Boxing on the big screen: Live fights hit movie theaters

Floyd Mayweather Jr. and Canelo Alvarez in the seventh round of their title fight in Las Vegas in 2013.
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This weekend's championship boxing match between Floyd "Money" Mayweather and Saul "Canelo" Alvarez, promoted as "The One," was the most anticipated of the year, and boxing fans worldwide were watching. And it so happens many of them watched in movie theaters.

The business model of theatrical screening of live bouts has created a new revenue source and new interest for the sport of boxing, as well as a novel selection for would-be moviegoers seeking to escape realities sometimes found just outside the venue's doors.

Dan Diamond, senior vice president of Fathom Events, the company that distributes fights like the Mayweather-Canelo matchup to partner movie theaters, likes the direction his business has been taking.

"It has been growing fight-over-fight, and audiences have been getting bigger," he said.

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Fathom screened its first boxing event in 2009, distributing Mayweather's showdown against champion Juan Manuel Marquez to 251 theaters nationwide. The company showed last weekend's fight on 543 screens.

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"We had about half the scale for the first fight," Diamond said. "I really think that the growth potential for this is enormous."

"The One" was the ninth fight—six of them featuring Mayweather—that Fathom has distributed in partner theater chains that include AMC, Cinemark and Regal.

Though final numbers aren't yet available, Diamond estimated before the event that 100,000 theater seats were available nationwide for "The One," with tickets priced at between $20 and $25, and that he expected to sell between two-thirds and three-quarters of those seats. That translates to revenue of $1.3 million to $1.9 million split between Fathom, theaters and the promoters.

While those numbers may not be overwhelming compared with estimated pay-per-view revenue of $100 million-plus for the event, Diamond says this is just the beginning.

"What we're expecting from this fight is easily double if not two and a half times what we did from our first fight," he said. "We're still a business that's in its infancy."

Wedbush Securities research analyst Michael Pachter said that at this point, movie theater screenings are about expanding audience rather than earnings.

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"I think this is more about exposure than revenue," he said. "But an incremental million bucks is an incremental million bucks."

Stephen Espinoza, general manager of CBS' Showtime Sports, the broadcaster of "The One," said theater screenings serve an unaddressed market segment.

"Overall, it's proven to be a very good tool," he said. "In the polling and research that we've done, we've seen for the most part that people who watch in the theaters were not planning to watch at home."

The Empire 25 in Manhattan was just one of hundreds of theaters across the U.S. screening "The One" this weekend. It's part of a trend that harkens back to the '60s and '70s and the heyday of closed-circuit fights.

Boxing fan Kevin Cruz, taking in his third movie theater bout last Saturday at the Empire 25, counted himself among that number.

"It's too expensive to buy at home, honestly, and at a bar it's too noisy with drinks flying around," he said. "Over here, you have the atmosphere of the movie theater, and amazing legroom."

Cruz brought his mother, also a boxing fan, to watch "The One." It was her second such event at a movie theater.

"He loves sports, I love sports, and any time that I can get away and have a date with my son, we do it," said Lucy Escalera.

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Shadeed Bey, a die-hard Mayweather fan, was viewing his first movie theater fight.

"The price is feasible," he said. "And just to have the other fans around, the atmosphere in general—it was awesome."

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It's not just established fans that the movie theater business model seeks to attract, though.

"There is an audience of people who religiously like to go to the theater on Saturday nights," said Richard Schaefer, CEO of Golden Boy Promotions, the promoter of "The One."

While the theater business model has spurred interest in boxing with new fans, Wedbush's Pachter sees even greater potential for audience expansion through more aggressive ticket pricing.

"Everything is price-sensitive, so the cheaper you make access, the more people are going to access the activity," Pachter said. "You could certainly see hundreds of thousands of tickets sold if they were willing to sell tickets for $10."

"The potential is there," said Brett Harriss, a research analyst at Gabelli & Co. "The market for sporting events is huge."

—By CNBC's Adam Molon. Follow him on Twitter @cnbcmolon.