Cable Operators

Cover Story: Down But Not Out

6/21/2009 2:00 AM Eastern

When boxing champion Floyd “Money” Mayweather postponed his July 18 fight with Juan Manuel Marquez due to a rib injury, he singlehandedly dealt a body blow to the pay-per-view boxing category.

The injury temporarily derailed what has been a two-year renaissance for PPV boxing. Just a few years ago, the sport that virtually established the event business in the 1990s was thought to have been counted out of the category.

Boxing glovesBut with PPV boxing-event distributors like HBO using a multiplatform marketing approach to build up young fighters like Mayweather and Manny Pacquiao, as well as veterans such as Oscar De La Hoya, into big stars and even bigger cash cows, PPV boxing events generated a record $265 million in PPV revenue in 2007 and drew nearly $200 million in 2008. That's despite the fact the $200 million revenue mark has barely been reached since the category was launched more than a quarter of a century ago.

The Mayweather-Marquez fight was expected to set the stage for a December clash between Mayweather and the sport's pound-for-pound champion, Manny Pacquiao, which many observers believe could break the all-time record of 2.4 million buys and $134 million in revenue set by the 2007 De La Hoya-Mayweather fight, which it typically splits with operators, more or less evenly.

Boxing is still the only PPV category that can draw 2 million or more buys for a single event.

The Mayweather-Marquez fight could have easily put HBO within reach of another record-breaking year, in terms of revenue. HBO's first major PPV fight of the year, the May 2 Pacquiao-Ricky Hatton event, drew more than 800,000 buys and $40 million.

A potential September rescheduling of the Mayweather-Marquez fight, a proposed Nov. 14 Pacquiao-Miguel Cotto fight and a possible December PPV event — along with a series of smaller, regional fights distributed by Top Rank and other event distributors — could help get the sport near its lofty revenue milestones.

“The Mayweather-Marquez postponement will make it difficult to reach the figures of last year, but we expect to have two or three PPV fights and we believe that those will be very big events for the PPV industry,” said Mark Taffet, senior vice president of HBO Sports, which today distributes the lion's share of marquee PPV boxing events.

If that scenario plays out, the sport's PPV revenue in 2009 will certainly rival that of the mid-1990s, when such popular heavyweight fighters as “Mighty” Mike Tyson, Evander Holyfield, Riddick Bowe and Lennox Lewis — as well as lower-weight fighters like De La Hoya, Julio Cesar Chavez and Felix Trinidad — made boxing the main attraction of a flourishing PPV-event category.

But the decline of the heavyweight division and the dearth of high-profile boxing champions — as well as growing PPV competition from mixed-martial-arts groups like the Ultimate Fighting Championship, which siphoned younger viewers from boxing — threatened to knock boxing out of the PPV event ring.

Between 2000 and 2005, the category averaged only 2.86 million buys and $130 million per year in revenue, according to HBO. It was during that time that boxing promoters began to put relatively unknown fighters in non-competitive PPV matches in an effort to generate significant revenue for themselves and fighters.

“The boxers and promoters realized that they weren't making any money by having the top fighters fighting nobodies,” said Tony Paige, a veteran boxing writer and sports-talk radio host on New York's WFAN. “When the champions finally started fighting each other, it started to spur interest in the sport again.”

In 2006, HBO and boxing promoters began to focus on matching up the top fighters in each division in the programmer's PPV events, in an effort to generate more interest and anticipation among the combatants, according to Taffet.

The biggest fight among champions took place in May of that year when De La Hoya — the biggest PPV draw at the time — fought undefeated titleholder Mayweather, then considered the sport's best fighter.

De La Hoya-Mayweather would eventually become the most lucrative event in PPV-industry history, drawing a record 2.4 million buys and $137 million in revenue.

De La Hoya's December 2008 fight with the hard-hitting Philippines-born Pacquaio also broke the 1 million-buy mark — the gold standard for PPV event performances. Two other fights — Mayweather-Hatton in December 2007 (925,000 buys) and Pacquiao-Hatton (820,000 buys) — are among the top 15 best-performing fights of all time.

Helping to spur interest in those fights was HBO's boxing reality series 24/7, which captures the behind-the-scenes action as fighters train for their fights and airs throughout the run-up to the event.

The network's first 24/7 series, created for the De La Hoya-Mayweather fight, captured the personalities of both fighters — as well as their trainers, entourages and families — and became a must-see series for both boxing fans and reality show buffs.

The show averaged more than 4 million viewers per episode, according to HBO.

Subsequent 24/7 series built around such fights as the December 2007 Mayweather-Hatton bout, the December 2008 De La Hoya-Pacquiao fight and this past May's Pacquiao-Hatton fight have averaged more than 2 million viewers per episode.

“The 24/7 series helped transcend the boxers beyond the sport,” Paige said. “It's probably the best marketing tool for the sport over the last 40 to 50 years — so many people I've talked to don't know anything about the sport but will watch [24/7] because it's so compelling and raw.”

More important for boxing, HBO's 24/7 also draws in a significant number of young viewers aged 18 to 49, which had begun to abandon the fight game for UFC and its peers.

UFC, which combines several fighting disciplines including boxing, wrestling and martial arts, has become a popular draw on PPV, with its monthly shows averaging between 500,000 and 1 million buys, according to its president, Dana White.

Still, no UFC PPV event has come close to matching De La Hoya-Mayweather's 2.4 million-buy performance. Such success keeps operators in boxing's corner when focusing on marketing and promotion.

Taffet said its Pacquaio-Hatton fight drew “ unprecedented” marketing support for what was considered a strong card, but not a mega-boxing event on the scale of De La Hoya-Mayweather.

The network has also shifted its marketing strategy for fights by devoting more resources to the Internet to reach hardcore boxing fans and younger viewers.

As part of its Pacquiao-Hatton campaign, the network used online banner ads to run video promos leading up to the fight and Webcast a live feed of the fighters' weigh-in. Once a user moved his cursor over an ad, it expanded to play a video promotion for the bout.

The marketing shift comes as the slow economy prompts HBO to strategically trim the number of PPV fights it will distribute during the year.

“We made a conscious decision at the beginning of 2009 that because of the economy, it would make sense to have more space between the PPV events to increase the pent-up demand for each event when it occurs and put less burden on consumers in tough economic times,” Taffet said. “We still believe that that's the way to manage over these tough economic times.”

The strategy has allowed HBO to put some marquee fights on its flagship premium network, further exposing the sport to casual fans. The network's Feb. 28 fight card, featuring a Marquez knockout victory over highly regarded contender Juan Diaz, help set the stage for the Mayweather-Marquez bout. In prior years and under better economic conditions that fight may have played out on PPV, according to Taffet.

“The live events on HBO have tremendously increased the total viewership for boxing this year, and we believe that will very positively impact the PPV figures,” he said. “It leads to a bigger, healthier sport and a bigger, better healthier PPV category.”

HBO isn't the only company throwing punches on the PPV boxing front.

Top Rank has offered a series of PPV “Latino Fury” fight cards featuring predominately Mexican and Puerto Rican fighters since 2007 and will stage its 10th card of the series in July, according to Top Rank president and veteran boxing promoter Bob Arum. The shows, targeted marketed directly at Latino boxing fans, have averaged between 75,000 and 100,000 buys, according to Arum.

Arum says between the Latino Fury cards and a new franchise focusing on Pilipino boxers, he expect to distribute as many as nine PPV events a year, all ranging in retail price between $34.95 and $39.95.

As for the blockbuster events, Taffet said there are many more on the horizon.

“There are many combinations of big fights to happen over the next year in the 140- and 147-pound divisions involving Pacquiao, Mayweather, Cotto, Shane Mosley and a few other fighters,” he said. “Mayweather's injury pushes those fights back a few months and as a result will cross calendar years — we'll see these fights develop over the next 12 to 15 months rather than the next six months.”

Whether in six or 15 months, In Demand president Robert Jacobson said as long as boxing continues to deliver quality boxing matches featuring the best and most popular fighters in the world, viewers will continue to come.

“If it's a big fight people are going to pay to see it,” Jacobson said. “Such events capture the imagination of people — they want to be able to say that they saw it when it was happening, and the only way to do that is to pay for it live.”

April

2015 BCAP Cable Academy

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May

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