Can Events Withstand the Economy?10/17/2008 8:00 PM Eastern
Even with the economy continuing to sputter along, the prevailing thought among some in the cable industry is that consumers will continue to pay for services despite a nose-diving stock market.
In other words, there’s a sense that cable is recession-proof.
In particular, those in the pay-per-view event category are confident fans will continue to fork out $30 to $50 each for several boxing, wrestling and mixed-martial-arts events scheduled for the rest of the year. With the Joe Six Pack sports fan having to make ends meet by possibly eliminating a few evenings out on the town, cable operators and event providers believe that high-profile ring sports events can serve as a more than adequate home-entertainment viewing choice — particularly if Joe’s sharing the tab, and a few beers, with his buddies.
In fact, it was during the last recession in 2001-02 that the PPV industry staged its second-biggest event ever. The June 2002 Mike Tyson-Lennox Lewis bout drew $106 million in PPV revenue — a number surpassed only by the $124 million generated by the 2007 Oscar De La Hoya-Floyd Mayweather PPV megafight.
Then again, we’re arguably in the worst economic crisis since the Great Depression.
Cable operators and event distributors will get an early indication whether the PPV event category is indeed recession-proof this week when buy and revenue numbers come in for HBO PPV’s Oct. 18 Kelly Pavlik-Bernard Hopkins fight.
Given the fact that the undefeated Pavlik generated 225,000 to 250,000 buys for his 2007 fight with Jermain Taylor, and Hopkins has drawn more than 330,000 PPV buys for his light-heavyweight fights against Winky Wright (2007) and Antonio Tarver (2006), it’s reasonable in the best of economic times to expect this fight to fall somewhere between 225,000 and 275,000 buys.
If the fight indeed hits those marks amid an ailing economy, then HBO can feel more confident that its Nov. 8 Roy Jones Jr.-Calzhaghe and Dec. 6 Oscar De La Hoya-Manny Pacquiao bouts will also match expectations.
But if Pavlik-Hopkins falls below 200,000 buys, that could be an indication that the economy is delivering a much more devastating punch to the PPV event category than anyone had anticipated.
Ultimate Fighting Championship and World Wrestling Entertainment are also watching the results closely, given the fact that each entity has several big PPV events lined up for the remainder of the year.
UFC president Dan White has even said that the company’s Nov. 15 UFC 91 fight between Randy Couture and Brock Lesnar could be the biggest of all time for the mixed-martial-arts outfit, drawing more than 1.2 million buys. But White’s prognostication came before the stock market dropped more than 700 points last Wednesday.
Still, HBO’s PPV boxing arm, the UFC and WWE are known entities to millions of avid viewers who have shown time and time again the willingness to dig deep into their wallets to purchase marquee ring sports events.
And it’s unlikely those fans will let a little thing like a possible economic depression get in the way of a good fight.