Sports Finance Report: Top Rank CEO Bob Arum Discuss ESPN+, PPV and Saturday Night’s WBA Title Fight

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Top Rank CEO Bob Arum Discuss ESPN+, PPV and Saturday Night’s WBA Title Fight

On Saturday night, WBA World Champion Jorge “El Niño de Oro” Linares (44-3, 27 KOs) will defend his lightweight title against Vasiliy “Hi-Tech” Lomachenko (10-1, 8 KOs), headlining a night of fights at Madison Square Garden (and on ESPN and ESPN+). Bob Arum, the CEO of Top Rank, is amongst the most storied promoters in boxing history; having represented everyone from Muhammad Ali to Oscar De La Hoya and now Lomachenko. JWS caught up with Bob prior to the Thursday afternoon’s Linares/Lomachenko press conference and asked him about Top Rank’s deal with ESPN+, how he decides if a fight should be on PPV and what makes Lomachenko the “most technically proficient” fighter he’s ever had.

JWS: The Walt Disney Company and UFC just signed a 5-year media rights deal worth $150 million annually, to bring 15 UFC events/year exclusively to ESPN+. Back in April, Top Rank announced a similar deal to bring 12 cards exclusively to ESPN’s OTT service. Does ESPN/ESPN+ value boxing the same way it values the UFC?

Bob: Somebody once asked me, why do you think horse trainers put blinkers on their horses? The answer was so that they don’t see what the other horses are doing. So, whatever deal ESPN made with UFC, I’m fine with; as long as we believe, which we do, that ESPN and Disney are treating us fairly. I don’t look to what the other guy is doing. 

JWS: Terence Crawford is going to fight Jeff Horn for the Welterweight Title on June 9^th. That will be the biggest fight on ESPN+ to date. Are you concerned that a marquee fighter like Crawford won’t receive the requisite exposure fighting on a platform with less eyeballs?     

Bob: The arrangement with ESPN allows us to take a fighter like Crawford and have him fight 3 or 4 times per year, as opposed to the old plan when we were relying on HBO and he fought at best twice per year. So, yes, fewer people will watch him on ESPN+ than on ESPN linear, but he’s going to be on ESPN linear at least twice. By having this tremendous number of dates, we’re able to be flexible; and also, 2 fights (Barrera/Adames and Linares/Lomachenko) are going to be televised on Saturday’s show, everything else goes on ESPN+. So, now guys like Michael Conlan and Teofimo Lopez who are on the undercard, they know that people will be watching them.

JWS: High-profile fights on cable television have become commonplace. Is there a magic number of sales you need to be confident you’ll hit before you decide a show is headed to PPV?

Bob: A lot of it is done by the seat of our pants, but obviously if a show pencils out to do 100,000 homes we’re not going to put it on PPV. If we guess it’s going to do 250,000-300,000 homes, then it’s a question and we very well may go on PPV; and if 500,000-600,000+ it’s clear that you have to go on PPV. The problem in making the prognostication is that we’re not always right, the cable systems aren’t always right and the satellite providers aren’t (always correct).

Howie Long-Short: Disney (DIS) reported fiscal Q2 ’18 profits increased 23% YoY (to $2.94 billion), with Black Panther ($1.3 billion in box office sales) and theme parks (+13% to $4.88 billion) spearheading revenue growth (+9% to $14.5 billion). Operating income for the company’s cable networks businesses (including ESPN) declined 4% YoY to $1.73 billion. The company did not provide an exact number of subscribers for their ESPN+ service, but CEO Bob Iger said that “a number of people have signed up for the trial and our conversion rates have been good so far”; adding “basically, I give it a so far, so good.”

Fan Marino: For those not familiar with Vasiliy “Hi-Tech” Lomachenko, make sure to tune to ESPN at 8p EST tomorrow night. He’s a two-time Olympic gold medalist, won titles at both featherweight and super featherweight in his first 11 professional bouts and has made his last 4 opponents quit before going the distance. Lomachenko was an accomplished amateur fighter, but relative unknown when Bob provided him with the opportunity to fight for a world title in his 2^nd professional bout. I asked if that was a difficult fight to sell, considering his lack of mainstream name recognition?

Bob: Accomplished fighter is not the right adjective to use. Lomachenko, as I viewed him, was the greatest fighter in the history of amateur boxing. So, it was relatively easy for me to fast track him for world titles as opposed to fooling around with preliminary fights. He didn’t need that type of a build-up.

Fan: You’ve called Lomachenko the most “technically proficient” fighter you’ve ever had. Explain to the casual boxing fan, watching him for the first-time tomorrow night, what sets him apart?

Bob: Here’s the difference, Lomachenko is the best defensive fighter I’ve ever seen; but, there have been great defensive fighters before, like Floyd Mayweather. Floyd would use his defensive skills to make guys miss, throw enough punches to build up points and win a fight that way. This kid is different, when he is being defensive he is looking for an opening to destroy his opponent. In other words, the difference between Lomachenko and any other defensive fighter that I’ve seen is that he’s defensive so he can be more effective offensively and that’s the beauty of watching him fight. 

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Perform Group Makes Largest Investment in Boxing History

U.K. based promoter Matchroom Boxing and Perform Group have formed a joint venture, Matchroom Boxing USA, to promote 16 U.S. based fight cards annually over 8 years. Perform Group, which has committed $1 billion to the venture (the largest investment in boxing history), will own less than half the company, but will gain valuable rights to broadcast the events on their digital streaming service, DAZN (self-proclaimed Netflix of live sports). Pronounced Da Zone, DAZN currently controls sports broadcast rights in 5 countries; including Canada, where it owns exclusive NFL live steaming rights. With rights to the Big 4 leagues under contract, the company will use boxing as its entree to the U.S. market.

Howie Long-Short: Perform Group is a subsidiary of privately held Access Industries. The sports media company counts The Sports News and Goal among its U.S. publications. While you can’t invest in Perform Group, there is one way to play DAZN; Dentsu, a Japanese advertising firm that trades publicly on the Tokyo Stock Exchange under the symbol (TYO: 4324). In late March, Dentsu invested in DAZN as part of a deal “which made the service available to customers of mobile phone operator NTT Docomo.” No information has been released relating to the size of the investment or the valuation placed on the company.

This is the 2^nd high-profile announcement that Perform Group has made within a week. On Tuesday, the company hired former ESPN President John Skipper to be their Executive Chairman. Skipper has indicated his focus will be on DAZN, which is particularly interesting as he’ll now be competing head to head with his former company and their OTT service, ESPN+.

Fan Marino: I’m excited about 16 cards being added to the annual sports calendar, but strongly dispute Perform Group CEO Simon Denyer’s assessment that “the U.S. boxing market has almost eaten itself alive. It’s pushed anything compelling to pay-per-view, and the pricing is now around $100, which is insane.” This weekend’s Lomachenko fight is on ESPN. 3 weeks ago, Adrian Broner, Jermall Charlo and Gervonta Davis fought on the same Showtime card. 3 weeks prior to that, Anthony Joshua and Joseph Parker fought on Showtime; and Deontay Wilder has never fought on PPV. U.S. boxing fans are getting more big-time fights on cable television than any time in the last 30 years and with the addition of OTT players like ESPN+ and DAZN, up-and-coming fighters on the undercard can now be seen too.

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