Canelo Alvarez: The $365 Million Deal

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Friends,

You’ve probably seen the headline by now — last week, boxing star Canelo Alvarez officially ended his relationship with Oscar De La Hoya and Golden Boy Promotions, which has represented him since 2010.

The more interesting part?

As part of his separation from Golden Boy, his record breaking $365 million deal with streaming service DAZN, which was signed in 2018, is no longer active.

Given Alvarez filed a federal lawsuit against both Golden Boy and DAZN in September, alleging fraud, breach of contract, and more, the news shouldn’t exactly be stunning.

Today we’ll run through how the contract came about, why it didn’t work out, and what’s next for Canelo Alvarez, Golden Boy Promotions and DAZN.

(📸 / DAZN)

Let’s start simple — What is DAZN?

For those of you who aren’t aware, DAZN is an over-the-top (OTT) sports streaming service which originally launched in Austria, Germany, Switzerland, and Japan in 2016, but slowly made its way to Canada in 2017 and the United States in 2018.

In simple terms, DAZN is looking to compete in the ultra-competitive sports media market by streaming live and on-demand content at $100/year or $20/month.

What’s their plan to do it?

The company appointed former ESPN executive John Skipper as executive chairman to run the operation and has spent billions of dollars on sports broadcasting rights worldwide looking to establish a vast and credible content library.

With the NFL, NBA, and MLB already locked into long-term multi-billion-dollar contracts, DAZN chose to focus their efforts on less-traditional US sports like Boxing — where their willingness to spend could have an immediate impact.

After agreeing to an eight-year, $1 billion joint venture with U.K. promoter Matchroom Boxing, DAZN decided to make their next big splash — signing Golden Boy Promotions and Canelo Alvarez, one of the most exciting & entertaining boxers in the world, to a 5 year, $365 million contract.

Here’s a breakdown of the mind-blowing contract, which at the time was the largest contract in sports history — only to be broken by Mike Trout in 2019 and Patrick Mahomes in 2020.

(📸 / SPORF)

The real question becomes — after 3 fights in less than 2 years, and everything seemingly going well with the agreement beforehand, what happened?

Well, it’s not exactly clear.

Here are the facts (Source):

• Canelo Alvarez signed a five-year $365 million contract with DAZN in October 2018, giving the subscription sports streaming service exclusive broadcast rights to his next 11 fights.

• Canelo Alvarez completed 3 fights with DAZN, against Rocky Fielding, Daniel Jacobs and Sergey Kovalev.

• His last fight against Sergey Kovalev took place in November 2019.

• Canelo Alvarez was scheduled to fight in May, but the event was cancelled due to the COVID-19 pandemic.

• Canelo Alvarez filed a federal lawsuit in September against Golden Boy and DAZN, alleging a disagreement about who Alvarez should fight next led to fraud, breach contract, breach of good faith and interference with prospective economic relations.

• The lawsuit asked for at least $280 million in damages—which is the remaining total on his contract with 8 fights left—and the right to schedule his own fights moving forward.

Details of the settlement weren’t made public—just an announcement that the contract had ended—but it appears this all came down to Canelo Alvarez’s desire to become a “free agent,” and “not the money.”

Here’s what he had to say about it (Source):

So there you have it, straight from the man himself — he just wants to fight.

But with over $280 million being left on the table, what’s next for Canelo Alvarez, Golden Boy Promotions and DAZN?

(📸 / Sky Sports)

From a macro perspective, after ending the $365 million agreement, the future for all parties involved actually looks quite simple.

Canelo Alvarez will now control his own fate — picking when, who, and where he wants to fight next. In the world of boxing, which has more backroom deals, politics, and semantics than any other sport in the world, the importance of this can’t be understated.

As of now, it appears Canelo Alvarez is finalizing a fight for next month against Caleb Plant.

Simply put, Canelo Alvarez is the greatest pound-for-pound boxer in the world and also the sports largest celebrity — he’ll be fine.

Sure, the inability to work with and subsequent loss of Canelo Alvarez is potentially a black eye for DAZN—a streaming service that is attempting to break through—but on the bright side, they now have over $280 million to spend elsewhere as they launch their streaming service in 200 countries and territories on December 1st.

As for Golden Boy Promotions, they’ll continue to work with DAZN by showcasing alternative talent like Ryan Garcia, Jaime Munguia and Vergil Ortiz Jr.

In the end, do I wish we had more detail around the settlement and what went wrong?

Of course, but this kind of stuff happens in boxing.

I’ve now turned my attention to where Canelo Alvarez goes from here, how Golden Boy Promotions utilizes their younger talent, and DAZN’s plan for global expansion — you should also.

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Extra Credit

Now that we’ve run through the financials, let’s watch some highlights.

Here’s a quick 5-minute clip highlighting the November 2019 bout between Canelo Alvarez and Sergey Kovalev — which happened to be Canelo’s last fight with DAZN.

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