Another View: Discord in PPV Land
Last week's Showtime Event Television-In Demandcontract dispute over a March Mike Tyson fight proved that all things will not go assmooth as the new In Demand regime would have wanted.
With Showtime pulling Tyson from PPV to fight on the pay TVnetwork, some industry executives are concerned that the rift between two of the biggestplayers in the PPV business could result in the loss of very lucrative PPV fightsfeaturing Tyson later in the year.
While for both Showtime and In Demand, this play may havebeen more about testing each other's will than about denying the industry significantTyson event revenue, it will be interesting to see what the two companies will do when atruly big Tyson fight comes knocking at PPV's door.
As with just about any negotiation, each side puts its bestfoot forward first before the real talks begin.
Showtime, already mulling over lucrative offers fromoverseas promoters for a pay TV-distributed Tyson bout, went into discussions with InDemand looking for a rate card for Tyson-Lou Savarese that was similar to its January 1999Tyson-Frans Botha deal.
Revenue splits for that fight were based on the twoblockbuster Tyson-Evander Holyfield wars, which generated record setting sales andbuy-rates for the industry.
Beginning with the disappointing Tyson-Botha PPVperformance, though, Tyson's PPV value has declined somewhat due to his troublesinside and outside of the ring in 1999. In Demand believed a Tyson PPV rate card should bebased on his current PPV appeal, and not his past.
But according to Showtime, In Demand's first offerincluded significantly increased revenue splits in favor of the industry and the PPVnetwork, as well as a decrease in the amount of industry marketing support for the fight.Instead of further negotiating a PPV deal, Showtime pulled the plug, forcing Tyson to makehis second straight appearance on the pay network.
While Tyson-Savarese may not have been Tyson-Holyfield III-- some boxing observers believe Tyson is better off not fighting on PPV, but ratheroverseas on pay TV to rebuild his once-dominant stature -- it's still lost revenuefor the PPV industry.
But operators will be really upset if a potentialTyson-Holyfield rubber match or some other marquee Tyson matchup does happen and the twosides are unable to reach a reasonable deal that works for everyone involved.
Both sides have tested the other's mettle. Showtimefound out that In Demand is not Viewer's Choice redux -- the PPV network is notafraid to be aggressive at the negotiation table. At the same time, In Demand shouldrealize that it can't be too aggressive, or it could risk alienating longtime PPVdistributors or losing potentially lucrative PPV events.
When the next Tyson fight comes up for PPV consideration,both sides need to sit down and negotiate in good faith before the whole industry reallyloses a major payday.
The smarter way to stay on top of the multichannel video marketplace. Sign up below.
R. Thomas Umstead serves as senior content producer, programming for Multichannel News, Broadcasting + Cable and Next TV. During his more than 30-year career as a print and online journalist, Umstead has written articles on a variety of subjects ranging from TV technology, marketing and sports production to content distribution and development. He has provided expert commentary on television issues and trends for such TV, print, radio and streaming outlets as Fox News, CNBC, the Today show, USA Today, The New York Times and National Public Radio. Umstead has also filmed, produced and edited more than 100 original video interviews, profiles and news reports featuring key cable television executives as well as entertainers and celebrity personalities.