Mayweather, Pacquiao Fight for Boxing's Biggest Payday
It took years for Floyd Mayweather and Manny Pacquiao, two of the best boxers in the world, to finally agree on how they would split the piggy bank.
A very, very big piggy bank.
Mayweather and Pacquiao will meet May 2 for a highly-anticipated welterweight championship bout at the MGM Grand in Las Vegas. The match is expected to be the biggest payday in boxing history. Here’s why:
1. $300M Purse
The Mayweather-Pacquiao fight is expected to generate a purse of $300 million. Top Rank’s Bob Arum, who represents Pacquiao, has said the purse could be as much as $400 million.
The two camps agreed to split the earnings with 60% going to the undefeated Mayweather. Pacquiao will get the remaining 40%.
Mayweather, 38, and Pacquiao, 36, are two of the highest-paid athletes in the world. Mayweather earned $105 million last year, more than any other athlete, according to Forbes. Pacquiao was the 11th highest-paid athlete in 2014 with $41.8 million in earnings.
Veteran referee Kenny Bayless will get $25,000 for officiating Saturday’s bout, and each of the three judges will be paid $20,000.
2. TV
Much of the purse will come from television revenue, which will be shared by HBO (NYSE:HBO), CBS’s (NYSE:CBS) Showtime and the fighters. Mayweather has an exclusive contract with Showtime, while Pacquiao has a deal with HBO.
A projected three million viewers will pony up a record $89.95—or $99.95 for high definition—to watch the fight live on pay-per-view. So the match should easily top Mayweather’s fight with Canelo Alvarez in 2013, which set the current record of $150 million in revenue.
3. Tickets
MGM Grand’s arena has a capacity of 16,500, and total ticket revenue could hit $72 million.
A large portion of the seats were allotted for MGM and the two fight camps. Just 500 tickets were sold to the public last week, with prices ranging from $1,500 to $7,500. The most expensive tickets, which have a face value of $10,000, weren’t part of the public ticket sales.
Many seats are up for grabs on the secondary market. According to SeatGeek, the cheapest tickets Thursday morning were priced at $3,337 each. Some sellers were asking for at least $50,000 for floor seats. Ringside tickets were available for $336,000.
MGM is also banking on the pay-per-view telecast. The 13 Las Vegas properties owned by MGM Resorts (NYSE:MGM) are the only hotels and casinos in the city that are permitted to show the fight on TV.
The company offered around 35,000 to 50,000 tickets last week to view the Mayweather-Pacquiao fight on closed circuit TV. The tickets cost $150 apiece and sold out in 90 minutes.
4. Sponsors
Five sponsors paid a combined $13.5 million to join the fight. The Mexican Tourism Board, Filipino telecom company Smart Communications, Viacom-owned (NASDAQ:VIAB) Paramount Pictures and rival film studio The Weinstein Company each bid at least $1 million.
Title sponsor Tecate chipped in $5.6 million, outbidding Corona, to be the official beer of the fight.
Eric Pineda, Pacquiao’s business manager, told the Manila Bulletin that sponsors paid a combined $2.25 million to put their logos on Pacquiao’s shorts.
5. Economic Impact
Boxing fans will spend $645 per person on non-gambling revenue this weekend, and nearly all 150,000 hotel rooms in Las Vegas are expected to be filled, according to the Las Vegas Convention and Visitors Authority.
Nevada is projected to collect $4 million in taxes stemming from ticket sales.
Other businesses are jumping into the ring, too.
Buffalo Wild Wings (NASDAQ:BWLD) said Tuesday it decided against showing the fight on TV, which would have cost $5,100 per restaurant. But a few company-owned restaurants will tune into the fight and charge customers a $20 cover. About 70 franchises have similar plans.