Business of Boxing: PacMoney, Marketing, Millions, and Manny Pacquiao
By Charles Jay
Part One – Introducing the “Players”
Oscar De La Hoya, who made in excess of $200 million in career earnings, did more for himself in terms of cashing in on his own brand than any fighter in recent memory. The De La Hoya method, once he got past a certain point, was to take control of his own career and deal directly with the networks.
Other fighters since then have endeavored to be their own promoter; Floyd Mayweather ostensibly functions in that role now, while Winky Wright tried it without a lot of success.
The difference with De La Hoya was that he decided to create a company designed to promote others aside from himself, with a genuine infrastructure, and he successfully leveraged his relationship with HBO to get the ball rolling.
The residual effect of all this is that Golden Boy Promotions is very formidable among the giants of boxing promotion, even after De La Hoya’s retirement.
Oscar’s success may yet be surpassed by a fighter who has taken a different route. Manny Pacquiao doesn’t promote himself; in fact, it is his promoter – and one who De La Hoya had previously “declared independence” from – who has played a central role, driving the truck that is taking Pacquiao all the way to the bank.
George Foreman may, on an overall basis, be richer by virtue of his eponymous grill, which has sold over 100 million units, but that was a product of his own job of self-promotion, which was among the greatest in the history of sports. Pacquiao and Bob Arum, the founder of Top Rank, may be the most formidable fighter-promoter tandem we have seen in quite some time.
Pacquiao is not one of those fighters who came into the pro ranks pre-sold. He was not an Olympian, nor did he have anything in the way of an extensive amateur career; in fact, his pro debut came just five weeks past his 16th birthday. Despite the fact that he had won a flyweight title in 1998, he was virtually unknown inside the U.S., and did not fight in America until his 35th pro bout. His rise to prominence has been phenomenal; he only lost one time since, holding world titles at 122, 130, 135, 140, 147 and 154 pounds, engaging in some epic bouts along the way. After working with a couple of different promoters, he finally settled on Top Rank, where he has undoubtedly found a home.
Arum is no stranger to success stories, of course. He’s worked with some of the best in the business since entering the business in the early 1970’s, including the likes of Sugar Ray Leonard, Muhammad Ali and Marvelous Marvin Hagler. He launched the career of De La Hoya and brought Mayweather along most of the way (before falling out with both). He has maximized the value of some fighters who may not quite have been at the super-elite level but made their share of money – Donald Curry, Big John Tate and most recently, Miguel Cotto, readily come to mind. He has often proven to be ahead of the curve; for example, he was positioned to cultivate the Latin pay-per-view market very early. And he may be more progressive than all of his peers.
Arum is closing in on his 80th birthday, but he infused some new blood into his company when his stepson, Todd DuBeouf, came into the fold in 1993. DuBeouf , who is now the president of Top Rank, did not come from the boxing culture, but that turned out to be advantage, as he has brought a fresh approach and an innovative mind to the table.
Those kinds of attributes work to the benefit of Pacquiao. As of this writing, Arum has not settled on a network for PacMan’s next fight (though we’re almost certain it will be Showtime); however, he is going to take Pacquiao on a “world tour” to hype it, regardless.
Another promoter might not look upon something like that as a necessity. But Top Rank is thinking about the bigger picture. They’re smart in that they understand the effect of worldwide branding strength as it impacts the bottom line. If Pacquiao generates more exposure, he’ll be better known. If he is better known, especially in the mainstream, it will constitute more pay-per-view buys, both now and in the future, operating under the consideration that pay-per-view success isn’t about reaching just avid boxing fans, but casual sports fans as well.
This is also the kind of thing that has a positive impact on Pacquiao’s endorsement value, which in turn yields more exposure to the general public, which in turn creates more value in the pay-per-view world, and, well, you can imagine how that cycle works.
In a case like this, “branding” equals dollars. Marketing people will use a lot of definitions to describe branding, as it goes beyond mere name recognition. One of them you’ll hear most often is that “branding is a promise.” It’s something that the brand stands for; what the consumer can depend on. With Pacquiao, that promise is all-action, which is why a fight with Joshua Clottey, which was not all that attractive or competitive on paper as far as boxing fans were concerned, still drew over 700,000 pay-per-view buys (producing over $35 million in revenue) and 51,000 in Cowboys Stadium.
Pacquiao’s last six fights have generated pay-per-view buys in excess of six million. It is anticipated that a fight with Mayweather would break all pay-per-view records. Considering that there are over 75 million homes with pay-per-view capability, a 5% buy rate, at, say, a premium price of $69.95, would produce over $260 million in revenue. That may or may not be enough, after the carrier gets taken care of, to satisfy the two fighters, but a sign of Pacquiao’s current strength is that even if he can’t get Mayweather’s name on the dotted line, he can still rake in millions, and be confident of a position as king of the mountain.
As for Arum, who had rather acrimonious splits with De La Hoya and “Pretty Boy” Floyd, success is rapidly becoming the best revenge.