the personalities of the two fighters. Pacquiao, who has won championships in six different weight categories, has been a member of the house of representatives in his home country of the Philippines since 2010. Mayweather, who has never been defeated or knocked down in his professional career, served two months in jail in 2012 for domestic assault. “It’s the biggest fight we’ve ever done,” Rutter said. “Mayweather is so outrageous and Pacquiao is beloved, and fans either love or hate these guys. It's the perfect storm. It's like Ali and Frazier. And they both have a huge fan base.” Each fighter has been successful over the past five years at building their own brands with pay-per-view fights, Rutter said. “When you get the two top pay-per-view fighters fighting each other, it doubles the buy rate,” he said. “And you’re going to get the armchair fans who wouldn’t walk across the street to see a match who want to be part of this because it’s more than a fight — it’s an event.” Rutter said the fight is the most expensive for viewers he’s ever seen, and will raise more money than any other match in history. Rogers Communications Inc., for example, is charging about $95 for a high-definition broadcast of the event to people's homes. The biggest fight in Canada before this was the match between Lennox Lewis and Mike Tyson in 2002, he said. The high price for the pay-per-view event means the broadcasters and promoters behind it are fighting hard against piracy. According to a Tuesday report from the Hollywood Reporter, lawsuits have already been filed against multiple websites promoting the ability to watch the fight for free. Heavy Reading media analyst Alan Breznick said in a phone interview that sports fans seem willing to shell out to get events live, even as other TV viewing moves to a more time-shifted model with streaming services and online portals. “Sports fans seem to have an insatiable appetite for sports,” he said. “Sports and some breaking news seem to be the last holdout against time-shifting right now. It's the one appointment viewing that remains right now in TV.” Breznick said that he has been predicting for years that sports content would hit a price ceiling and saturate the market, yet he has been consistently proven wrong. “Sports promoters seem to know that there doesn't seem to be a limit on what people will pay, assuming it's a good event,” he said. “I don't see any red flags yet for pay-per-view sports. It seems like there should be, but it doesn't seem to be happening.” Unlike almost all of the major televised sports in North America, including NHL hockey, NFL football and Major League Baseball, boxing has no league or association to negotiate broadcast rights or provide collective rights to its participants. Top-tier boxing fights, such as the one between Mayweather and Pacquiao, are negotiated between representatives of the individual fighters and the distributors. After more than 25 years in the business, Rutter said, bars and other commercial establishments that call the big companies for PPV rights get sent to Canadastar. “Everybody knows when it comes to pay-per-view boxing to commercial establishments, they refer them directly to us,” he said. In Canada, TV providers such as Rogers, BCE Inc., Shaw Communications Inc. and Eastlink are not allowed to make exclusive deals for PPV sports events. In an email, Rogers spokeswoman Patricia Trott said the rights holders for pay-per-view events want to make it as easy as possible for viewers to buy. “With PPV events, as it is driven on an à la carte purchase basis, you want the maximum number of buys possible, so content owners prefer to have agreements with every TV distributor so that every household has access to buy the event,” she said. Rogers will be carrying the fight on Sportsnet pay-per-view, she said, priced at $89.99 for standard definition and $94.99 for high definition. Bell and Shaw will also be carrying the fight, according to spokespeople from those organizations, at similar prices. Breznick said boxing, as well as other sports including mixed martial arts, will remain a popular pay-per-view attraction because of their appeal to a small but devoted fan base, the money that promoters make, and the challenge of selling advertising for violent sports. “With pay-per-view, they can target their audience better,” he said. “They're not subjects that appeal to broader audiences and they're not going to necessarily get a big advertising response. If you're not going to monetize it through selling ads, the other way to go is to go pay-per-view and charge a lot to the relatively few who will buy it.” He cautioned, however, that putting events behind a pay wall could deter boxing and other sports from growing. “It definitely limits the broadness of its appeal, it definitely limits its reach,” he said. “It definitely limits the generational appeal of it, and you would think at some point these sports would look at how they're going to attract the teens, the 20-year-olds, and the 30-year-olds. But, as long as the revenue keeps pouring in from the 40, 50, and 60-year olds, they don't seem to care.” —With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Pay-per-view sports getting boost from boxing

News | April 30, 2015

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