PPV: Cable/satellite providers take a 50% cut of every buy

Discussion in 'World Boxing Forum' started by Slippery Pete, May 8, 2013.


  1. Slippery Pete

    Slippery Pete Member Full Member

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    So I keep seeing these post like "how can Showtime only break even on 1.2 million buys at $60 a pop...that $72 million!!!! It doesn't make sense.

    Here's why:

    The cable/satellite provider (i.e. Comcast, Direct TV etc) gets a 50% cut from every PPV buy. They are the gateway into your home. The Showtimes and HBO's of the world need them to deliver the fight into your home.

    Let's say the average price paid was $60 (it's my understanding that the HD broadcast was $70 and standard definition cheaper) so the average was maybe $60 per buy just for arguments sake.

    $60 X 1.2 million buys = $72 million. 50% of that goes to cable/satellite, that leaves $36 million. Floyd's guarantee is $32 million.

    That leaves $4 million. How much did it cost to promote, to film the all access shows etc.

    This is why 1.1 - 1.2 million buys is the break even point.

    If the Floyd-Guerrero fight did 700,000 buys like some have claimed (I for one think it's probably higher) Showtime is going to take a massive loss here.

    Some may say that's a good thing for the sport, I tend to disagree. I don't think it's ever a good thing when the marquee attraction of the sport doesn't do well on tv no matter what you may think of him. Something like this cuts into Showtimes boxing budget big time.
     
  2. The Owner

    The Owner New Member Full Member

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    My boy who works at Comcast gets the pay per view for $30. Comcast doesn't charge their employees their cut of the pay per view.
     
  3. tliang1000

    tliang1000 Obsessed with Boxing Full Member

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    don't forget that rob got 3 million too.
     
  4. tliang1000

    tliang1000 Obsessed with Boxing Full Member

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    but he works at comcast though. At least they can do.
     
  5. Slippery Pete

    Slippery Pete Member Full Member

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    I also read somewhere that he was getting a cut of the PPV's as well, but I'm not sure if that's true.
     
  6. jeffjoiner

    jeffjoiner Obsessed with Boxing Full Member

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    I'm surprised more people don't realize this. That's why the satellite and cable companies throw out promos for the fights: they fill dead commercial spots and get 50% of any money the ads generate.

    My brother in law worked for Bright House Networks for years and got PPVs for half price.
     
  7. PetethePrince

    PetethePrince Slick & Redheaded Full Member

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    Amazing how Cable providers can just take half that seems egregious.
     
  8. Hands of Iron

    Hands of Iron #MSE Full Member

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    They're on that Boss Mode ****.
     
  9. Slippery Pete

    Slippery Pete Member Full Member

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    Without them there is no PPV. They deliver the signal to people's homes. Think of it as oil. You may not own the oil but you own the pipeline it travels through so you can make these types of demands. Without the pipeline the oil isn't going anywhere.
     
  10. ATrillionaire

    ATrillionaire Noah Full Member

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    It's not all on Showtime. Mayweather and Goldenboy foot the bill for a lot of the expenses, including Robert and undercard fighter salaries.
     
  11. PetethePrince

    PetethePrince Slick & Redheaded Full Member

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    I understand, I just figured it would be less. What are the costs for the providers signaling it to people's home. I bet they get a boatload with little downside.
     
  12. turbotime

    turbotime Hall Of Famer Full Member

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    It's amazing how many times I've had to say this.
     
  13. Stylez G.

    Stylez G. Boxing Junkie Full Member

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    The cable providers do not get 50%. The distributor(I.E, Showtime, HBO), generally get 50%. That number of course is negotiable.
     
  14. Hulkamania

    Hulkamania What ya gonna do!!! Full Member

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    They also make money via Sponsors, and Ticket Sales........
     
  15. Daruf

    Daruf Boxing Addict Full Member

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    The only way it is a good thing is if showtime has some say in who Floyd fights, this might get us better fights.