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Overhyped? Mayweather-Pacquiao loses a little steam

Updated

First, let’s be clear. The Floyd Mayweather-Manny Pacquiao fight Saturday night in Las Vegas will be the most lucrative boxing match in history.

Mayweather will earn at least $120 million (he says it’s closer to $200 million), giving him the highest single annual payday for an athlete. Pacquiao will earn at least $80 million. Uncle Sam will take a big bite, but at least the fighters can be happy they’re fighting in Nevada, where there’s no state income tax. 

Everyone in town expects to go home richer.

But they may not end up quite as rich as they thought.

Sky-high ticket prices and hotel rooms remain inflated beyond anything Vegas has ever seen, but they’re starting to come down.

For example, take the MGM Grand, which is hosting the fight. Rooms can usually be had for $85. Earlier this week fight-night prices skyrocketed to $1,500 a room, but by Thursday, Kayak.com showed some rooms available for $475. That’s still more than five times higher than normal, but a lot cheaper than nearly 18 times more.

“Prices have been falling – not to say they won’t rebound, but that’s good for the buyer.”
Nick Gray, StubHub ticket returns manager
There were reports that tickets had sold out to closed-circuit viewing areas inside MGM properties in Las Vegas—the only places in the city where people who can’t get into the fight will be able to watch it on TV. However, as of Thursday night, there were tickets available for the viewing party inside the MGM Grand Ballroom starting at $327. Tickets that include free drinks started at $418.

As for tickets to the fight itself, secondary-market site TiqIQ said the average resale price has fallen almost 17% to about $9,600. 

StubHub reports that while the highest asking price for ringside seats is $350,000, the highest selling price so far has been $41,000. “Prices have been falling—not to say they won’t rebound, but that’s good for the buyer,” said StubHub’s ticket returns manager, Nick Gray.

Chris Marcia is an equities trader who managed to score a ticket during the 60-second interval last week when they were available to the public. “I did something a little under the radar,” he said. “I bought my ticket off the mobile app because someone was telling me they allocate a certain number of tickets off mobile.” 

Marcia purchased one ticket for $8,000, and he hoped to quickly make a profit since he saw prices for similar seats hit $15,000 or more. However, under StubHub rules, he could not put his ticket up for sale until he took physical possession of it. That did not happen until Wednesday.

“The market has gone down … I’m hoping by Saturday there will be an uptick,” Marcia said. He’s hoping he can resell the ticket for $10,000. If not? “I’m going to the fight. I’m a huge Manny Pacquiao fan.”

The outlook is better for betting.

“I’m expecting 50 to 60% of what the Super Bowl does,” said Jason Simbal, vice president of risk management at CG Technology, as he stood in the middle of a busy sports book operation within The Venetian. “The Super Bowl does about $100 million to $120 million per year for the past couple of years, this will be about half that, 60% of that number.”

Mayweather remains the favorite, but Simbal said many bettors see the fighters as evenly matched, so the majority of bets are coming in for Pacquiao. Basically, if you bet $100 on Mayweather and he wins, you win $50. Bet $100 on Pacquiao and he wins, you take home $150. “The normal customer likes a value,” Simbal said. 

The average bet is around $500, though some are in the six-figure range. But what’s really eye-opening is the volume of bets. “The previous high was Canelo-Mayweather in May of 2013,” said Simbal. “We have already eclipsed that handle number today, Thursday morning. We are going to triple that, maybe even go five times.” 

So while ticket prices and hotel room rates may be deflating before the “Fight of the Century,” there’s still plenty of money rolling around Las Vegas like a Southwestern dust storm. Simbal said when you throw in all the betting coming in for the Kentucky Derby, “It certainly will be a record-breaking weekend.”

CNBC’s Jessica Golden contributed to this report, which originally appeared on CNBC.com.

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Overhyped? Mayweather-Pacquiao loses a little steam

Updated