Tyson's a view to a killing.
Mention the phrase 'pay-per-view' at a football club that does not play in the gilded elite of the Premier League and you are likely to be struck off their Christmas card list in double quick time. The bitter aftertaste of the ITV Digital collapse and the prospect of a prolonged legal battle with the channel's owners has resulted in a series of gloomy financial reappraisals.
Most clubs that form part of the Football League are in Johnny Nash mode: the financial questions currently exceed the answers. The majority are limited to seeking either an extension to their overdraft facilities or else calling upon the largesse of directors or fans to lend them more money.
There are four areas to consider when calculating whether pay-per-view (PPV) can be profitable for all parties: prime content, the popularity of the sport, exclusive access to the content and cost. The Football League could only deliver on two.
But the impact of PPV on all sports and importantly, on sports fans, will continue to be significant. If proof were required, one need only consider last Sunday's heavyweight clash in Memphis between Mike Tyson and Lennox Lewis. Financially, the fight was the second highest grossing in history, generating more than $80 million (pounds 57 million), or pounds 2.3 million per minute. The price for the PPV broadcast in the USA was set a record high of $54.95 (pounds 38.40), beating the previous record of $49.95 (pounds 34.95) for the second Tyson-Holyfield clash five years ago.
Sky, too, pushed the boat out, pricing the fight at pounds 14.95 which, for a broadcast scheduled to commence at 4.00am, was bold. Nevertheless, the 'Rumble on the River' was eventually beamed live to more than 50 million households in the USA and the UK, indicating that people will pay for exclusive access to prime sports content provided they consider the offer to represent value for money.
In this instance, the arithmetic worked because to broadcast to their UK audience, Sky paid $7 million (pounds 4.9 million) to secure the PPV rights, meaning they had to attract fewer than 330,000 subscribers to break even. Although the final figures were not available, Sky are believed to have more than exceeded their expectations in terms of subscriber numbers.
It is little wonder that there will be calls for a rematch despite Tyson's age and the clear diminishing of his pugilistic prowess.
The reason is simple: the man generates a colossal amount of cash. Tyson thanked Lewis after the fight for giving him the chance to earn a hefty purse; despite his huge earning capability, Mike Tyson will not require too much persuading to step back into the ring because he needs the money.
It is interesting to note that Iron Mike has now been involved in five of the top six grossing fights of all time and in seven of the top ten. These seven fights have generated a total of $471 million (pounds 330 million) between them, averaging $67 million (pounds 47 million) each. This is on a par with the annual turnover of a good-sized Premiership club in 2002, but Tyson has generated this every year since 1991.
Even allowing for a generous split of the purse, agent's fees, the location cost, publicity and a host of other expenses, Tyson has still earned pounds 7.5 million gross and that excludes product endorsements.
Of course, it is the viewer who ultimately bankrolls any PPV operation and we can expect more, not less, use of pay TV in a limited number of popular sports, but only if the content is exclusive. If delayed coverage of the same event is made available to a terrestrial broadcaster, prospective PPV subscribers will wait to see it for free.
Earlier this week, a survey conducted by Sporting Insights in the wake of the Lewis-Tyson fight asked a representative number of boxing fans why they had not watched the fight on PPV. Ignoring the ungodly hour, nearly 40 per cent of the respondents said they preferred to watch the free highlights transmitted later in the day.
If, then, PPV broadcasters cannot acquire 100 per cent exclusivity to an event, it would appear that the days of pay-TV operators paying the earth for major sporting rights in the belief that they could sell millions of subscriptions are gone. Broadcasters are now more circumspect in developing their subscriber bases, preferring instead to invest more modest sums in sporting events to ensure a return.
Although two high profile PPV broadcasters (ITV Digital and U>direct) have gone bust in the UK as a result of paying massively over the odds for football content, we should not forget the PPV consortium, including Sky and Telewest, that paid pounds 181 million to broadcast 40 Premiership games each season.
Telewest, for example, who offered the lowest cost per game to new PPV subscribers, had to cover costs of pounds 377,000 each time a match was transmitted. Unlike ITV Digital, Telewest had a relatively low break-even threshold in terms of subscriber numbers. Instead of cranking up the price to subscribers, Telewest has 'cross sold' products such as its telephone and internet services on the back of its football coverage. The system has worked as Telewest are maintaining the same 'season ticket' subscription levels for the whole of next season.
Back in the Football League, the PPV content it was supplying ITV Digital may have been exclusive, but it was not the very best.
The Champions League is available virtually every week and it's free.
For the 72 League clubs facing the prospect of an uncomfortable time in front of their respective bank managers, it is a pity that the four basic rules of PPV television were not understood by the people who were negotiating on their behalf just 12 months ago.
Killer Content: Top Ten pay-per-view events
Event Year Revenues
Holyfield v Tyson (2)1997pounds 69.6mLewis v Tyson2002pounds 57.2mTyson v Holyfield (1)1996pounds 55.8mTyson v McNeeley1995pounds 47.4mDe La Hoya v Trinidad1999pounds 43.6mTyson v Bruno1996pounds 39.1mHolyfield v Lewis1999pounds 38.4mHolyfield v Foreman1991pounds 34.2mTyson v Seldon1996pounds 32.2mTyson v Ruddock (2)1991pounds 29.3mSource: Sport Business International
Iron Mike Tyson may have taken a battering from Lennox Lewis but the American still remains a potent draw for television viewers
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|Publication:||The Birmingham Post (England)|
|Date:||Jun 15, 2002|
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