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When Floyd Mayweather Jr. steps into the boxing ring on Saturday night, he’ll get paid more than any other boxer, but not just because he’s a champion in the boxing ring. Mayweather is a champion in all things concerning the game with a very unique financial model that allows him total control. Whether or not he wins the welterweight title against Victor Ortiz, Mayweather is making a cut of every ticket and every hot dog purchased and from every country that paid for broadcasting rights. According to the New York Times, Mayweather’s chosen financial plan enables him to exchange “upfront risk for back-end profit while retaining total control.” Basically, he pays for the logistics of the game, including his opponent’s fees (which will run him about $2 million on Saturday night), advertising, publicity, legal contracts and more. But the undefeated champ knows that his success and popularity will draw millions of fans and generate more than enough revenue in one fight. He earned $115 million in his past four fights. This Saturday night he will pay about $10 million, but expects to make about $40 million. In addition, he says the checks will continue to come for years depending on the results for instance, of the pay-per-view television numbers. His cut is much higher than most boxing professionals. For comparison, boxing champ Pacquiao will make about $30 million in total for his upcoming fight in November. Mayweather started his atypical business plan after hiring Golden Boy Promotions. The company, which was started by Oscar De La Hoya, is run by Richard Schaefer, a former Swiss banker with no history of working with boxers. Schaeffer describes the model as a pie, with half of the money apportioned to distributers such as Time Warner and DirecTV, and the rest handed to the network, either HBO or Showtime. The network then takes its distribution fees and the rest is given to promoters or in this case, Mayweather. Continue reading →