Sunday, February 22, 2015

Mayweather-Pacquiao and the Role of Big Money

In a rarity, all was right in the boxing world on Friday as Floyd Mayweather and Manny Pacquiao finally agreed to fight after more than five years of on-and-off negotiations. And this was not an easy negotiation. HBO and Showtime, who have exclusive contracts with Pacquiao and Mayweather, respectively, only work together when compelled to do so. Promoter Bob Arum and power broker Al Haymon, bitter rivals and two of the shrewdest minds in the sport, sat on opposite sides of the table. Lingering animosity still characterized the relationship between Arum and his former fighter, Mayweather. Each boxer had a significant financial minimum, a reputational stake and other sources of ego to assuage. In the background of the negotiations was Team Mayweather's suspicions about Pacquiao and performance enhancing drugs, an issue they were so concerned about that settling a defamation suit didn't fully tamper down aspersions and accusations (although now the talk has shifted to veiled innuendo).

Mayweather-Pacquiao was never inevitable. Over the past 30 years, fighters have ignored huge financial opportunities for one reason or another. Marvin Hagler walked away from the sport after his disputed loss to Sugar Ray Leonard. Lennox Lewis also chose to retire instead of engaging in a lucrative second fight with Vitali Klitschko. Roy Jones and Bernard Hopkins talked themselves out of a rematch in their primes. Joe Calzaghe left the sport at the peak of his earning potential. Winky Wright could've put his great grandkids through college with the money that he turned down. Somehow, Oscar de la Hoya and Felix Trinidad left a second bout on the table. 

Boxing isn't always about fighters jumping at money. From Deontay Wilder, Keith Thurman and Peter Quillin rejecting career-high paydays to Juan Manuel Marquez going to Indonesia for short money instead of facing Pacquiao again, boxers consistently make decisions that are predicated on factors besides the almighty dollar. Vitali Klitschko could still be making millions boxing but he's helping Ukraine stabilize its democracy. David Haye is choosing to do whatever David Haye does, outside of fighting in the ring.

Purse splits ultimately weren't the main hindrance in getting boxing's ultimate dream matchup finalized. Mayweather-Pacquiao would have been the biggest paydays of the fighters' careers if it were made in 2009, 2010, 2012, 2014 or at any point along the negotiations. Other factors, like marketing plans and budgets, ticket disbursement, drug testing and rebroadcast rights played just as essential a role in this negotiation as the financial splits for the fighters did. 

In my estimation, the large forces of capitalism that exerted pressure on the fight to get made were essential in finalizing the negotiations. Yes, either fighter still could've walked away, but options were limited and BIG MONEY, the money behind Money Mayweather, for instance, was getting itchy. Ultimately, both fighters deserve praise for pulling the trigger. However, I believe that if the background elements all weren't aligned in seeing this matchup agreed to, then boxing's ultimate pageant would remain a pipe dream. 

Let's stick to what's widely reported. Showtime and CBS have Mayweather signed to a six-fight deal with a minimum guarantee of $32M per fight. Through the first four fights of the deal, Mayweather had one huge financial triumph (Alvarez) and three fights that failed to galvanize the larger sporting world (Guerrero and Maidana I and II). Over the duration of this deal, Showtime ceased to disseminate pay per view figures but it's been widely reported in the industry that the two Maidana fights underperformed at the box office. Coming into this year, CBS was still on the hook for $64M dollars without credible or compelling opponents for Mayweather; that's a lot of potential downside risk for a corporation. 

Similarly, Pacquiao has been guaranteed at least $20M per fight by Top Rank (Bob Arum's promotional company). HBO and Top Rank have seen Pacquiao's pay per view numbers plummet after his loss to Juan Manuel Marquez. His fights in Macau, China may have somehow turned a profit for Top Rank but they have helped to diminish Pacquiao's popularity in the U.S. market. Like Mayweather, Pacquiao also faced a dearth of quality potential – and available – opponents. Still owing Pacquiao at least three more fights, Top Rank couldn't afford to see its prized asset continue to depreciate. 

The third key player in the mix is boxing power broker Al Haymon, who, with significant financial muscle behind him, has brought boxing back to network television through large time buys on NBC and CBS. (Time buys are a term for an outside entity paying a network for programming time. The typical situation is the reverse, where a network pays for the right to broadcast content). Haymon, a key member of Mayweather's brain trust, needs boxing's profile to grow in the United States for his network deals to succeed. The attention that a Mayweather-Pacquiao fight could bestow upon the sport and his fighters in particular could be incalculable. Haymon has two years with NBC to provide certain ratings levels so that for the next deal, television rights for boxing can become a competitively bid process among the major networks, leading to significant profits for him and his backers. For Haymon, Mayweather-Pacquiao is a key ingredient to increasing boxing's exposure. 

Finally, HBO and Showtime needed this fight to happen to reassert their dominant positions within the sport. The premium cable networks are aware of the massive broadcasting changes in boxing. Instead of just squaring off against each other, soon they will have further competition from NBC, ESPN and potentially other players. HBO and Showtime have built up brands, cultivated subscriber bases and provided the central boxing narratives in the North American market for decades. Although an intense rivalry exists between the networks, for this fight, their interests align perfectly. This fight was paramount in maintaining their preeminent roles within boxing.

Ultimately, the forces around Mayweather and Pacquiao truly desired this fight to happen and for it to happen now. Huge corporations, the largest promoter in the U.S., a private-equity backed power broker and the constant drumbeat from the media and fight fans all helped to make this singular event possible. 

If Mayweather or Pacquiao were looking for external reasons or excuses for the fight to fall through, they were out of luck. There were no more promoters or drug testing or networks or managers to hide behind. If the fight didn't happen, blame would be placed solely on the fighters. 

It's certainly possible that it took more than five years for the needs of the fight's key stakeholders to align. Luckily, for the health, relevance and legacy of the sport, its two largest icons have agreed to battle, and at a point close to their respective primes. No matter what happens in the event, this is a significant win for boxing. The time was right on all sides. Ultimately, the 60-40 financial split for Mayweather was not what led to the deal being completed; it was the will of two boxers and the insistence of BIG MONEY – with millions to lose, investments to protect and opportunities to exploit – that finalized the fight. These are the reasons why Mayweather-Pacquiao is now a reality.

Adam Abramowitz is the head writer and founder of
He is also a member of the Transnational Boxing Rankings Board.
@snboxing on twitter, SN Boxing on Facebook

1 comment:

  1. An excellent essay. Convincingly stated and argued. By far the best I have seen on the subject. Thank you, Mr. Horowitz.