Pay-Per-View Supplementing Subscription Streaming Services Is “The Future”

CrawfordKhan

Terence “Bud” Crawford will defend his WBO welterweight title against Amir “King” Khan on Saturday night at Madison Square Garden. The showdown is headlining ESPN’s first pay-per-view card since the network agreed to a 7-year distribution deal with Bob Arum’s Top Rank Boxing promotion back in October ’18.

Crawford-Khan is the 3rd boxing pay-per-view event of 2019 – corroboration that despite the emergence of OTT subscription services (like ESPN+ and DAZN) the PPV platform remains “alive and well.” Arum explained that there’s a misconception the “subscription model and the pay-per-view model are at conflict with one another, but moving forward you’re going to see that they’ll supplement each other. Look at the ESPN-UFC deal. That’s the future.”

Howie Long-Short: Bob’s right, PPV boxing has a future – despite companies like ESPN+ and DAZN making 9 figure investments into the sport – because the rights fees to the biggest fights are too expensive for a linear television network or streaming service take on. “Fighters command big purses for big fights and the only way to make the math work on those fights is to show them on pay per view.”  

I was quick to point out that the Cinco de Mayo bout between Canelo Alvarez and Daniel Jacobs is airing on DAZN – subscribers of the monthly service will get the fight for just $19.99 (or $99.99/year) – but Bob insists John Skipper’s platform is simply using the marquee bout to get subscribers in the door and “once they build up a large enough subscriber base, they too are going to price major fights above their monthly subscription fee.” He might be onto something. When I asked Matchroom Boxing promoter Eddie Hearn last December if a Wilder-Joshua matchup would air on DAZN, he said “not necessarily. We’ll go to the broadcast [platform] that puts the most amount of money up.”

Speaking of Matchroom Boxing, GGG recently signed a 3 year, 6 fight contract with the promotion – choosing Hearn and DAZN over ESPN and Top Rank (and Premier Boxing Champions and Fox). Bob acknowledged that he would have liked to add GGG to his stable of fighters but “budgetary constraints forced us – and ESPN – to make a choice; to put our bucks with 37-year-old Golovkin or a 27-year-old lineal heavyweight champion in Tyson Fury. We think you get a much bigger bang for your buck with Tyson Fury.”

Tyson Fury’s next fight will be against Tom Schwarz on ESPN+ in June. While the bout would get more eyeballs if it aired on ESPN’s linear network, Bob understands that the transition to digital is “a process” and that Tyson’s presence is necessary for ESPN+ to continue building its subscription base – “which is now more than 3 million.” Arum said, “I’ve been through this before. I remember when people asked ‘how could you abandon radio when millions of people are listening and make a fight exclusive to television when there are so few sets. You’ll see that within 10 years most of the content that we watch – including sports – will be on a streaming platform.”

Fan Marino: If you watched the Final Four, you likely saw an interview with WBC heavyweight champion Deontay Wilder in between games. Many wondered why CBS featured the boxer during college basketball’s biggest event, but the decision was “part of a [savvy] overall strategy to introduce Wilder to the American sports fan.” The network was incentivized to use the valuable time slot (segment averaged 13.77 million viewers) on Wilder with his next fight on Showtime – a CBS subsidiary.

Cross promotion is among the benefits of Top Rank’s deal with ESPN too, and Arum & Co. first got a taste of the marketing possibilities (now that they’re aligned with The Walt Disney Company) this week with the release of a recent spot co-promoting Crawford-Khan and Avengers: End Game. ESPN VP of programming and acquisitions Matt Kenny recently told Multichannel news that it’s the company’s ability to “leverage that intellectual property to create an even bigger event feel” that gives them an advantage over “the streaming services or our competitors” [when selling a pay-per-view card].

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Author: John Wall Street

At the intersection of sports & finance.

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