Monday, June 3, 2013

Manny Pacquiao latest news

Manny Pacquiao latest news, By now, everyone knows that eight-division world champ and boxing cash cow, Manny Pacquiao is taking his show to Asia-- More specifically, to China's offshore gaming hideaway, Macau. It has been widely reported that the move has to do with taxes and Uncle Sam's hunger for a bigger chunk of Pacquiao's earnings.

According to promoter Bob Arum and manager Michael Koncz, the 39.6% now demanded in taxes, effective January 1 of this year, pushed their fighter over the threshold and ran him away from the red, white, and blue.
On the surface, it's a completely valid premise and one that doesn't require much explanation. Who among us hasn't objected to a high tax rate and an aggressively unfair tax code?

Really, though, this move across the world may have very little to do with taxes. Rather, it might be more about a veteran fighter looking to close out the last chapter of his career on his own terms and under his own conditions.
The augment in taxes, from last year's 35% to the current rate, is a 4.6% increase, but hardly a deal killer given the many options Pacquiao has to cut costs and also considering the uncertainty of what will happen by taking his show to China.

On paper and without any investigation, a move to Macau, where the top tax rate is 12%, would bring him an extra $6.9 million from a proposed $25 million purse. But this is assuming all things will be equal in terms of sales and revenue-- a huge assumption.

According to Arum, himself, a major pay-per-view based outside of North America could cost his company as much as 50% of the typical buy rate. So, assuming Pacquiao-Brandon Rios on November 23 would've had one million buys if based out of Las Vegas, that number could drop to as low as 500,000. In terms of revenue, the move could cost Top Rank Promotions as much as $15 million dollars.

To combat this, Pacquiao-Rios will be staged in the morning, Chinese time, to accommodate HBO Pay-Per-View and the U.S. market. There will also be an experimental push to sell the event online to Chinese consumers at a greatly reduced rate. Still, Pacquiao's absence on American soil to hype the fight will take its toll on the bottom line buy rate.

So, what will likely happen is that Pacquiao will get a greater share of a smaller purse, thereby nullifying the financial benefits of the move to China.

The 4.6% increase in taxes from last year to this year amounts to a $1.15 million hit on a proposed $25 million payday. If Pacquiao really wanted to keep fighting in America, that relatively small amount of money could be eliminated in any number of ways.

Pacquiao and his team could refuse to have his upcoming bout sanctioned by any of the four major sanctioning bodies. Currently, there is no title attached to his fight with Brandon Rios, but it will be just a matter of time before one of the organizations generates a fake belt for the contest in an effort to squeeze out a sanctioning fee.

The 3% Pacquiao would save from refusing sanctioning body overtures would amount to an extra $750,000 in his pocket.

Of course, Pacquiao could also restructure his financial relationship with Arum so that his deal more closely resembles that of arch-rival Floyd Mayweather, who was once again named Forbes' richest athlete this year.

Mayweather, thanks in great part to his adviser Al Haymon, takes home considerably more money than Pacquiao and was recently cut a check for $32 million in base pay, before bonuses, from his May 4 PPV bout with Robert Guerrero. In contrast, Pacquiao takes home a fraction of his total earnings, with a relatively small base pay and the rest coming in drips and drabs over time.

Last December, the Filipino icon received $8.595 million in base pay for his KO loss to Juan Manuel Marquez, but stood to earn as much as $25 million after sales bonuses.

If Pacquiao were to actually take control of his financial dealings, the money would come rolling in and an additional $1.15 million tax burden would not be felt at all.

What's really happening here is that the Pacquiao product has grown stale in the States and his team is eager to take him to a fresh market where the fans are desperately eager for his presence and somewhat less discerning as consumers. By the time the Pacquiao honeymoon is over and the Asian market begins to demand more of him, he will be long retired with several additional paydays under his belt.

For Pacquiao, whose empire continues to grow in his native country, competing a few hours from home is much more appealing than having to travel to, literally, the other side of the planet to make a living. And if he has been sold on the idea that the money will be the same, the decision to leave America was an easy one.

While the tax excuse may be used to curtail any possible backlash from American consumers, the move is all about lengthening a career that appears to be on the decline. It's about packing up the tent and taking the circus to another town before the act gets old.

Manny Pacquiao latest news Rating: 4.5 Diposkan Oleh: Atha Afika

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