Jake Paul: Narrowing the Gap Between Pro Sports & Entertainment
I’ve been on a proverbial soapbox for a while now, talking about the disruptive effects of the COVID shock and long-term technology trends on sports and other performance-based businesses. This Spring has done nothing to dissuade me from the view that the world of sports and entertainment are changing fundamentally. Recent ratings and survey data yield a mixed but trending unfavorable prognosis for sports. (The podcast digs into some recent ratings data for the NBA, NCAA and MLB). However, the item that I found the most fascinating is last weekend’s PPV boxing event. The Great (Sports) Disruption of Jake Paul Jake Paul’s boxing career may not be the sports story with the most significant long-term potential impact. The conventional wisdom suggests that the title probably goes to the proposed Soccer Super league. But, what the Paul brothers are doing is creating a new blueprint for star-based sports entertainment. Combining the best teams across leagues is more about changing the way sports revenues are distributed. The Paul brothers may be an early iteration of a new approach to star-focused content. Maybe crazy, but I think the “Paul story” is the one for sports marketers to study. The Paul story is about creating and leveraging brand power. Specifically, it is about creating and leveraging brand power in a rapidly evolving marketplace using social media channels and a combination of sports, entertainment, and spectacle. But it will be a challenge to take the Jake Paul project to mainstream success. Let's define the basics of the Jake Paul project. First, Jake seems to train as a professional boxer. It is apparent from his conditioning and the way he moves that he is serious about the sport. He is now 3 and 0 with victories over a YouTuber, a retired NBA player, and a retired MMA athlete. The first question: Is Jake Paul a legitimate boxer? I doubt we will ever know. He does seem to be facing increasingly challenging opponents. However, he has not faced any legitimate competition. His first victory was over someone called AnEsonGibA. Some telling commentary on the fight. The shorter Gib came out charging Paul with a very unorthodox style, crouching and trying to advance forward to land punches. Paul, who was trained by "Sugar" Shane Mosley in isolated Big Bear, California, remained composed. Paul quickly computed the weirdness Gib was presenting him with and countered it with a right hand to the temple for a flash knockdown just one minute and seven seconds into the fight. The key takeaways from the first fight are the opponent fought in a weird (untrained) style, and Paul has elite-level training resources. In his second fight, Paul defeated three-time NBA dunk contest champ Nate Robinson. The upgrade to facing a pro athlete seems like a big jump up from a YouTuber (I admit I have no knowledge of “Gib” beyond the previous passage). Sounds impressive. But athletic ability doesn’t necessarily transfer across sports. Would an all-pro NFL linebacker beat a club pro in tennis? The right way to look at Paul is as a brand. In victory 1, he built some credibility through his training. In fight 2, he gained more credibility by defeating a professional athlete. Just as critically, he generated massive publicity for each fight. Especially the second fight that occurred on a Mike Tyson undercard. High awareness and signals of credibility are crucial elements of a brand. This past weekend, Paul achieved his third victory with a knockout of Ben Askren. This win was a victory over a successful combat sports athlete. On the other hand, Askren showed little boxing skill, Askren is retired, and Askren did not show up in shape. Did Askren take a $500k payday to help Paul build his brand? Regardless of Askren’s effort, the end result is that Jake Paul is now one of the top names in “Boxing Entertainment.” The second question: Is Jake Paul good for boxing? My heart wants me to say no, but the current era is different. We are living through a time when demographic trends and entertainment technologies are shifting rapidly. Paul may be bad for traditional boxing, but the Jake Paul project may show a glimpse of a brighter future. A brighter future in terms of revenues, if not in terms of the quality of the competition. I suspect that if you asked sports fans to name boxers, Paul has more awareness than many of the top current stars. Canelo Alverez, Tyson Fury are not household names. The reported 1.4 million PPV buys places the Paul-Askren bout in the top twenty of PPV events. It's an over ranking of the fight’s appeal as it was sold at $49.99, but it shows that boxing can be sold without top-level competition. Mike Tyson’s Legends Only League (LOL) also comes to mind as an example of where this is all heading. What’s next? Will Paul continue to carefully curate his opponents? How about for fight 4 he finds another social media star? Sort of an easy opponent but one that generates lots of attention (and maybe a million PPV buys). Then maybe another retired athlete for fight 5. A more modern Jose Canseco comes to mind. Will his PPVs continue to sell if the competition remains at the sideshow level? These are packages that include musical acts and Snoop Dog. Maybe another slot on a Mike Tyson LOL undercard? (Is the biggest potential boxing match really Tyson versus Holyfield?) And there is, of course, a potential match with his brother, Logan. I believe Logan is also undefeated with a victory over someone named KSI. If I’m managing the Jake Paul brand, the challenge is to build a resume that gets him to a big-money matchup. The prominent names are folks like Floyd Mayweather (who may fight Jake’s brother) or Connor McGregor. Or perhaps J. Paul aspires to be a true professional boxer. Ego and pride are essential factors in any individual’s decision-making. The true pro option will be a tough challenge. Paul is too big of a name to fight unknown boxers. There is too much risk and too little upside to fight a pro who lacks market appeal. However, any top boxer with market power will have advanced skills that Paul can’t possibly be ready for given his limited time in the ring. So the Jake Paul project needs to remain a novelty act. How long can this go on? Before 2020, I would have said it is, at best, a limited run. In this post-COVID, social media dominated landscape; I don’t know. He needs to be careful with his nascent sports entertainment brand, but he is something new and maybe a new sports prototype. He A fun fact, the Paul-Askren fight generated more than seven times as many Google searches as the previous weekend’s Wrestlemania. Moving forward, does “Sports Entertainment” needs actual uncertainty and credible brands? The Jake Paul case is instructive. It is sports entertainment created around a star. It is designed to further the star’s star power and to build the star’s brand. Social Media has created stars with more followers than any league or team. The fading of local media has reduced the connection between local teams and fans. I suspect that this is just the beginning of a shift in market power from traditional sports organizations to individual performers. The Podcast: In this week's podcast, Professor Mike Lewis discusses how Jake Paul's knockout win over former MMA fighter Ben Askren may have forever changed the relationship between sports and entertainment. Professor Lewis also discusses topics such as the European Super League, Spring College Football, and MLB's surprising COVID era bounce back. Listen to the full podcast here: Also streaming on Apple Podcasts, Spotify, and Stitcher.