Pay-per-views, price points, and price counterpoints

The term “predatory pricing” refers to the business practice of setting prices extremely low in an attempt to eliminate the competition and establish a monopoly.

Predatory pricing may or may not be a reason why Saudi Arabia’s General Entertainment Authority established a price in the U.S. of $25.99 for the loaded February 22 pay-per-view card that will be available for purchase through DAZN. On social media, Turki Alalshikh simply stated, “We want the fans [to] be happy and enjoy it.” And that could be the entirety of his objective. With the benefit of a virtually unlimited budget to promote boxing events, he may simply want to do right by fight fans and reach as many viewers as possible.

But, even if it’s not intentional, there’s no denying that a price point of $25.99 for one boxing PPV makes prices about three times as expensive for other boxing PPVs appear exorbitant by comparison.

This weekend, the sport will enter a stretch with three major PPVs in the following 29 days. Sandwiched around the seven-fight Saudi mega-card headlined by the Artur Beterbiev-Dmitry Bivol rematch are this Saturday’s four-fight PPV promoted by PBC and available for $79.95 on Prime Video or PPV.com, headlined by David Benavidez vs. David Morrell; and a March 1 four-fight PPV, also promoted by PBC and expected to cost about $75 on Prime Video or PPV.com, headlined by Gervonta “Tank” Davis vs. Lamont Roach.

Boxing fans are not necessarily comparison-shopping. It’s not like buying a car, where you’re choosing between a Toyota and Hyundai, and you’re definitely purchasing one or the other but not both. Many hardcore boxing fans will order all three PPVs, and just because two of them cost significantly more than the third, that doesn’t mean those two won’t be worth paying for.

At least, that’s what PBC and Prime Video are hoping.

“Certainly, the boxing consumer doesn’t have unlimited money, and particularly in challenging economic times, there are choices that need to be made. Not everyone is going to buy every pay-per-view,” said former Showtime Sports President Stephen Espinoza, now a consultant to PBC. “However, typically, pay-per-views are not particularly price sensitive. If someone’s a David Benavidez fan, or if someone’s a Tank fan, they’re going to buy those pay-per-views, regardless. At a certain point, are consumers having to make choices and looking at the relative prices? Some probably are. But does this pricing [for the February 22 card] cut into the meat of the business model? I don’t think so.”

There’s actually a case to be made that the upcoming Riyadh pay-per-view costing a minimal amount is good for PBC’s PPV sales. If the DAZN pay-per-view were the same price as the two PBC cards, the combined cost of all three would be around $235 or $240, possibly forcing certain customers to choose their favorite two of the three to stay within their budget. But because the combined cost of all three will be more like $180, that many more fans will be able to plunk down for both PBC events and not necessarily pass on one of the cards because it puts them over their spending limit.

Mark Taffet, the former longtime senior vice president in charge of the pay-per-view division at HBO, has probably spent as much time thinking and talking about PPV price points as any human alive. And he has a unique perspective on the trio of PPVs coming up and why the pricing for each makes sense.

“You have to remember,” Taffet said, “that pay-per-view boxing is primarily viewed like a Super Bowl party, where six, eight, 10 people get together and spend the evening together and watch a fight. So, $80 for a fight on a Saturday night when you’ve got 10 people together is actually much less than the cost of a movie ticket for each person.

“Beterbiev vs. Bivol is a great card with one of the best main events you can have in the sport, but I think DAZN very astutely recognizes that it’s on a Saturday afternoon, which is a time when it’s more difficult to get large groups of people together. So when you have less people per household viewing the event, a lower price makes a lot of sense. Saturday afternoon is a different vibe than Saturday night. So that makes it very prudent to reduce the price at that time of day.”

When Taffet was at HBO, he always kept an eye on the prices that his competitors — namely, Showtime — were using, though there was never a gulf approaching the difference between $79.95 and $25.99. Back then, it was mostly just a question of which network would bump it up by the next five-dollar increment and establish a new baseline price for major PPVs.

“We were more focused competitively on the dates that fights took place than we were on the pricing,” Taffet noted. “The focus wasn’t the cost of one purchase, it was whether someone might have purchased a fight the week before or might be looking at another one a week later. The date, the timing, and the spacing between the events, I believe, was more impactful than were the pricing levels.”

That’s definitely part of the conundrum over the next five Saturdays, and even Espinoza admitted that, in an ideal world, his February 1 and March 1 shows would be more spaced out. “The cost component wouldn’t be as obvious if these were a February pay-per-view, a March pay-per-view, and an April pay-per-view,” he said.

Still, even with two $75-$80 PBC events just a month apart, Taffet doesn’t believe there’s great risk of the shows cannibalizing each other because the audiences are somewhat different.

“Yes, if you’re a core boxing fan, all three of these shows hold appeal,” Taffet said. “But among the two PBC events, one of them is more Latino based, and one is more African-American based, and my experience teaches me that that there’s a good possibility that there won't be tremendous overlap of the audiences.”

It’s instructive to go inside the minds of these executives who have tried or are currently trying to induce PPV purchases. But they only tell half the story. It’s also helpful to explore the mind of the boxing fan clicking the “purchase” button.

Hardcore boxing fan David Kushin doesn’t speak for the more price-sensitive PPV consumer, as he’s the type of person who orders every major boxing pay-per-view — not because money is no object to him, but because boxing is his passion and he long ago got into the habit of directing most of his discretionary income toward it. Still, even if he isn’t the most discerning PPV customer, Kushin offers a common fan reaction to the pricing differences awaiting over the next five weeks.

“If I can spend $26 for an absolutely loaded card with seven main-event-type fights, and two or three weeks before spend $80 on an excellent headliner and a decent undercard with three fights, it’s impossible to miss that contrast as a boxing fan,” Kushin said. “It’s so in your face. It doesn't make me bitter, and it doesn't make me less likely to buy the $75 or $80 pay-per-view — I’m going to buy Benavidez-Morrell no matter what — but I absolutely recognize that the value is not the same.”

Looking at each of the three cards individually, at their respective prices, Kushin identified three different levels of appeal.

To him, ordering Benavidez-Morrell for $80 is an easy decision, because the main event is simply a must-see.

The decision to order the Beterbiev-Bivol card is “beyond easy,” Kushin said. In fact, he noted — not trying to give Alalshikh any ideas, but just being honest about the quality of the card — if it cost $125, he would “buy it without hesitation.”

The Davis-Roach card on March 1 is in a slightly different category. Kushin said the decision is easy for him “because when Tank fights, I’m watching — but for the average boxing fan, I think it’s not an easy decision. Tank is a prohibitive favorite. So I think some people will probably have some hesitation.”

This is an unusual moment in the boxing business. The Saudi promotion, using what Espinoza referred to as “a business model different than just about anything else we’ve seen in boxing” — i.e., a business model that seems not to factor in turning a profit — has become more and more prominent and powerful. At the same time, U.S. broadcast networks have receded. Other than ESPN — whose future televising boxing is in doubt at the moment — there are no traditional over-the-air networks showing fights right now.

“There’s a major transition going on,” Espinoza said. “There’s at least a couple hundred million dollars in license fees that are missing from the boxing ecosystem, compared to six or seven years ago. So we’re in a place where, like a lot of other parts of the media business, boxing is going to have to figure it out. There's going to be a transition period, while business models are adjusted and maybe new platforms come in.

“But during this period, in order for the sport to continue, there’s got to be an alternate source of funds, and the alternate source of funds is pay-per-view. If there’s not a network or a streamer paying for your fights, you’ve got to pay for them somehow. I don’t think anybody’s particularly happy about pay-per-view being the only answer, and I don’t think anyone believes that’s a successful long-term business strategy. But that’s where we are in the market. If people want to continue to see boxing regularly, until there are additional platforms coming in willing to pay for the content, there are going to be more pay-per-views.

“And I understand consumers may view this as greedy or as a cash grab, but it’s far from that. It is really the only means for boxing to survive during this transition period.”

As always, it’s up to the consumer to decide what’s worth their entertainment dollar. If a fight card is worth the money to you — possibly aided by being able to defray the cost by splitting it with friends — you’ll buy it. If it isn’t, you won’t. And unfortunately, there are some fans who will look for ways to work around the system and obtain the fight for free — which is likely part of the motivation behind the $25.99 price point, as a price that already feels like a steal ought to reduce real stealing.

Whatever the Saudi promotion’s motives — to squeeze out competition, to benefit boxing fans, or to discourage PPV theft — the fact is that an expensive month for boxing fans isn’t quite as expensive as it otherwise could be.

To some, perhaps this is a case of predatory pricing. For boxing fans, it’s probably refreshing just to be able to order a night (or day) of fights and not feel like the prey.

Eric Raskin is a veteran boxing journalist with more than 25 years of experience covering the sport for such outlets as BoxingScene, ESPN, Grantland, Playboy, and The Ring (where he served as managing editor for seven years). He also co-hosted The HBO Boxing Podcast, Showtime Boxing with Raskin & Mulvaney, The Interim Champion Boxing Podcast with Raskin & Mulvaney, and Ring Theory. He has won three first-place writing awards from the BWAA, for his work with The Ring, Grantland, and HBO. Outside boxing, he is the senior editor of and the author of 2014’s . He can be reached on , , or , or via email at RaskinBoxing@yahoo.com.