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PBC, TV Deals And The Future Of Boxing: Is There Hope For Haymon’s Model?

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Al Haymon’s Premier Boxing Champions made a big splash anchored around the premise of premium cable-quality fights on TV.

Yet since then, the proliferation of TV deals have expired, leaving its distribution up in the air.

Nevertheless, PBC seems to be settling into a niche with some strong, well-built fights on its premium cable partner Showtime, who’s been on fire with a long string of significant fights lately.

On April 17, Showtime unveiled a kickass spring schedule—many of them PBC-branded—a lineup that continues to pace 2017 as one the best years in boxing in recent memory (2013 and 2015 come to mind).

With less focus on terrestrial TV partners, could PBC be exploring new platforms to add to its booming union with SHO?

I mean, just look at the numbers. Cord-cutting is real.

The pay-TV market lost around 800,000 subscribers in 2016. That’s almost double the 445,000 subscribers lost in 2015, according to data compiled by Leichtman Research Group (LRG).

“The pay-TV market has seen significant change in the past two years, with the introduction of Internet-delivered services, and share shifts among traditional providers that are driven as much by providers’ decisions as by changes in consumer demand,” said Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.

For consumers who’ve been tasked with paying over $100 a month for basic cable, cord-cutters simply buy products like Amazon’s Fire Stick, which basically offers your cable package on demand.

“When analyzing the pay-TV market, it is now essential to include Internet-delivered services as part of the industry, just as it was important to include satellite and Telco services when those new forms of delivery were introduced.”

The premium cable giant is adjusting to the cord-cutting trend as well.

In July 2015, Showtime launched a $10.99 standalone-streaming service and cut a deal last year to have their apps featured on Samsung TV — a move designed to appease cord-cutters.

They’ve also toyed with new forms of content distribution, most notably with the Adrien Broner-Adrian Granados event, a fight that also got distribution on Twitter.

“It was a good experiment and it we got a bit of a different demographic than watches on Showtime and we got good feedback,” Showtime Sports VP and head of the network’s boxing franchise Stephen Espinoza told ESPN. “It was a no-lose situation. One of the things we found on Twitter is that three-quarters of the audience that watched was under 35.”

Social networks are getting busy on the content distribution end, too.

“Facebook has been active in terms of going out and soliciting content providers of all kinds to do events on the platform,” Espinoza added.

In addition to the aforementioned Broner-Granados fight, Twitter apparently made a killing on their NFL deal, raking in $50 million on a $10 million investment. And it teamed up with Banner Promotions for a full card earlier this month.

On the other hand, PBC boss Al Haymon still owns a piece of Bounce TV, a network available in most homes on cable-free TV.

In 2014, rumors circulated about exploring an OTT (over-the-top) platform a la WWE’s Netflix-inspired WWE Network — a business model that’s challenged the pay-per-view model obsolete. For them, anyway.

For WWE, despite a rocky 2014 start—and backlash from angry PPV distributors)—the network has taken off, growing close to 2 million monthly subscribers as of this month on the heels of Wrestlemania 33.

At $9.99 a pop, that’s close to $240 million a year.

(In an interesting social media sidebar, live streaming service Periscope has been cannibalizing PPV sales — even the #MayPac 4.6 million PPV blockbuster.)

For both Showtime and HBO, their WWE-inspired forays into OTT seems to be paying off. HBO’s equivalent debuted in April 2015 (three months before Showtime’s), building a robust 2 million subscriber base.
Meanwhile, Showtime/CBS’ CEO Les Moonves said their OTT play had surged to 1.5 million—a 50% jump in under a year.

As an interesting sidebar, Showtime—traditionally the Avis to HBO’s Hertz—has been pummeling HBO on the boxing end. Outside of PPV’s (events that have no license fee and perform sluggishly at that), HBO has pretty much left the boxing business since the mass exodus of its three top executives around two years ago.

Hindsight’s 20/20, obviously, but a number of significant promoters bet big on their partnership with HBO — most notably Main Events, Top Rank and Golden Boy — in the middle of boxing’s political divide and have paid for it. And at the expense of a valuable relationship with Showtime, the current alpha dog in the space at the moment.

“Prior to this, we relied on our partner, HBO. HBO is now the subject of a merger, and they’re not spending money the way they used to,” Bob Arum told Corey Erdman in a great piece on Boxingscene.com today.

HBO’s parent company Time Warner is still in the midst of a massive $85.4 billion sale to AT&T. When these things go down, shit hits the fan. Just for some context: In my day job, I run a private equity real estate fund. Before that, I helped lead a media company to a sale to a private equity company. When there’s a merger/sale, it’s very common to shave expenses as much as possible to inflate your earnings and, thus, your valuation.

“They wanna make their bottom line look good as the merger moves forward,” said Arum, who’s been forced to put on several PPV events just to offset their losses. One included Terence Crawford’s junior welterweight unification bout with Viktor Postol. Many of these recent fights used to headed to HBO, no-brainers. Not so much now.

“This sometimes happens. So in effect, we’re collateral damage,” Arum said.

One common way of bolstering your earnings is through cutting payroll, which goes directly to the bottom line. Another is way is through programs no longer deemed a priority by the new bosses who may not have the same emotional connection to a franchise. Something similar happened back in 2001, ironically with the same players, when Time Warner merged with AOL. WCW aired on TNT, a Turner station, which had been acquired by Time Warner in 1996. Ted Turner, who had bankrolled his wrestling baby WCW since 1988, despite ratings and PPV business plummeting. (Sounds familiar?) Once the deal went through, the new bosses saw a business franchise that wasn’t performing, cut ties and took them off TV. Once off TV, the franchise was useless. In an almost bizarre turn of events, WWE CEO Vince McMahon ended up buying WCW for pennies on the dollar three months after the Time Warner-AOL deal went down.

He then leveraged that catalogue (and his live sports leverage) into his network and used his annual Wrestlemania franchise to jumpstart his “transformative growth” OTT play. And yes — McMahon got the social media integration game down pat. So what does it all mean?

For all of the mainstream attention it garnered, #MayPac, a $600 million blockbuster that added billions to bottom lines, was a political kamikaze, a clusterfuck to negotiate and came at the boiling point of the Cold War between SHO-HBO, Haymon-Arum and PBC and Top Rank.

But with another potential billion-dollar mega-match on the horizon, could Al Haymon, Les Moonves and Espinoza take a page out of McMahon’s book?

Could we see Haymon leverage this blockbuster event even further and strike deals with Jack Dorsey, Mark Zuckerberg and Jeff Bezos instead?

We do know this much: Boxing’s PPV audience is dying. HBO is basically out of the boxing business, at least in the way they used to compete. And players like Amazon are getting into the live sports game, as their latest $50 million deal proves.

“When it can be monetized and there’s a financial component, maybe eventually I am bidding against Twitter for a fight,” Espinoza told ESPN.

“Right now every marketing platform is also a potential programming outlet, and your marketing partner can become your competitor a few years down the line.”

Maybe there’s hope for Haymon’s model after all.

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