Floyd Mayweather: World’s richest athlete gets richer
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The world’s highest-paid athlete just gave himself a raise.
Last year self-employed and self-promoted boxing superstar Floyd “Money” Mayweather topped Forbeslist of big-money athletes by pulling in $85 millionlist of big-money athletes by pulling in $85 million. His income could cover the Seattle Mariners’ entire 2013 payroll, with $800,000 to spare.
Mayweather’s May 4 showdown with Robert Guerrero is the first bout under a new agreement with the U.S. cable network Showtime that Mayweather’s team says will break records and change how both boxing and television sports do business in an era of globalization.
Under the deal, which spans up to 30 months and six bouts, Mayweather retains the autonomy that made him so rich in the first place – by promoting himself he avoids paying management fees that often consume a third of a fighter’s payout.
But the contract could guarantee Mayweather up to $200 million, while Showtime and partner CBS will provide the marketing muscle they hope will boost pay-per-view sales and attract cable subscribers.
Factor in sponsorships, concessions and international broadcast rights, and Mayweather’s team says the Showtime deal will be the most lucrative any athlete has ever signed.
“If Floyd was the highest-paid athlete last year, did you think we were going to take a step backwards?” says Leonard Ellerbe, CEO of Mayweather Promotions. “You’ll see the impact of this deal… He’s put boxing on his back. He’s bringing awareness to the sport. He’s bringing boxing back to the network and it will turn into a mainstream sport.”
That’s a lot of weight to place on the shoulders of a 147-pound man, and though the deal could enrich both the 36-year-old Mayweather and his cable TV backers it also contains plenty of risk.
As audiences splinter, broadcasters have bet heavily on sports, since live action attracts huge numbers of viewers who can’t fast-forward through commercials.
In Major League Baseball the value of free-agent contracts has risen sharply, in conjunction with the cash teams receive for TV rights. And when the NFL announced contract extensions with broadcasters in late 2011, the price of TV rights jumped by 60 per cent.
But boxing is more difficult to position. It’s been dismissed as a dying sport that’s losing market share to the Ultimate Fighting Championship, yet its biggest names – Mayweather and Manny Pacquiao – have averaged more than 1 million U.S. pay-per-view buys since 2009.
UFC superstar Georges St-Pierre averages 791,000, and has never topped 1 million.
And while it rarely appears on network TV, HBO and Showtime spend lavishly on boxing and use it to anchor their sports offerings.
The cold war between the sport’s two largest promotional outfits complicates the issue. While HBO works exclusively with Top Rank Boxing, Showtime has partnered with Mayweather’s company and its ally, Golden Boy Promotions.
The promoters function as de-facto leagues whose top competitors are forbidden from facing off against each other. Can you imagine if the AFC and NFC champs skipped the Super Bowl every year over contract disputes?
That’s pro boxing.
“Boxing isn’t dead (but) it’s more compartmentalized,” says Adam Harris, who runs North American operations for U.K. based boxing promoter Hennessy Sports. “As a promoter it’s disappointing when everything is so fragmented. It’s not that everyone’s corrupt. It’s just so compartmentalized that you can’t be effective sometimes.”
As a result the promoters have devised competing strategies to capture a larger share of a market their rivalry helped fragment.
Last year Top Rank partnered with MLB Advanced Media to develop mobile and tablet apps and this year it expanded operations in China, where a televised bout featuring Olympian Zou Shiming recently drew more than 200 million viewers. Top Rank plans to stage a pay-per-view bout in Macau later this year, selling it to Chinese viewers for $3, turning a profit through sheer audience size.
“This in an intriguing part of boxing’s globalization,” HBO analyst Larry Merchant told the New York Times. “The number of zeroes on the estimates are staggering, unprecedented and tantalizing to a promoter.”
Mayweather, meanwhile, is betting legacy media can increase his access to paying audiences in North America.
In addition to the pre-fight documentary series airing on Showtime, CBS broadcast an hour-long special on Mayweather.
Two weeks earlier a column appeared in Sports Illustrated under the fighter’s by-line, describing the weekend he spent at the NCAA men’s basketball tournament. Mayweather’s publicist, Kelly Swanson, says the magazine asked him to write the piece, but it reads like branded content.
Early on he asks readers to indulge him in one quick plug, then makes several more references to his new contract and products for sale at his web site.
“You have a have a whole new platform to enable you to bring more eyeballs to the sport,” Ellerbe says. “He’s been able to take a niche sport…and turn it into an unbelievable situation where he’s become a rock star.”
Though a Mayweather pay-per-view is about as sure a bet as boxing can offer – his last four bouts have drawn more than 1.1 million buys -- investing $200 million in a 36-year-old athlete means returns aren’t guaranteed.
The contract calls for him to fight twice a year through mid-2015, but Mayweather hasn’t maintained that pace since 2007. Worst-case scenario he becomes to Showtime Sports what Alex Rodriguez is to the New York Yankees – an aging, injury-prone drain on the budget.
And for an undefeated fighter whose nine-figure brand is built on winning, advancing age increases the chance of losing his edge, losing a step, or losing, period.
But if a loss – and its business implications – is a possibility, Mayweather and his team haven’t considered it.
“The future should be bright,” Mayweather said during a media conference call. “Everything at the present time is going the way it should go.”