Manny Pacquiao is taking a massive financial risk in his fight against Jessie Vargas

Combat columnist
Yahoo Sports
Manny Pacquiao is taking a hit with his guarantee in his fight with Jessie Vargas. (Getty Images)
Manny Pacquiao is taking a hit with his guarantee in his fight with Jessie Vargas. (Getty Images)

LAS VEGAS — Manny Pacquiao has admitted that, at least in part, his return after a brief retirement from boxing is about money. The man who last year earned well over $100 million for his bout with Floyd Mayweather Jr. needs the cash.

He’s one of the highest-earning athletes in the history of professional sports, and yet, he admits that he can’t get by on a politician’s salary. He gives so much of his fortune away to his countrymen in need that he has to fight to earn the multi-million dollar purses he needs to continue the habit.

But Pacquiao faces a sobering truth on Saturday at UNLV in his bout for the WBO welterweight title against the underdog champion, Jessie Vargas: His money is almost all on the come.

Pacquiao is the headliner of a pay-per-view show that promoter Bob Arum of Top Rank decided to distribute himself.

Ever since the Mayweather-Pacquiao fight did a record 4.6 million sales, boxing pay-per-view sales have largely fallen off a cliff and nearly every one of them has failed to meet expectations. In some cases, they’ve missed the mark by extraordinarily large amounts.

Part of it, obviously, is customer revulsion, fueled by the money grab that Mayweather-Pacquiao became. The fighters made nearly a half-billion dollars between them, and the fight was horrendous. The undercard was one of the worst ever put on a major pay-per-view, with no anticipated or exciting fights.

Rooms on the Las Vegas Strip were raised to more than 12 times their normal rate in some cases. Fans even had to pay to attend the weigh-in. And while all of the proceeds from that went to charity and it was done, organizers said later, for crowd control security reasons, it still left a bitter taste in the mouths of many.

It’s gotten so bad that in September, Canelo Alvarez couldn’t reach 300,000 sales for his bout in Arlington, Texas, against Liam Smith. Alvarez is regularly referred to as the largest star in boxing by his promoter, Golden Boy’s Oscar De La Hoya.

Now Pacquiao, once second only to Mayweather as a pay-per-view attraction, is coming up in a bout that few people wanted to see. Despite his world title and 27-1 record, Vargas is little known.

Fans made it clear they preferred to see Pacquiao face the highly regarded Terence Crawford, whom many would have given a better shot to win than they do Vargas. Pacquiao is more than a 6-1 favorite to beat Vargas.

Arum made the decision to go it alone and dump HBO when he couldn’t come to terms with the network on when to place the show. HBO wanted to steer clear of the Nov. 19 date it had already set for the Sergey Kovalev-Andre Ward pay-per-view.

But because of Pacquiao’s position in the Filipino senate, none of the dates that HBO offered worked with Pacquiao’s schedule.

So Arum opted to save the 7.5 percent fee HBO takes for broadcasting and distributing a pay-per-view and do it himself.

But that meant making choices, and one of them was in Pacquiao’s guarantee. That number still hasn’t been determined, though it will be far lower than what Pacquiao’s received in the past.

Pacquiao’s income on this fight will be determined largely by how well the pay-per-view does. In the past, he was given a large guarantee and then took a lower dollar figure per sale. This time, he’s taking a lower guarantee and getting a far larger cut of the pay-per-view sales.

“I don’t know,” Arum said Thursday when asked by Yahoo Sports what Pacquiao’s guarantee would be. The guarantee is the minimum he’d make for the fight, even if zero pay-per-views were sold.

“We’re going to put a low number on the contract because he has really no guarantee,” Arum said. “We’ve upped his percentage of the take. He’s fighting on a percentage. We can no longer afford the tremendous guarantee he was getting based on the results in the [April Timothy] Bradley fight. Rather than going in with a huge guarantee, we’re giving him an upside. We played it safe. We’re giving him a huge percentage [but with] no guarantee that would get us in trouble.”

Pacquiao adviser Michael Koncz said because Pacquiao gets a piece of all of the revenue and not just the pay-per-view dollars, it makes more sense to him.

“I made this deal thinking we’d have two or three more fights and so this was done and the deal was crafted for the long run,” Koncz said. “We’re involved in all revenues, but also in all expenses. We’re true partners.

“Since the Mayweather fight, I’ve been paying very close attention to the expenses and all of that. That’s why for this undercard, I insisted on a cap of $1 million. This way, we share in the revenues from everything, but we also share in the expenses.”

Arum is expecting a large crowd in the Thomas & Mack Center, which will hold roughly 19,500 Saturday. “If there are more than a thousand tickets left unsold, I’d be very surprised,” he said. Arum expects the paid gate to be between $4 million and $4.5 million.

Revenues from outside the U.S. are going to be much higher, Arum said, particularly from China. He said he isn’t sure what the pay-per-view sales in the U.S. will be, but said the revenues from outside the U.S. will be vastly higher than they were for Pacquiao’s April bout against Bradley.

Fighters in the top four bouts on Saturday, which will be part of the pay-per-view broadcast, come from six countries: U.S., Philippines, Mexico, China, Japan and Thailand.

Arum said there are 18 media outlets from China at the fight because of the presence on the card of two-time gold medalist Zou Shiming. Zou will face Prasitsak Phaprom of Thailand for the vacant WBO flyweight title.

The fight will be broadcast in China, and Sheng Li of SECA, one of Zou’s co-managers, told Arum it will do enormous numbers.

“We’re creating a global business and so if you do that, you want fights that mean something, not only here but around the world,” Arum said. “We have 18 media outlets from China because Zou Shiming is on. This isn’t from me, this is from Sheng Li who told it to the [Chinese] press today, but 80 to 100 million homes will watch this event in China. This isn’t hyperbole Bob; it’s Sheng Li who said it.”

So the sponsorship revenues will come in from around the world and won’t be from traditional American and Mexican companies that are typical for boxing.

One of them is Anta Sports, which Arum described as “the Nike of China.”

“We have three or four big Chinese companies sponsoring this event,” Arum said. “People won’t be able to read half of the [expletive] on the ring mat. This is a global business and we’re showing people. It’s not about HBO and their shoulder programming. It’s about a sport like boxing, which has a global audience and you make it a global business. [Projected revenue] is not even comparable to the Bradley fight.

“How comparable the pay-per-view numbers are, we’ll have to see. But this foreign revenues in this fight are way more – way, way, way more – than they were for that one.”

Time, though, will tell whether Manny Pacquiao will benefit from that or not.

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