The floor rumbles and your ears feel like they’re stuffed with cotton from the combination of the crowd noise and the blaring music. The flashes from cameras and smartphones dot the darkened arena like a million fireflies on a summer night. As the boxers make their way toward the ring, it all intensifies to a maddening crescendo that doesn’t stop until after the first punch is thrown.
There is nothing quite like the atmosphere of a big-time championship fight night.
Floyd Mayweather Jr., the reigning and defending champion of big-time boxing, knows all about the atmosphere of championship fight night. He helps create it. From the positioning of the television cameras to the staging of the fight and choreography of the ring walk, Mayweather has a hand in it. Not to mention he is the star of the show under the bright lights in the ring.
Little do all those screaming fans know that the man they’re watching in the ring collects money on the tickets they bought, the beer or soda that they’re drinking, the hot dogs that they’re munching and the signs on the ring posts that they’re looking at.
Because of his unique business model, Mayweather reaps huge financial rewards from all aspects of fight night. All revenue streams for a Mayweather fight flow to the man who calls himself “Money.’’ And while he has to pay some of the cost for his big events, his representatives have negotiated deals that save him money and minimize his risk of losing money.
Interviews with boxing industry insiders, cable television executives, rival promoters and managers and members of Mayweather Promotions detailed the exhausting 12-week process of staging a Mayweather boxing event like his rematch against Marcos Maidana at the MGM Grand Garden Arena in Las Vegas on Showtime Pay-Per-View on Saturday, Sept. 13. They also laid out the various financial arrangements that Mayweather and his representatives have negotiated for his megafights that made him Forbes magazine’s highest-paid athlete for 2014 ($105 million).
Read this $72,276,000.00. God bless. pic.twitter.com/dpwE3X7eLR— Floyd Mayweather (@FloydMayweather) August 23, 2014
In a star-driven sport that is also star-starved, Mayweather is the brightest in the boxing constellation. And fortunately for him, Mayweather has come along at a time in boxing when he is able to leverage his talent into deals that no other boxer would even dare ask for.
“I think his ability to harness the revenue to himself has arisen from two things,’’ said Stephen Espinoza, Showtime vice president and general manager of sports and event programming. “It’s the recognition early in his career that he wanted and needed to control his own marketing and image and how his events were presented. The second is he had the ability to make it big, extravagant and loud and eye-catching.
“Certainly other people have tried this business model. But trying this business model where you rely on your own blood, sweat and tears to maximize your event doesn’t work if you haven’t built over time the kind of appeal that Floyd has. If Floyd wasn’t Floyd, then the business model wouldn’t work as well.’’
That financial power gives Mayweather the kind of shot-calling clout that no other athlete in sports has today. When he announces the date that he is going to fight, Mayweather becomes the general commanding a small army that works furiously for 12 weeks to create his vision of fight night.
“With Mayweather’s fight, where it all starts is the spectacle of the event,’’ Espinoza said. “The athletes, the celebrities make it a star event. The outrageous ring walks with Lil Wayne and Justin Bieber and social media creates this electricity, enthusiasm and adrenaline when the athletes are walking out. The task when promoting the event is to take all that and communicate what it’s going to feel like in that moment. Anybody who gets a taste of that will want to come back to the next one and the next one and the next one.’’
Espinoza is well-versed in putting on major boxing events. He was the attorney for Oscar De La Hoya, one of boxing’s major stars before Mayweather. He also helped handle Mike Tyson’s bankruptcy filing.
The first and most important element of every Mayweather fight is the opponent. Mayweather makes the selection with his adviser, Al Haymon, a Harvard-educated businessman whose association with Mayweather has made him boxing’s major power broker, and Leonard Ellerbe, the CEO of Mayweather promotions who has been with Mayweather in various capacities for 18 years. Ultimately, Mayweather has the final say.
The right opponent could mean the difference between less than 1 million and more than 2 million pay-per-view buys. At $65 a pop ($75 for hi-definition) it is a significant amount of money to Mayweather’s bottom line and Showtime’s coffers. Mayweather takes 50 percent of all pay-per-view revenue on top of what he is guaranteed for each match. Showtime collects that money and takes its small percentage before sending the remainder to Mayweather. The distributors of the pay-per-view take the other half when people who bought the pay-per-view pay their cable bills.
Showtime signed Mayweather to a six-fight deal in 2013, which could be worth more than $250 million depending upon his opponent in each of the six fights, according to industry insiders. Espinoza refuses to talk specifically about Mayweather’s deal with the network, but needless to say, they have a huge stake in the success of every Mayweather fight.
To illustrate the importance of the opponent, Mayweather’s first fight in the Showtime deal was against Robert Guerrero, a lowly regarded and little-known opponent. It generated just under 900,000 pay-per-view buys. His second match was against Saul “Canelo’’ Alvarez, a Mexican superstar who many believed had a chance of beating Mayweather. The fight did 2.2 million pay-per-view buys and generated a record $150 million in pay-per-view revenue.
Mayweather has been involved in two matches that have done over 2 million pay-per-view buys. His fight against Oscar De La Hoya amassed 2.5 million buys and generated $136 million in pay-per-view revenue.
“Historically, the biggest pay-per-view fights have featured fighters where both have fought 15-to-20 times or more on HBO or where there has been a fighter with a particularly strong following in his community. Guys like Evander Holyfield, Mike Tyson, Oscar De La Hoya and Floyd Mayweather fought on HBO several times before becoming pay-per-view boxers,’’ said Mark Taffet, HBO senior vice president of sports operations and pay-per-view. In the boxing industry, Taffet is considered a pay-per-view guru.
“That’s the formula for pay-per-view success. Very rarely does a fight hit 1 million pay-per-view buys where the opponent is not very well-known and hasn’t had significant following and hasn’t fought on HBO. It takes a lot of name recognition.’’
Marcos Maidana doesn’t fit any of those criteria. And his first match against Mayweather reflected it. Mayweather’s representatives and Showtime have refused to release the figures from the first match on May 3, but industry insiders say the number is close to 900,000 pay-per-view buys.
Maidana defeated Adrien Broner to set up the first fight against Mayweather. He gave Mayweather a tough challenge in losing a 12-round majority decision to earn the rematch. It let Mayweather off the hook from coming up with another opponent for his fourth match on his deal with Showtime. As the promoter, Mayweather pays his opponents anywhere from $1.5-$4 million, though he paid Miguel Cotto $15 million.
After Mayweather selects his opponent, he concentrates on putting together the undercard.
“You try to put together an undercard that rounds out the attractiveness to all segments of the market,’’ Espinoza said.
Typically, he litters his big pay-per-view shows with some boxers from his company, Mayweather Promotions, and Golden Boy Promotions, which he pays a flat fee to help run the promotion of the show. Industry insiders said that he pays Golden Boy Promotions between $500,000-$2 million depending upon the size of the fight and whether he fights one of the boxers it has under contract in the main event.
As the promoter, Mayweather pays for the undercard boxers on the show. He spends $1.5-$3 million depending upon how many championship bouts are on the undercard.
The site for a big Mayweather fight seems to be set in granite at the MGM Grand. Mayweather has fought his past 11 fights in Las Vegas, with the last nine being at the MGM Grand.
“For a Mayweather fight, Vegas is the capital of excess and extravagance. It’s a natural home. That’s where Floyd feels at home,’’ Espinoza said. Mayweather also lives in Las Vegas.
The casino has given him a sweet deal to play host to his fights. For most of his fights, they buy 3,500 of the prime seats at $1,000 each, giving the revenue ($3.5 million) to Mayweather. They also turn over blocks of tickets to him, which he is able sell on the secondary market. He gets all the live gate revenue, which ranges from $12-$15 million. His match against Alvarez set a record for live gate in Nevada with $20 million.
“There’s been a lot of criticism to the Mayweather model because there has been some softness in the market and plenty of tickets on the streets. Brokers start to give the tickets away to fill the house, which affects the true number on the gate,’’ said one boxing industry insider.
Along the way, Mayweather’s representatives will put together deals for sponsorships ($2 million), international television rights ($2 million), domestic television and closed-circuit rights ($1.5-$2 million) and Showtime’s delayed-broadcast rights ($750,000). All of that money trickles to Mayweather Promotions, which is Mayweather.
Once Mayweather has an opponent, an undercard and a site, a horde of marketers, TV producers and directors and public-relations specialists who work with Showtime, the MGM Grand, Mayweather Promotions and Golden Boy Promotions swing into action.
“Once you have the event itself put in place, quickly you turn into how do you package and market the event,’’ Espinoza said. “What’s the hook, the quick way to capture the excitement of the event that’s easily communicated to the audience? Sometimes it’s a catchy name, song or artwork.’’
A promotional tour is often organized with both the fighters and their entourages hitting several large cities for press conferences, radio and television interviews to sell the fight. Flights, hotels, transportation and meals have to be arranged for each city. Sites and locations have to be secured for the press conferences. The media has to be alerted.
Mayweather will pick up the cost for the press tour and purchase magazine and newspaper ads. The pay-per-view distributors will also produce and air commercials for the fight at their expense.
Showtime does a large share of the marketing and promotion for the fight with programs like All Access, which is basically a series of 30-minute documentaries/commercials to drive interest in the pay-per-view. Mayweather worked out the concept for that type of show when he was at HBO and did the first 24/7 for his match against Oscar De La Hoya in 2007.
A person who used to work with Mayweather when he was at HBO said Mayweather saw scripts for the pay-per-view commercials and signed off on them and that he had a creative vision for each fight that carried over into some elements of the TV production. Mayweather encouraged active debate, though he ultimately made all the final decisions.
“He wanted everybody’s opinion and he wanted people to disagree with him,’’ he said. “If you’re not good enough to sit at the table and add value, then he’s not going to respect you and you’re not going to be at that table for long.’’
Mayweather operates the same way at Showtime. He doesn’t micromanage, but he wants to have input and in the end, whatever he says goes in terms of how his fights are marketed and promoted.
Unlike any other major boxing stars in the past, Mayweather has utilized social media to his advantage to promote and market fights.
“That has contributed to his visibility and his popularity,’’ Espinoza said. “That was not a tool that Oscar De La Hoya or Mike Tyson had at their fingertips for promotion. Being able to utilize that is a major plus. Among current athletes and entertainers, there isn’t anyone better than Floyd in creating attention in traditional media and social media.’’
The athlete-centric business model that Mayweather is using isn’t new. Mike Tyson deployed it after he parted ways with promoter Don King and during the latter stages of his career. Oddly enough, he was also signed to an exclusive deal with Showtime. De La Hoya used it, too, once he left promoter Bob Arum.
With the help of his adviser, Al Haymon, Mayweather has taken it to another level. Even though Mayweather acts as the promoter, his risks are minimal. The biggest risk would be his inability to go through with a fight for some reason. His deal with Showtime has taken most of the financial risk out of each of his boxing events. Not only has it afforded him guaranteed purses that bottom out at $32 million, but he can cover the cost of his shows through other revenues from the fight.
“They underwrote a big check to move him from HBO to Showtime. His model is the least risk and the most profitability for him,’’ said one boxing promoter. “There is no promoter taking the risk. It’s a network taking the risk. If his fight tanks, Golden Boy isn’t at risk. Mayweather Promotions isn’t at risk. If my fight tanks, we sweat it out. We’re at stake. Every person in my office is at stake. That’s our job.’’
Mayweather’s business model closely resembles that of major music artists or groups. They pay a promoter a flat fee to handle the marketing and promotion of the concert and then basically rent the building, taking in all the money from ticket sales, concession and merchandising. Mayweather’s model may be closely associated with musical acts because Haymon made his fortune in the music promotions business before getting involved in the boxing industry. No other athlete controls all aspects of the revenue linked to an event like Mayweather does.
“You think LeBron James is getting a cent from the hot dogs that are being sold at concession stands in the arena?’’ asked one boxing industry insider.
Some boxing industry insiders say that Showtime lost $9 million on the first fight in the Mayweather deal against Robert Guerrero. Espinoza refutes that.
If Espinoza is sweating any risks with his deal with Mayweather, he’s not letting on.
“It has paid off far beyond what we had originally hoped for,’’ Espinoza said. “Floyd’s level of commitment to elevating our programming and network isn't something that we anticipated. He’s outperformed from a promotional standpoint and from his visibility on the network. The financial aspect is an absolute success. There’s not a fighter out there today that even comes close to the types of numbers that he generates.’’
Mayweather may be the first and last boxer to have this type of control over his shows.
Leonard Ellerbe, CEO of Mayweather Promotions, said no other boxer will be able to repeat the business model that they have with Mayweather.
“Too many things have to go right,’’ he said. “There will be another great boxer to come along and win titles. But this will never be duplicated again because there will never be another Floyd Mayweather Jr.’’
Timothy Smith is a former sportswriter for The New York Times and the New York Daily News. He is currently a freelance writer based in New Jersey.