Palookaville in PPV

ANDY GROSSMAN

MSOs lose millions as boxing wanes There used to be a popular saying around election time, "As Maine goes, so does the nation." That bit of wisdom went out with Alf Landon, but nowadays cable has its own version: "As boxing goes, so does pay-per-view."

And PPV is looking like the NASDAQ this year.

Recent third-quarter results from a handful of cable operators look like this: Cox down 22%; Charter down 47%; Insight down 29%. Showtime dismissed the third-quarter results as atypical, but Cox is still off 15% for the year, or $13 million. That's worth 1% of operating cash flow for Cox and not a minor shortfall. As Mavis Scanlon reports this week in our cover story, operators need every cent they can get while advanced services take hold. After all, you can't lay fiber, buy cable modems and pay ESPN with surplus coax.

Unfortunately Santa Claus, uh, Mike Tyson, hasn't come to MSOs' homes this year. And the lightweights are, well, lightweights in the PPV attraction department. Felix Trinidad might be one of the best pound-for-pound fighters in the world, but outside of your hardcore Palooka Joe, his fights are a tough sell except in Latino markets.

That's too bad because the best fighters are in the weight classes, where some of the classiest fighters America has never heard of reside, such as Trinidad, Shane Mosley and Roy Jones. While Oscar De La Hoya remains a big draw (his fight with Mosley gave MSOs an unusual PPV payday in June), his career seems on the wane.

Absent not-so-Iron Mike, the heavyweights are ruled by champion Lennox Lewis, an enigmatic Brit who hasn't even captured the imagination of his countrymen, and the aging Evander Holyfield.

Holyfield is a nice guy who is doing his best imitation of Larry Holmes in staying around long after his prime in order to pick up some more paychecks. (Don't any of these guys believe in savings accounts or IRAs?) Lewis and Holyfield are decent blokes with the drawing power of the Kansas City Royals. Holyfield has rarely drawn well on his own.

SET and TVKO, who distribute and promote PPV fights, have been unable to make lemonade out of box-office lemons. Lewis' Nov. 11 fight against David Tua was an artistic bore and drew about 420,000 customers by SET's count (which is generally a bit above what the individual operators say when polled). Earlier in the year, Lewis-Michael Grant garnered fewer than 400,000 buys.

SET EVP/GM Mark Greenberg spun the especially dismal third-quarter results by blaming them on a lack of events and competition with the World Series. If that's the case, why was the first half of the year almost as bad, and what accounts for the Lewis-Grant fiasco?

Is there any hope operators will bounce off the canvas in 2001? And are those prayers spelled T-Y-S-O-N?

The outlook appears grim. Tyson has adamantly said he's retired, and even if (knowing boxers, that's probably "when") he returns, he's no savior anymore. His last couple of fights have drawn fewer and fewer customers and have been debacles, from Andrew Golota quitting after two rounds (it was later shown that he was badly hurt) to his controversial 40-second knockout of Lou Savarese when he continued to hit the overmatched fighter after the bell.

The Golota fight generated fewer than 500,000 buys, Tyson's worst performance since his January 1999 bout with Frans Botha. Who wants to pay $50 to see Tyson maul some poor sap, bite someone in the ear or deliver a cheap shot to an opponent?

That brings up another issue: pricing.

The only customers who came out ahead in the Tyson fight were those who bought the fight from Cablevision Systems, which delivered its $9.95 per round promotion: $20 isn't a bad price for Tyson and an undercard. While Cablevision probably won points from its customers for innovative pricing, it's unlikely it will go back to the well and risk another fiscal fiasco. (Although a good argument could be made that Cablevision got more buys than it otherwise would have because of the promotion, it probably wasn't enough to make up for losing much of its revenue.)

Operators have grumbled that customers are balking at the high retail price of many of these events. MSOs won't reduce the price because it will come out of their share.

Is there anything on tap for 2001 that can help the operators?

PPV distributor In Demand thinks the genre can recover next year and has budgeted for one Tyson and one Lewis fight (not necessarily against each other) as well as another De La Hoya-Mosley rematch. The rest are just the usual lower-weight bouts, which are good for a few hundred thousand buys, mainly in Hispanic areas.

PPV was hoping for a Tyson fight in 2000, and Lewis by himself is a dud. As the Calgary Herald writes, "Lewis ... can't even get a rise out of the desperate British."

It could be worse: Someone could bring back Thunder `N' Mud.