The richest fight in boxing history: The bout behind the ring

“What the world has been waiting for has arrived.” By those words, Floyd "Money" Mayweather announced on his Twitter account what we all had expected for several years: Mayweather, still undefeated with a record of 47-0 is going to fight at MGM Las Vegas  Manny "Pac-Man" Pacquiao, 57-5, in what looks like being the " fight of the century". The tortured negotiations between the two fighters have taken place on and off over the last six years, but this is the closest they have come to making the bout happen

Contract agreement: It's officially on 

Beside all the efforts they put on to make sure this fight will finally happen, they've faced a lot of pressure from both promoters, TV Broadcasters and Sponsors. Indeed, a lot (a lot lot lot lot) money will be involved around the corner. The fight of the century will likely be the richest ever as well. 

Because of the large amount of information we need to fully understand the economic importance of this fight, we decide to focus our effort on three different area to provide you the best insight about the fight.

First of all, here is a breakdown of the expected numbers:

- PPV (Pay per view): The HD version of Mayweather vs. Pacquiao will cost around $100 ($90 in Standard version). An estimation of 4 million buys of HD version could generate $200 million, divided into the fighters and both HBO and Showtime.

- The fighter earnings is expected to be as bigger as ever for both fighters. According to ESPN, reports have circulated that the fighters will earn $150 million (Mayweather) and $100 million (Pacquiao), but those figures might be optimistic unless PPV buys go crazy. The fighters are more likely to earn $120 million and $80 million, respectively (see appendix 1)

- Tickets: The gate will top $40 million with all of the tickets likely to be priced somewhere between $1,000 and $4,000 with a peak estimated at roughly $7500.

- MGM Resort: MGM Area will host the fight and the economic impact for Las Vegas will turn the city around an unquestionable winner, no matter who the winner will be (see below) 

We might take into consideration how berserk could be bets when it comes to kind of fight involving great athletes like Pacquiao and Mayweather:

" This is the kind of fight that we'll take a lot of big bets, seven figures," Jay Rood, MGM vice president of race of sports, 

So, as a whole, so many zero... 

But how it actually happened? Who's involved? 

First of all, promoters play a big role in making great deal. Just a reminder: In 1999, The Sporting News listed boxing promoter Don King in its list of the 100 Most Powerful People in Sports for the 20th Century. Don King, whose net worth is $150 million (Source: www.therichest.com), is very well-know promoter, working closely with the most prominent name in boxing including Muhammad Ali, George Foreman, Larry Holmes, Mike Tyson. . He is remembered for his promotion of the the greatest boxing fights of all time, “The Rumble in the Jungle” and the “Thrilla in Manila.

Don King, Mohammed Ali and Joe Frazier

Promoter has power, and deal with his own interest, before those of the fighter. He is in charge of setting up and paying for everything involved in a boxing match and making sure all legal requirements are met at every step along the way. The promoter assumes all financial risk associated with the event. And while a promoter is going to do everything in his or her power to minimize costs, the interests of a boxer and a promoter do align in a general way in that both of them benefit from a well-publicized fight (for further information, see below the link of the "Manny" documentary, from 26'36 mn).

Then, TV broadcasters are huge in promoting those fight. HBO and Showtime, both Pacquiao and Mayweather's TV broadcasters, know very well how important could be the fight in terms of revenue and image. Regarding as the two biggest PPV stars of their generation, there is plenty of money to look at. For Showtime, It could generated generated more than 9.6 million buys and $543 million in television revenue, according to the network.

Moreover, the city of Las Vegas is still playing a great role in making this event an even impressive one. First, the MGM hotel, located next to the MGM area. According to SI, MGM Resorts recorded room prices at the MGM Grand for Friday, May 1st to $1,601 for a standard king room. By comparison, just one week earlier, the standard rate is $198. (+710%)

*"No Arrivals" means that you can't check into the hotel that day (In this case the D-Day)

With a whopping 40,714 rooms in Las Vegas, the economic impact for MGM Grand would be $40.7 million. Then, for MGM resort, owning a near monopoly and a portfolio including for instance Mandalay Bay, Luxor, Excalibur, New York-New York, Monte Carlo, and City enter, and Bellagio surrounding MGM Grand is another great opportunity. For a city still struggling to recover from the financial crisis, no matter who the winners will be between them, Las Vegas is undoubtedly a winner of this event. When it is all said and done, according to some pundits, this fight could bring in as much as $400 million.

Mayweather is already ranked first in Forbes list of the world’s highest-paid athletes, while Pacquiao ranked No. 11. But no doubt that The Pacquiao-Mayweather fight will be their biggest pay day to date, which come as no surprise reading this article. Manny Pacquiao couldn't have been happier...

As usual, here is some of the most relevant website on which we could bring out useful information...

1) https://www.youtube.com/watch?v=QTrHUQBp8lc: Floyd Mayweather Documentary "30 days in May".

2) https://www.youtube.com/watch?v=8FUyRoVSwz8) : "Manny" Documentary

3) http://www.therichest.com/sports/boxing-sports/top-10-highest-grossing-pay-per-view-boxing-matches/

4) http://espn.go.com/video/clip?id=12357381: Mayweather- Pacquiao in figures


*Appendix 1: Pacquiao- Mayweather achievements so far (Sources: Forbes.com)

Figures	Mayweather	Pacquiao
Earnings	$105 million between June 2013-June 2014	$41,8 million, including endorsements
Purse Last Fight	$32 million	$23 million
Biggest Career Payday	$75 million	$30 million
Career Earnings	$420 million	$335 million, including endorsements
Career PPV buys	$14,2 million	$13,6 million

TBT: La Liga El Classico Real Madrid-FC Barcelona

BBC (Benzema-Bale-Ronaldo) vs MSN (Messi-Suarez-Neymar). Carlo Ancelotti vs Luis Enrique. Real Madrid against Barcelona. Two of the most powerful club in the world of football are going to meet again on Sunday in la Liga El classico for what seems to be likely the most important game of the season for both of them. Barcelona (1er, 65pts) has been playing really well since January, with a Leo Messi absolutely on fire during that stretch (16 goals in his 9 played game so far in 2015).


One the other hand, El Real Madrid has been faced a lot of criticism since January, after playing at a high level during the first 3 months of the season. The way they play, the recent dip in form of Cristiano Ronaldo and injuries didn't help a lot. They will be the opportunity to respond to criticism over their form by winning at Barcelona on Sunday to get back at the top of La Liga.


Those games have almost always shown great display from both team and we all have great memories from those games. With 3 days to go before this must-see game, we provide you the opportunity to let us know what was your best memories about La Liga El Classico. From the League of Champions game to the Ronaldinho show at Bernabeu, there are so many games to remember of. Please comment at the end of this post and keep getting involved in our TBT tribute.


Hasta Pronto por el clasico!

Endorsements: Why Sport Companies spend so much on athlete endorsements?

"Be like Mike". One of the most recognizable advertisement centered around Michael Jordan in the 1990's. At this time, every single kid wanted to be like Mike. He was the best player in the NBA, putting on the show every night on the court and leading the Chicago Bulls en route to their first NBA Championship. Jordan made everything easy while he was playing but he was as well the man who changed the life of Nike.

Jordan had always worn Converse, the sneaker of choice for both his college coach and the United States Olympic Committee, and the de facto historical choice of most hoopsters. Michael has since said that he, like many players, believed that Adidas made the best product. Had he gotten a decent offer, Jordan probably would've signed with either Converse or Adidas. But Nike made the biggest offer (five-year $2.5 million deal + $500,000, on advertising that would feature Jordan) and Jordan signed with Nike to become the biggest endorsement deal the world has seen.

In 2012, the Jordan brand sold $2.5 billion worth of shoes at retail, its best year ever, according to market retail tracking firm SportsOneSource. Air Jordans made up 58 percent of all basketball shoes bought in the U.S. and 77 percent of all kids' basketball shoes. Most of those kids didn't even see Michael Jordan play.

So, Why Nike decided to land Michael Jordan? Why did they take so many financial risk?

Today, endorsements is one of the most effective way to get the product out there and make it appealing.

The marketing industry these days is so vital and important not only to the marketers, but to the consumers as well. When it comes down to what consumers want or need, it all goes in to how well a product is presented to them. And athletes who're performing in their league, winning record and have the style and the skills help create competitive advantages in the marketplace which help ensure the long-term success and profitability of big name companies.

The increase in revenue created from these competitive advantages from athlete endorsements easily outweighs the costs brands pay athletes in order to endorse products, making athlete product endorsements highly effective.

One of the recent example of how endorsement is actually working is all about the relationship between Stephen Curry and Under Armour. Under Armour is a rising brand,who took over the second place position in the US sportswear market (ahead of Adidas but way behind Nike).

Under Armour is known for making great efforts in increasing its presence in the football sponsorship game ( partnership with Tottenham for instance) and in the basketball sneaker game. With only 0.35% of the market share on basket ball shoes at the end of 2013, its presence is virtually non existent, with Nike holding almost 93% of the market share (thanks in large part to its Jordan Brand).


However, the game is evolving and Under Armour knows it. That's why Under Armour  has made a major statement of its intention to be player in basketball with the pick of Stephen Curry, the world’s fastest rising basketball star. Yet within just a few seasons of entering the NBA, Curry has become one of the world’s most recognizable athletes and one of the sport’s most electrifying players. At age 26, Curry already owns three league records, including the most three-point field goals made by any one player in a season.


 

Curry’s sensational rise is precisely the platform Under Armour has been waiting for to launch its attack on the basketball market.


Here is the latest ad from Under Armour, starring Stephen Curry and Jamie Foxx.

Under Armour is growing faster and the addition of Stephen Curry has almost everything to do with that. But it's not the only one strategy Under Armour is carrying out. Young and talented players are not the only way to promote products and ultimately sell them.

Under Armour knows how relevant are some athletes, no longer in the competition but still selling products and making money. The perfect example is the deal made with Muhammad Ali, 73 years old, regarded as the best boxer ever, but not only:  The legendary boxer was known in the 1960s and 70s for his over-the-top personality, his crafty moves in the ring and his outspoken politics. For Under Armour, it's a means to capitalize on "one of the most recognized and celebrated figures of all time" (Kevin Plank, CEO Under Armour).

However, endorsement is not that simple. In reality, companies have to deal with so many other components to ensure a highly successful partnership.

 

Indeed, whether the athlete is the best in this category or not, companies should look at what's so called "Off-field attribute":

- Personality

- Physical attractiveness

- Role model

- Behaviour outside the field

Brands should look for athletes who possess most of the off-field attributes above. Even when one of these attributes is clearly not achieved, possessing the on-field attributes and the other off-field ones may just be enough. For instance, Tiger Woods, still the biggest earner in terms of product endorsements, has been known mostly for his much publicized marital affairs as well as Kobe Bryant, who lost his endorsements deal with Nutella and McDonald's after the NBA star was caught up in a sexual assault cause.

Injuries is also a big deal for companies and the best example of that is Derrick Rose. Derrick Rose was on top of the basketball world in February 2012. The point guard was the NBA’s reigning MVP after averaging 25 points per game and leading the Chicago Bulls to the NBA’s best record during the prior season. At 22, Rose was the youngest player ever awarded the MVP trophy. He was playing in his third straight All-Star game and in the process of leading the Bulls to the top of the NBA standings.

After signing up a 13 years deal worth $185 million, the nightmare for Adidas has begun. 3 injuries in 3 years for their superstar and a career in doubt. Like the motto said " Timing is everything" and Adidas is now trying to figure out a way of expanding its offering beyond just Rose, even though Rose was the bottom line of their marketing strategy in US.

 

That's why sport company has to manage between player performance on and off the field.

To conclude, these highly profitable rates of return earned on investments by big name brands on endorsement deals paid to athletes are actually, well, quite a bargain for companies to capitalize on in order to increase brand awareness, equity, image and thus long-term success and revenue.

Here are few figures on this point that are worth considering (take a look at endorsements + click on Overall) :

http://www.forbes.com/athletes/list/#tab:oldest_sortreverse:true

Then, here are the Nike highest paid endorsements deal:

http://www.tsmplug.com/richlist/nike-highest-paid-endorsement-deals/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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"UWS Football Team: Back on top"

UWS Football Team 2014/2015

FFK ( Foday Fostar Keran, UWS Football Team's coach) : "I was really pleased for the result myself".


They needed it, so they got it. After a really good performance from the team, ended up with a 3-1 victory over Edinburgh, they're now back to the top 3 side with two games remaining.
"We needed to win last game to give any hope of winning the league" added FFK, who praised the overall performance of the team : " I was really pleased for the result myself. the way we played was great, especially from the defenders".


However, it'll not be easy for the team to reach the first side, as they both need to win their last two games and hope for a stumble from St Andrews. But, because of the way the team played last week and how good the team is doing, FFK is still positive when it comes to talking about winning the title.

"Many players are improving right now" FFK



"We're quite positive about that because last year was the same thing like we needed the last game to win the Championship".


"Many players are improving right now and we're playing really well. We still have a chance to do it again.


FFK has been the perfect example of this "good spirit" within the team: He scored his fifth goal of the season so far and seems to be the leader of this young team, which have seen so many changes over the last couple of years.


" It was my intention to carry this team and become like a leader for them. I have to give them the confidence to perform as good as possible".


Undoubtedly, the next fixtures will be really important ones for the team in their hopes to win the Championship for the second time in a row.


University of Dundee will take on the UWS Team for what seems to be a "must needed win" as will be the next one as well.


The other game is a great one as St Andrews will face Sterling with the ambition for both team to either consolidate its position or climb the first spot.


(For those who're interested in knowing more about the UWS Team, check the video of their training out on the blog.).