How ITV will flex its ‘marketing power’ to battle BT and Sky in PPV boxing

British stars James DeGale and Chris Eubank Jr face off on ITV Box Office this weekend

ITV returns to the lucrative pay-per-view boxing business this weekend as part of its strategy to curb its dependence on advertising and raise £100m-a-year directly from consumers.

The decision to charge £19.99 for Saturday’s (23 February) grudge match between British super-middleweights James DeGale and Chris Eubank Jr on its fledgling Box Office platform is a signal of ITV's intent to compete in a UK PPV market already fiercely contested by BT and Sky.

But where the commercial broadcaster believes it has the edge over its pay-TV rivals is in being able to leverage the huge reach of its free-to-air platforms, according to Tom Graham, who is leading ITV’s PPV efforts as its newly named director of DTC (direct-to-consumer) sport.

“It’s not as closed a shop as other sports are," says Graham, who first joined ITV as head of commercial affairs, sport and drama in 2011. "A new player has the opportunity, if they’re smart and make the right associations with the right boxers, to break into it.

“It is very competitive and boxing, particularly PPV boxing, needs a lot of engagement with your potential audience to – without sounding patronising – educate them and explain to them what the narrative is for each particular matchup."

Along with wall-to-wall advertising across ITV’s owned and operated platforms, the broadcaster is leaning heavily on free content to build a boxing audience and heighten anticipation for PPV contests. An hour of Saturday’s undercard from London’s O2 Arena will be screened live on freely available ITV4 to entice viewers to pay for the main event.

“We have a huge marketing reach because of the people who are watching our free-to-air channels every day of the week, including huge sporting audiences like we’re seeing for the Six Nations currently [Ireland vs England attracted 5.5 million viewers]. And that’s before you take into account all of our social media outlets as well. It’s the marketing power of ITV, the ability to build that narrative, which is so important for PPV boxing.”

Sparring partners

In his capacity as ITV’s chief sports rights negotiator, Graham was instrumental in striking December’s deal with Premier Boxing Champions, the heavyweight US promotional company, which guarantees a minimum of 15 televised events each year for the next three years. Not all will be PPV. The first fight nights, involving challenger Caleb Plant beating Jose Uzcategui for the IBF super-middleweight world championship and the legendary Manny Pacquiao overcoming Adrien Broner, were screened live in the early hours on ITV4. But it is in creating an appetite for PPV where the biggest money-making opportunity lies.

As part of its ‘More Than TV’ strategy announced last summer, ITV identified DTC revenues as a “key focus” in its drive to reduce its reliance on advertising, which it expects to come under threat this year. Defined as income that comes straight from viewers – such as the money made from competitions, live events and branded products – DTC already earns ITV £41m a year but it wants to hit £100m by 2021. And though declining to make his own projections due to it being in a closed period ahead of its 2018 results publication next week, Graham is confident PPV boxing can help it make a major dent in this target.

“A lot of the people who are buying PPV fights offered by pay channels are already accustomed to paying for sport. We have the ability to go to a wider audience and say, we’re not going to ask you to pay for everything else that’s on our channels, you can get that for free. The Six Nations and boxing coming from the States – that’s on our free-to-air channels. But here’s an opportunity for you to experience something you maybe haven’t felt a part of, or you’ve had to go to the pub to see, when it’s been on other platforms.”

While DeGale-Eubank is a long-awaited matchup, there is no major belt on the line to lend the clash prestige and neither man has anything like the star power possessed by British boxing’s biggest draw, Anthony Joshua, who fights exclusively on Sky Box Office in the UK. Graham acknowledges Saturday’s audience will fall some way short of what the heavyweight champion of the world can muster.

“Joshua’s probably the biggest draw in PPV boxing and his biggest fights will command a million-plus at the moment, or the high hundreds of thousands. We’re not necessarily looking in that category but we’re hoping it’ll be a very strong result.”

The spoils of PPV

Alex Fenton, an analyst at Enders, expects PPV income to “significantly contribute” to ITV’s £100m DTC goal, but caveats that it will have to share these spoils. “It is important to remember here that one cannot earmark this revenue as solely ITV’s,” he says. “Despite being an extremely price-efficient way for broadcasters to monetise content minute-for-minute, a significant proportion of PPV revenue is divided between fighters and promoters.”

Before it can count on this revenue, ITV has to convince casual and hardcore boxing fans alike that its fights are worth paying for, and Fenton has his doubts about this weekend’s contest. “Demand for fights is very personality-driven, and though the Eubank name is something of a draw, and this is probably one of ITV Box Office’s bigger fights, that isn’t saying much.”

With three mainstream PPV platforms now operating in the UK, fight fans are being expected to fork out for fights on an increasingly regular basis. Matt Christie, the editor of Boxing News, questions the sustainability of a monetisation model unique in British televised sport.

“There is a presumption about boxing fans – a presumption not made about any other sporting fan, by the way – that they will dip into their pockets no matter what," he says. "To a small extent, recent history has proved that to be true but the current market, which is seemingly reliant on these events and in turn, their ongoing appeal, is short-sighted in its planning.”

Christie blames broadcasters less for that than boxing promoters, who count PPV nights as their biggest cash cows. The “mindless greed of the situation”, as he puts it, came to a head on 22 December when rival promoters Frank Warren and Eddie Hearn screened PPV events at the same time on BT and Sky’s Box Office platforms.

“Imagine football fans, who are already paying subscription fees, being asked to not only choose between two top class matches, but to choose which of them they have to pay for,” says Christie. “It wouldn’t happen, of course, because there are laws in place to prevent it.”

Christie cuts ITV some slack because, unlike BT and Sky which charge a subscription for their regular fight night coverage, ITV has already made the intriguing Pacquiao clash free-to-air and looks set to do the same for more top-class fights from the USA as part of its PBC deal. “For me, that makes the likes of DeGale-Eubank easier to justify and, in a way, represent overall value for money,” he says.

He warns all the broadcasters, however, of the dangers of fleecing fans. “There has to be some distinction here; every single fight that has appeal and a ‘storyline’ doesn’t have to be Box Office because, simply, the sport doesn’t have the talent pool to deliver value for money every time.

“The fear, and it’s a real fear, is that British boxing is so drunk on its own success at the moment it has nothing in place to prevent the almost inevitable hangover.”

PPV: the making (and breaking) of boxing?

For almost as long as there has been an ability to televise boxing, opportunistic media businesses have had an appetite to charge viewers extra for the privilege.

On 19 April 1966, Pay TV Ltd, a pioneering precursor to today's subscription television businesses, announced that it had secured exclusive rights to broadcast the Muhammad Ali vs Henry Cooper rematch in the UK. Viewing the bout would cost £5.60, and the service was able to transmit to a total of 4,000 sets, according to the National Science and Media Museum.

PPV technology and appeal has come a long way since then, not least in the US where the long-awaited 2015 clash between Floyd Mayweather, Jr. and Manny Pacquiao, billed as the "Fight of the Century", generated 4.6 million buys and revenue in excess of $400m.

"It does allow certain fights to happen that wouldn’t happen if the platform didn’t exist and – important to remember – boxers at the top level are getting paid more money than at any point in history," says Boxing News editor Matt Christie.

But with US PPV bouts costing up to $100 a time, the PPV model has been accused of harming the sport's popularity and is coming under threat from new models. DAZN, a UK-based streaming business dubbed 'Netflix for sports', launched in the US last year. Its proposition is to undercut PPV prices for boxing by instead charging fans a flat fee of $9.99 a month for all they-can-eat action.

To boost DAZN's content offering, it has inked a $1bn deal with promoter Eddie Hearn's Matchroom Boxing to provide a steady stream of fight nights and, in something of a coup, signed one of the sport's biggest current stars, Canelo Alvarez, to a $365m 11-fight deal. Watching Canelo had previously cost viewers anything up to $84.95 a fight. Now they just need to pay the more modest monthly fee.

Don't count out the PPV model yet, though: this week British heavyweight Tyson Fury signed a deal with US network ESPN worth a reported £80m. Fury's team are said to be in negotiations with rival Deontay Wilder's camp for a hotly-anticipated rematch after their December draw, and if that clash is made it will inevitably be a PPV contest – on both sides of the Atlantic.

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