By Martin Rogers and Kevin Iole
Manny Pacquiao's chief adviser insisted Monday that the Filipino superstar's preference is for his next bout – a fifth fight against Juan Manuel Marquez – to take place away from Las Vegas, with the off-shore Chinese gambling resort of Macau emerging as the "favorite."
Michael Koncz told Yahoo! Sports that the 39.6 percent tax rate Pacquiao would face if he were to fight again in the U.S. makes a fall bout in Las Vegas "a no go."
Promoter Bob Arum is hopeful of arranging a fifth match between Pacquiao and Marquez in the fall, potentially on Sept. 14. Arum's preference is for the fight to be at the MGM Grand in Las Vegas, which is his company's home base.
But Arum and Koncz say Pacquiao is balking at the additional money he'd lose to the government if the fight were held in Las Vegas. Arum said Pacquiao would not have to pay taxes if the fight takes place in casinos in either Singapore or Macau.
"Manny can go back to Las Vegas and make $25 million, but how much of it will he end up with – $15 million?" Arum said. "If he goes to Macau, perhaps his purse will only be $20 million, but he will get to keep it all, so he will be better off."
While avoiding a huge tax bill would be a benefit to Pacquiao, it would hurt Arum in terms of pay-per-view sales. Arum said a detailed review indicates that a pay-per-view bout emanating outside of North America would do about 50 percent fewer sales.
At the numbers a fifth Pacquiao-Marquez fight would generate, that is a staggering loss. Pacquiao-Marquez 4, in which Marquez knocked Pacquiao out in the sixth round on Dec. 8 in Las Vegas, sold 1.15 million on pay-per-view.
The fifth fight figures to be at least as big, if not larger. At 1.15 million sales, the gross revenue from pay-per-view would be $69 million. The cable and satellite companies, which distribute the bout, get half of that off the top, leaving $34.5 million to the promotional side.
A 50 percent cut would mean a decrease in revenue to the promotion of $17.25 million.
While Pacquiao seems set in preferring to fight in Asia because of taxes, Arum conceded that hasn't been an issue for Marquez.
"Juan hasn't expressed the same concern about U.S. taxes that Manny has," Arum said.
Pacquiao's last four bouts and 10 of his last 12 have been in Las Vegas, but Koncz insisted the Filipino congressman is unhappy with the tax increase and is not eager to return.
Koncz spent the end of December and all of January traveling with Pacquiao in the Philippines and vacationing with him in Israel. He said they had begun discussing fight plans in earnest.
Macau's financial power is extraordinary, and Macau has emerged as the world's most lucrative gambling hotspot, with revenues that far outstrip those of Las Vegas. Nevada casino mogul Steve Wynn claimed recently that he now considers his chain of resorts as "a Chinese company, not an American company," as the bulk of its income is derived from its two Macau properties.
Koncz, though, said Singapore is a viable alternative to Las Vegas, in addition to Macau.
"We were talking only this morning about where and when and against who he would fight next," Koncz told Yahoo! Sports. "One thing we agreed on is that the taxes make Vegas a no-go. You're a fighter up there risking your life in the ring, so you have to maximize what you are going to get out of it.
"I know, Manny knows, that he only has a certain number of fights left, maybe one, maybe three. We don't know. So that means the priorities change a little bit at this point."
Koncz said that after fighting exclusively in the U.S. since 2007, Pacquiao may have tapped out his popularity in America and could benefit from expanding into new markets.
"We feel the real growth potential for Manny and his brand and fan base and all that is going to be in Asia," he said. "He is so popular in the States, there is not much more we can do there.
"So here is what we are looking at: We want somewhere that is appealing from a financial perspective, with low taxes that allow him to keep a lot of his income. Also, we are looking for him to take something back to the fans who have supported him. He is a global fighter with global popularity, but he has only fought in one country for so long."
Koncz has visited Singapore, where there are two major casinos and a convention center that has previously hosted international badminton and basketball events, to discuss the viability of Pacquiao fighting there. He said he was "greatly encouraged" by his meetings there.
Arum has been planning to put the fight on Sept. 14 – Mexican Independence Day weekend. However, that could be a problem because Floyd Mayweather Jr., the world's biggest-selling pay-per-view fighter, is also planning to fight that day.
The pay-per-view divisions of either HBO or Showtime would likely side with Mayweather given he has performed better on pay-per-view recently and because they wouldn't have to send their crews halfway around the world.
When Pacquiao-Marquez 5 is held is not as significant as where. Arum is working with representatives of both fighters, though he told Yahoo! Sports that because of the salaries involved, "it would have to mean a casino market."
That means the bout would either be held in Las Vegas, Macau or Singapore, the only casino markets that could generate the kind of money necessary. Atlantic City, N.J., doesn't have a venue nearly big enough.
If the fight ends up outside the U.S., the big loser would be Arum, who conceded he'd make about $10 million less than he would if it were once again held at the MGM Grand Garden in Las Vegas.