Mayweather, McGregor and the Changing of the Guard In Premium Sports

UFC-logo-design-2015-brand-identitySaturday August 26th  saw the biggest prize fight in combative sports history, with unbeaten world welterweight champion Floyd Mayweather in a boxing match against Ultimate Fighting Championship (UFC) fighter Conor McGregor. Mayweather is considered to be the greatest defensive boxer of all time with a defensive record of 49-0, which has extended to 50-0 after a technical knockout of McGregor in round 10 of the match on Saturday night. Mayweather is estimated to have become the first ever boxing billionaire on proceeds from the match, with $100 million fight money plus a share of the pay-per-view (PPV) revenues. McGregor, on the other hand, has gone from receiving welfare cheques in 2013, to being worth an estimated $34 million this year, according to Forbes. Indeed his recently acquired yacht is named “The 188” in ironic recognition of his meteoric rise —his final welfare cheque was for €188. His personal wealth will have more than doubled after Saturday, on the back of the $30 million fight money plus a share of the PPV revenues.

The most lucrative PPTV sports event ever…probably

As with any media event which combines star-billing with hype, the Mayweather-McGregor fight is alleged to have brought in more than $700 million in PPV revenues, surpassing the $400 million PPV record set by the Mayweather bout against Filipino boxer, Manny Pacquiao, in 2015. In what was Mayweather’s second to last fight, of the 10.1 million PPV spots sold 54.4%  were sold out of North America where the average cost was 34% of the  North American costs. Therefore the majority of the PPV sales would have been at the lower  price point and so bring down the overall revenue generation for the fight.

On Tuesday August 29th, UFC President Dana White claimed that they had sold 6.5 million PPVS (presumably North American numbers only). If these were the total PPV numbers then it would translate into $416 million in PPV revenues based on the previous fight’s 45.54/54.46% North American versus rest-of-world revenue split. However, if these are 6.5 million PPVS for North America alone, then the fight would have brought in $650 million in North America alone. As with all things to do with sports TV coverage, hype and inflated numbers predominate. Either way  last Saturday was a de-facto half a billion revenue generation experience for Showtime and UFC, and especially for their SVOD services, which sold PPVs to watch the fight live on Sho.com and UFC.TV.

When PPV, sponsorship and the live gate are added together the overall revenue is almost certainly going to be north of $700 million. Of greater significance than the revenue is the narrative of a big premium sports brand competing against and up and coming new sports franchise, which has embraced the transition to digitally native distribution and content formats.

Mayweather V McGregor – peak boxing?

40-year-old Mayweather was brought out of retirement for one supercharged final sporting payday against 29-year-old McGregor under his fighting rules. It was a juxtaposition of tradition against change; legacy against reputation-building — and that’s just focusing on the two combatants. The shift in media focus from heavyweight contests to welterweight contests in boxing underlines the shift in consumer demand away from big heavy boxing bouts, and increasingly, towards leaner more agile and skilful combatants. Alongside this is the cultural shift towards MMA which is being seen in the bottom line. UFC claims that since 2010 it has  averaged 75% more PPVs than boxing on a year-on-year basis.

Saturday’s record-breaking clash was therefore about far more, than just headline grabbing numbers.


Tagged in: Boxing, Mayweather, Mcgregor, MMA, Sports Streaming, Svod, Ufc

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