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Mayweather vs Pacquiao: Networks and distributors fight over fees

If you thought all the issues over the upcoming megafight were concluded when the fighters signed the contracts, well, you were wrong.

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Wil Esco is an assistant editor of Bad Left Hook and has been covering boxing for SB Nation since 2014.

Even after all the drama of the negotiations for Mayweather-Pacquiao, there are still snags being hit as it pertains to setting up the logistics for the fight. It's now being reported that HBO/Showtime and PPV distributors are at odds over the fight fees, and how they will split the PPV revenue between them.

So there is a reason why the PPV price tag has yet to be announced for the fight, and that's because of the tussle between distributors and the networks is at an ongoing stalemate. Reports are that the PPV will likely be set at $90, but those details still need to be ironed out at this point. Typically, the split between the networks and PPV distributors is 50-50, but here (because of the joint promotion between HBO and Showtime) the networks have submitted an offer for a 70-30 split in their favor, a split the distributors have outright declined.

"Everybody at some point will hopefully be rational and we'll be able to put our heads together and come up with a good solution. We're not there yet," said Michael Berman, executive vice president and general counsel of iN Demand, which negotiates on behalf of big cable operators including Comcast Corp. and Time Warner Cable Inc.

Obviously one would think that there is supremely high demand for this fight, and with that being the case the networks feel they have the negotiating leverage to get a lions share of the split. Of course that feeling hasn't made the distributors budge at all at this point. HBO/Showtime consider a 50-50 split with distributors as a nonstarter for the fight, and in any event the promoters for both fighters (Top Rank and Mayweather) would be required to sign off on any agreed split.

"I wouldn't agree to it," said Bob Arum, chief executive of Top Rank Inc., which handles promotion for Mr. Pacquiao, of a 50-50 split. "I really believe everybody agrees that there has to be a more generous split and they are in the process of working out what it will be."

At this point both sides are at an impasse. The distributors say they would consider 'untraditional economics' for splitting the revenue with networks IF the fight were to outperform what they've seen from other PPVs. But until that point, they think the demand for the fight is just speculative in nature and therefore they should adopt a traditional model for the split.

Could this possibly derail the fight? In theory it's possible, but it's highly unlikely given the magnitude of this event. It seems to me that both sides will eventually meet somewhere in the middle where they say that if the PPV buys surpasses a certain number, then there will be a higher split to the networks. If it's lower than that number, then they'll keep something closer to the traditional model.

We'll be sure to provide more on this as the story develops...

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