The Soapbox: Greed wasn’t good
We are just one day away from the fight that has been brewing for five long years between Manny Pacquiao and Floyd Mayweather. It has also been one of the most bizarre promotions you’ll ever see. There was an early frenzy to book flights and reserve hotel rooms as the showdown loomed. Then it was downright madness as this event was eventually announced. And then…
Well…nothing. As tickets – as late as two weeks from May 2 – were nowhere to be seen as the likes of Top Rank Promotions’ Bob Arum groused and fans wondered if they would even have the ability to watch this fight via closed-circuit. There was actually some talk of this fight being canceled as the deal with the MGM Grand, the host hotel, was still unsigned. But a deal was reached with the 11th hour intervention of Les Moonves, the head of CBS, who has singlehandedly willed this fight to fruition with his deft diplomacy and influence.
Eventually tickets (all 500 of them to the general public) went on sale but not before many “whales” and other average Joes had already canceled their plans for fear of not even being able to purchase a closed-circuit ticket in Las Vegas. Yeah, it’s a fine mess they’ve created.
Regardless, the event will go on but not without leaving a bad taste in the mouths of hardcore boxing fans, who, quite frankly, were left out of this event from the moment it was consummated. Mayweather-Pacquiao is truly for the one percent.
Brian Swider – brother of Matt, a frequent contributor to “The Soapbox” – an Assistant Professor of Business at Georgia Tech, chimed in on this subject:
“I do not want to dedicate too many words to this missive, given it is only relevant for another 72 hours, but I did want to chime in on it.
“Unlike most of you, I was very OK with this ticket market situation. Now, I was 100% annoyed by the lip service ‘for the fans… and charity’ nonsense. That was disingenuous. We all know no fans got their hands on tickets and if the $10 for each weigh-in ticket went to charity, they surely were not going to give them the extra $290 made by giving them directly to the secondary market. It was bogus and patronizing.
“But, and you know, I am very pro-capitalism. I am a business professor that believes in the free market for all but the most necessary of goods (e.g., food, water, power, health care). Supply and demand, to a very large extent, works. To quickly tease out the two parties involved: the suppliers of tickets and the demanders of tickets.
“From a supplier side – and lets call these people ‘scalpers’ – they were simply making an investment. Like any stock you might buy on Wall Street, scalpers were making a prediction on the value of a limited good. This is 100% fine by me. Happens every day when someone gets the inside scoop on the next Apple or WalMart or whatever up-and-coming company. What has happened, however, is just like the tech bubble 15 years ago; the scalpers misjudge the market. Sure, tickets were limited and there was a lot of buzz about the potential of the investment, both characteristics of tech stocks in the late-90’s-to-2000s, but there simply was not as much true value as the scalper/investors expected. You guys know all the reasons why (e.g., delay of release, travel issues, etc.), so no need to detail them here. But to quote the start of ‘The Godfather’ and probably Don King, ‘I believe in America. America has made my fortune.’ If someone makes a big investment on something and they are predicting a big windfall then they should be able to do that (again, note that this does not involve necessary goods addressed above). But just like on the stock market, buying the super-hot stock at top dollar price often results in huge losses. That whole inverse risk/reward relationship. I do not feel sorry for those that will lose their shirt on this, or at least not generate the huge returns they expected, just as I do not begrudge someone who makes a ton of money on a shrewd investment. However, it is important to recognize, the example I use is the tech bubble, not examples of fraud. Issues in cases like Enron and WorldCom were based on practices designed to deceive the consumer/investor. Those would be better examples if scalpers were promised real tickets but were given fakes instead. That would not be OK in my book (as someone that spent a fifth of a month’s salary in grad school on a fake Pacquiao-Ricky Hatton ticket).
“Now for the demander side: I get the ‘Well, what about the fans who helped build these guys, who go to all the small cards, etc.?’ What I would say is that if they want to go, they should buy a ticket. A ticket to this fight is a luxury good. Those are sold on auction-like marketplaces every day. If you want to pay $1500 for some sneaker, then there are places online where you can make the transaction. Most people scoff at that price (as I do) for sneakers you do not wear. But that is 100% OK. I do not need the Air Whomever shoes the day they come out. Some do and they can make that value judgment for themselves. That is not to say that these ticket prices are realistic. Just like the sneaker example, they are outlandish. We have all been in that arena. A seat for the second coming of Christ is not worth $5000; the sight-lines would not be good enough. So would going to this fight cost me more than what I paid for Pacquiao-Juan Manuel Marquez III or Pacquiao-Miguel Cotto or Pacquiao-Tim Bradley II or Pacquiao-Antonio Margarito, etc.? Yes. But this happens in all forms of entertainment/life. For instance, I go to anywhere between 30 and 40 live concerts every year. Last year, that number was 32. There have been countless instances where I have seen a band on their first tour and paid $10 to stand in the front row of a dingy bar to watch them. Ten years and four amazing albums later, maybe a Grammy or two, they are in huge venues, charging $500-$2000 for front row seats. And guess what? If I want front row seats to see them play, then I will have to pay that price. Maybe I will have to get a worse seat to see them now. Or maybe I will have to wait until they play a festival where they play with worse sound and a shorter set with 1000 rows of people between me and them. That is the way it works. Remember when you saw Jerry Seinfeld do a 20 minute spot in the late-’80s? Well, those tickets are more today. When you got comped to see Kenneth Branagh off-Broadway? Now you got to pay. You saw Bruce Springsteen play a bar on the Jersey Shore in the ’70s? Pit ticks for his shows are now $500. Sorry. That is life. You are a buyer. It is your job to determine if the value of the good is equivalent or greater than the cost associated with it.
“As for the ‘Well, the Super Bowl is not a good parallel because at least you can go to a sports bar,’ argument, I get it and agree. Well, assuming no one will be streaming a fight in Vegas (sidebar: this promotion has been a total disaster but they will somehow figure out to stop the burgeoning and rapidly diversifying streaming market…Riiiight). However, and this is my real frustration with people crying about ticket prices, if you are an informed consumer of boxing, you knew this market was going to crater. I get that Vegas is remote and much more difficult a trip to make on a week’s notice. But if you were a boxing fan in driving distance (like, say, from LA), then you should have known damn well you could get to see this in Vegas if you waited out the market. It is not ideal by any stretch, yet it was not anything but obvious.
“The only real bone of contention I have is the attempted control and/or shutting out of the media. Every ‘society’ (defined loosely as a group of distinct entities working together for a relatively common goal: Rome, the USSR, boxing industry, etc.) that has attempted to stifle/control/censor the flow of news about its society has crumbled. This is the worst element of this promotion and my general concern about the Premier Boxing Champions.”
“Well, the media thing is my only ‘new’ bone of contention. The Pac-May promotion gets at the main issue with boxing: Focus on marginal short-term profits for select individuals/groups in lieu of exponentially larger, long-term profits for the entire sport. But that charge could be leveled at just about any boxing card put together since the introduction of pay-per-view.
“Last note, I am hosting all of our friends for a party to watch the Derby, NBA/NHL playoffs and the PPV. Currently we have 19 people RSVP’ed. While only three or four might have bought the PPV alone, that still is two or three buys less than they would get otherwise. I would be shocked, given the streams, parties and low-bar purchase figures if this PPV does nearly as well as they expect. In total, I think the financial outcomes for those involved with this card will range from well-below expectations to totally losing their shirt.
“Man, that got long-winded in a hurry. Perhaps this is best read during the Leo Santa Cruz sacrifice…I mean Leo Santa Cruz fight.”
Brian, thanks for writing in. Yeah, this is all about supply-and-demand and all that other stuff that Darren Rovell loves to espouse but what’s interesting here is that, with the way Al Haymon (who’s really in control here) and Mayweather (mis)Promotions handled things, it may have had the opposite effect on their intended plans. Not that they wont make bushels full of money but they may have created a bit of a buyer’s market here with their shenanigans – which were really designed, in effect, to make this a money grab of historic proportions.
There’s a few reasons this fight was only going to take place in Las Vegas. First, Mayweather doesn’t fight anywhere else. It’s been almost a decade since he fought outside the 702 area code and he seems to have, shall we say, a favorable relationship with the local commission? And the MGM Grand has hosted his last 10 fights. And from the perspective of his adviser, Haymon, Mayweather has gotten his hooks into Richard “The Perm” Sturm, the president of MGM Grand Entertainment and Sports INC. And while some – namely Arum – wanted to put this fight into a stadium, the bottom line is that would not have fit the agenda of Haymon, who makes more than a few dollars on the side scalping tickets. The fewer seats available, the better for him, especially as he has control of the tickets and can manipulate the secondary market.
But as tickets were so late to be released, a funny thing happened – as people canceled their trips – suddenly there was a bit more supply and a little less demand. Case in point, hotel rooms, which were thought to be so difficult to attain for this weekend were suddenly becoming available.
And now the MGM Grand, of all places, is now sending out email offers for room and closed-circuit packages, which were both announced as “sold out” just last week. Yet magically, some past visitors were sent this:
At one time, room sat the host hotel for this fight were going for well over a thousand dollars each. Well, not anymore. Now this is all well and good but if you’re not within driving distance of Las Vegas, try and book an affordable flight at this late stage of the game.
As for tickets…well, I’ve been talking to some people in the industry and I was told in Verona, NY. after the Lucas Matthysse-Ruslan Provodnikov fight by a guy in the ticket brokering business that many of his colleagues simply didn’t put in any orders for tickets because…at that point, there was no evidence of their existence and they were afraid this would become a buyer’s market because of the way the tickets for this promotion were handled. Those brokers who got in early and invested in tickets…well, I heard they are having a tough time out there (yeah, poor scalpers. When professional gougers can’t even make an honest living, what is this world coming to?!). As you look at sites like TiqIQ.com, as of Thursday night, prices on the secondary market were declining:
And sources who are out there in “Sin City” say that, while they have to pay more than 10 bucks for a beer (yes, a beer. I shudder to think what a Grey Goose and soda costs this weekend), everything from the weigh-in tickets – which were sold at $10 and then quickly on the secondary market for around $300 – have come back down to earth and hovering around the $100 range. As for the actual fight tickets, it’s my belief that those who are disciplined and willing to miss the majority of this undercard (and yeah, you wouldn’t be missing much) have a very good chance to land tickets near face value on Saturday night.
So the bottom line is, while it will still cost you a bit to get into the fight or watch it on closed-circuit, at least now it won’t cost you your first born – just an arm and a leg.
Brian, as for the media aspect of it, yeah, well, what can I say? That’s the Orwellian reality that those in charge of this promotion wanted to enforce and create for future cards (namely with the PBC) and many are willing to play that game for access or a ringside credential. It is what it is.
But this was a promotion that Gordon Gekko would have endorsed in theory but not in execution.
Here, greed was NOT good.
Here’s the latest episode of “The Next Round” with Gabe Montoya and Yours Truly, with a full preview of Mayweather-Pacquiao.
3 KNOCKDOWN RULE
OK, there are two new episodes of “The 3 Knockdown Rule” with me and Mario Lopez. One features special in-studio guest Oscar De La Hoya, who helps us break down Mayweather-Pacquiao, among other issues. Then Mario and I review some of the recent fights, introduce our “Ask Mario” segment and go through our “Final Flurries.”
Steve can be reached at email@example.com and he tweets (a lot) at twitter.com/steveucnlive. He also shares photos of stuff at instagram.com/steveucnlive and can also be found at tsu.co/steveucnlive.