Boxing’s Biggest Fights Unlikely To Happen Without Fans In Attendance

JohnWallStreet

The UFC returned to action last Saturday night (May 9th) after a nearly two-month layoff. The promotion is scheduled to put on two more cards at an empty Veterans Memorial Arena in Jacksonville, Florida over the next four days (May 13th & May 16th). It’s logical that MMA would be among the first sports to return from the COVID-induced hiatus. The number of participants needed to stage a fight card are relatively small (important with the number of tests available still limited) and gate receipts - which don't exist right now - represent just a fraction of broadcast revenues for all but the biggest events. In theory, the sport of boxing should benefit from the same advantages (promotions like Top Rank and PBC have lucrative broadcast deals in place with ESPN and FOX Sports/Showtime). But while it’s easy to envision fights returning within a studio setting sooner than later, it’s much harder to imagine they’ll be the mega fights that the casual sports fan tunes in for (think: Wilder-Fury III); or even the "old 300K buys fights" that appeal to the hardcore boxing fan (think: Crawford-Porter). The costs of putting on bouts of that quality likely exceeds what could be made in staging them under the current circumstances (think: recession, social distancing guidelines in effect).

Howie Long-Short: The ability for promoters to book marquee showdowns in the near future is likely to come down to the combatants’ willingness to fight for less money. Long-time HBO Sports President Ross Greenburg said one should assume “there won’t be gate revenue (which could be worth as much as $20 million for a mega fight) and in a down economy fans may be hesitant to shell out $70 or $80 for a single night of entertainment" (presumably the fighter guarantees are too high for a broadcast or cable network to offset costs with advertising and retransmission fees). Remember, social distancing guidelines will prevent many fans from gathering and splitting the costs as they’ve done in the past. Of course, the presumed lack of discretionary spending money available and shelter-in-places orders in effect seemed to have little impact on the UFC last weekend. UFC 249 - a card without a mainstream star on it - drew 700K buys at $64.99.

It’s important to remember that boxing and MMA operate under very different business models. While the UFC's combatants may be making as little as +/- 20% of the revenues generated from an event, boxers can take home 70% or more of the proceeds. Greenburg believes with so much money at stake that the most marketable boxing stars “will wait until the pandemic clears - and tickets can be sold - before they take a major fight" (particularly if venues are going to be offering enticing terms to land the biggest events). That doesn’t mean the sport’s biggest names are going to be shelved until a Coronavirus vaccine emerges. Like everyone else, “they have bills to pay” (never-mind the short career windows). Expect PPV level fighters to book ‘safe fights, “for a lot less money”, until it’s safe to fill venues again. 

The fact that so many people bought UFC 249 shouldn't be a surprise. Overwhelming desire for live sports aside, fight sports have historically been recession proof. The early 1980s (a period that followed the economic struggles of the late '70s) was arguably the sport’s last glorious era. Greenburg reminded “fans would pack arenas around the country to watch the likes of Leonard, Duran, Hagler, Hearns and Holmes; and guys were earning eight-figures for the biggest fights.” While the late ‘00s lacked much of the same star power (Mayweather and Pacquiao would be the exceptions), “there were still some major events held during those years.” Pacquiao-De La Hoya (1.25 million, Dec. 2008) Mayweather-Marquez (1 million, Sept. 2009), Pacquiao-Cotto (1.25 million, Nov. 2009) and Mayweather-Mosley (1.4 million, May 2010) all did north of 1 million buys in the midst of the Great Recession.

Greenburg attributes the sport’s ability to successfully navigate those two difficult periods to its willingness to adopt emerging distribution technologies before they “became fashionable” (think: closed circuit television, PPV). It’s possible that companies like Amazon or Apple could pay up to host mega fights on their respective streaming services (which would enable the sport to thrive in COVID's wake as it has during previous recessions), but it reasons to believe a cross-over star will have to emerge before they do. “The reason boxing has always been able to initiate a change in technology that created more revenue was because it was a popular mainstream sport. Unless boxing has a major rejuvenation or a fighter as electric as Mohammed Ali or Mike Tyson comes along, [it probably wouldn’t be worth their investment].”

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