It was recently reported that Manny Pacquiao’s purse for the Miguel Cotto fight amounted to “only” $7.5 million as registered in the contract submitted to the Nevada State Athletic Commission (NSAC).
Pacquiao’s purse for the Oscar de la Hoya fight was also reported to be $6.6 million and for the Ricky Hatton fight, $7.4 million. The figures were extracted from documents held by the NSAC.
For those three fights, Pacquiao received checks, which reflected a deduction for income tax, equivalent to 30 percent, withheld in favor of the US Internal Revenue Service (IRS).
But you and I know that a fighter of Pacquiao’s stature doesn’t negotiate on the basis of a purse stated in a contract. He negotiates on the basis of a guaranteed income which includes the “contracted” purse.
From sources, it was gathered that Pacquiao’s guarantee has escalated from the De la Hoya fight to his recent bout against Cotto. For De la Hoya, he was guaranteed a sum of $10 million. For Hatton, it was $12 million and for Cotto, it was $13 million.
The difference between the guarantee and the “contracted purse” is covered by part of what Pacquiao earns from his share in other fight-related revenues, including pay-per-view sales, site fee, ticket sales, closed-circuit TV sales, delayed TV rights fee, merchandise sales, international rights fees and sponsorship fees. The risk is absorbed by the promoter who guarantees the income.
In those three fights, Pacquiao’s share in “ancillary” revenues went beyond the balance of $3.4 million for De la Hoya, $4.6 million for Hatton and $5.5 million for Cotto.
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Aside from the guaranteed income, Pacquiao negotiates a percentage of the “extra” revenues.
For the De la Hoya fight, it wasn’t clear what the sharing was but for discussion purposes, let’s assume that Pacquiao took a 40 percent share with the Golden Boy claiming the balance of 60 percent because of his marquee status. The fight brought in roughly 1.25 million pay-per-view buys amounting to about $70 million. If De la Hoya and Pacquiao shared 60-40 on the “upside” of the pay-per-view sales, meaning net of expenses borne by the satellite provider and the promoters’ cut, it’s possible that the Filipino could’ve earned as much as $6 million from his pay-per-view share, easily covering the $3.4 million difference between his “contracted” purse and guaranteed income. He also collected from his share of other “ancillary” income from the site fee, ticket sales and others.
For the Hatton fight, Pacquiao initially bargained for a 55 percent share with a $12 million guarantee, later scaled down to 52 percent with a $13 million guarantee. Eventually, Pacquiao settled for a 50-50 sharing with a $12 million guarantee but Top Rank and Golden Boy, the co-promoters, agreed to give up a portion of their shares to increase the Filipino icon’s cut to an effective 52 percent. It was probably the first 52-50 sharing in negotiating history.
The word was the Pacquiao-Hatton fight drew less than 900,000 pay-per-view sales so it’s possible that the Filipino could’ve pocketed only about $6 million as his share – still covering the $4.6 million difference between his “contracted” purse and guaranteed income.
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For the Cotto fight, HBO Sports said 1.25 million pay-per-view buys were generated, bringing in about $70 million in revenues. It was Pacquiao’s second fight that raked in at least a million pay-per-view hits. The figure includes 650,000 subscriptions from cable homes and 600,000 from satellite and telco homes. Puerto Rico added to the total with 110,000 buys.
It’s not certain what the sharing was for the Pacquiao-Cotto fight. As both fighters are under contract with Top Rank, there shouldn’t have been a problem settling the cuts. If Pacquiao took a 60 percent share, he would probably bankroll at least $10 million more from his pay-per-view slice alone. That would easily take care of the $5.5 million difference between his “contracted” purse and guaranteed income. So for the Cotto bout, it’s possible Pacquiao could walk all the way to the bank with a cool $23 million, less withholding tax, of course.
If you add up the numbers, Pacquiao’s guaranteed income from his last three fights amounted to the equivalent of about P1.6 billion. If you include what could be his share of the pay-per-view stakes in those three fights, his total take would probably be in the vicinity of P2.5 billion.
By the way, Pacquiao’s tax lawyers and accountants may submit expense reports to the IRS to get back a part of what had been withheld from his “contracted” purse. Pacquiao’s earnings from “other” income come in on a staggered basis, not in a lump sum as is the case with his “contracted” purse.
If Pacquiao fights Floyd Mayweather Jr., the pay-per-view buys will likely eclipse the record of 2.15 million registered in the Pretty Boy’s duel with De la Hoya in 2007. It might go over 2.5 million buys which could mean revenues of close to $140 million. Assuming a 50-50 sharing, Pacquiao could take home at least $30 million from his pay-per-view cut alone. In all, he could earn as much as $50 million or P2.4 billion in the showdown. That kind of money is a convincing reason to postpone any talk of retirement.
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