How the Market Perceives Conor McGregor vs Floyd Mayweather

Conor “The Notorious” McGregor did it. He succeeded at selling the idea that he has a chance to beat Floyd “Money” Mayweather. I looked at the odds this morning and Floyd pays 1.15x and Conor 5x your money. Basically a $100 bet on Floyd will give $115 (15% gain) and the same bet on Conor will pay you $500 (500% gain). Yes obviously McGregor is a massive underdog. But the odds give McGregor a better chance of beating Mayweather than ranked professional boxers. In Mayweather’s past fights, a bet on him yielded less than 5% (-1.05x your money). The opposite fighter usually paid at least 8x your money. This would imply that Conor should pay upward of 8 times your money. But the market is inefficient. Mood, perception and the buzz surrounding Conor seems to be moving the line here. Basically McGregor managed to convince the public that he has a chance. Even after he was knocked out by his sparring partner. And that plays directly in the hands of Mayweather and the promoters. The promoters needed to desperately sell the idea that Conor has a chance to win so they can sells millions of PPVs. Everybody is in on it, even Conor, except of course the viewers that will be forking the money to watch this circus. A circus. That’s what it is. This will not be a real fight. It’s absolute circus.

Verdict:

Well I believe the press conferences offered more in terms on entertainment than the fight will. If this is a real classic boxing match, Floyd wins. If this turns into some crazy show, anything can happen. Imagine if Conor starts the fight in a karate stance? Will that mess will Floyd’s head? If Conor is in deep trouble, will he use his kicks or take him down or something. Imagine if McGregor kicks him in the head and knocks him out cold. Or takes him down hard. Does a fighter get his payday if he’s disqualified? Maybe the fight will be fixed and you will a second fight to suck more money out of fans. Verdict: I highly doubt you will get your money’s worth. It will not live to the hype. Winners: Floyd, Conor even if he loses, the promoters. Losers: People forking $100.

Maybe it will look like this:

Odds on Bet365 on Monday July 17, 2017.

Floyd Mayweather vs Conor McGreggor

Mike Tyson the Investor

mike-tyson-trading

I love Mike Tyson.  He was the absolute dominator in his prime. There hasn’t been a fighter like him since. But it’s really hard to fall for this ad. Associating Mike Tyson to online trading…I’m not sure that’s a smart move. Mike Tyson can punch really hard. That’s his thing. I don’t know if you have heard him speak, but it doesn’t rhyme with forex or futures’ trading. What’s even more ridiculous is the note in the bottom left corner stating that U.S. citizens cannot trade on Trade12. I’m pretty sure Mike is a U.S. citizen and if he’s trading on Trade12 that would make what he’s doing illegal. I don’t think Mike is trading. He just sold his image because he’s broke (again why would that be a good person to promote making money?) But I would love to have Mike as a counter-party (in trading, not in the ring).

I don’t think the ads got much traction. There’s two videos on Youtube has about 300 views combined since July.

Taxes and Stamkos

*Update: 35 minutes after posting its reported that Steven Stamkos resigned with the Tampa Bay Lightnings.

I written two pieces in the past on professional athletes and money, The Montreal Tax and Broke Athletes.

My brother, Hugh, sent me this great article from TSN on the possibility on Steven Stamkos signing with the Toronto Maple Leafs. You need to listen to Bob McKenzie’s analysis of the situation, he’s one of the best. Toronto fans are getting all excited since he’s a kid from the Toronto area (Markham) and signing this elite player would change the faith of the franchise. That’s the team that finished last and the proof of their last Stanley Cup conquest are black and white pictures.

Steven Stamkos is the biggest NHL free agent to hit the market in years. Mr. Stamkos is likely to command one of the highest salary in the NHL. While there are many factors that go into this decision we don’t exactly know what exactly is driving Stamkos’ decision. It’s actually pretty hard to read. If it was purely money, he would have resign with the Tampa Bay Lightnings. If it was team success, he would have also resigned with the Tampa Bay Lightnings since the team is one of the best in the league. From what I heard, and that again are purely rumors, he was offered the same contract than Patrick Kane and Jonathan Toews. I believe the contracts are worth $10.5 million each per season for eight years. Another theory is that he’s waiting to see what the others team are offering to have TB match the terms. This is the first time and maybe the last time (big money years anyway) that Stamkos gets to be an unrestricted free agent and test the market.

Talking about dollars, we love to speculate on how much money one player makes but one area we often overlook is after tax dollar that is left. We don’t talk about it because it’s not sexy and complicated but taxes play a huge role in the decision a player has to make when it comes to picking a city. The Canadian cities are clearly at a disadvantaged when it comes to attracting top talent. Let’s face it, $10 million in Toronto is not same as $10 million in Tampa Bay. According to the article, if he was paid $10 million (U.S.) a season by the Maple Leafs, he’d only take home about $3.8 million annually, compared to about $5 million if he re-signed with Tampa Bay according to estimates provided to TSN by the Gavin Management Group. These amounts also include deductions for agent fees and an 18% escrow.  Florida also doesn’t have a state income tax while Canadian teams need to offer more money to compensate for the high taxes. And with a salary cap environment that plays against you.

The Tampa Bay Times did an analysis on how an $8.5M Lightning contract keeping Steven Stamkos in Tampa is better than $10.5M to leave (see table below). The article states that if Stamkos takes $8.5 million with the Lightning, it would net almost the same annually as $10 million in New York, presuming he’d be a New York City resident. He’d net roughly $500,000 less annually than $10 million deals in St. Louis or Detroit, due to city and state taxes, but take in more money over the length of his contract. In Toronto, Stamkos’ hometown, there’s a proposed 53.53 percent federal/provincial tax if he’s a Canadian resident. So even if the Maple Leafs offer $10 million annually, Stamkos would net $7 million less total over the length of the deal compared one at $8.5 million annually in Tampa Bay, partly thanks to an eighth year.

One money advantage that Toronto offers is more endorsement opportunities. But then again you lose a lot of that revenues to taxes of course. If Stamkos wants to play the hometown hero, then Toronto is the place but he will be giving up a lot of money. If he’s after money, he should stay in the sunshine state.

Source: Tampa Bay Times
Source: Tampa Bay Times

Honorable Mention on theScore

My tweet on the Dion Phaneuf trade got picked up by theScore (SCR) at Social media stunned as Maple Leafs trade Phaneuf to Senators by Bryan Mcwilliam.

Why? I have no clue. It’s not even that good of a tweet. I didn’t even know that my Tweet got picked up. I was on Bleacher Report reading up on the latest sports news during lunch and there you go, out of pure randomness.  It didn’t show up in my notifications either. I don’t know who Bryan Mcwilliam.  I’m squish between a bunch of verified accounts, like the mayor of Toronto (not Rob Ford anymore) and several sports new anchor. When I tweeted Dion Phaneuf was already mentioned 15k times. So again, I have no clue why my tweet is up there. Now it makes me wonder if I have other tweets that were picked up by news organization that I’m not aware of.

 

Andre The Giant – Life and Legend

My view of the holidays and what the reality is are two different things. And the whole time I’m fully aware of my flawed thinking.

My idea of the holidays is this: Having a lot of free time to do the things I enjoyed the most. Something along catching up on reading by the fire place while sipping on eggnog. Maybe learn the art of binge watching. All along I know that’s a fantasy.

As you would know, the reality is that the holidays are quite chaotic. You rush to cram year end work in a short amount of time (plus some people have to work during the holidays). Then you have your Christmas shopping, cards to write, decorations, packing, many long drives, hosting, visiting, cooking etc…Add kids in the picture and you have a tornado. And I love all of that. That’s what you want every year. You eat well, you drink well, and spend time with great people. Everything is merry. When it’s over you are happy and sad at the same time. I’m fully aware that I’m lucky and not everyone can have the luxury of a nice holiday. So I’m grateful for that. I just need change my perception of what the holidays are. Or maybe its need to be relabeled or re-branded. I’m sure if I had the nice quiet holiday I was talking about I would write a post on how it should be more hectic. We actually should have a “real” holiday after the holidays to recuperate and detoxing. Along the line of a mandatory stay at home so we can actually rest and start the year energized. And why does everyone publish these top ten list of books you should read during the holidays if nobody has time to read them.

Andre The GiantI wrote everything above to let you know that I only read one book during the holidays: Andre the Giant – Life and Legend by author/cartoonist Box Brown. It’s a 230 page comic book biography that I read in less than one hour. It was gifted to me by illustrator Hugh Langis. The gift itself is a total surprise considering I’m not exactly what you would call a fan of the giant. You can have a glimpse of the book with a preview here.

121-56978_01_3P.indd
Hogan opening the story.

His real name was Andre Roussimoff (1946-1993) and the “Giant” was his professional wrestling stage name. My wife actually know him because he was an actor in the Princess Bride (they needed a 7 and a half foot giant…). While on set he ran a 40,000$ bar tab. What else do you do between scenes?

Andre was born with a rare syndrome known as acromegaly, he produced too much growth hormone in his body. It’s a condition where his body continued to grow and eventually his body started to turn on him. Doctors said he wouldn’t past 40 years old. At his peak, he weighed 500 pounds and stood nearly seven and a half feet tall. The current WWE/WCW “Giant”, Paul Wight the Big Show,  used to have acromegaly and had a surgery to halt the progress of his condition. Coming from a rural family in France, Andre didn’t see a doctor until he was much older, so maybe he could have been saved if detected early on.

When I was a kid I was too young to have seen the Giant wrestle. His body of work goes back to the 70s and 80s. He was undefeated for 15 years. However I know Andre not for his wrestling accomplishments, but for his drinking stories, out of the ring stories, and persona. His drinking is stuff of legend. He’s drinking throughout the whole comic book.

By Box Brown
By Box Brown

This is certainly not a complete biography. I’m sure there are more accomplish body of work. I think the point of the book was the capture the bigger than life essence of Andre and the book accomplish exactly that. He had one hell of a life. Even though he died in 1993, as to this day he’s still the legend he was. It’s fun a read if you have an hour to learn more about an extraordinarily human being.

One Jeopardy Question That I Got Right

Jeopardy MLB

48-0* – (49-0* next week)

CAN BOXING TRUST USADA?
QUESTIONS SURROUND DRUG TESTING FOR MAYWEATHER-PACQUIAO AND OTHER BOUTS
By Thomas Hauser (Thanks to Jean-François Corbet from Mount-Royal soccer for the link)

Floyd Mayweather: 48-0* (49-0* next week)

This is the best piece of investigative sport journalism I read in a long time. It’s long article to read and very interesting (more of those are needed). The author leaves no stone unturned. The timing of the article is questionable since Floyd is fighting this weekend. I bet they knew months ago but could get more attention during the media week leading up to a fight. I’m not sure how much leg this article has, but it definitely puts Mayweather on the defensive. It also cast the USADA in a bad light. That group has lost all credibility in the PED/doping/drug world. This article maybe found the next big doping scandal or the whole thing will be throw under the rug. But at the moment of writing these lines it definitely left a mark.

You can probably sense that I’m quick to jumping to conclusion on this only after reading a blog article. Like this blog I can write anything I want. But that piece is so well researched that it’s hard to deny. Unfortunately Mayweather is guilty until proven otherwise. But the guy is allowed a defense. Maybe Mayweather fought clean and the whole thing misunderstanding.  However here is what you can’t denied: When you hear about any kind of shady behavior regarding the allegations, it smells bad and it’s doesn’t look good. It’s appropriate that we get to the bottom of this and there should be an investigation. Meanwhile USADA should be denied any Federal funding until this mess is clean.

Questions: Why did Mayweather used an IV before the fight against Pacquiao? And why did he need so much fluid? (an IV helps re-hydrate an athlete but it also helps mask other banned substances.) Mayweather never had trouble making weight and dehydration was never an issue if you followed his career. There are also rumors that he failed drug testing tests in the past but because of special clauses and exemptions to his contract it never became an issue.  It’s worth reading the whole thing. At the moment the Mayweather camp is denying any wrongdoing.

The Brock Lesnar Project

Brock Lesnar

Tonight is Wrestlemania 31 featuring Brock Lesnar. For somebody who doesn’t follow wrestling, Brock Lesnar is what makes Wrestlemania interesting. Lesnar’s accomplishments are well documented (NCAA, WWE, NFL, UFC) so I won’t spend time on it.

Earlier this week ESPN stopped their regular programming to break in live to Lesnar’s special announcement, where he announced that’s he’s not returning to the UFC but instead he re-signed with the WWE. ESPN doesn’t care about the WWE, they cared about what Lesnar had to say. Why? People are obsessed with this freak of nature. Why? Because he’s entertaining as hell. Lesnar is this larger than life figure. People want to be entertained and Brock Lesnar delivers exactly that. Even with a scripted outcome, people are turning in to see what Lesnar is doing in the WWE.

You can put Brock Lesnar in a bowling game and people will buy the PPV in droves. He’s one in a generation. We can’t clone him. He’s a monster with almost 300 lbs of pure muscle, where a boat fits on each shoulder, his neck is as large as a tree trunk, and he’s as fast and mobile as a 170 lbs fighter. Then he goes on to beat people up. That’s what makes him scary as hell. When people see him on TV, they are just glued to it. You have this “wtf is this” moment and you are paralyzed. The last time I had this feeling was with Michael Jackson. Michael Jackson would come on CNN for one of his trials and you were just possessed. Then you look at the clock and you lost one hour of your life. Why? Without a doubt Michael Jackson was this larger than life character.Brock Lesnar 2

The WWE signing resigning Brock Lesnar is a major business decision. Last year the WWE took a giant gamble by going all digital with their new WWE Network, now $9.99 a month for all the wrestling you want. The network is the future of the company (they killed the PPV business and the days of paying $60 for a show are over). The WWE desperately needs to meet their WWE Network subscription numbers to keep its stock afloat. Thanks to heavy promotions and freebies, they reached the 1 million subscribers milestone and they need more  if they want the company to spit cash. I think the break-even is somewhere between 1.2 to 1.5 millon subcribers. Now that the WWE network has the hardcore wrestling fan and some casual fans signed up, they need to find a way to get the non-wrestling fan to fork over $9.99 a month. Tough sell. Solution: Enter Brock Lesnar. Non-wrestling fan will watch this beast have fun throwing around opponents all over the ring.

Fans follow Floyd Mayweather, not boxing. Fans follow Mike Tyson, not boxing. Fans follow Tiger Woods, not golf. Fans followed Michael Jordan, not the NBA. Just like fans follow Brock Lesnar, not the WWE or the UFC.
Floyd Mayweather is set to make $120 million plus at his next fight not because he’s an excellent boxer but his larger than life personality drives people to buy PPVs. The United-States have the boxing heavyweight champion (one of the belts) and nobody knows who he is, but they are sure still talking about Mike Tyson. When Tiger Woods is not playing, golf is in a slump. Michael Jordan is still getting millions from his popular Nike shoe collection. When Lesnar sets foot in the octagon, people buy PPVs. Even when you know the quality of the show will be sub-par. Let’s admit it, Brock’s fights are not making the all-time must see fights. They were very lump-sided and short. But entertaining and good entertainment makes people happy.

These guys are larger than their sport (or respective industry). Their personality over-floods their sport into the mainstream. My wife knows who Floyd Mayweather is but doesn’t watch boxing. And what’s interesting is you don’t necessarily need to be the best at your trade. You just need to be really really fun. You need to grab people’s attention and emotions. Lesnar is not the best fighter but people buy tickets. Because he’s a beast. Anna Kournikova wasn’t the best tennis player but filled up stadiums because of her beauty. Kim Kardashian wasn’t the best at porn and now has her own game for kids because….because, well I don’t know about this one. But the Kardashians are entertaining and they are definitely a case study.

Below are three videos of Lesnar. First one he’s doing a backflip shoothing star. In the 2nd video he’s hunts a deer and carries it on his back up a mountain. Then he F5 a shark.


 
2:25 is the workout session.

 

Great Interview with the Owner of the New England Patriots

Robert Kraft Super Bowl
Mike Ozanian from Forbes did a great interview with Robert Kraft, the owner of the New England Patriots.This is same Robert Kraft that got one of his Super Bowl ring stolen by Vladimir Putin.

This 50 minute interview is a refreshing from all 1 minute rapid fire sounds bite that’s flooding the Internet. Why is it that in the world of non-stop 24-hour we can’t have a decent interview? I guess that’s the topic a future blog post. Regarding the interview, Robert Kraft goes in-depth on not just the Patriots, but also his philosophy, faith, how he acquired the team, what you need to be successful, what drives him and more. He’s not just any NFL owner, since he acquired the team the Patriots won 4 Superbowl on six appearances, that basically qualifies for a modern day dynasty in the salary cap era. Nice job by Mike and team Forbes for scoring this interview.

In 1994 Kraft bought the team for $172 million, about $50 million more than he told his wife he was willing to spend. He told his wife that a reasonable price for the franchise was $115 million but was willing to go as high as $125 million. With that purchase, it was the highest price ever paid for a sports team at that time. Then afterward he built Gillette Stadium, recruited Bill Belichick, drafted Tom Brady and the rest is history. Today the New England Patriots are worth $2.6 billion, or a nice return on your investment.

At the moment the video has less than 2,000 views. That mesmerize me. I know the local chamber of commerce charge upward of $250 per person to bring guess speakers in and they sell out. Youtube has millions of hours of video like this one for free that will educate you and make you a better person, sort of a e-library. 2,000 views…..that’s insulting. In the other hands, Justin Bieber probably just broke the Internet with his latest music video. We’re definitely heading in the right direction.
How New England Patriots Owner Robert Kraft Thinks

Alex Rodriguez + Jerry Jones

Arod
The Education of Alex Rodriguez

I just read this massive piece on Alex Rodriguez written by J.R. Moehringer in the March issue of ESPN magazine . That’s the same J.R. that collaborated on the excellent Andre Agassi biography. The article is a mini biography of Arod. J.R. spent 6 months and over 100 hours with Alex Rodriguez. He got to see a side of him that none of us were exposed too. He’s probably among the most hated player in professional sport and this article probably won’t change that. But you will get to know the person you hate better and maybe you will find a spot in your heart to give him a 4th chance. Great piece.

Jerry JonesWhile I was at it ESPN suggested that I read the Jerry Jones story, Jerry Football by Don Van Natta Jr.  I couldn’t sleep so I got that one done too. Another great suggestion. Jerry Jones loves his whisky (Johnny Walker Blue to be precise), looks like we have that in common. You get a feeling that he’s drinking throughout the article and I almost pour myself a cheaper blend at 2am. Again this is one of those mini biography on one of sport’s largest profile. I’m not a Dallas Cowboys fan but I admire the guy. Plus he built one of the best stadium in all of sports.