Why Mayweather-McGregor will likely be the most pirated event ever

[grimm]

LAS VEGAS – Floyd Mayweather and Conor McGregor are unquestionably the two most popular fighters in the world and millions of people pay hundreds of millions of dollars per year to see them compete, whether by purchasing a ticket to a live event or through buying a pay-per-view telecast of one of their fights.

They will box each other at T-Mobile Arena on Aug. 26 in a match that is expected to set numerous financial records. It is expected to sell more than 5 million pay-per-views, which would break the mark set in 2015 when the Mayweather-Manny Pacquiao bout sold 4.6 million. It is expected to exceed $600 million in gross revenues and ticket sales are expected to approach or exceed $90 million.

Lawrence Epstein, the chief operating officer of the UFC, believes it will set another, more dubious, record, though: He believes it will be the most pirated pay-per-view event ever.

“For Mayweather-McGregor, it’s going to be tens of millions of dollars,” in stolen signal, Epstein said. “There’s no doubt about it. This is going to be the most pirated event in pay-per-view history. I predict that.”

If Epstein is correct, the signal that night will be stolen more than 1 million times – and a number of persons involved in the pay-per-view field interviewed by Yahoo Sports say if anything, he’s being conservative.

The pay-per-view has a suggested retail price of $89.95, with an additional $10 charge for high-definition viewing.

As they say, piracy is not a victimless crime. Fighters like Mayweather and McGregor earn a portion of the pay-per-view revenues, and the greater the signal theft, the greater the financial losses for the fighters.

While there is little sympathy from many would-be signal thieves for taking a few dollars out of the pocket of Mayweather, who earned about $260 million for his bout with Pacquiao, it also takes from far less-affluent athletes.

Former UFC CEO Lorenzo Fertitta testified to Congress about the issue on Dec. 16, 2009. At the time, he said “The UFC is potentially losing tens of millions of dollars a year from piracy.”

He later gave an example regarding UFC 106, a card held Nov. 21, 2009, at Mandalay Bay in Las Vegas that featured a rematch in the main event between Tito Ortiz and Forrest Griffin. Though the UFC does not release its pay-per-view sales, MMAPayout.com, a website which tracks the figures, estimates it sold 375,000.

The theft rate for that show, according to Fertitta’s testimony, was more than 37 percent. If Fertitta’s estimates were correct, it cost the UFC more than $6 million in lost pay-per-view revenue given the $44.95 purchase price at the time.

“The broadcast of UFC 106 had over 271 unauthorized streams with over 140,000 views, and those were just the streams that our piracy team was able to locate,” Fertitta testified.

Mark Taffet is a pay-per-view expert who came in on the ground floor of pay-per-view in the early 1990s when he worked at HBO. He went on to become HBO Sports’ senior vice president in charge of PPV before leaving the company at the end of 2015.

He expects Mayweather-McGregor to post enormous sales, but isn’t of the mind that the theft will be as damaging to the promotion as many others believe. Part of the reason for that, he said, is that the viewing experience in many cases isn’t as good as the legal stream will be.

He noted that years ago, a pirated pay-per-view signal was equal in quality to what was being offered for sale, but that is not the case now. The picture quality and sound quality are both diminished, he said.

Social media services such as Twitter and Facebook have now become an easy way for someone to share the signal, particularly with the advent of video-sharing services on those sites such as Facebook Live and Twitter’s Periscope.

Taffet, though, thinks that such streams are a poor substitute for the genuine product.

“That’s why I really believe that it’s not going to affect the buys,” Taffet said. “No one buys pay-per-view frivolously. It’s a serious proposition. When you put your hands in your pocket and take it out, it’s difficult for anyone to open their hand and let the money go. Pay-per-view is a completely different experience than watching free television. It’s very discriminating and as a result, people demand quality. Discriminating fans will not be happy with an inferior product and the experience [on a pirated stream] will be inferior.”

Last year, Facebook introduced a product called Rights Manager, which is designed to help in these cases.

Though a Facebook spokesperson declined an interview request, a blog post on its Rights Manager page denotes some of the efforts being taken to prevent theft.

“As more people watch and share live video on Facebook, we’ve taken steps to ensure that Rights Manager protects live video streams as well,” the post reads. “We check every Facebook Live video stream against files in the Rights Manager reference library, and if a match surfaces, we’ll interrupt that live video.

“Video publishers and media companies can also provide reference streams of live content so that we can check live video on Facebook against those reference streams in real time.”

Rights-holders spend significant amounts of money in attempts to reduce piracy each year. Leonard Ellerbe, the CEO of Mayweather Promotions and the lead promoter of Mayweather-McGregor, said signal theft has been an ongoing problem.

Mayweather Promotions, Showtime and the UFC have worked to limit the impact, but it is Sisyphean effort in many cases.

“We are putting methods in place to very aggressively go after people who want to steal the signal,” Ellerbe said.

There are many complex systems designed to combat piracy, but Epstein said getting the word out is very effective for folks who unwittingly watch illegal steams.

He said he’s heard from many people over the years who said they had watched a UFC event online.

“I’ve talked to a lot of people over the years and the conversation has gone one way,” Epstein said. “‘Hey, I watched the UFC card last week. It was really good.’ ‘Oh, great. Did you go to the event?’ ‘No no, I watched it on my computer.’ ‘Oh, did you watch it on UFC.TV?’ ‘No, I watched it on some site that was streaming it.’ ‘Did you pay for it?’ ‘No, it was free. It was free on this site. It was really good. Great fights.’ And then I’ll say, ‘Well, you know you stole the content.’ ‘No, what do you mean?’ ‘That signal was pirated. You have to pay 50 bucks to watch our pay-per-views.’

“I tell you that anecdote because I believe that public relations, communications, simply explaining to people that when that happens, that’s an illegal activity and what they’ve done is they’ve stolen our event, is an important piece of this process. And it’s not just hurting the UFC, the corporation, but it’s hurting the individual fighters we’re partnering with. Communications and public relations have always been an important prong in this effort. Some people just don’t realize what they’re doing.”

The Combat Sports Law blog has a section dedicated to piracy, and it has headlines like, “$25,000 Awarded for UFC 183 Piracy,” $8,200 in Damages Awarded after Piracy of UFC Events with Little Monetary Gain,” “$2,200 in Damages Awarded for UFC 165 Piracy,” $3,800 in Damages for UFC 165 Piracy,” and $20,000 in Damages Awarded for UFC 162 Piracy,” across its site.

That is evidence that the piracy issue is not just unwitting thieves, but those who steal the signal and distribute for their own financial gain.

Taffet gave a staggering answer when asked to estimate how many stolen signals will be on the internet the night of the Mayweather-McGregor fight.

“I really don’t know, but the truth is, the manner in which people are sharing and stealing signals with new technology today, you could argue that the piracy could be unlimited,” Taffet said. “With a spectacle like Mayweather-McGregor, you can imagine that the interest if not the titillation of seeing the signal could be tremendous.

“But once again, I truly believe those are not their buyers. Those people absolutely not were never going to buy it, no matter what. They’re the triers. They may get a titillating experience, but it will be a completely unfulfilling experience from an event consumption standpoint.”

Regardless, Mayweather and McGregor will make a lot of money on Aug. 26 – just not as much as they might have made otherwise.