Mayweather v Pacquiao packs a pricey pay-per-view punch

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[April 28, 2015]  By Mary Milliken

LOS ANGELES (Reuters) - Guadalupe Jaimes, a Chicago roofing supply salesman, calls the $100 pay-per-view price tag for a high-definition broadcast of Saturday's boxing mega-match "ridiculous."

It's a price that he and millions more will pay to watch an undefeated Floyd Mayweather take on Manny Pacquiao in Las Vegas on Saturday in one of the year's biggest sporting events.

"You can definitely get that much and possibly even more for the kind of fight that is going to happen Saturday," said Jaimes, who is used to paying $50 or $60 for a PPV fight. "It is no-holds-barred pricing."

The showdown between the two top fighters, years in the making, is expected to smash pay-per-view records, both in terms of buys and revenue. Mayweather's defeat of Oscar De La Hoya in 2007 has the buy record of 2.48 million households, while his 2013 showdown with Canelo Alvarez has the revenue record of $152 million.

The pairing has also brought together rival networks HBO and Showtime to co-produce and co-distribute a boxing match. The only other time they have done so was when Mike Tyson fought Lennox Lewis in 2002.

"Given what we are seeing in the early ordering part is that this will be a very, very successful night," said Ken Hershman, president of HBO Sports.

Hershman, however, won't make projections, noting that they are working with "an untested retail price point" and they don't know how that will impact what he calls the "grouping phenomenon" of viewers.

Jaimes, for one, is probably fairly typical in that he is gathering with family and friends to watch the fight and they will likely split the cost. The standard broadcast costs $90, but high definition is the only way to watch boxing, he said.

If 3 million households purchase the standard PPV package, that means $270 million in revenue. But some are predicting the fight could be seen in up to 4 million homes.

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That the boxing world can break pay-per-view records at a time when the sport has faded from cultural prominence speaks to the uniqueness of the match-up.

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"This is going to be a data point that is going to eclipse previous data points," said Ed Desser, president of consultancy Desser Sports Media, Inc. "But I don't think you can come to the conclusion that boxing is back in the mainstream."

Desser believes that unlike baseball, basketball or football, boxing suffered from not having a league or a commissioner looking out for the long-term interests of the product.

That left the premium cable networks - HBO owned by Time Warner Inc. and CBS Corp-owned Showtime - developing the sport as part of their broader business of building diverse audiences and programing for their subscription services.

HBO has Filipino southpaw Pacquiao under contract, while Mayweather's fights are shown on Showtime.

Pacquiao, who is 57-5-2, agreed to 40 percent of fight revenues, to Mayweather's 60 percent, and together they take the biggest part of the pay-per-view haul, the most lucrative revenue stream of the fight.

HBO and Showtime stand to make a small cut from pay-per-view, splitting between them just 7.5 percent of revenue.

"We are not in the pay-per-view business, per se, we are in the HBO business," said Hershman. "We use pay-per-view as a tactic and a tool where necessary and this is obviously one of those times. We could never afford to put a fight like this on HBO."

As to putting aside the rivalry between the two networks, Hershman said they don't always see things the same way, but that this collaboration was working well.

"We'll go back to bashing each other's heads on May 3," he said.

(Reporting by Mary Milliken; Editing by Frank Pingue)

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