It's been approximately 2 years since the launch of the Premier Boxing Champions (PBC) experiment. Since its inception, there has been much speculation regarding the venture in terms of networks, end goals, financing/sustainability, and effectiveness. The networks that would officially be involved in showcasing PBC events would include CBS, Showtime, NBC/NBCSports, FOX/Foxsports 1, ESPN, Spike, and Bounce TV.
During the past 24 months, the creator of the series, Al Haymon, has had to address two lawsuits brought forth by promotional companies Top Rank and Golden Boy Promotions (GBP). These lawsuits were predicated upon the fact that Haymon was in the process of developing an entity that would allegedly negatively impact both companies in an unlawful manner. Top Rank would end up settling their lawsuit out of court while Golden Boy Promotions would lose their case due to a judge's ruling citing their inability to prove illegal, monopolistic practices taking place from Haymon's side. The Muhammad Ali Act was also cited in the GBP suit as a reason Haymon is operating illegally. Unfortunately for GBP, the law was enacted in order to protect the exploitation of boxers by managers operating in the best interest of the promoter. In the case of Haymon, the opposite appears true in which fighters are compensated handsomely on a consistent basis.
It's been interesting observing the unfolding of PBC from a distance as it takes time to see the potential repercussions of the venture.
RATINGS
This has been a mixed bag of up and down over the past 2 years. Being that PBC fights take place across many different networks with a great variation in the budgets and names involved per each event, it's no surprise that ratings would vary wildly. The one definitive that can be stated is that PBC events have by far generated the greatest level of viewership compared to the rest of the domestic industry (HBO & Spanish Networks). Whether this viewership and event quality will be enough to warrant a financially significant contract with multiple networks has yet to be realized. It would seem that realistically speaking, CBS, FOX/FS1, Spike, and Bounce are networks that will likely be the easiest to garner future deals based on the current relationships. NBC and ESPN seem to be wildcards partially because insiders such as Louis Barragan and Brian Kweder (both executives at the networks during the inception of the PBC deals) are no longer with their respective networks. Nevertheless, I tend to believe that it all comes down to the price point requested by Haymon as to whether or not long-term agreements can be generated.
NBC seemed to have had interest in boxing prior to the PBC time buy being that they had worked with promotional firm Main Events for several years. The license fee for the programming provided by Main Events would hover in the $150,000 per event range. While PBC events have been more frequent and have generated significantly greater viewership than those produced by Main Events, their costs have also been significantly greater. It all boils down to whether or not NBC is comfortable spending an amount greater than $150,000 on boxing programming and whether or not Haymon is comfortable receiving "X" amount from the network per event. It seemed that initially NBC would be a primary focus for PBC to showcase marquee events, but for unknown reasons, that focus appears to have shifted to FOX and CBS. I suppose that if both parties cannot come to an agreement, NBC has the potential to revive their relationship with Main Events at their original price point.
ESPN is another crapshoot being that they discarded their ESPN Friday Night Fights (FNF) series in favor of the PBC time buy agreement. FNF was a low budget series ($60,000 per event) that featured up-and-coming prospects as well as veterans on the comeback trail. At the time of its dissolution, FNF viewership had degraded to the 300,000 range for the programming. Being that both PBC (ESPN) and GBP (ESPN2) are in essence time buy deals in addition to the low ratings for FNF, it would be difficult to imagine ESPN going back to a FNF format anytime soon.
PRESENTATION
The unnecessary bells and whistles, such as the jumbotron above the ring, entrance walkway, and notable but non-boxing centric announcers such as Marv Albert, have been discarded. Much of these facets were deemed as overkill and unnecessary in terms of entertainment value and effectiveness. This type of stuff seems to occur when non-boxing minded investors get involved in the creative process of boxing events and lose focus as to what is important. It's a good thing they did away with the nonsense as it was expensive and, most importantly, unnatural and unnecessary. It doesn't take a whole lot to present a high quality boxing event when the announcers compliment the action, the live crowd is emotionally involved in the bout, and most importantly, the fight itself delivers in terms of quality.
FINANCES
This is likely the greatest source of controversy for Al Haymon and PBC amongst the skeptics. In the Fall of 2015, much of the boxing media would begin speculating that PBC would run out of funds to finish the year. This continued rampantly throughout 2016 in which anonymous sources were tossed around citing that PBC would be bankrupt by the end of the year. Even ESPN would jump into the speculative fray in a September 2016 blog piece, stated, "Once upon a time, there were often multiple PBC cards per week populated by name fighters; Haymon spent his investors' $500 million lavishly as though it would never run out. Now it is plainly clear that the war chest has been badly depleted, even though PBC officials are loath to talk about it."
Now that we are in April of 2017 with only an increased level of activity across the platform, these rumors have died down and reality has seemed to have set in.
Yes, it's clear that PBC has spent some money in building their brand and producing events. The amount that has been spent thus far can only be speculated upon. The number of $600 million seems outlandish when you conduct a basic "back of a napkin" analysis projecting the costs of each event compared to the revenue generated. Bounce and FoxSports 1 events are lower budget shows in which losses can be conservatively estimated to be in the $500,000 range at most. The other events on Fox, NBC, CBS, & ESPN can be conservatively estimated to have lost an average of $2 million per show. Even at this level of "red ink", PBC can only be projected to have spent somewhere in the region of $150 million thus far with a generous administrative cost of $50 million over the past 2 years, equating to a total $200 million in expenditures. To be safe, one could even add an additional $100 million to the losses and PBC would seemingly still have a war chest of around $300 million. These are just guesstimates based on utilizing basic logic and not relying on a sheet of numbers in which no one can decipher what was spent, where it was spent, and how much is left over.
In January 2017, MMA writer Paul Gift would pen an article describing some of the financial divulgements obtained from the Golden Boy Promotions-Al Haymon lawsuit. Gift would write, "Waddell & Reed's Media Group Holdings (MGH) made a capital investment of $585 million into Haymon Holdings - the entity that wholly owns Haymon Sports which in-turn runs the operations of PBC." In the piece by Gift, there was also speculation that an even larger amount ($925 million) was potentially invested into Haymon's venture. Regardless of what the exact figure invested in Haymon/PBC was, it's clear that neither amount ($585 million or $925 million) could have been burned through by now based on utilizing the most basic of cost projection methods.
COMPETITION/HBO
Being that Haymon has close ties with premium network Showtime/CBS and has built relationships with Fox, NBC, ESPN, Spike, & Bounce, there lies very little legitimate, current competition within the U.S. boxing landscape. Top Rank was unable to retain their TruTV deal initiated in 2015 and GBP has recently engaged in what is essentially a lower budget, sponsored time buy by Tecate on ESPN2/ESPN3. Both Top Rank and GBP have deals with Spanish broadcast stations who provide per show budgets of less than $70,000 per event.
This leaves HBO as Haymon/PBC's sole domestic competition.
Being that it appears clear that HBO no longer values it's boxing program in the same regard as it does other forms of programming on the network, the amount of their budget allocated to the sport has dwindled drastically. In 2016, there were only 14 regular boxing broadcasts on HBO with 5 HBO Pay-Per-View events. For the first 6 months of 2017, there will be approximately 5 regular boxing broadcasts on HBO with 2 Pay-Per-View events. While the HBO boxing budget has been cited to hover in the $24-$26 million range annually in recent years, it would appear that the 2017 budget has nose dived to the $20 million range (and possibly less). This leaves promotional entities whose entire business model is based on garnering HBO dates with very little options and narrowing margins. The one interesting thing that has come about in the past 18 months is the increased saturation of "B-sides" from Haymon appearing on HBO/HBO-PPV. While some might state that this is indicative of Haymon not having all the marquee "A-side talent" in all divisions, it still effectively eats up HBO's budget for promotional competitors. It has seemingly reached a point where any license fee paid above $200,000 in U.S. boxing from any network is becoming increasingly infiltrated by Haymon's stable.
While HBO's parent company, Time Warner, is currently in discussions with AT&T in terms of a merger, it has spurred rumors that HBO might be completely out of the boxing business within the next few years. According to the Nielsen ratings, the viewership for HBO boxing programming has continued to fall dramatically with the majority of their live events garnering less than 800,000 viewers over the course of the entire program. The highest average viewership for a HBO boxing program in 2016 was the Golovkin-Wade/Gonzalez-Arroyo doubleheader, which averaged 1.2 million viewers. As the quality of the match-ups on regular HBO degrade due to budgetary deflation, the ratings continue to fall, which leads very little quantifiable data points for HBO Sports executives to request future investments from the head programming honchos, let alone an increased budget.
The change in HBO's spending patterns has forced outfits such as Top Rank to produce in-house Pay-Per-View events that have been deemed largely unsuccessful based on their less than significant buy-rates.
It seems as though the main competition/challenge for Haymon & Co. are not entities within the boxing industry, but rather the changing media landscape and global economic uncertainties. There seems to be a softening in the sports rights market that also coincides with a notable loss of subscribers to cable networks such as ESPN and FoxSports. The question isn't so much whether Haymon will eventually garner a deal with the networks in which PBC is currently showcased, but moreso the amount that will be realistically negotiated.
ANNOUNCED TOURNAMENT
A boxing tournament known as "The World Boxing Super Series" was recently announced by a newly formed entity titled Comosa AG. This group was founded by promoters Richard Schaefer and Kalle Sauerland. It is an intriguing concept in which a single elimination tournament involving 8 fighters per weight class begins in September/October and ends 9 months later in May.
The purses for the fighters have been estimated to range from $1 million in the quarterfinals to potentially $5 million for the winner in the tournament finals. The earnings for a fighter who wins the entire tournament has been cited to be in the $10 million range. That would equate to an average purse figure of $3.33 million per fight. The initial launch for the tournament has been stated to include $50 million in purses that will include two different weight classes. From the initial press conference, it was stated that the worldwide television rights excluding Scandinavia and the United States have already been sold via media rights distribution company MP & Silva. It also seems as though Showtime/CBS is the forerunner to land the U.S. broadcast rights to this tournament.
This is a very significant development for a few reasons.
The first being that it appears outwardly that PBC has struggled a bit to garner any significant sponsorships outside of Corona. I've seen a few sponsorship spots alongside Corona, including Tequila 1800, Applebee's, and Motel 6, but they seem to be short-lived. It appears that the partnership between SJX Partners (the contracted entity to sell sponsorship) and PBC has dissolved within the past 18 months. One of the comments I've come across from potential sponsors of boxing is, "What are we sponsoring?" or "What is this?" The vast majority of major sports (virtually all sports) are presented in a tournament format in which a progression of competition is presented in a logical manner. For the most part, boxing has operated in a haphazard manner in which there is no season, there is no telling when the best in the division will fight, and the frequency of competition is unpredictable. This leaves potential sponsors with little to grasp in terms of event importance and or significance of match-ups. A tournament format directly addresses this missing piece in the "business of boxing" discussion as well as giving mainstream fans a straightforward structure to follow.
The second reason for the significance of this tournament is the timing. As stated prior, HBO's dedication to boxing has continued to dwindle in terms of investment, which has negatively affected fighter activity and purse levels. It now seems as though it is completely out of the question for any fighter to compete 3 times within a 12-month timeframe on HBO (not PPV) while garnering $2 million purses per event. This, in essence, forces the majority of fighters to try and secure a tournament spot being that it will provide the most financial upside in the entire industry.
Pay-Per-View fighters that can regularly draw in excess of 200,000 buys comprise of Canelo Alvarez, Miguel Cotto (a part-time fighter at best), and Manny Pacquiao. International heavyweight attractions such as Wladimir Klitschko, Anthony Joshua, and Tyson Fury also command substantial purses based on their drawing power. This would mean that anybody outside of the heavyweight division and those 3 fighters (Canelo, Cotto, Pacquiao) would essentially be motivated to join the tournament due to earnings potential. Being that there are 17 weight classes in boxing, that allows for 13 divisions in which the top 8 fighters have no alternatives to generating greater purses.
The third reason for the significance of the tournament format is the frequency of fighting and the ability for casual fans to follow the format. While the recent Keith Thurman-Danny Garcia fight generated significant peak viewership on CBS (5.1 million), it still provided very little storyline for the casual fan being that it had taken years for the bout to reach a level of importance for the boxing public. If this bout had taken place following a culmination of a tournament in which both fighters had participated in elimination bouts a few months prior, there lies the potential for much greater public interest and subsequent viewership spikes.
PROJECTED FUTURE
It's pure speculation, but I do not believe that PBC/Haymon Co. is at any risk of financial insolvency now or in the near future. I believe that they likely have plenty of money in the bank for operations and experimentation over the next 3 to 5 years. It is no secret that Haymon and Richard Schaefer have been intimately involved in the boxing business for many years. The creation of PBC, as well as the World Boxing Super Series (WBSS) tournament, do not seem entirely separate regardless of what both parties might state publicly.
I believe that somewhere down the line, PBC and WBSS will operate as something akin to a single entity or official partnership. Over time, the winner of WBSS will be recognized as the legitimate world champion of their division and there will be little need for the multiple sanctioning organizations. It would not be surprising if down the road, the WBSS begins to focus on the original 8 weight classes, creating a consolidation of sorts for the excess number of current weight classes in boxing.
While many will continue to speculate as to how the tournament can effectively transpire without all the fighters being signed under one promotional umbrella, the real question boils down to whether more profitable, alternative options are realistically available? As HBO's boxing budget continues to dwindle and even the most heavily promoted fights/fighters on the network fail to generate more than 200,000 pay-per-view buys (Kovalev-Ward/Golovkin-Jacobs), it leaves little option for boxers not named Canelo.
At this point, the brain trust at HBO Sports might be better served to focus on 4 premium events per year in which 24/7 countdowns are provided for bouts that will actually take place on the network rather than on Pay-Per-View. This might allow them to actually reverse the ratings downtrend and show the much needed analytics to support any future investment in boxing programming. As it stands right now, HBO is in "no man's land" with low budget events generating low ratings and any modestly premium level bouts taking place on Pay-Per-View. If this trend continues, it would be exceedingly difficult to project that the decision makers at HBO will continue broadcasting boxing in 36 months as there would be very little quantitative support for doing so. HBO has established itself since the 1980s as the home of the best, premium level boxing events in the world. It would make little sense for them to continue transitioning into a second-tier network as it relates to boxing. They can easily discard the sport altogether and continue raking in significant profits from their original programming.
If HBO does in fact exit the boxing industry within the next couple of years, it leaves the fighters who predominantly perform on the network to rely on their promoters to conjure a financially viable alternative. Even if HBO doesn't exit boxing altogether, their pullback from the sport forces promoters aligned with the network to seek viable alternatives at the top end of the market. This is extremely difficult as it would require a new network to somehow be coerced to invest more than $1 million per event for a sport that they likely haven't been involved with at all. The only alternative is pay-per-view, which comes with no guarantee.
It wouldn't surprise me to see PBC garner modest deals with all the networks currently televising boxing via their time buys in mid to late 2018. By this time, there would have been no excuse for PBC to not put their best foot forward and showcase the best of what they have to offer in an effort to secure an agreement.
Overall, based on the maneuvering through 2 lawsuits and launching into uncharted waters with a shaky media landscape, I'd give the PBC venture a C+. It was a ballsy move to attempt to do what Haymon and Co. are attempting to do, but it was a necessary move based on the downward spiral the U.S. boxing industry has experienced since the 1990s.
For all the other promoters who have failed to innovate and create new business models/ventures that can help spur the growth of domestic boxing and their fighters, they get an F+.
Let's see where the industry stands in Spring of 2019...