Top Rank: Taking its swing
When Top Rank Boxing President Todd DuBoef answered his cell phone on a recent Thursday afternoon, he was decompressing after a tedious two-hour ride from ESPN’s Bristol headquarters back to his Manhattan hotel.
This, an observer joked, was his penance for landing the seemingly out-of-nowhere rights deal he signed with the network earlier this year, which moved all of Top Rank’s content — every last one of its fights for the next four years, from basic cable-level prelims to pay-per-view features, plus a library that includes many of the great fights of the last 50 years — to ESPN and its soon-to-launch OTT service.
Long a critic of his sport’s self-eating reliance on premium cable and pay-per-view to pay the bills, DuBoef felt liberated by the deal, which this summer delivered two of the seven most-watched fights of the last year, beating all but one of the dozens of cards that aired on premium cable.
“I’d happily drive four hours to have this as opposed to our old business model!” DuBoef shouted into the phone, the pace of his words rushing and his voice rising. “I’d probably drive eight hours! I’d paddle up the Hudson to Bristol if that’s what it took! I’d be out on a boat in the cold, trying to find my way up to ESPN.”
First Look podcast, with boxing discussion beginning at the 9:22 mark:
|ESPN’s first fight under the new deal, Manny Pacquiao vs. Jeff Horn in Pacquiao’s first time off pay-per-view in 12 years, averaged a staggering 2.8 million viewers.
DuBoef came to the fight game and its penchant for hyperbole honestly. When his mother married the iconic fight promoter Bob Arum, DuBoef went to work for him, learning the business. Arum eventually named him the company’s president, giving him a wide berth on many matters.
The business model he referred to was the one that had been the norm in boxing for decades, fueled largely by premium cable and pay-per-view. At the start it was lucrative, with fighters gaining exposure on broadly distributed networks and then graduating to HBO, Showtime and pay-per-view. But as fewer networks aired fights and the opportunities to expose fighters diminished, the model broke down. Ratings eroded and advertisers’ appetites dried up.
Then, in 2015, fight manager Al Haymon made an audacious play that disrupted that environment mightily. Fueled by more than $400 million in institutional capital, Haymon signed upward of 150 fighters and bought time on NBC, CBS, Fox and ESPN under the brand Premier Boxing Champions, or PBC, offering up fights of a caliber previously reserved for premium cable.
His goal: To prove boxing viable in the now fragmented world of advertiser-supported television, and then convert that proof-of-concept into a rights deal.
The two leading U.S. promoters, Top Rank and Golden Boy Promotions, each sued in federal court, charging antitrust. Top Rank settled its case in 2016, with Haymon agreeing to remove exclusivity clauses from his network contracts. Golden Boy’s case was dismissed earlier this year.
It was in the midst of that disruption that DuBoef came to the conclusion that the path he and Arum long had followed was untenable.
Frustrated and demoralized by the shift that left HBO and its sibling, Turner Sports, as the only viable U.S. buyers for his fights, DuBoef phoned the head of HBO Sports, Peter Nelson, with a polite request to change the way they negotiated rights fees.
“I have a menu,” DuBoef told Nelson. “You know what’s on my menu. If you want something, pick up the phone and call me and I’ll be happy to see what I can do. I just can’t keep trying to twist and turn and kill myself to get one night. It’s way too volatile for me as a business with an infrastructure. It can’t continue.”
|Top Rank Boxing President Todd DuBoef realized that the sport brings in more younger viewers than it’s given credit.
Last summer, DuBoef found a glimmer of hope while poring over spreadsheets filled with TV ratings. While the three-year trends for boxing on Showtime and HBO showed declining audiences, with HBO dropping to about 600,000 boxing viewers for the first half of 2016 and Showtime at less than half that, ratings for his shows on HBO remained relatively strong — averaging 878,000 viewers from 10 cards across 2 1/2 years.
He then saw that those were comparable to the audiences the UFC got for its far more regular stream of fights that aired on FS1. Knowing that the UFC was in the market shopping its next rights deal, he wondered whether Top Rank might do the same.
DuBoef took the idea to CAA broadcast agent and attorney Nick Khan, who he’d gotten to know through two Kahn clients, boxer Manny Pacquiao and trainer Freddie Roach.
Over dinner in Los Angeles, DuBoef asked Khan whether he thought Top Rank could land a deal that was similar to the seven-year contract that the UFC secured with Fox in 2011. He wondered what his rights would be worth if similarly structured. But what he most wanted was a single home for all his fights on a network that then would be motivated to develop shoulder programming, lending continuity and structure to a sport that came and went around the intermittent cycle of big fights.
Khan told him he wasn’t sure, but he knew someone who would be. He took the question to Alan Gold, who heads CAA’s sports media advisory practice.
“Alan came into the room skeptically,” said Khan, whose clients include Mike Greenberg, Kirk Herbstreit, Stephen A. Smith and Colin Cowherd, along with boxing fixtures Jim Lampley and Max Kellerman. “When he saw that Top Rank on HBO with 33 million subs was doing better than UFC on FS1, that’s when he and his group became really interested in it.”
CAA presented the package to all the prospects you’d expect: ESPN, NBC, Fox and several OTT players, including Amazon. Because OTT was a significant component of the deal, the ESPN conversations quickly required a loop-in of Disney and its then-partner BAMTech. In June, ESPN President John Skipper and Burke Magnus, executive vice president of programming, discussed the deal with former ABC President Alex Wallau, a one-time boxing commentator who is a close friend and counselor to Disney CEO Bob Iger. After that meeting went well, the CAA side sensed a gain of momentum.
On a Wednesday in early August, on a teleconference that included DuBoef from Las Vegas, Khan from Los Angeles, Gold from the Dominican Republic, and Burke and Skipper from New York, DuBoef got the news for which he’d long hoped.
“We’re all in on you guys,” Skipper said.
It was the day after Disney announced it had accelerated its purchase of BAMTech. A week later, they closed a four-year rights deal that a source familiar with the negotiations valued at eight figures annually. ESPN will be responsible for selling media on the shows, while CAA will handle sponsorships. But they also will work together on integrated packages in the manner that CAA worked with Turner and the NCAA on March Madness.
Magnus, who said the minimal investment ESPN put into boxing in recent years “almost felt like we were fulfilling some kind of unspoken obligation,” pointed to three factors behind the network’s 180-degree pivot back to the sport. One is the opportunity to capture all of the promoter’s fighters and fights, without the concern that the stars they develop will then move to premium cable. Another is the soon-to-be launched OTT service, which will rely on deeply engaged fans who will pay for content like Top Rank’s fight library, and also brings the distribution of pay-per-view into play. The third is the data narrative that DuBoef and CAA brought to the initial conversation.
“What we saw was a lot more compelling than the old refrain that boxing is old, the demo isn’t great and you can’t sell advertising,” Magnus said. “There was a little bit of that, but it was as much a result of it being in a non-commercial environment on premium cable as anything. We found the demos to be a lot more compelling than what had become an assumption — but a false assumption.”
DuBoef’s recent three-hour meeting in Bristol was reflective of the depth of the new deal. It was an “all-hands” session that brought together executives and staff from across ESPN, including both programming head Magnus and Connor Schell, executive vice president of content, who rose through the company as head of ESPN Films and now also oversees studio programming. While they did discuss potential dates on the 2018 calendar, the majority was spent on what Magnus described as “creative vision and business execution.”
The first year of the deal includes 18 events, plus about 50 hours of shoulder programming. The latter was something DuBoef viewed as essential, the “keeping on the lights” that he long has complained the sport lacked.
An early look at the calendar has the two examining fights on big sporting weekends, and particularly those that match to boxing’s multicultural demo. They’ve discussed NBA All-Star weekend, as well as the Super Bowl.
On Dec. 9, after the Heisman Trophy presentation, ESPN will air Vasyl Lomachenko vs. Guillermo Rigondeaux, a fight it can sell to the sports masses as the first time in history that a pair of two-time Olympic gold medalists have met as pros. Held in the Theater at Madison Square Garden, the fight offers an interesting production opportunity.
“It’s not just rolling out of the Heisman presentation,” Schell said. “It’s rolling out of the Heisman, but still being in New York City. Joe Tessitore will be part of both broadcasts. He’ll be at the top of the Heisman show as he is every year, but then he’ll head over to Madison Square Garden and call the fights. I think there’s a lot we can do back and forth between the two venues. And that’s one of the showcase time slots on our air every year. It’s coming out of a highly rated program and I think it’s a real opportunity for us to drive [viewership].”
It’s impossible to assess the importance of this deal without also considering the broader landscape, and the way the world changed as a result of Haymon and the PBC.
The fact that ESPN would suddenly show an interest in a sport that it fled a few years ago emanates directly from the ratings that it, Fox, CBS and NBC did from their PBC time-buy shows. When Haymon gave ESPN some of his top names in his first year out of the gate, the shows garnered audiences of more than 1 million. When the talent fell off in year two, the ratings were cut in half.
“I think the PBC experiment taught us one thing: That like so many other sports, it’s about quality,” Magnus said. “Get good fights, get good games and people watch. It’s no different than college football or ‘Monday Night Football’ or the NBA. People will watch good games and good teams, and you’ll have a harder time when the quality is not there.
“I don’t have a bad word to say about [the PBC]. They rekindled our interest in the category because we saw what was possible when you had really good fights on broader platforms.”
It’s tough to miss the irony of Top Rank landing a rights deal based in part on the proof-of-concept provided by a bitter rival that it sued, while that rival still hasn’t managed to do the same. But that’s where it stands.
Based on the business plan that Haymon and PBC chief of staff Mike Ring laid out in their initial conversations with network executives, this could be a crucial year for the PBC. In depositions taken last year as part of Golden Boy’s lawsuit, Ring said that 2018 was the year by which they hoped to flip the model from time buys into rights deals, and that they couldn’t expect that to happen if it didn’t happen by then.
Of course, strategies and tactics can change along with the environment. One of the networks with which the PBC is most engaged, Fox, likely will make its decisions on boxing only after it knows where it lands with the UFC. Haymon has more heft than could fit on any one network, so there could be a larger deal coming once the clouds part at Fox.
Or there may not.
“We can’t say if PBC is going to get a big rights deal or what kind of rights deal it will get, but one thing PBC definitely accomplished was to demonstrate the viability of boxing as a TV property,” said Stephen Espinoza, who runs Showtime Sports, which has been all-in with the PBC since its inception. “That is not a little thing. It has been largely absent from network TV and all but a few sports outlets, even on cable. The plan hasn’t been perfect. But it has demonstrated that there is a thriving audience and there is a way boxing can be programmed and arranged that makes sense for broadcasters.
“What’s left to do now is to connect the dots between the opportunity and the deal, which is where transactions always live or die. But in order to even have something to pitch you need that proof of viability and proof of consumer interest.”
Espinoza often has said he was perplexed by the vitriol with which Haymon’s competitors went after his venture, arguing that if the PBC could put up solid ratings it would benefit them all. He sees the re-entry of ESPN into boxing similarly.
“More boxing on television is good for the sport and good for Showtime boxing,” Espinoza said. “We’re very committed to the sport. But it isn’t going to survive if there aren’t other outlets supporting it, too. So to have ESPN back in the sport actively, regardless of the promoters, is a good thing. It is the home base for sports fans. If they are committed to the sport, it can only help the sport as a whole.
“Now, are they also a competitor for us? At some point, yes. But there is no content market that is desirable to be in where there are no competitors. I’d rather have the competitors than have no one helping to raise the profile to the masses.”
At HBO, the head of the sports division viewed ESPN’s energized re-entry similarly.
“We’ve been a consistent provider of premium boxing for over 40 years, so our place in the sport has been fortified over decades,” said Peter Nelson, executive vice president of HBO Sports. “We’re not engaging in any kind of experiment here. You adjust strategically over time based on what the landscape is evolving to look like. But I think, as we’ve seen again and again, the success of others has been good for us.”
DuBoef knew they’d hit a home run with his first fight on ESPN as soon as the overnights came out, when friends in the TV world started emailing him congratulations. The show, which featured Pacquiao from Australia in his first time off pay-per-view in a dozen years, averaged 2.8 million viewers, making it the second-most-watched boxing telecast of the year. But as he dug deeper into the numbers, the news got even better.
Not only was the fight the most-watched show on cable among 18- to 49-year-olds that night, but it delivered enough of them to ESPN’s late-night “SportsCenter” to make it the second-most-watched cable show of the day. Further, it vastly outperformed the network’s expectations among 18- to 34-year-olds.
|ESPN will showcase Top Rank star Vasyl Lomachenko vs. Guillermo Rigondeaux in a bout following the Heisman Trophy ceremony on Dec. 9.
Coming out of a U.S. Men’s National Team/MLS soccer doubleheader that had 86,000 18-34s watching during its final quarter hour, Top Rank’s show started with 119,000 of them. By the time Pacquiao was in the ring, that number had risen to 863,000.
“The 18-34 is a category that has no relevance to boxing in the public narrative,” DuBoef said. “That’s what we’ve been told. Young men don’t care about boxing. They love UFC. They love the NBA. Boxing isn’t resonating for them. It’s an old man’s sport. That has been the narrative, but it’s just not true.
“To see those numbers: It was empowering.”
In two of its ESPN appearances, Top Rank got to see how it fared against the UFC, the property that has been taking boxing’s lunch money for the last decade, at least in the realm of sports television perception.
The first came on Aug. 5, when its show featuring Lomachenko was pushed back almost 90 minutes because the NFL Hall of Fame induction ran long. Though it wasn’t a big hit — with an average audience of 728,000, compared to 859,000 for “UFC Fight Night” on FS1 — boxing actually beat MMA 317,000 to 271,000 among males 18-49 and 137,000 to 109,000 among males 18-34.
Then, on a Friday night in September, Top Rank had lesser-known Oscar Valdez headlining an ESPN2 show opposite a “UFC Fight Night” card from Japan that aired on FXX. It wasn’t the ideal scenario for the UFC card, but Top Rank also took a hit because its telecast was pushed back to 11:45 ET by an extra-inning baseball game. Again, we’re talking about audiences of fewer than a million. But, considering the graybeard boxing vs. bro-centric MMA narrative, the results are worth pondering.
Boxing beat the UFC 706,000 viewers to 502,000 viewers. And, again, it won among male 18-34s.
DuBoef said he’s buoyed even more by a few broader comparisons. Top Rank’s overall numbers on ESPN have been in line with a regular-season NBA game, with main event windows on par with ratings for “Sunday Night Baseball” when the Yankees play the Red Sox.
About 60 percent of the audience for Top Rank shows on ESPN has been multicultural, delivering about 1.6 times the multicultural audience that ESPN typically attracts. The shows also attracted an audience that was 20 percent Hispanic, which was about 2.6 times the network’s average.
On the strength of numbers like those, Top Rank and CAA plan to reposition boxing as a unique way to find common ground with two hard-to-reach demos.
“The UFC did a phenomenal job in building out an obscure and mocked sport and taking it into the mainstream and making it advertiser friendly,” said Khan, the CAA agent whose client list also includes MMA star Georges St-Pierre. “There’s a model in front off you. If you can take the good qualities of that and follow it in the model of boxing, maybe you’ll have success.”