Arum said production costs for a Macau show amount to US$500,000, about the same as for bouts in Vegas.
Arum said he envisions Top Rank, which organizes 60 boxing shows a year, eventually holding four to six a year in Macau. Las Vegas, in comparison, is hosting a dozen pro bouts this year. For Arum, the big prize in bringing boxing to China is the potential for pay-per-view profits that would dwarf those in the US.
Zou’s fights were carried on state broadcaster CCTV. Arum had hoped to offer the Pacquiao fight on pay per view, but he said lining up a deal with potential partners has been harder than expected. China’s broadcasting industry is dominated by state-run broadcasters, while premium cable and satellite channels have little role to play. One idea had been to offer the November fight for US$5 in China on smartphones. That is a fraction of the between US$50 and US$60 typically charged to see a live bout on cable in the US, but the sheer numbers of potential viewers in a country with more than 1 billion people would make up the difference.
“We were hoping to do pay per view in China, but we are not anywhere near ready to do it yet. That’s something for next year and the year after,” he said.
“Once we get that going, it could be a monster,” Arum said.
Even if Chinese pay per view does not take off, Macau will still remain a viable boxing venue because for non-US fighters, it will represent a bigger purse. They will not have to pay US taxes of about 40 percent on their earnings. That would be a substantial incentive for someone such as Pacquiao, who would only be subject to lower tax rates in the Philippines or Macau on the between US$25 million and US$30 million that Arum said he is expected to earn from the November fight.
However, the biggest upside from the fight nights may be for the casino. It benefits directly from more visitors, which will help raise gambling revenue. The Pacquiao fight will be an especially good chance to reel in the high-rolling mainland Chinese VIP gamblers that have supercharged Macau’s casino industry.
It also gives casinos another way to circumvent the advertising and promotional restrictions that come with mainland China’s ban on casinos.
“The boxing in Macau without doubt helps promote Sands China or the Venetian brand in China,” said Aaron Fischer, head of gaming research at brokerage CLSA Asia-Pacific Markets. “Marketing of casinos is illegal in China and hence gaming companies will have to indirectly promote the integrated resort by marketing the non-gaming facilities like the hotel, conventions or by marketing the various events like boxing matches.”