Friday, March 17, 2023

DAZN Continues To Roll The Dice

As previously announced earlier this week, Undisputed Super-Middleweight champion of the world Saul "Canelo" Alvarez will defend his crown on May 6th against WBO number one contender and mandatory challenger John Ryder in Mexico, signaling Alvarez' first fight in his home country in more than a decade. While this column will not discuss the fight in detail as we are still more than two months away from the scheduled date, the bout already has generated controversy.

How has a fight that is still weeks away from taking place already raised the ire of Boxing fans? The Alvarez-Ryder bout will be broadcast on DAZN internationally, which means that it will be part of a standard monthly or annual subscription to the digital streaming network in many countries around the world. In the United States and Canada however, the fight will be available on DAZN Pay-Per-View. Why has that decision already raised the ire of many? It is important for this observer to state as I have in the past when discussing the business of the sport of Boxing that I do not currently work for any other outlet or network outside of my own The Boxing Truth®, which I own and operate. Having said that, I would not be objective if I did not say that I have been a vocal advocate for the subscription-based model that both DAZN and ESPN's digital streaming network ESPN+ operate under as it generally offers much more value for subscribers as compared to pay-per-view, which over the last twenty years has frankly resembled that of a compulsive gambler in that both the frequency of events once touted and reserved for fights of significant public demand, have increased to insane levels and along with it so has the prices for such events have increased to where in the United States, one can expect most pay-per-view Boxing events to have a starting price at or above $70, which when one also factors in taxes and additional fees means the final price is actually closer to $90 on a per event basis. This does not also add to the equation that there are times where networks that produce these events will continue to roll the dice and raise the price point even further akin to one playing one too many rolls on a craps table or one too many spins on a slot machine trying to hit the ever elusive "Jackpot," which in this case, means revenues via pay-per-view buys that will make an event a rousing success. The problem with such a mentality is as most those who deal with gambling problems eventually discover, what is hoped for is rarely achieved, and more often than not, the opposite of hitting the "Jackpot" or in this case achieving massive revenues in the form of pay-per-view buys result in both promoters, networks that put on the events, and more importantly the fighters losing money. 

In the current landscape, as of this writing, there are three pay-per-view Boxing events that have been announced between late March and the scheduled May 6 bout between Alvarez and Ryder, with more potentially to be added either before and after that date. When one also factors in that DAZN will be a co-broadcaster for the April 22 pay-per-view bout between Gervonta Davis and Ryan Garcia, along with Showtime and both networks are selling the pay-per-view broadcast on their respective platforms with each's respective branding, one would be justified to question the wisdom of DAZN opting to roll the dice again and to be more specific, do so in relatively close proximity to the April 22 date in producing another pay-per-view event (At least in North America) mere weeks after that event. Considering the co-production with Showtime, who may be nearing an exit of the sport by year's end due to a major restructuring of it's Paramount Global, being rumored to be priced at $100 as of this writing, the question of wisdom in the decision process perhaps becomes more important and the ire/outrage of the Boxing fan becomes more understandable.

An element that has not been touched upon by yours truly thus far is the fact that fighters have been conditioned to expect substantial money via pay-per-view, which unfortunately for many does not materialize into significant income for them when all is said and done for reasons including, but not limited to the revenue split model, which more often than not favors cable/satellite providers, pay-per-view distributors, and finally the promoters and networks, before it trickles down to the fighters. When one takes into the equation that many pay-per-view attractions fail to reach a break even point for all involved, let alone profitability, which I have felt along with the model being outdated compared to what else is available to consumers, can be directly tied to the ever increasing price points for such events, which whether networks want to admit it or not, consumers continue to largely reject.

While all the aforementioned points this observer has made should not be viewed as an indictment against DAZN in particular, as I still feel they have a more economically reasonable model in place with their subscription service if they commit to it, the points I have made is more of an indictment on the pay-per-view model itself, which no longer offers value to the consumer for the price and very rarely is used only for the true "Big Fights" / "Special Events" that it was originally intended to be.

Although Saul Alvarez is one of the top stars in the sport, if he is using the model as a requirement for a broadcaster like DAZN to be able to carry his bouts, unfortunately it does a disservice to Boxing and the fans that support both him, the sport, and other fighters who have been conditioned to have a similar mentality. Despite my view that DAZN would be better served to try and work out a deal with Alvarez and other fighters that fight on their network similar to that of the 11 fight, $365 Million guarantee with incentives for subscription milestones being met that Alvarez received shortly after premium cable network HBO announced it's exit from Boxing after forty-five years in 2018, that saw Alvarez featured as the centerpiece of DAZN's streaming network and marketing the subscription model over pay-per-view, a deal that seemed beneficial until the COVID-19 epidemic and a well-publicized split between Alvarez and his longtime promoter Oscar De La Hoya, which for a time also brought an end to his relationship with the network, an opinion which I stand by as evidence continues to show the decline of pay-per-view, at least for now DAZN continues to dip their toes in the pay-per-view model, which they continue to insist will be strictly on a case by case basis.

A potential problem for the network however, is whether subscribers will continue to support the network if it eventually becomes clear that in order to see the marquee stars of the sport, a subscriber will unfortunately be asked to shell out an additional fee on top of what they pay monthly or annually. Considering that the network raised their subscription rates to $24.99 per month or $224 yearly in the United States in February, there is reason to be concerned when they are also continuing to dip their toes in the pay-per-view model. While I remain supportive of a subscription-based model that I truly believe both as someone who has covered Boxing and combat sports most of his life, but also as a consumer, that has better value, I have also been around long enough to know red flags when I see them.

For most of it's forty-five year run, HBO was firmly established as one of the sport's power players even as unfortunately, Boxing moved away from free over the air television, where revenues were earned not only by ratings, but also by significant advertising, which is still something Boxing sorely needs. Up until a certain point in the late 1990's even as the network had created it's own pay-per-view network TVKO (Later renamed HBO Pay-Per-View) many of Boxing's biggest fights aired on HBO or similarly it's longtime rival Showtime. Eventually, HBO became more reliant on the pay-per-view model, even at times moving fights off their network to pay-per-view, but only opting to serve as a distributor of such events. While I spent a good portion of my career as a writer up to their 2018 exit calling out the network for that as well as other decisions related to how they presented the sport, eventually the over reliance on pay-per-view, increased prices, lack of value, and ultimately arrogance of those running the network at that time in assuming that such decisions would not have a negative impact on their network, led to their demise. 

With Showtime seemingly heading in a similar direction now having moved more and more Boxing events away from their subscribers and to pay-per-view, as well as the former head of Showtime Sports Stephen Espinoza touting how "Pay-Per-View is a tool," but failing to come up with any legitimate justification for using the model on an all too frequent basis as well as displaying a similar arrogance as those who ran HBO when they were still part of the sport, with the restructuring of the network's parent company Paramount Global now underway and Espinoza now recognized as one of the presidents of CBS Sports under the Paramount banner and with Showtime soon to be absorbed into the Paramount+ streaming network, it would appear that it is indeed heading for a similar exit as it's longtime rival HBO.

What both network's forays into the sport and what have proved to be bad decisions, which as of now has led to one exit with perhaps the other with one foot out the door, should show DAZN as a network that is seven years into it's existence that has expanded rapidly including it's 2018 launch here in the United States, is essentially a playbook on what not to do if they want to both survive and thrive in the sport of Boxing. Unfortunately, no matter how big a star might be in the sport, the Boxing fan/subscriber will remain the ultimate authority and if events used for the antiquated model of pay-per-view do not do overwhelmingly well in terms of buys, no matter what a promoter or network executive might say in attempt to spin the obvious slap in the face of fans/subscribers especially when those same people not only criticized the pay-per-view model for many of the points yours truly has made, but also succeeded in showing that a better model that offers more value for the price does indeed exist, DAZN, much like a compulsive gambler may find that they have rolled the dice one time too many, which more often than not means one thing. "Craps." For a network that has been a credit to Boxing since it's inception, it would truly be a shame to see it go down the same path as the former power players of Boxing television in the United States, especially when the evidence to avoid that same path is clearly visible. 

As someone who always has the best interest of Boxing at heart and sees untapped potential in DAZN as a network, particularly here in the United States, I sincerely hope this is not the start of something akin to two stories about networks involved in the sport of Boxing that I have seen play out before, both as a fan growing up and as someone who has covered the sport since the mid-1990's. If it indeed is, the victims will continue to be the sport itself and the fans who support it. Although I am a proud Boxing lifer, in the interest of both objectivity as well as honesty, I will concede that for those who are not involved in the sport beyond being a fan, there is only so many times a fan will allow themselves to be slapped in the face and will willingly pay expensive fees to watch the sport they love before both out of anger as well as fiscal responsibility, they say enough is enough. Regardless of who might be at the top of a Boxing card. 

"And That's The Boxing Truth."

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