THE BLOG

Top 3 Business Lessons From Mayweather-Pacquiao

05/07/2015 10:20 pm ET | Updated May 07, 2016
Photo by Al Bello/Getty Images

The latest 'fight of the century' ended as many have before - collective viewer boredom followed by calls for a rematch. Despite its oftentimes unmatched hype, boxing frequently delivers disappointing end products. Pacquiao's shoulder injury adds customary intrigue and lengthens the news cycle. On the other hand, the event's financial success can't go unnoticed during one of the most packed weekends for sporting events in recent memory. Beyond the usual marketing commentary, the fight environment offers some surprisingly ground-breaking lessons that are changing traditional perspectives.

Lesson #1. Periscope is a game changer. #MayPac was the first major event to feel the impact of Periscope - Twitter's new live video streaming app for iOS. Users could easily circumvent the broadcast rights holders and bring viewers live feeds of the event. Needless to say, this creates a game of whack-a-mole for Periscope's rights enforcement team. The MayPac fight was the first major event to let this particular genie out of the bottle.

Every rights holder needs a clear strategy beyond packaged video and commercial breaks if they wish to protect their revenue streams. Specifically, strategies like NBC's much criticized decision to delay broadcasts from inconvenient time zones for the Olympics are no longer viable. Infrastructure companies will devise speedbumps to slow the trends, but the technology won't go backwards. Rights holders shouldn't be looking to Twitter and other start-ups to protect the status quo. Dick Costolo, CEO of Twitter revealed his position when he tweeted victory for Periscope shortly after the fight. The official position of Twitter will no doubt change quickly as lawyers and lobbyists gear up for battle. Unlike the early days of Napster, all sides of the conversation are better prepared and well-funded. Legal wrangling won't resolve the question. It will take a clear plan to monetize a technology that won't go away. Regardless of the end game, Periscope is real, can operate at scale, and will be an ongoing and growing factor.

Lesson #2. Operational excellence remains important. While Periscope was operating at scale, traditional infrastructure failed. Cable and satellite companies weren't able to cope with demand resulting in yet another round of service nightmares with some reporting 12 hour wait times. Issues were so pronounced that the fight was delayed in hopes of resolving the problem. As outages grew, following the battle between subscribers and customer service on social media became more entertaining than the fight. The hard-dollar cost to the distributors won't be tallied until decisions on refunds are made, but it's bound to be significant. A corollary lesson is that, in the end, customer service doesn't matter. Anyone cutting the cord in the hopes of finding a Periscope feed still has to pay for broadband service. Broadband providers hold virtual monopolies on high-speed access for consumers. Most industries aren't as fortunate.

Lesson #3. Consumer activism rings hollow. Not long ago, the NFL was under fire as Adrian Peterson, Greg Hardy and Ray Rice sparked outrage with their behavior. Boycotts were threatened, advertisers were nervous, internal discipline was handed down. In the end, the legal outcomes were benign. Major sports are supported by advertising dollars not consumer spending. When advertisers feel threatened, they take a stand, sports leagues react. Consumers aren't required to follow through on posturing. Boxing, in contrast, is driven by consumer choice. Major advertisers don't play a role. In the lead up to MayPac, several anti-domestic violence groups voiced concern over Mayweather's history of domestic violence with #noMayPac trending briefly. However, without major advertiser involvement, the concerns fell flat. Celebrities showed up, consumers bought PPV, millions of people still talked about the fight. Without the megaphone and infrastructure offered by advertisers, consumer attention is fleeting and activism ghostly. Mayweather is estimated to walk away with $180 million for the fight with most coming directly from consumer willingness to pay to see him. Nice guy, Pacquiao, in contrast, only gets $120 million.