They are two of the biggest stars in their respective sports – mixed martial arts and boxing, but on Saturday, August 26, the Ultimate Fighting Championship’s Conor McGregor will step into the ring at the T-Mobile Arena in Las Vegas to fight the undefeated Floyd “Money” Mayweather, widely considered one of boxing’s all-time greatest athletes in what is being billed by Showtime’s promoters as “The Money Fight.”
The promotion is appropriate as each fighter is expected to produce a lucrative payday as Mayweather is set to make at least $100 million, but that figure could increase four times that amount if the event hits its targets in audience, according to Forbes. Meanwhile, McGregor is set for his largest single fight payday ever as he figures to take in at least $75 million from the showdown.
These are figures that most entrepreneurs can only dream of, and in reality, only a small percentage will achieve. However, there are lessons small business owners can learn from Mayweather and McGregor:
1. Build Your Brand
Mayweather and McGregor are marketing geniuses; their trash talking generates an unprecedented level of interest in their fights. However, they walk the talk and that is a variable that separates them from the rest.
Last year, McGregor became the first fighter in UFC history to simultaneously hold championship belts in two different weight divisions. Meanwhile, Mayweather holds a 49-0 fighting record and was only knocked down once in his entire career. Both fighters leverage their winning percentages in the root of their promotional efforts.
Entrepreneurs must identify their niche in the industry and what separates their enterprise from its competition. Take that difference and run with it – don’t be afraid to be brash in your promotions. However, keep the trash talking of your competition to a minimum to avoid potential lawsuits.
2. Understand Supply and Demand
Boxing is sometimes referred to as a dying sport. Meanwhile, Mayweather and McGregor are leveraging intrigue in an inter-sport fight for a massive payday that the fans demanded. Mayweather, who came out of retirement to compete in his 50th fight, has defeated everyone he has faced. This “super fight” between the two most famous current athletes in either sport is the first of its kind and engages fans of both mixed martial arts and boxing. The public has been asking about it for years at this point. There is a tremendous amount of intrigue as to whether the showdown will live up to its hype. If it does, expect a lucrative rematch; if it is a disappointment, the public won’t buy into it again.
For entrepreneurs, harnessing such excitement in their product or service is a dream come true. Understand your market and identify a particular area that is lacking and may need improvement. If you have a popular new product, be sure you can generate a supply that will meet demand.
3. Charge Premium Rates for Your Product/Service, When the Market Dictates It
The pay-per-view price for Mayweather vs. McGregor are expected to be $99.95, which is higher than most other PPV events. Tickets are already sold out for the live gate, and on secondary marketplaces, such as StubHub, prices start at over $2,500. If you want to sit in the lower level, expect to pay well over $5,000. Ringside seats are expected to fetch more than $20,000 on the ticket marketplaces. In comparison, tickets for this fight dwarf that of the NFL’s Super Bowl, America’s most-viewed television broadcast. While the boxing venue is much smaller than a football stadium, the ticket prices for the event speak volumes on the demand.
While the fighters won’t see much, if any, of the royalties on the ticket sales on these secondary marketplaces, it is a good metric of the interest in the fight. If pay-per-view subscriptions on Showtime exceed expectations, both fighters should anticipate a nice bonus to their purses.
For business owners, understanding the supply and demand of your product is essential to success, and knowing when to charge a premium price for an item in high demand can make you rich. Don’t underprice if you have something in high demand.
Regardless of whether you’re a boxing or MMA fan, business owners should be able to appreciate the business success of Mayweather and McGregor. These athletes excel at their sport but are on another stratosphere when it comes to marketing and selling their brands.