As if there weren’t already enough uncertainty about the direction of Manny Pacquiao’s fighting career, it looks like Pac-Man is done fighting in the U.S.—possibly for good.
According to Martin Rogers and Kevin Iole of Yahoo! Sports, Pacquiao’s camp is behind him in his desire to not fight a fifth bout with Juan Manuel Marquez in Las Vegas because of the “39.6 percent tax rate” Pacquiao would be forced to pay on the purse.
A Pacquiao-Marquez bout has been rumored to be in the works for months. Promoter Bob Arum would like to arrange the match for Sept. 14, but a lot of details still need to be worked out. According to Rogers and Iole, Arum has his eyes on Singapore or Macau as the potential location, with tax rates being the main concern:
Manny can go back to Las Vegas and make $25 million, but how much of it will he end up with – $15 million? If he goes to Macau, perhaps his purse will only be $20 million, but he will get to keep it all, so he will be better off.
The financial aspects make sense, especially for Arum who stands to make a bigger cut should Pacquiao choose a destination with a lower tax rate. Macau is one of the world’s best gambling locations, and a bout at that location would certainly draw plenty of attention.
At this point in his career, it’s unlikely Pac-Man will have many more opportunities at a big payday. He’s 34 years old, and while he has shown little sign of slowing down, he can’t fight forever. An extra $5 million from a fight outside of the U.S. could go a long way.
The figures are far from final, though. According to Rogers and Iole, Arum cited a “detailed review” of the pay-per-view figures for another Pacquiao-Marquez fight. Should they fight outside the U.S., pay-per-view sales could be cut in half:
At the numbers a fifth Pacquiao-Marquez fight would generate, that is a staggering loss. Pacquiao-Marquez 4, in which Marquez knocked Pacquiao out in the sixth round on Dec. 8 in Las Vegas, sold 1.15 million on pay-per-view.
The fifth fight figures to be at least as big, if not larger. At 1.15 million sales, the gross revenue from pay-per-view would be $69 million. The cable and satellite companies, which distribute the bout, get half of that off the top, leaving $34.5 million to the promotional side.
Pacquiao won’t crunch the numbers himself—he trusts Arum will make the smart financial decision. More money for Arum also means more money for Pacquiao. What Pacquiao should consider, though, is the amount of interest he would be gaining from international markets.
Ten of Pacquiao’s last 12 fights have taken place in Las Vegas, where Arum is headquartered (via Yahoo! Sports). A September fight outside the country could draw a whole new group of spectators to the sport. The Sweet Science is as much entertainment as it is sport, and taking a marquee fight to Macau or Singapore would open up unlimited possibilities for Pacquiao in the future.
Pacquiao has been rumored to already be considering a warm-up fight in Dubai in April. According to Arum, the Dubai fight would open up plenty of viewing markets as well (as quoted by ESPN):
A place like Dubai for a fight could be great. It's a great location for pay-per-view and TV networks and it would be seen worldwide. There would definitely be a lot of interest for a fight to take place there so it has the potential to be a great event.
If Arum and Pacquiao are concerned with a broad reach and marketing opportunities, fighting outside the U.S. is smart for both financial and promotional purposes. Pac-Man’s career will continue forward as long as people want to watch him fight.
What it all boils down to is money, though. Pacquiao deserves to maximize his potential earnings at this point in his career, and fighting outside the U.S. at a location with lower tax rates is the smart career decision.
Pac-Man will put on a show no matter where he fights—he just won’t get paid the same.