Most People arguing Pac-Floyd Split DKSA MONEY

Ya heard it here FIRS'

anyways tired of reading voodoo analysis on ESB, and I'm bored so I'm here to talk real numbers.

Data Assumptions/Constraints:
- 3% average inflation rate used (I coulda used the CPI index individually but too lazy, avg looks to be 3% anyway)
- Base year, 2007
- All events held at the MGM Grand Garden Arena
- NOTE: PACQUIAO-MOSLEY, PACQUIAO-MARQUEZ III, and MAYWEATHER-ORTIZ figures are based off SECONDARY SOURCES (THX 4 UR CONCERN)

Data used: Just looked the numbers up on google, used HBO numbers when available. If you want to dispute the base data, say so and post a source so I can evaluate it. I was unable to find some revenue figures (possibly hidden by Arum), so I will note with an ** for calculated numbers, and such numbers will be calculated conservatively. Ordered by PPV Revenue Generated in millions


Floyd

Opponent---Gate---PPV Rev---Buys
DLH-------18.40----137.00----2.40
Cotto-----12.00-----94.00----1.50
Ortiz-------9.00-----78.44----1.25
Mosley----11.30-----78.00----1.40
Marquez----6.80-----55.60----1.05
Hatton----10.30-----47.00----0.85


Pacquiao

Opponent---Gate---PPV Rev---Buys
MarquezIII--11.60---80.00**---1.45
Mosley-------8.90---75.00-----1.30
Cotto--------8.80---70.00-----1.25
DLH--------14.40----70.00-----1.25
Hatton------8.80----42.00**---0.85


Now that we have the data, we will convert it into 2007 dollars via TVM with i=3, n=number of years from 2007.


Floyd

Opponent---Gate---PPV Rev---Buys
DLH--------18.40---137.00----2.40
Cotto------10.35----81.08----1.50
Mosley-----10.09----71.38----1.40
Ortiz-------8.00-----69.69----1.25
Marquez----6.41-----52.41----1.05
Hatton-----10.30----47.00----0.85


Pacquiao

Opponent---Gate---PPV Rev---Buys
MarquezIII--10.30---71.07**--1.45
DLH--------14.00---68.00-----1.25
Mosley-------7.91---66.64----1.30
Cotto--------8.30---66.00----1.25
Hatton------8.30----39.60**--0.85


As you can see, the spread has shrunk when converted and also some rankings in terms of revenue have switched. From here we can use these numbers to compare with each other's figures and forecast trends, as well as extrapolate/interpolate from it and produce a model which will reflect payouts based on PPV buys, in 2007 dollars.

Comparing the two
When we have the revenues adjusted for the growth of money we can plot these figures against the time the event was held and chart their growth in output. Below I have listed each fight in chronological order, in period intervals of half a year, and split them according to each fighter. Looking at the two graphs comparing the two, one in regards to PPV revenue, the other in regards to gate, you can see that there is a general trend of growth between the two fighters. You can also see that there is an obvious outlier in DLH. This can easily be explained as the two fighter's "superstar" debuts were with DLH, and the figures reflect more on his status moreso than the two fighters in question. If we remove this outlier we can see that the two actually have smooth and steady growth in PPV output over time. Note that Floyd's is consistently higher thus proving his net output being greater, but the gap between the two diminishes over time, (most applicably explained by the head start he got, yet now general public awareness of the two is similar).

The gate shows a very interesting picture in that the revenues have grown very little if any over the whole range of time (note that the Y-axis margins are much smaller), and the trend remains mostly flat with the exception of, well, DLH again. (Also as I have shown in the lines drawn in figure 2, if DLH is factored in, their trends would in-fact, be downward sloping, but based on general reasoning, its more a factor of being an outlier rather than the two becoming less popular).

Anyways for comparative analysis, this shows that Floyd has been consistently producing higher real output than Pacquiao but the gap has diminished to near even. People will tend to use rather archaic methods such as arithmetic averages but the trends show that they are now practically equal (I'd give Floyd a bone though and let him have 52-48 ).

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Now as for the actual income streams, many people are under the wrong impression of who gets what amount. Because of the nature of Floyd's position in his fights, he is essentially the sole investor, meaning he gets 100% of the revenue. Before people start getting crazy about that, there are many factors to take into account.

Firstly, when you invest in anything there's a chance that you can LOSE money, if what you invested in bombs. I've read that Duran-Leonard II was overhyped and held in the Louisiana Superdome with many high net-worth investors, edging themselves into boxing for the first time. Well the numbers bombed (in comparison to expectations/investment) and people LOST a **** load of money. Needless to say, many of those didn't invest in boxing again.

This is why Floyd rakes in so much money- he rakes in all of these additional proceeds in return for bearing the RISK that such an event will tank. This is where Arum gets his money as well. They guarantee their fighters jack **** to hedge whatever risk they may incur (HINT HINT- Pac is only getting 6M guaranteed for Bradley because Bradley is a nobody = RISK), and give em a share of the PPV once the numbers actually roll in. Floyd can guarantee himself whatever dollars but it doesn't mean anything because the guarantee is an expense in regards to hosting the event, and expenses> revenues= LOSS and Floyd takes that loss. So if he guarantees himself 500,000,000, and takes a loss of 460,000,000, well he still netted 40 mil in the end. But hey, people will jump on that and say OMG he GARANTEY'D himself 500 gazillion!!! ZOMG he's so rich!!!!!:love

Anyways, here's a general breakdown of the proceeds (note that not all information is readily available, so I'll be making general estimates). For PPV, I created a linear regression model based on PPV vs real revenues (Figure 3, bottom graph), and will assume a buy rate of 2.5 million buys. The model can be used to map out the revenues for whatever amount of buy scenario's you like, so I'll also include a scenario of buys where he ends up getting 50/50 if necessary.

REVENUE

Gross PPV: 168 million

Live Gate: 19 million

(The remainder are guestimations based on other fight revenues and ratio comparisons, if you have a better figure feel free to post it)
Closed Circuit: 1 million (I read that Pacquiao-Marquez did 575k)

Delayed Broadcast: 4 million

International Rights: 3 million

Sponsorships: 3 million

Memorabilia: 1 million

TOTAL REVENUE= Roughly 200 million rounded up


EXPENSE

Networks: 84 million

Guarantees: Pacquiao- 40 million, Himself- whatever he wants, it'll affect the total

Undercard purses: 3 million (bein a lil generous dunno who he'll put in)

Promotion: 15 million (they spent 10m on the Cotto fight, I don't see why they wouldn't spend 1.5x that for the mega fight)

Misc expenses (Press conferences, travel, blah blah): 2 million

TOTAL EXPENSE: 144 million

NET PROFIT: 56 million (if he guarantees himself say, 60 million, well the net profit of the event will be a LOSS of 4 million so he'll end up with 56 million anyway)


40+56 = 96

40/96= 41.66%
56/96= 58.33%

While I said that earlier that their real output trends are near even now, Floyd in this case would be bearing the risk of the fight, as prospective revenues are never a sure thing.

I think 43 million or so would be better but anyways Floyd's offer is essentially 60/40 so at that I'll just post this

[ame]http://www.youtube.com/watch?v=dOQuVeJRWVg[/ame]

 

Other than the fact that Arum's been part of the issue all along, it's either the proceeds go to Floyd, or they go to Arum (not pac), but it wouldn't really matter too much who bears the risk, Pac just wants to fight and pays people to manage the middle stuff anyway (Koncz and Arum). So it seems to me that Arum is pretty much the superfluous 3rd man and it should be easier to negotiate with 2 people rather than 3 people.

 

contractually

apparently it ends this year

 

The gates are official, and reflect such numbers well within comfortable range