Mayweather is not a serious buyer

theDUD3 · Mar 8, 2012

Pacquiao/Mayweather : The Concept of Negotiating & Dealing with a Non-Serious Buyer

By Steve Lewis: It is a topic in boxing that just wont go away: the long drawn-out pugilistic fantasy known as the Floyd Mayweather/Manny Pacquiao superfight. And tied to that topic is its own sub-topic: the failed negotiations.

We keep hearing it asked: Whos to blame? Who is ducking? Who is putting up roadblocks? Is it just posturing? Who said what? To whom? Did it really take place at all?
Boxing writer Paul Magno of the Boxing Tribune calls on mainstream media to take more responsibility in reporting the facts, rather than trying to cater for pecuniary interests to partisan fans who only hear what they want to hear. Apparently, Magno also feels that the truth is further drowned out by the more vocal and fanatical Pacquiao contingency, the very same group whom the mainstream (and non-mainstream) media constantly cater to.

Magno then opines that most Mayweather supporters hold Pacquaio responsible for the failed negotiations (no more surprising than Pacquiao fans thinking Mayweather is responsible), as do most hardcore fans. Magno takes an issue that this particular side does not get highlighted much by the media, and instead, only tells one side of the story.

However, similar to what Magno concludes, there are plenty out there who attribute the failed negotiations to both sides. But Magno points out that it is Pacquiao who has walked away from negotiations on at least two occasions.

Based on what I have read from various writers (usually bloggers), their concept of negotiations differ, ranging from rudimentary to outlandish. I am, by no means, an expert in negotiating. But as someone who had through sit through an entire year of 1L Contracts, listening to lecture upon lecture about offers, counter-offers, consideration, and acceptance, mutual assent, performance, obligations, discharge, breach, remedy, and even the dreaded UCC (American lawyers would know what I am rambling about), I can say that I have some basic (and I stress basic) understanding of the concept of negotiations.

To put it simply: you have two sides who want to get as best of a deal as they can get. For purposes of our illustration, let us call one party the buyer and the other one the seller. The buyer will want to pay as little as possible, and the seller will want to sell for as much as possible. The objective is finding that middle ground that would be satisfactory to both parties. Remembering this objective is key.

So how do these two parties reach a middle ground? Well, the seller has to lower his price, and the buyer has to raise his purchase offer. In other words, both sides have to try to move towards the MIDDLE. That is how you come closer to an agreeable compromise.

Now lets take a look at the Pacquiao/Mayweather negotiations. Going back to our illustration, let us designate Mayweather as the buyer (as he is the one supposedly offering Pacquaio a $40M guarantee) and Pacquiao as the seller. These two sides will obviously start out on opposite sides of the spectrum. Now, the question is, Have they been trying to move towards the MIDDLE?

Well, the first issue (and at the time, the only issue, it seemed) that served as a roadblock was the drug testing policy. The parties have supposedly agreed on everything else, except for this sticky blood testing issue. Pacquaio wanted the standard NSAC drug testing that everyone else in the state of Nevada has ever undergone at that time, and Mayweather wanted Olympic-style testing.

Stalemate.

To their credit, both sides tried to move towards the middle, even if it were only by a little bit. A sign of good faith dealing is that you keep moving towards the middle. Pacquiao agreed to Olympic-style testing, but with a 24-day cut-off. Mayweather countered with 14 days.

Still, both sides could not agree. But thats not unusual. One cannot expect a multi-million dollar deal to be done in one sitting with no counter-offers.

So after much hullabaloo over a difference of 10 days, Pacquiao relented and moved further towards the middle by agreeing to Mayweathers 14-day proposal. Now, here is where we see a shift, in that instead of inching closer towards the middle, Mayweather heads the other way. He goes the opposite. He says no cut-offs at all! No more 14 day cut-off, which was previously acceptable, but now is not. Reminder: the objective is to inch towards the middle until you reach a common ground.

Again, the seller needs to keep coming down, and the buyer needs to keep going up, until they reach a mutually agreeable point. But here, as the seller (Pacquiao) kept lowering his price, the buyer (Mayweather) kept decreasing his purchase offer. In sales parlance, Mayweather is what would be called a non-serious buyer. He is a buyer who isnt really serious about buying. A serious buyer would either increase his offer or accept the terms of the seller, not lower his offer even more.

If you were selling me your Rolex watch for $50, and I offer to buy it instead for $30, and you say, Well, at least give me $40 for it, and I tell you that I do not want to spend more than $30 for a used watch, what would your reaction be if you relented and decided to sell it for $30 and I say, Nah, Ill only buy it for $10? You would say I wasnt really serious about buying your watch for $30. I would say that I was not a serious buyer, period.

Now, I know the usual counter-arguments: Well, Mayweather already withdrew the offer. Pacquiao didnt take it, so its too late.

Yes, yes, yes. In contract law, that is what we call a rejection of a counter-offer. A rejection of an offer (or a counter-offer) ends the transaction. A party cannot give an acceptance to that which has already been withdrawn. I get that.

What you do then when INITIAL negotiations fail is try to begin re-negotiations. And where would you start? Well, the typical starting point is where you left off and go from there.

So Pacquiao started where he left off: the 14-day cut-off. Mayweather says no can do. So Pacquiao moves closer towards the middle (remember the objective) and finally agrees to Mayweathers version of Olympic-style blood testing, which the Mayweathers kept chanting as a mantra previously, Take the test! Take the test! If you take the test, then we have a fight.

So what does Mayweather do? Does he finally agree to the terms he was previously insisting on? Does he move towards the middle? Nope. He goes the opposite way again.

Now, with the drug test supposedly being a non-issue, it is now how the pie is divided. Pacquiao wants 50/50 (as most people assumed it would have to be), but Mayweather only wants to pay him $40M with NO percentage from the pay-per-view revenues, estimated to be about $150M!

Not only did Mayweather inch the opposite way instead of inching towards the middle, he sprinted the other way!

I hear the counter-arguments again: But Pacquiao already said before that he would be willing to take a smaller share to fight Mayweather!

First, what a person thinks out loud should be taken with a grain of salt. And even if Pacquiao was sincere about that statement, most reasonable people understood taking a smaller share to mean maybe a 49/51 split, just so that the other party can say they have the lions share. I seriously do not think he contemplated a flat rate of $40M and no PPV revenues at all. Anyone who thinks that a megabout between the two top fighters in the world should have one fighter getting all of the $150M PPV pie and none for the other is out of their mind. To justify that would be intellectually dishonest.

I hear it again: Why should Mayweather split 50/50 with a guy who does less pay-per-view sales, has 3 losses, a couple of draws, and has been knocked out before? Floyd is undefeated!

I am not going to venture into an analysis of comparative pay-per-view sales. We can argue all day about who really carried a pay-per-view event. All I can say is this: people will pay to see Mayweather if he is in a compelling match. People will pay to see Pacquiao fight anybody, including your Aunt Helen. People are already speculating as to who will sell more PPVs this May and June: Mayweather/Cotto or Pacquiao/Bradley? That would not be an apples to apples comparison.

Lets put it this way: Pacquiao/Josh Clottey in Cowboy Stadium and Mayweather/Clottey in Cowboy Stadium. Who do you think would sell more? Do you think Mayweather can fill up Cowboy Stadium against an obscure fighter like Clottey, the same way that Pacquiao did? I have my doubts. That would be more of an apples-to-apples comparison.

Next, this Im entitled to more because Im undefeated and he has losses rationale carries little weight in these types of negotiations. What matters is: What do you bring to the table? Few would argue about Pacquiaos ability to sell tickets and PPVs.

Records are irrelevant here, especially if these are records from years ago. As ESPN personality Colin Cowherd always says, Stop living in the was, and start living in the now. And money is not dictated by records anyway. Otherwise, Paul Spadafora would earn more than Sergio Martinez, because Spadafora is undefeated and Martinez has losses. Wouldnt make sense now, would it?

Both fighters need each other to generate the kind of money they think this fight will generate. Its a symbiotic relationship. Thus, it is not unreasonable to split everything down the line. Asking Pacquiao to take $40M while everything else goes to Mayweather is. So again, both need to start working towards the middle, which only Pacquiao has been doing. Constantly going the opposite way only says one thing to me:

Mayweather is not a serious buyer.
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All valid points in a business/negotiation point of view.

JMM's Pee Pee · Mar 8, 2012

theDUD3 said: ↑

All valid points in a business/negotiation point of view.
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So now there's supposed to be $150 million just in PPV revenue to split between the fighters? :rofl DLH-Mayweather is the highest grossing fight in the history of boxing and the fighters' combined purses totaled only $77 million including PPV percentages.

Uncle Rico · Mar 8, 2012

Good article. You may want to change you profile pic, though. You'll get banned if you don't. Titties are no longer allowed.

theDUD3 · Mar 8, 2012

JMM's Pee Pee said: ↑

So now there's supposed to be $150 million just in PPV revenue to split between the fighters? :rofl DLH-Mayweather is the highest grossing fight in the history of boxing and the fighters' combined purses totaled only $77 million including PPV percentages.
Click to expand...

that's just an estimate moron, it has nothing to do with the business/negotiation pov in which the the article points out that while pac always seems to be the one giving in to floyd's demands floyd still backs out and finds something else to add to the table.

theDUD3 · Mar 8, 2012

Uncle Rico said: ↑

Good article. You may want to change you profile pic, though. You'll get banned if you don't. Titties are no longer allowed.
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since when? i've had this avy for about two years now. thanks for the heads-up.

Uncle Rico · Mar 8, 2012

theDUD3 said: ↑

that's just an estimate moron, it has nothing to do with the business/negotiation pov in which the the article points out that while pac always seems to be the one giving in to floyd's demands floyd still backs out and finds something else to add to the table.
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He's just a troll. Ignore him.

The next stumbling block I see, could be the weight. Mayweather will soon be holding two 154 world titles, and could demand Pacquiao to move up to fight him.

Uncle Rico · Mar 8, 2012

theDUD3 said: ↑

since when? i've had this avy for about two years now. thanks for the heads-up.
Click to expand...

Kinda' recently (past 12 months). Maybe it's because you're not that active, and your avy has gone under the radar during the new rule.

Badbot · Mar 8, 2012

JMM's Pee Pee said: ↑

So now there's supposed to be $150 million just in PPV revenue to split between the fighters? :rofl DLH-Mayweather is the highest grossing fight in the history of boxing and the fighters' combined purses totaled only $77 million including PPV percentages.
Click to expand...

According to Mayweather he takes 100 % of the PPV. His thing is that he pays GBP promotion to promote the whole thing and he also pays his opponents purse. That means if the PPV is a flop it is only Maywaether who loses money. GBP already got paid.
A big chunk of the promotion money comes from sponsors. Then there is also the gate revenue. So it seems if the PPV generates 80 mil it seems reasonable for Floyd to walk away with 40 to 60 mil in his pockets.

qwert · Mar 8, 2012

Mayweather clearly doesn't want the fight. He will continue making ridiculous demands, and if Pacquiao cedes to them, he'll just move the goalposts again. Pacquiao isn't too bothered; a Mayweather fight could devastate his political ambitions, as ridiculous as that sounds.

JMM's Pee Pee · Mar 8, 2012

theDUD3 said: ↑

that's just an estimate moron, it has nothing to do with the business/negotiation pov in which the the article points out that while pac always seems to be the one giving in to floyd's demands floyd still backs out and finds something else to add to the table.
Click to expand...

A complete ****ing moron calls me a moron...

The fact that the ****ing idiot who wrote this dumb **** estimates $150 million just in the fighters' share of the PPV revenue should tell you all you need to know about his "business knowledge".

BTW, good article bro. Will read again. :yep

JMM's Pee Pee · Mar 8, 2012

Badbot said: ↑

According to Mayweather he takes 100 % of the PPV. His thing is that he pays GBP promotion to promote the whole thing and he also pays his opponents purse. That means if the PPV is a flop it is only Maywaether who loses money. GBP already got paid.
A big chunk of the promotion money comes from sponsors. Then there is also the gate revenue. So it seems if the PPV generates 80 mil it seems reasonable for Floyd to walk away with 40 to 60 mil in his pockets.
Click to expand...

Does it really? Because like I said, DLH-Mayweather (the highest grossing fight of all time, which was also promoted by GBP) generated a total of $165 million ($136 million in PPV sales) and the fighters only came away with $77 million total, COMBINED. :deal

Leonard · Mar 8, 2012

we're on self-preservation now. although i think we looped a bit back to the testing issue.

JMM's Pee Pee · Mar 8, 2012

Uncle Rico said: ↑

He's just a troll. Ignore him.

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Yeah, I'm just trolling, ****head. Care to try to refute what I posted? :think

Badbot · Mar 8, 2012

JMM's Pee Pee said: ↑

Does it really? Because like I said, DLH-Mayweather (the highest grossing fight of all time, which was also promoted by GBP) generated a total of $165 million ($136 million in PPV sales) and the fighters only came away with $77 million total, COMBINED. :deal
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But we are not talking about Mayweather - De La Hoya...

If Floyd actually paid 50 mil for the Ortiz promotion and 2.5 mil for the purse then that means the PPV brought him about 30 mil. Add sponsor and the gate fees to that you can see why he talked about 40 mil.
HBO takes a small cut too.

Uncle Rico · Mar 8, 2012

JMM's Pee Pee said: ↑

Yeah, I'm just trolling, ****head. Care to try to refute what I posted? :think
Click to expand...

Nope. :hi:

And I advise others to do the same. A decent thread with a decent post, is being ruined by your lame trolling.

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