What Does the Fight of the Century Mean to the Vegas Economy?

Tess Eyrich | April 28, 2015 | The Latest

In an off-the-cuff chat, Bill Hornbuckle, president of MGM Resorts International, talks about the Fight of the Century’s impact on the Vegas economy and tells us what he’ll be doing on fight night.

The MGM Grand Garden Arena and its parent company, MGM Resorts International, may be hosting the upcoming Fight of the Century, but when Floyd Mayweather Jr. comes face to face with Manny Pacquiao on May 2, the financial impact of their meeting will certainly be felt in every corner of Sin City. We sat down with Bill Hornbuckle, MGM Resorts International’s president since 2012, to gauge the unprecedented fight’s economic significance and find out how an MGM executive experiences a fight night in Vegas.

In terms of how much money this fight will funnel into Vegas, the highest number we’ve heard so far is $400 million. Do you think this is an accurate estimate?
BILL HORNBUCKLE:
I would suggest a little more than that, although nobody knows ultimately. There are a couple of things I can tell you. The gate for the fight—just ticket sales—is over $70 million. Room revenues, as you’ve seen throughout town and in most of our properties, are up 30, 40, 50 percent and then some, in some instances, particularly at MGM and some of the surrounding high-end luxury properties.

We’re going to sell 39,000 closed-circuit tickets, and when I say “sell,” half of those are for sale to the public and guests, and the other half are for casino customers and other special [invitees], people who may or may not have qualified to go to the fight or would choose not to go to the fight because of logistics or location.

We’re going to have a community filled with 100,000 fight fans that weekend. If you think about extra money, [$400 million] maybe makes some sense, but if you think about it in totality, [that number] is probably a little light. This is the biggest fight in history by far, in terms of monetary economics.

How important is this fight to a company like MGM Resorts International?
BH:
Well, we serve principally as a venue provider. We’re not the promoter of the fight. We make a large ticket buy and we provide ancillary services around the activities. […] We consider ourselves an entertainment company, and this is one piece in that puzzle. We’re not a hospitality company, we’re not a resort company—in our view, we’re an entertainment company, and this is one vehicle to be able to demonstrate that, much like our new arena. We’ve got some other new plans coming up in terms of entertainment, and sports are a big piece of that.

Vegas saw a record number of visitors in 2014, even as gaming’s popularity continued to wane, in part because millennials are more interested in entertainment than gambling. Is there a strong push to sell boxing to a younger generation in the future?
BH:
Yeah, a crazy push. I think we’ve all seen the phenomenal job that [Ultimate Fighting Championship owners] the Fertittas have done with UFC. […] That didn’t get off to a great start. Lorenzo and company were off to a difficult start and it got exposure on Spike TV and some other things happened and the next thing you knew, they had a billion-dollar business. It was mostly [because of] young millennials—that’s not lost on boxing.

Why do you think Vegas has developed a reputation as such a perfect place to host fights and how do we continue to protect that reputation?
BH:
I think we’ve learned how to do it and how to accommodate it. […] The MGM has become iconic. It’s scaled right, the view quarters are right, and it’s become known as the home of championship boxing. Yeah, there are other venues, but many people who come here—fighters and otherwise—say, “From the moment I get off the plane until the moment I leave, I think about this as a total experience.” You can go to [AT&T Stadium in Texas], to use an example, but where are you? You’re out in Arlington. Other than the actual fight itself, the activities, the hype, the surroundings, the people-watching—all of the things you can do—you just can’t replicate anywhere but here.

When you have a venue that has 15,000 seats versus a venue that has 100,000 seats, it doesn’t take a math scientist to figure out the [difference in] numbers. Ringside tickets are $10,000 [at the MGM Grand Garden Arena]. MGM Resorts bought every ticket we could get access to and because of the demand that we created and the way that we yield this arena, while it doesn’t compare to a 100,000 seat one, […] our gate proceeds are amazing here. Only because of the resort community […] and all of the stuff around it can we afford to spend. I’ve got one customer in particular that I’m going to give eight $10,000 tickets to—“Here’s $80,000 worth of tickets, I hope you enjoy the fight, sir.” I’m happy to do it. It makes sense for him, for us, and for everybody. That doesn’t happen in Dallas, Texas.

Back in 2011, The New York Times reported that Pacquiao’s boxing matches played a large role in attracting a number of wealthy Asian gamblers to Vegas. What is it about these two fighters—and the demographics they attract—that makes this fight so beneficial to the Vegas economy today?
BH:
It’s kind of interesting, if you understand where the fight game was and where it’s migrated. In the ’80s at Caesars, we had [Marvin] Hagler versus [Thomas] Hearns and some great middleweight fights. They were beginning to be exposed to an international market, particularly from Las Vegas, as the international market started to come to our destination more often.

Then you got into the ’90s and what was extremely intriguing—and I’ve talked to many Asian customers about this—was that Mike Tyson, and the sheer raw power of a heavyweight, was compelling as hell to them. It was something that they just enjoyed coming to see and so we got in that game with Tyson and [Evander] Holyfield, but it’s migrated from that. If you understand today’s great fighters, in terms of prizefighters who make the most money, it’s no longer heavyweights again. It’s all focused on middleweights and all of the classes that surround that. You’ve got two fighters—Floyd, who’s become iconic for all kinds of reasons, and Manny Pacquiao, who represents […] a lot of Asia. When Manny goes into Macauan fights, he sells them out.

Which great fight of the past would you compare this one to?
BH:
In terms of the proceeds, nothing in history, not even close. In terms of classic fights, the Tyson-Holyfield series that was here was probably the closest thing and the last thing that was like it. […] But there isn’t anything in the past couple of years that even comes close to this. We’re hoping for a great fight—I want a great fight for a rematch. I’d love to see this done all over again at some point in the near future.

What will you be doing on fight night?
BH:
I’ll be there. All of the work will be done […] but we’ve set up some reception areas for VIPs, so it’s all about saying hello and thanking them for coming.

So, is it safe to assume that you’re a Mayweather fan?
BH:
No, I’m rooting for a great fight and a rematch.

Who do you think is going to win?
BH:
I’m not going there. I think it’s going to be a great fight, I really do. Floyd is very difficult to hit but Manny can rock people if he hits them. It’s hard to bet against Floyd […] because he’s just never lost and he’s a master craftsman.

How imperative is it for Vegas to continue hosting fights like this one?
BH:
Making sure we have a healthy economy around convention business and all that happens there is critical to our business. Making sure that international tourism continues to grow is critical to our business. Making sure that we’re always seen as the entertainment capital of the world is critical to our business and boxing has been, on a world stage, the one thing that has broken through. […] It’s one of our biggest branding vehicles, not only for our company, but for the city, and I think it’s essential.

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