PPV Boxing Packing Weak PUNCH

MIKE REYNOLDS

The millennium year wasn't a momentous one for the sweet science in the pay-per-view arena.

Although cable operators are awaiting one last drop from the highly anticipated Felix Trinidad/ Fernando Vargas bout Dec. 2, PPV boxing revenues will fall significantly short of the record $220-$230 million this segment of the event industry generated in 1999.

The reason? A lack of bouts in general and a relative dearth of high-profile matchups in particular.

Just check out these punch stats: The third quarter featured only one fight - Roy Jones Jr. versus Eric Harding - which generated 125,000 buys. In the second quarter, Lennox Lewis' defense of his heavyweight title, when he KO'd Michael Grant April 29, drew 350,000 buys, while Shane Mosley's June 17 victory over Oscar De La Hoya collected $37 million from 700,000 purchases. Meanwhile, Trinidad's 12-round Mar. 4 decision over David Reid and a Hispanic card headed by Paulie Ayala were the only PPV fights of consequence in first quarter 2000.

The industry is still sore from having missed out on a multimillion payday when a March 25 matchup between Mike Tyson and Lou Savarese was scuttled in a rate card negotiations dispute with In Demand. However, sources maintain that with SET looking at a higher payday abroad, this fight had little chance of making it to PPV in the first place. Perhaps that was just as well given the outcome: Tyson took out the overmatched Savarese in one round on premium channel Showtime on June 24.

Even with a pick-up in PPV activity during the fourth quarter in the form of Trinidad/Vargas, as well as the heavyweight action centering on Mike Tyson/ Andrew Golota (which SET says triggered 450,000 buys Oct. 20), and Lewis/David Tua (which TVKO says weighed in at 420,000 purchases Nov. 11), this year's ring roster will fall well short of 1999's.

Last year, TVKO scored with what TVKO SVP-sports operations Mark Taffet calls four "mega-fights:" De La Hoya bouts versus Ike Quartey and Trinidad and a pair of heavyweight title tilts between Lewis and Evander Holyfield. This quartet of confrontations garnered a total of 4 million buys that yielded $200 million. Additionally, PPV coffers benefited from the 700,000 buys produced from the Mike Tyson/Fran Botha fight in January of that year.

"No doubt, operators would like to have seen more revenue generated from the boxing category in 2000," says Taffet. "But when they look back at 1999, it may turn out to be the best year in boxing, period. Operators have to take a long-term view. At Time Warner Sports, we look at boxing as a continuum on HBO and TVKO, not just what's happening over any six-month period."

SET EVP/GM Mark Greenberg says his company took a chance with Tyson/ Golota Oct. 20.

"We tried to establish a new franchise on Friday nights," he says. "Boxing fans have grown accustomed to pay-per-view action on Saturday. Operators told us they got quite a few calls for Tyson/Golota that Saturday."

Greenberg also says Tyson/Golota and Lewis/Tua suffered at the hands of two very unusual events.

"All the media coverage leading up to Tyson/Golota was on the first Subway Series in 44 years," he says. "Then, Lewis/ Tua went up against all the media focus on the popular vote with the Presidential election and developments in the electoral college that hadn't taken place in 120 years."

Nevetheless, Greenberg believes Tyson remains a PPV draw.

"If this had been on a Saturday night in November, Tyson/Golota would have performed much better," he says. "Mike still has appeal; Tyson is a franchise that can still deliver."

Just maybe not to the levels of his past. There appears to be some rust on "Iron Mike," whose lowest previous PPV performance was the 700,000 buys he generated against Botha in January 1999. Prior to that, Tyson had never drawn less than 900,000 PPV purchases.

Despite the downturn, cable operators tempered their expectations and budgeting.

"Trinidad/Vargas is a great fight for boxing purists and it may perform well, but 2000 was disappointing compared to the past year when there were a number of big-time fights," says Karol Pinnick, PPV director for Insight Communications. "The year met expectations, though, given what was out there. Any year there is boxing, it's a plus for the pay-per-view industry. This year may not have met the performance of 1999, but when Mike Tyson fights on pay-per-view, that's a good thing. Lennox Lewis is developing a following - that's going to help in the long run."

Dan York, SVP-programming and development at In Demand, also says 2000 met the cable PPV distributor's forecast.

"Boxing in 2000 performed very much as we anticipated. There were several mid-level cards that didn't have the marquee value in the absence of megafights from Oscar De La Hoya and Mike Tyson," notes York, who only budgeted one PPV fight apiece for those meal tickets.

If the matchups were less than compelling from a buy-rate perspective this past year, the industry is hopeful that with the right set of match-making and TV circumstances, it could be sitting on a PPV promotional powder keg in 2001.

Taffet says while 2000 didn't match up revenue-wise with its predecessor, it was important nonetheless.

"We believe 2000 will set up well for 2001, and operators may get some bouts as big as they've ever seen," he states.

TVKO cards could showcase bouts with Lewis, Mosley, De La Hoya, Trinidad, Jones and the pay-per-view debut of Prince Naseem Hamed.

"Depending on negotiations and results, you could see three or four mega-fights this year," says Taffet, pointing to a potential Mosley/De La Hoya rematch and Jones possibly meeting either Trinidad or Vargas.

Greenberg envisions Tyson doing some PPV punching, possibly in a third go-round against Holyfield.

"There are lots of questions out there," he says. "We still see Tyson/Holyfield as a big event."

From a business perspective, York was disappointed in Lewis' dismantling of Tua Nov. 11.

"It certainly would have been better for the PPV industry if Tua had defeated Lewis," he says. "It would have set up more heavyweight fights. Tua would have fought Holyfield for the three belts, and the winner there would have squared off against Tyson. Meanwhile, Lewis would have been looking to get his belts back."

The potential for a Lewis/Tyson meeting is generating buzz.

"If Lewis/Tyson takes place, that's a bout that will attract a lot of interest," says Hodgins, predicting a price point that could push up to $55.95 with the distributor looking to grab 60% of the revenues, even with strong promotional execution from operators.

"Trinidad/Vargas is one for purists," says Pinnick. "I think there is still a good business with Holyfield/Tyson, but Tyson/Lewis is the fight many sports fans want to see."

So what about it, guys? Tyson is in SET's camp, while Lewis is with TVKO. Shall the TV twain ever meet?

"We stepped aside with Evander for Lewis and with Tua against Lewis," says Greenberg. "Trinidad is now fighting with HBO. We've done some things that have been in the best interest of boxing. We're wondering if this is ever going to be a two-way street."

"No one did anybody any favors," says Taffet. "Holyfield was free and clear to negotiate with us. We never interfere with contracts between fighters and promoters. Only when the parties are free and clear do we proceed to make the fight. Any other view is fuzzy and the wrong news."

Obviously, the sparring has begun.

Despite smaller returns from boxing, the PPV industry could surpass the $2 billion plateau for the first time in 2000.

Mark Greenberg, EVP/GM for SET, which was still compiling data for its annual survey, says the industry "should finish above $2 billion this year. The expanded base of digital households is leading to more activity with movies, both traditional Hollywood films and adult." In 1999, SET calculated PPV movie and event revenues at $1.92 billion.

Turning his attention to the event side, Greenberg says "boxing didn't have one of its better years," but the industry "benefited from wrestling on a continuing basis."

Relative to music, Greenberg says that while there were "a lot more smaller shows," 2000 didn't match up with 1999 in terms of big events like Woodstock 99 and Backstreet Boys. He says SET's KISS concert was the big ticket on the concert scene this year, generating 60,000 buys.

Greenberg was encouraged with "the potential of Broadway" as a new category for PPV, a reference to Smokey Joe's Cafe: The Songs of Lieber and Stoller.

SET is expected to release its survey in early December.

MSO PPV executives believe their take from wrestling could grow significantly if WCW, which has been restructured several times and is the subject of numerous divestiture stories, can get itself back on track.

"Right now, we're doing a good wrestling business, but it's all WWF," says Karol Pinnick, PPV director at Insight Communications. "They are doing a great job of marketing and they have four or five shows here in Columbus per year that really keeps things going on pay-per-view every month. We'd do even better with wrestling if the WCW got back in form. They have a long way to go, though."

"WCW definitely has its share of problems now, while WWF is out there performing every month," says Dan York, SVP-programming and development at In Demand

He notes In Demand is looking to broaden its wrestling stable next year.

"Extreme Championship Wrestling is talking about a new basic cable deal and having a half-dozen pay-per-view shows," he says. "We did a deal with IGeneration Wrestling for Rodman Down Under, with the former basketball star in Sydney, Australia, Dec. 1. There are some other interesting parties. This can only help the PPV business."