On Thursday, UFC president Dana White told the world he'd come to terms with his lightweight champion, Conor McGregor, for a boxing match with Floyd Mayweather.
On Friday, Mayweather reinforced his decision on coming out of retirement in order to fight the Irish superstar.
It seems like there is momentum and should be encouraging to those who want to see the fight, but it's not.
McGregor may have a deal with White on how they'll split the revenue that goes to their side, but the only deal that matters is coming to an equitable revenue split with Mayweather. That deal is nowhere close to happening.
The only reason McGregor wants the fight is because of the massive payday it would bring him.
It would do him no good to take a fight for $20 million in which the odds would be overwhelming against him. But if he were to make close to, or more than, $100 million, the long odds wouldn't matter so much to him.
That's where the split with Mayweather becomes the only thing that matters.
Mayweather had a 60-40 edge in his hugely hyped and highly profitable 2015 bout with Manny Pacquiao. That bout sold a record 4.6 million on pay-per-view.
It's highly unrealistic to believe McGregor will do better on a split than did Pacquiao and the fight will again generate 4.6 million pay-per-view sales.
Nor is it likely that the paid gate would be anywhere close to the record $72 million gate Mayweather-Pacquiao generated at the MGM Grand Garden Arena.
All sources of revenue for Mayweather-McGregor — sponsorships, foreign broadcast rights, closed-circuit sales at bars and restaurants, rebroadcast rights and merchandising — will likely be less than Mayweather-Pacquiao.
Most experts expect the fight to do phenomenally well on pay-per-view, so let's say it does 4 million, meaning it comes close but doesn’t surpass the record.
The Mayweather-Pacquiao pay-per-view sold for $89.95, meaning at 4.6 million sales, it generated $414 million. Off the top, half of that money goes to the cable, satellite and telephone companies that sell it. And another 7.5 percent generally goes to the TV network that distributes it.
While UFC does its own pay-per-views, Mayweather is contractually bound to use Showtime according to Stephen Espinoza, the executive vice president of Showtime Sports. So it's likely this bout would follow the boxing model. That means another 7.5 percent would almost certainly come off the top and go to Showtime.
In Mayweather-Pacquiao, after taking 50 percent for the cable/satellite/telephone companies and 7.5 percent for the TV networks, that left about $175 million for the promotion.
Now, these are rough and not exact numbers, but they're typical of what happens.
Given the backlash after the Mayweather-Pacquiao fight was so horrible and that so many fans felt ripped off, it doesn’t seem like promoters would gamble to put the price at $89.95 again.
So if they cut it $10 and offer it at $79.95, that means that at 4 million sales, they'll generate nearly $320 million, or $136 million going to the promotion.
If Mayweather-McGregor has the same 60-40 split that Mayweather-Pacquiao had, that would mean $81.5 million would go to Mayweather and $54.4 million would go to be split between McGregor and White.
So even if McGregor's deal with the UFC that White was touting is 75-25 in favor of McGregor, that means that $40.8 million is going to "The Notorious One" out of a gross PPV sale of $320 million.
McGregor's most lucrative UFC fight was his August 2016 rematch with Nate Diaz where he received a $3 million purse and walked away with an estimated payout in the $10 million ballpark.
It's still awesome money, but it's nowhere near the $100 million-plus figures for McGregor's purse that are being bandied around. That doesn't include the other revenue streams, but combined, they would be far less than the pay-per-view revenues.
That's why the split between the two sides is so critical.
For McGregor to earn the kind of money Pacquiao made from his fight with Mayweather, it seems likely that he’d need as high or higher pay-per-view sales and a better split than Pacquiao got.
If the pay-per-view were to be sold at the same $89.95 Mayweather-Pacquiao did and it surpassed it in total sales, reaching 5 million, that would be a different story. At that point, that would generate $450 million in gross PPV sales.
And if he had a 50-50 revenue share with Mayweather, then and only then would McGregor be looking at the nine-figure payday Pacquiao got.
So any talk about how the fight may go is premature because there is enormous work left on the business end.
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