By Ivan G. Goldman
The welterweight showdown between Manny Pacquiao and Floyd Mayweather was like a property on Park Avenue that the owners held on to for years. Finally, with its value bid up to astronomical heights, they’re cashing in.
How much is the fight worth now? A hint came this week in the spectacle’s only pre-fight press conference, when at the very end of the program Leonard Ellerbe, who runs Mayweather Promotions, casually announced in Los Angeles that seat prices for the May 2 card in the MGM Grand will be listed from $1,500 to $7,500. The official sale date hasn’t even been announced, but on the resale market – already going great guns — there was nothing available for less than $4,100, reported financial site Forbes.com. But today the lowest-priced seat available was $5,400. Tickets are trading like porkbellies, and at record prices. A floor ticket, said Forbes, was selling for $33,000.
The only comparable event Forbes could cite was this year’s Super Bowl between the Seahawks and Patriots, where “get-in” prices – presumably standing room — were close to $5,000.
In the MGM Grand, I don’t recall those “cheap” $1,500 seats ever selling for more than $300 at face value. Often they went for $50 to $100. With Inflation at less than 2 percent, these fight tickets have jumped by a margin of 400 to 3000 percent.
The fevered bidding reminds old hands of the Fight of the Century between undefeated heavyweights Muhammad Ali and Joe Frazier in 1971 in Madison Square Garden, Not even Frank Sinatra could lay his hands on a ringside seat. Finally he made a deal to work as a photographer for Life magazine.
Movie star Burt Lancaster, though totally inexperienced as a fight commentator, used his pull to work the closed-circuit telecast as an analyst just so he could get close to the action. It was of course a sellout, 20,455 seats sold.
The MGM Grand Arena in Las Vegas holds about 16,800 for boxing. One of the big differences between the original Fight of the Century and this one is the updated technology that enables virtually an unlimited number of fans to see it electronically.
There was no pay-per-view in 1971, and as promoter Bob Arum recalled Wednesday, the telephone company couldn’t feed more than 400 closed-circuit screens simultaneously. Consequently, those seats became a hot item as well.
Pay-per-views for May 2, being presented by HBO and Showtime jointly, probably won’t rise more than 33.3 percent – from a fairly standard $75 for the biggest cards to approximately $100 to get this one in high-def. But that’s just a guess. The figure is never really announced. You have to sift through the promotional materials to find it, and it’s generally not sprung on you until the moment of purchase.
As for the fight tickets, they, like basically all tickets to events with great demand, have an inexorable way of bleeding away before the public sale, leaving very few available through that channel, and those are snatched in seconds. There may be a few hundred left on sale day, and they’ll be available only for propriety’s sake, so no one can complain that the sale was 100 percent bogus. If 200 are offered out of 16,800 it will be only 98.8 percent bogus.
If you’re some kind of clerk, computer drudge, or have some other way to secure access beforehand, you need only get in there first and pay the stated price, then turn around and sell them on the secondary market at an inflated number.
Tickets are also carefully distributed to sponsors, the casino, network executives, the promoters, and the fight teams. Some of these seats will be used by their intended recipients. Others will end up in the marketplace.
Arum refused to estimate the number of pay-per-views, but 3 million seems like a reasonable number, representing roughly $300 million. Add $50 million for the record gate. Plus there are sponsorships and foreign broadcast rights. This fight will easily break all financial records, every one.
Mayweather, who apparently gets 60 percent of the purse money, could very well walk away with $140 million to add to the $400 million he’s already earned from his fights. If we figure the total purse money at $240 million and want to put that in perspective, then note that the NFL team salary cap for 2015 comes in at about $150 million for 53 players.
The biggest payroll in major league baseball is the $197.5 million the Los Angeles Dodgers owners will shell out in 2015, plus perhaps $20 million in bonuses for its 40-man roster. The Dodgers allocate ten times the aggregate salaries of the Houston Astros at the bottom of the scale.
All this May 2 money creates interesting phenomena. Congressman Pacquiao is already known as a soft touch in the Philippines, personally funding hospitals, schools, individuals in need and others who just have good sob stories. So if he makes, say, $96 million in purse money, most of it coming from U.S. fans, he’s acting as a kind of foreign aid agency that redistributes funds from the world’s wealthiest nation to his home country, as is his prerogative. After all, he’ll face a 39.6 percent income tax from Uncle Sam for money earned in Nevada (which has no state income tax).
Also, Mayweather, who can’t earn serious endorsement money because of his guilty pleas for assaulting women, gets it through the back door with advertising sponsorships. Auto and beer companies that fear boycotts if they seek his product endorsement have learned that they can attach their names to his fights without fear. Boycott forces haven’t figured that one out.
It is possible this fight can be worth all this money? It can be difficult to place a value on an experience, which isn’t a tangible item like those beers and cars.
You didn’t hear many complaints after Ali-Frazier at the Garden. It was a great 15-round fight that Frazier won fair and square. If we see a great card with a great main event May 2, it will be up to each individual to decide if the money to see it was well spent.
New York Times best-selling author Ivan G. Goldman’s Sick Justice: Inside the American Gulag was released in 2013 by Potomac Books. Watch for The Debtor Class: A Novel from Permanent Press in spring, 2015. More information here.