Triller Overspent on Lopez Fight, but Unique Business Model May Yield Profit
Back in late February, Triller Fight Club (TFC)—a subsidiary of the music-based social media network, Triller—won the live broadcast rights to undisputed lightweight champion Teofimo Lopez’s upcoming bout against George Kambosos with a purse bid of $6.018 million. Considering the bid was $2.5 million greater than what anyone else was willing to pay for the fight (Matchroom Boxing bid $3.506 million, Top Rank bid $2.315 million), boxing insiders have suggested TFC overpaid. But because the Triller Fight Club business model is so different from that of a traditional boxing broadcaster, it may not matter—at least in terms of the company being able to turn a profit on the event. TFC plans to pair the lightweight title fight with “some of the biggest names in social media, music, [and sports]” to create what co-owner Ryan Kavanaugh calls a “four quadrant epic event.” By surrounding the Lopez-Kambosos fight with a collective of other entertainment elements, the company believes it can draw demographics that wouldn’t otherwise buy a boxing PPV (including the under-30 crowd). The formula worked back in November when Triller put Badou Jack on a card with Jake Paul/Nate Robinson, Mike Tyson/Roy Jones Jr., French Montana and Wiz Khalifa. The event did more than 1.5 million buys.
Our Take: TFC overpaid for Lopez-Kambosos by at least $2 million. There was literally no chance another promoter was going to bid above $4 million. But Kavanaugh got what he came for—a fight, and a fighter (in Lopez), that will motivate the hardcore boxing fan to buy the event. Remember, while Triller is trying to reach a collective of different demographics that typically do not buy boxing PPVs, they still want/need to draw the sport’s core fan base.
Kavanaugh wasn’t concerned about the perception TFC overpaid, saying the company bid what they believed the fight to be worth and that “we think we’ll make a lot of money on [the event].” How much money would seemingly depend on the celebrities, influencers, athletes and music acts that surround the title fight. Nothing has been announced to date, but the Triller co-founder said there will be a “social media fighter, an NFL fighter and a UFC fighter” all fighting on the card.
Without tying in music, social and all the other entertainment elements, Kavanaugh suggested a PPV card headlined by Lopez-Kambosos would draw 500,000 boxing purists. But it’s Triller’s hope that by wrapping the title fight into a much larger entertainment spectacle they can turn the event in a PPV that does “more than a million and a half [buys].” While Lopez is a rising star, there’s no way Lopez-Kambosos would do a 500,000 buys for a traditional boxing broadcaster. In fact, 300,000 would be a stretch. For reference purposes, Showtime’s September ‘20 doubleheader PPV featuring the Charlo brothers did less than 120,000.
However, if Kavanaugh’s math is correct and TFC can increase the number of buys 3x by surrounding a fight with some other high-demand entertainment, it’s not unreasonable to suggest the PPV could do between 500,000 and 1 million buys. Kavanaugh said the event would be profitable at 1 million buys, even after paying $6 million for Teofimo-Kambosos “and then adding in what we still have to pay to all of the other talent, all of the other fighters.” Another boxing promoter indicated break-even was likely a much lower number. “If [Triller] does 300,000, 400,000 [buys] they will come out OK,” the promoter said. “They are not going to lose money.” For informational purposes, TFC plans to price the event at $49.99.
If Matchroom or Top Rank could sell out a venue (i.e. there weren’t COVID limitations), it’s possible they might have been willing to bid more. But “it wouldn’t have taken anyone into the $6 million realm,” the promoter we spoke to said. “Unless you’re Canelo Alvarez or Anthony Joshua, the gate isn’t going to be huge. You need a mega fight or a mega star to get a big gate,” the promoter explained. Lopez vs. Kambosos at Madison Square Garden with 12,000 fans might have generated a little more than $1 million in net gate receipts. It’s worth noting that neither Matchroom nor Top Rank was planning to go the PPV route. Top Rank would have placed the fight on ESPN or ESPN+, and Matchroom would have aired the fight on DAZN.
The prospect of a limited gate was a nonfactor in Triller’s purse bid. That’s because having fans in the building is not part of the company’s business model. “We don’t, as of now, intend on having a paid audience to any of [our live sports events],” Kavanaugh explained. “The way we shoot and light these [events], we’re basically building a movie set [around the ring], so it’s harder for us to have a live audience.” While fans won’t be able to buy their way into the Lopez-Kambosos fight, “There will be ways [roughly 100 individuals] can win their way in,” the TFC executive said.
While the absence of a live gate could cost Triller millions in the short-term, “Creating the perfect look for the home viewer is long-term what is going to drive people to see [future] Fight Club events,” Kavanaugh said. “We think people are going to be talking about the production quality and how different it looks [and ultimately that will drive people to buy PPVs down the line].” Part of Triller’s thesis is that to attract the younger demo, content needs to be delivered in a new and engaging format. “This next fight [card, headlined by Jake Paul] will have a Tarantino meets Stranger Things feel in terms of the lighting and the camera angles,” he said. It remains to be seen if the TFC’s production quality will lead to buys, but there was positive sentiment around the broadcast on social media during the Tyson-Jones event.
Top Rank CEO Bob Arum recently said he believed Triller’s willingness to spend $6 million on Lopez-Kambosos was indicative of the platform’s plans to place the fight on the undercard of Tyson-Holyfield III. “As of now, that’s not the plan,” Kavanaugh said.
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