Boxing its way out of a crisis?
The entertainment industry has been heavily affected by the global recession. Sports fans simply don’t have the disposable income available to be able to afford to attend or pay to watch as many events as in the past. So what affect has this had on the boxing world and can it fight its way through this crisis?
The statistics
At its peak the match between Muhammad Ali and Joe Frazier in 1971 drew in 27.3 million viewers on BBC1. This is almost half the population of the entire country and demonstrates the potential audiences that boxing matches can attract. However, since then the number of channels has increased from just three to a couple of hundred and boxing has moved from its prime time terrestrial channel position to a pay-per-view model. This has resulted in viewing figures dwindling to below one million which has substantially affected the sports appeal to potential sponsors eager for brand exposure to a large audience.
Getting the best television package and maintaining the interest of sponsors is a difficult balancing act which many critics have argued boxing officials have got wrong. In exchange for a big increase in revenue, the boxing industry has sacrificed a large chunk of the television audience which has limited the sports appeal to sponsors who have injected substantially less money into the sport over the past decade. It can not be argued that this sponsorship exodus is in anyway to do with the boxing industry being outdated because of the huge appeal of boxing films such as ‘Million Dollar Baby’ or ‘Rocky’.
In fact, the latter inspired the recent advertisement by Moneysupermarket featuring John Prescott, which shows that potential sponsor interest is still there. So what can be done?
Expanding horizons
Formula One boss Bernie Ecclestone has proven that this balancing act is not impossible as he has maintained his sports position as a big attraction to sponsors while at the same time maintaining a substantial television revenue stream. He has done this by expanding the sports coverage to extend to growing markets such as Russia and India. This has enabled F1 to be broadcast on BBC1 (along with the accompanying increased television audience) and still maintain a substantial television revenue stream thanks to have deals with television networks around the world. However, the sport has achieved this by featuring drivers from these regions which has helped stimulate interest in these new markets and hence justified the interest from television stations in these countries.
The much ridiculed Max Mosley is the man primarily responsible for this shift as his primary goal upon being appointed as the head of Formula One’s governing body (FIA) in 1991 was to improve the sports coverage in the developing world. He planned to do this by creating races in these regions which helped develop enough interest to ultimately produce the stars of tomorrow who he hoped would be enthralled by the prospect of one day driving a Formula One car. Mosley believed that once these stars finally reached Formula One then the popularity of the sport in the country would explode as their countrymen would have a figure to support.
There is no better evidence of this than in Spain, where audience figures were well below one million in the 1990s prior to the arrival of Fernando Alonso. However, when Alonso started to become successful audiences figures exploded to well over ten million. This resulted in F1 gaining more money from a television deal with one of Spain’s primary terrestrial channels (TV3) and also resulted in a number of big Spanish sponsors entering the sport (Telefonica, Repsol and Sandtander).
Perhaps these are lessons to be learned by the boxing industry.
