Business of Boxing: Pay-Per-View, What About the Fighter?
by Charles Jay
After the story in which I broke down, in very basic terms, the way a pay-per-view deal in boxing works, I got some inquiries from people who recognized that I showed the allocations to the distributor (HBO PPV or Showtime PPV), the cable systems (like Cablevision or Comcast) and the promoters (Top Rank, Golden Boy or whoever). But they wanted to know “how much does the fighter get?”
Well, that was scheduled to be the next part of the situation that I was going to address anyway. And well, there is no standard answer to it.
The fighters in the main event are the ones who are the main focus in a pay-per-view event, and while their money is going to be paid to them by the fight’s promoter, it is not part of a specific formula. The truth is, whatever the fighter makes is whatever has been negotiated with the promoter. When an event is proposed, the promoter makes estimates as to how much in the way of sales is going to be generated, and therefore, using the apportionment formula we have already outlined, they’ll have an idea of what they can expect from the whole pie, considering the gate or site fee, foreign rights, secondary markets, and any merchandising opportunities that are available.
Obviously he is going to make the offer to the main event fighters (whether they be only two or four) that is going to back into that figure so that he can make a profit. Of course, he is not guaranteed a profit, since he could always fall short of his estimates.
Some fighters may get a flat fee, as part of an “all-in” deal. That means he gets paid what he gets paid and not a dime more. Other fighters may have a hybrid deal where there is a guarantee, then some piece of what is known as the “back end,” which is a percentage of the pay-per-view sales, perhaps based on a gross figure, or dollars generated past a certain level of sales. Frankly, it varies.
The point is, it is not a hard and fast figure that is derived as a percentage of the revenue that the promoter will bring in.
This is not to say that the fighter is never aware of what could be available. In fact, these are the things of which true negotiations are made. Any fighter who is at the level where he be in the headlining bout of a pay-per-view show should have management that is very much aware of the market and of the “comparables,” meaning what similar bouts have generated in revenues, as well as the latest developments in terms of the size of the pay-per-view universe. It fact, it would almost be negligent for them not to.
Fighters who have a “back end” deal have to be on the lookout for certain things. One of those is the tendency of pay-per-view money to “trickle in” from all the cable carriers. Remember that there is a cycle involved here where the customer orders the programming, gets billed for it, and finally pays for it, and then there is the process of accounting on the carrier’s end, which can slow down the process. Needless to say, it is possible for money to take a while to come in, and somewhere along the way it can get “lost.” It almost takes professional auditors to determine how much money has actually been brought in.
Other comments included those where objections were raised about the fighter’s “sweat and perspiration” and how that was going to be compensated, as if the promoter and the cable systems were a greedy part of the process that took much more than they were entitled to. Look – we realize who the stars of the show are. However, without the infrastructure that is in place by which the show is promoted, marketed and distributed, along with the technology to make it happen, the fighter’s “sweat” is worth a lot less than it would be using the present model. That much you can be certain of.
Hey, the purest thing in the world would be for the fighters to cut out the promoters entirely, make a deal with the systems and even an entity like HBO PPV, and roll the dice in the hope that their own appeal and promotional acumen were going to bring in the results they want. For a fighter to earn based almost precisely on his drawing power, without any guarantees, is kind of “democratic,” when you come to think of it. But there have been only a handful of fighters who would ever venture down that path, which speaks volumes.
The moral of the story is that everybody has their job, and if they all do their job right, they can all go home with some money.