Home Box Office Pay-Per-View and Showtime Event Television last week completed distribution deals that will pass the June 8 Lennox Lewis-Mike Tyson heavyweight championship fight through a record 50 million households.
Operators also will have to reach unprecedented performance and marketing levels to gain a 50 percent split of event revenues, but executives from both companies said the rate-card terms are warranted for what is expected to be one of the highest-grossing PPV events of all time.
Neither SET, HBO PPV nor In Demand officials would reveal specifics of the rate card deal, but the Lewis-Tyson event will retail for a suggested $54.95 — the highest suggested retail price ever for a single PPV event.
HBO senior vice president of sports operations Mark Taffet said the unprecedented retail price is less than early projections of $60 or $70.
"We feel that's appropriate, given the uniqueness of the event, but it's also in line with expectations," said Taffet, who added that the fight has already set a live-gate revenue record of $20 million.
The fight also marks the first time rivals SET and HBO PPV will work together, and should provide a big lift for a revenue-starved industry.
Sources close to the situation said systems can gain a 50 percent split of revenues for generating a 4.5 percent buy-rate for the fight.
Operators can earn a 45-percent split if they run a record 600 cross-channel spots and implement five approved marketing tactics.
They'll garner a 40-percent split by executing four marketing tactics and airing 350 cross-channel spots — but a mere 25 percent take if they conduct no marketing effort at all.
The fight will reach 32 million cable households and 18 million satellite households, said Taffet. In addition, 2,000-closed circuit venues will carry the event. To protect the PPV business, Taffet said non-residential outlets offering the fight will be capped at 500 patrons.
The companies are also offering system-wide incentives to operators who develop creative marketing plans for the fight.
Tickets to the event will be awarded to systems that compete in three different categories — those with 75,000 or more subscribers, operators with 30,000 to 75,000 subscribers and systems with less than 30,000 customers, said SET senior marketing consultant Suzan Couch.
HBO PPV vice president and general manager Tammy Ross said operators have until May 29 to submit marketing plans.