How Mayweather-Pacquiao gives PPV cops a chance to make big money

After years of hype and buildup, Manny Pacquiao and Floyd Mayweather will finally meet in the ring on Saturday evening. It’s a big night for boxing.

It’s also a big night for HBO and Showtime, who are jointly producing the pay-per-view television event. At $89.95 (£59) — and 10 dollars more for HD — the fight is the most expensive pay-per-view of all time, smashing the previous high of $74.95. Previous Mayweather and Pacquiao fights have generally been closer to $70.

The two boxers are expected to divide around $300m. Lots of money will be made on Saturday night by the promoters, the ticket brokers, the Vegas hotels, the PPV operators, the cable companies etc. But another group will be making money on Saturday night, too – the pay-per-view cops.

On the night of the big fight, the PPV cops – who are not real police, though one company says many former law-enforcement officers are in their ranks – will attempt to find bars showing the fight without having paid licensing fees. If they help promoters nail establishments that have not paid, the companies say they can make hundreds or even thousands of dollars.

A bar cannot just order the $100 pay-per-view and show it on its televisions; it needs a licence to show the fight in public. G&G Boxing — the company selling the rights to show Saturday’s fight — reports the cost of the event “is determined by the occupancy of your establishment among other factors”. ESPN’s Darren Rovell reported the cost for this bout is $25 multiplied by the fire code occupancy of the location.

It varies. Bar owners and managers report numbers around that. A bar manager in Wilmington, Delaware, says his place was quoted $5,000 for a 257-seat occupancy (about $20 a head). Cardrooms in California have been quoted as high as $50 a head. A Buffalo Wild Wings in Henderson, Nevada, was quoted $4,500 to show the fight.

You have to sell a lot of food and beer to cover such a high cost. It’s no wonder many bars are opting out of showing the fight, despite the amount of interest. KTNV-TV of Las Vegas talked to quite a few sports bars that have declined to show the fight; it simply wasn’t worth it to them.

Bars, of course, have a murkier option: they can show the fight illegally. The owner of a bar in south-eastern Pennsylvania, who asked for “anonymity and vagueness of his location” so he could talk, says he is closing down the bar on Saturday night rather than spend the money to order the fight. Obviously that’s not his real plan: “We’re going to have our regulars in and we’re all going to watch the fight.” The owner had not even bothered to check with G&G to see what it would cost, as “he knew he couldn’t afford it”. He says he wants to give his regular customers what they want, but he says he cannot do it above-board. He says he has done this before – but only for WWE wrestling.

But our bar owner could be in trouble if he has more than just his regulars in. G&G says it attempts to combat piracy – threatening those showing the fight without paying the licensing fee – with “civil liability for actual and statutory damages in excess of $100,000, injunctive relief, legal costs and attorneys’ fees, as well as other severe criminal and civil penalties as provided for by federal copyright and state and federal telecommunications laws”.

Companies take this seriously. G&G even has a bilingual line where interested parties can report PPV piracy. Sometimes bar owners make it easy by advertising the fight on social media or on fliers. But others go into deep cover to show big fights. That’s where the PPV cops come in.

The company Audit Masters did not respond to requests for comment. But it did advertise on Craigslist in February for auditors for the Mayweather-Pacquiao fight. On Monday, Edlund Data Services — a company that specialises in recruiting mystery shoppers — posted an advert looking for PPV cops for Saturday’s event.

People contracted by Audit Masters get a list of bars legally showing a PPV. During the four-hour telecast, PPV cops travel around to locations that are showing the fight but not on their list.

“We do not tell you where to go,” Audit Masters says on its website. “That is up to you, we leave that up to your local expertise as to where you feel the most productive areas for piracy would be. We do ask that you average at least five stops per hour during the hours of the telecast.”

The company – Audit Masters or another firm – then has its “police” give affidavits about what they saw. These can get incredibly detailed, as one lawsuit stemming from a 2009 Ultimate Fighting Championship (UFC) pay-per-view broadcast of a fight between Georges St-Pierre and BJ Penn showed. This suit was filed by Joe Hand Promotions, a Pennsylvania–based promoter. “Network showed replays of Pierre’s left jabs and spoke of how effective they were,” Jerauld Peacock said in the affidavit, after previously reporting he had entered a Virginia bar and ordered a drink. “Upon the decision, Pierre did his trademark back flip, over rotating, doing a backwards roll and springing to his feet.”

Audit Masters’ testimonial page quotes a J Mallow from Miami Dade Law Enforcement: “The first time I went out, I caught seven pirates. When Dee calls with a gig I am always ready to go, I know two things are going to happen: 1. I am going to bust some bars engaged in illegal activity; 2. I am going to make some decent money for the night … I also get personal satisfaction from the fact that some of these bars will be closing and when a bar that was a detriment to the community is closed, the community as a whole is better off, to me, as a law-enforcement officer, it is a win, win situation.”

PPV cops are paid by the number of illegal locations they are able to find. The ad posted by Edlund offers $250 per location found.

Part of this is bluster: companies want to scare bars into paying fees in advance. But if a bar is caught showing a fight without paying, there can be significant consequences. A bar in Lake Elsinore, California, shut down after paying a $23,000 fine for illegally showing a Mayweather fight. J&J Sports Promotions, which licenses fights and has partnered with G&G, has also filed more than 1,600 lawsuits against businesses illegally showing PPV events since 2010. In 2009 it won a $112,800 default judgment against a bar in Arkansas. It settled for $50,000 with a bar that showed the Mayweather-Victor Ortiz fight in 2011. “I’m not in business to sue people,” the J&J president Joseph Gagliardi told the Los Angeles Times. “But I’ve got to do it for one reason: to protect the clientele who are doing it right.”

It is not limited to boxing. The UFC has sued several bars that showed PPV events without paying. Four years ago the UFC sued one Nebraska bar for $260,000. Another lawsuit in 2010 asked for $640,000. Joe Hand, which has distributed the UFC since 2001, lists several victories against bars on its website. It has won between $6,325 and $80,000 after suing bars that illegally showed UFC cards. In the 2009 St Pierre-Penn fight, where the backflip was described in a court filing, Joe Hand settled for $2,400.

Audit Masters says Saturday’s fight will be “the most pirated event ever … and without question this will be the absolute most worthwhile, beneficial lucrative, productive, successful, and profitable event ever worked by our auditors. It will be without a doubt the biggest moneymaker ever”. For bars caught showing the fight without paying, it will be anything but.