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Wednesday, July 6, 2022
Home Sports BOXING WHEN DOES THE BUBBLE burst? || FIGHTHYPE.COM

WHEN DOES THE BUBBLE burst? || FIGHTHYPE.COM


For the longest time, premium cable giants HBO and Showtime subsidized high-end boxing, handed out big checks to promoters, and often ran into the red for the privilege of broadcasting exclusive content on their networks. The direct financial losses were denied by the long-term benefit of bringing in subscribers who came for boxing but stayed for the other premium programming.

Just when HBO Boxing was starting to seriously implode and Showtime Boxing was pulling back a bit, Al Haymon’s Premier Boxing Champions (PBC) started making headlines in the industry, throwing big money around and willing to work in the red to get their foot in the door of the American boxing market. Some would argue that PBC’s success with the signing of American talent and HBO Boxing’s controversial response in light of that success hampered the premium channel’s retirement from the sport after 40+ years.

Then came the streaming service DAZN, backed by billionaire Len Blavatnik. In 2018, the popular Netflix of sports invested $ 1 billion in establishing a boxing brand and was also willing to function deep in the red while doing so. The company raised eyebrows by paying fighters too much that they really did not establish as bankable draws and invested nearly half a billion to sign Saul “Canelo” Alvarez and Gennady Golovkin for multi-fight deals.

A lot of new money was injected into the sport in the post-HBO days and honestly, the business model is not that different from what happened during the HBO / Showtime days – a time when boxing’s American audience shrank dramatically and eventually to niche sports status. But the overall atmosphere seems less productive, less conducive to growth now. With the exception of PBC’s FOX programming, there is very little to no way to reach the mainstream. Even Showtime’s boxing efforts look more like stand-alone events as part of a network’s premium bundle.

Boxing is increasingly being sold exclusively to the already-sold fans, with no view to expansion or reaching new audiences. And with new money supporting this micro-targeted business strategy, things keep going … in the red … to deliver audiences that consistently do not meet the growing wallet demands.

But what happens when the bubble bursts and the money stops flowing so freely? What happens when the big shots get tired of losing money to drive a market that has proven that it is no longer worth taking a turn?

Big. Breeding. Chaos.

I mean, it’s coming. Counting on another money man to come along and spend a billion to support boxing and keep the engine running is a bit like counting on lottery winnings to cover next month’s bills . The question is – what will happen when boxing has to be run like a real business?

Look at a guy like Devin Haney (not to single out just one fighter, because you can make this point about so many top boxers these days). The child has signed a multi-fight deal with DAZN and reportedly earns about a million dollars per fight. I think if you had added all his living gate income over the course of his entire career, you would not have reached $ 1 million. And it is probably realistic to assume that he has not yet sold a single subscription to the streaming service on the weight of his nominal value alone. To think that he is holding out for more money and strikes talks with 3-belt lightweight champion George Kambosos is more than borderline absurd given the realities of his own traction.

Again, this is no knock on Haney or even DAZN. These poor business practices run across the board in boxing. Terence Crawford vs. Shawn Porter – a great fight that promised to be a great fight – reportedly yielded a combined main event scholarship of $ 10 million, while bringing in just under $ 7 million in total in live gate and pay- per-view income. Imagine a restaurant that, even on one of its best nights, operates at a loss of more than 30%.

What kind of business works like that? Definitely not one with a view to long-term health and sustainability.

There are already signs that the bubble is starting to burst.

DAZN apparently kept manners in check in their free spending. PBC’s recent series of pay-per-view cards either talk about exploring new business models or trying to keep wallets high by handing the hat directly to fans. Top boss Bob Arum, even with ESPN money behind him, talked a lot more than usual about budget issues. Golden Boy, meanwhile, has nothing but low-level battles on their 2022 schedule so far, even when it comes to their top stars.

If / when the bubble bursts, the immediate result will be a drastic reduction in the quality of battles we see (even more than in the present time). After that, fighter wallets will have to shrink to fit the market. Between these two stages, however, we are likely to have a long period of nothingness, as the stars refuse to accept salary cuts and prefer to put things off to see where the business is going. In that standstill, even more fans will walk away, making even less money at the box office.

Nobody talks about the sport “dying”. Box will not die. However, it will crack, bend, shrink and restructure itself. And the growth pains of these changes will absolutely suck from a fan’s perspective.

But maybe that’s what boxing has needed for decades now. Sometimes you have to burn down the village to save the village. Without it being a mega-cats, mega-flawed business model, boxing can actually be spurred to deliver the fights that fans want to see rather than engage in an eternal bait-and-link chase. It will take a while to fully recover and it will take even longer to get back into the good grace of the mainstream sports fan, but the first step is probably to drop everything in the shit so that a rebuild even possible.

Do you have anything for Magno? Send it here: paulmagno@theboxingtribune.com



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