ESPN has been consistently losing subscribers on a monthly basis and with $24 billion wrapped up in television rights contracts for the next few years the worldwide leader needed a boost. Fights like Vasyl Lomachenko’s win over Guillermo Rigondeaux that beat out UFC programming on FS1 in the younger demographics is exactly what the broadcast company needed.
TopRank boxing and ESPN are four months into their four year contract and ESPN is currently paying more for a single Monday Night Football game than they are for the entire partnership with Top Rank, according to Kevin Draper with the New York Times.
The Creative Arts Agency (CAA) is managing the sales for advertisers and sponsorships. Creating revenue through advertisers and sponsors will be essential to make up for missing out on PPV revenue if the biggest fights and fighters are to remain on basic cable.
There are a few important takeaways from this article. First, it seems that Top Rank has learned from the Premier Boxing Champions (PBC) mistake. The PBC sought to buy air time on sports networks and sell the rights themselves, then after a few years sell the rights for the events back to the networks they had previously bought air time from. However, those results have likely not come to fruition the way the PBC thought and the partnership between Top Rank and ESPN may be a better route to go. Networks will promote much more often if they have some skin in the game. One example that Draper points out is that NHL coverage on ESPN dropped after the network was no longer pay the rights fees to broadcast the league.
Second, ESPN is looking to launch an over-the-top (OTT) service to people who are cutting the cord with cable. The OTT service would allow ESPN to skip the cable company and offer a product that is direct to consumer. When changing the target audience to just sports fans instead of cable companies, ESPN isn’t just buying the rights to Top Rank, they are also buying a die-hard boxing fanbase. It’s similar to how Netflix has been purchasing niche television programs and how Sirius didn’t just buy the rights to Howard Stern, they bought Howard Stern’s audience.
Third, this is a strong play into the long-term viability of the sport reaching the casual sports fan. When the biggest fights are on PPV then the casual sports fan is going to miss out on the program when they could easily turn on an NBA game that they don’t have to pay extra for. Networks are also unlikely to invest much into athletes who are going to move to a different platform when their highest-earning fight is up. ESPN is assured the biggest fighters in their biggest fights and therefore they have a big interest in promoting the fighters and fights across their different channels and on different programs, like lead-ins from the Heisman Trophy Ceremony.
Lomachenko-Rigondeaux was a big success, but having a star like Lomachenko face an equally talented opponent does not happen as frequently as high-profile NFL and NBA games. At this point, a partnership with a sports network on basic cable is probably the only way to generate enough popularity around fighters to create more star-studded events.
For now, both Top Rank and ESPN are getting what they need out of the deal.