For those who don’t know yet, Floyd Mayweather, the highest paid athlete in the world with average earnings of $40 million per fight, will face the Mexican rising superstar, Saul Canelo Alvarez on 4 September 2013. The fight is going to be one of the richest fights in history, possibly eclipsing the De la Hoya – Mayweather fight, which is still the best selling boxing fight of all time. Mayweather can still set a new record and earn $100 million for the fight.
Why did a tough negotiator like Floyd Mayweather, allow himself the short end of the stick? Considering that he is the bigger name, shouldn’t the challenger be the one making bigger concessions? Besides, Didn’t Mayweather just sign a historical deal with Showtime which guaranteed him more than $200 million dollars. All he has to do is to get into the ring with whomever he chooses. Why choose such a risky fight, and then make such drastic concessions, in only his second fight of the six fight deal?
Several factors explain this scenario. First and foremost, Money Mayweather is a businessman who believes in honoring his word. His agreement with Showtime was that he would bring both viewership and money to Showtime, even though it wasn’t specifically written into the contract as a stipulation. Although his earnings with Showtime are guaranteed as long as he fights, he also wanted to keep his goodwill end of the bargain, make Showtime money. He is reportedly guaranteed $32 million every time he fights, irrespective. His fight with Robert Guerrero did not do as well as was expected, so felt obliged to somehow make up for that shortfall.
The second point regards Golden Boy Promotions. Golden Boy Promotions is Mayweather Promotion’s business alliance partner. The two entities have co-promoted all of Mayweather’s recent fights. But in this case, Golden Boy represents Canelo. In order not to sour the good business relationship, it can be argued that Floyd felt obliged to make the fight happen. If it works out, it will turn out to be a very sound investment in the end.
The third point regards Mayweather’s legacy. Floyd Mayweather is the recognized P4P king in the boxing world. Canelo is seen as the number one contender to his throne. Many pundits do not regard Canelo as ready yet (in terms of boxing skill and maturity) for Mayweather, a point that Floyd himself has said over and over again. But, since Canelo wants the fight so badly, why continue to delay the fight?
The fourth and most important point regards money. With Floyd, it is always about the money, and this explains why he made the majority of his concessions. Goodwill aside, there’s never a free lunch with Mayweather. He is the current PPV king and Canelo rising rapidly to challenge that too. After the Guerrero PPV fiasco, his status as the boxing PPV king was beginning to be in doubt, so he had to move swiftly to remedy the situation. Being a PPV king is an integral part of the Mayweather’s marketing strategy. To lose the status will hurt it, and by extension, in his pocket.
The final point still regards money. Canelo is the most lucrative fight for Floyd right now. By making the most concessions, Floyd undoubtedly negotiated a bigger slice of the live gate and PPV earnings for himself. Anyone who knows Floyd will know that the fight wouldn’t happen otherwise. Also, by allowing Canelo to keep his advantages, while clearly disadvantaging himself, Floyd knows that the perceptions of him likely losing would be increased. Many people watch Floyd with the hope of witnessing him lose for the first time. This directly translates into more PPV buys and thus more money for him.
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