Boxing for Billions

The Financial Side of the Sweet Science and Other Interesting Facts

Boxing for Billions
April 27, 2015

Boxing has arguably been on a long decline in terms of overall popularity. “The Sweet Science” used to be regularly featured on weekend television and resulted in spectacular major heavyweight championship bouts between household names — Muhammad Ali, Joe Frazier, George Foreman, Evander Holyfield, and Mike Tyson to name a few.

These days, very few major boxing events are featured anywhere but pay-per-view, with most audiences limited to hardcore boxing fans. MMA (Mixed Martial Arts) has arguably taken boxing’s place in fighting popularity through the UFC (Ultimate Fighting Championship) and other outlets.

Right now, there is only one boxing match that commands attention — but that fight will be by far the highest purse in boxing history. Floyd “Money” Mayweather and Manny Pacquiao will be meeting in the ring on May 2nd in Las Vegas at the Garden Arena at the MGM Grand.

As well as generating massive income, the fight will unify the welterweight title. Currently the WBC and WBA recognize Mayweather as the Welterweight Champ while the WBO recognizes Pacquiao. (For some reason, the fourth major boxing organization, the IBF, recognizes Kell Brook. Who? Exactly.)

The purse is anticipated to be well upwards of $300 million, with a guaranteed 60/40 split between Mayweather and Pacquiao respectively. However, the final purse is likely to go significantly beyond that mark, based on the pay-per-view (PPV) take and ticket sales. The PPV price is $89.95, the highest ever, but it will cost you even more for a high-definition feed. Tickets range from $1,500 to $7,500 at face value, and according to SeatGeek, the secondary market ranges from $5,400 to $28,000.

For a frame of reference, the Ali-Frazier fight in 1971 featured a guaranteed purse of $2.5 million for each fighter in the pre-PPV days. Adjusted for inflation, that would be approximately $15 million in today’s dollars. PPV rates have risen to the point that it can dominate the purse money.

In terms of total PPV buys, the 2007 fight between Mayweather and Oscar de la Hoya tops the list. It generated an estimated 2.48 million PPV and $19 million in attendance, resulting in a $136 million intake, a $52 million cut for de la Hoya, and $25 million for Mayweather (despite Mayweather’s victory). However, Mayweather’s fight with Saul Alvarez in September 2013 topped the money total at $150 million.

PPV estimates for the Mayweather-Pacquiao fight range around 3 million households, thus a likely take of $270-$300 million. The arena holds close to 17,000, which puts the take from the gate at around $50 million. With sponsorships and broadcast rights in other countries, the total could creep toward the half-billion dollar mark. Should Mayweather and Pacquiao spark new interest in boxing, a billion-dollar fight would only be a matter of time.

This is why boxers often top the lists of athletes with the highest income. Consider that the NFL salary cap is around $150 million that must be spread around 53 team members, and the L.A. Dodgers will be paying out $197.5 million in 2015 with up to $20 million in potential bonuses. Given all sources of income, Mayweather could potentially out-earn those entire teams in one evening, and approach another 50% of the estimated $400 million he has already made in his boxing career.

Ultimately, the stakes on the fight between Floyd “Money” Mayweather and Manny Pacquiao go beyond the enormous cash intake. It has been billed as a test of whether boxing can become relevant again or sink further into the dustbin of popular sporting history.

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