Rivers of money are flowing into boxing's biggest bout in years, and it's not just the fighters who stand to gain a windfall.
Saturday's welterweight fight pits Floyd Mayweather Jr. against Manny Pacquiao in an event the boxing world has demanded for years. While a likely astronomical pay-per-view haul and lofty ticket prices have drawn attention, the bout will almost certainly generate huge cash for venues, promoters and broadcasters on a number of other fronts.
"If you call it the fight of the century, you might be underestimating it" in terms of revenue, said Rick Horrow, a sports business consultant and visiting lecturer at Harvard Business School.
Pay-per-view purchases will account for the biggest piece of the estimated sales. With a suggested price of about $90, and the potential for 3 million or more buys, pay-per-view could generate $300 million, according to a CNBC analysis.
Tickets for the bout at the MGM Grand in Las Vegas may rack up an estimated $70 million, according to The New York Times. International broadcasts could take in $35 million, while licensing fees for closed-circuit broadcasts could fetch another $13 million.
Sponsorship revenue may reach $12 million, while $1 million in merchandise could be sold.
Those sums may just be the start. Within the geographic confines of Las Vegas, the fight can be seen only at MGM's locations in Vegas, allowing the company to charge for entry and generate more foot traffic, said David Carter, a sports business professor at the University of Southern California.
And those estimates do not account for the enormous cash flow into Las Vegas itself, said Horrow. He could not put an estimate on figures, but noted that the bout will almost certainly lead to significant hotel, restaurant and, of course, gambling revenue.
On the surface, at least, the fighters will see a massive payday. Estimates have placed Mayweather and Pacquiao's combined pay at $200 million, if not more.
But even those figures don't factor in what the boxers themselves will pay out, Carter said. After taxes and payments to promotion companies, the fighters could see half of that disappear.
Mayweather Promotions and Top Rank—the promoters representing Mayweather and Pacquiao, respectively, will also see a boon. Carter noted that promoters can take up to 30 percent of a fighter's cut, though the number may drop significantly for established fighters.
Neither Mayweather Promotions nor Top Rank responded to CNBC's requests for comment.
Media and cable company profits will likely soar, mostly because costs to put on the bout will not increase significantly enough from the average match to cancel out the huge revenue boon, Carter said, though he was unable to quantify the comparison.
Time Warner-owned HBO and CBS-owned Showtime, which will co-produce the broadcast, will split a 7.5 percent cut of the pay-per-view, or $22.5 million, based on the $300 million projection.
Other cable and satellite distributors will split a 30 to 40 percent cut of the pay-per-view haul, according to the Times. That sum could reach $100 million, as well.
Article courtesy of CNBC
