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September 20, 2014

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Kats in Macau: Sifting through the figures of a major fight with the man who runs Venetian Macau

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Chris Farina/Top Rank

Manny Pacquiao, center, and his wife Jinkee are greeted by Edward Tracy, president and CEO of Sands China, as they arrive at Venetian Macao in Macau, China, on Friday, July 26, 2013.

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MACAU — In a singular manner that is not at all apparent, Edward Tracy is similar to Jerry Lewis.

Both men record their interviews.

“In case you need to, you can ask Melina for a copy,” says Tracy, referring to one of the PR reps at the hotel he runs, Venetian Macau on the Cotai Strip. Between us are two iPhones, the screens’ digital audio readout dancing with every word.

It’s good that we have all this verbiage recorded, twice over. Tracy is one of the most powerful individuals in one of the world’s hottest tourist destinations: Venetian Macau, with more than twice the number of rooms than MGM Grand and the largest casino space in the world at 550,000 square feet.

This weekend, the hotel’s Cotai Arena is the site for “The Clash in Cotai,” pitting Manny Pacquiao against Brandon Rios in a fight scheduled to start at around noon Sunday in Macau, or 8 p.m. today on the Macau-Las Vegas Time Machine, where those of us in China live 16 hours in the future.

Today’s pay-per-view undercard action starts at 6 p.m. PT.

Much of the conversation with Tracy invariably swings to the numbers vital to the big event. Some of the more pertinent, and impressive, figures to note entering the Venetian Macau’s third professional fight card:

28: How many years Tracy has been involved in the fight game.

“My first job in the casino industry was at the Sands in Atlantic City, and I was sent down to Puerto Rico to the Sands in San Juan,” Tracy says. “I got involved in boxing with one of Bob Arum’s protégés Alexi Arguello, who became one of my advisers down there, and we had a lot of local fights under a tent outside. I was eventually recruited by Donald Trump and ended up in Atlantic City with him and became CEO of the company and started doing business with Bob, and we had all of the big fighters in those days. The (Mike) Tysons, the (Evander) Holyfields were just coming on the scene in those days. (Tommy) Hearns, Sugar Ray Leonard. It was just a wonderful time in history to be involved in boxing.”

200 million: The number of homes in mainland China that can watch the fight free of charge on the country’s national TV network, CCTV.

“Pay-per-view is a component, but our primary market is China, and they can’t do pay-per-view in China, so we’re broadcasting this for free in China,” Tracy says. “But the payback is it’s in 200 million homes in my backyard. That, you can’t buy. Pay-per-view in the States gives me a cash stream that allows me to support this kind of event. … That economic component is very important to the overall ability to execute this event. … But to reach 200 million homes in China, it is very hard to get that kind of exposure anyplace.”

12,000: The capacity of Cotai Arena.

“We have the right venue,” Tracy says. “We have a 12,000-seat arena that is perfect for these types of events. We have the Venetian Theater that is a smaller, more intimate, acoustically more spectacular event venue that we’re having Alicia Keys play for two sold-out shows. We’re leveraging the fight into an event weekend.”

$100: The lowest cost, in USD, for the cheapest ticket to the fight.

“We needed to scale the price of the tickets to correspond with the quality of the event, which had never been done here,” Tracy says. “There is a lot of price sensitivity in the market, so we were taking a fair amount of risk, but we felt we had it calculated pretty well from a business standpoint, what the benefits were. … As it turns out, we’ve sold 11,000 tickets (through Tuesday) with our cheapest ticket $100, up to $3,000 for ringside. That’s never been done here, ever. Not in Hong Kong, not in China.”

30: The percentage of increased business that the smaller-card fights featuring Chinese star and Olympic gold medalist Zou Shiming has generated.

“Our prediction is we’ll be able to break even on this fight, and that’s not counting the casino. We look at the event on a standalone basis, and we’re pretty happy with the results already,” Tracy says, offering a startling piece of business information that the Venetian treats a fight as an independent entity unrelated to gaming and retail revenue. “In the first two events we had, which were obviously lesser in terms of importance or significance, we had about a 30-percent incremental bump not only in our casino but in our retail area.” The hotel figures to make more than $155 million in gaming and retail this weekend.

620, 137, 9,500: The number of stores, restaurants and hotel rooms on the Venetian Macau property.

“We have an enormous footprint here,” Tracy says. “We have great entertainment all over the place and the largest casino in the world. The prism we look through is: How do we leverage every one of those assets to make this event a success? We obviously try to do things that are good for Macau, that raise the visibility of Macau as a full-on tourist destination and not just some backwater gaming destination. It’s got to be good for us, good for the brand commercially.

“If we can check all of those boxes and give the customers what they are asking for, it becomes a pretty good business cycle for us. That’s what’s going to give it legs or sustainability. … If this one works as well as I think it will, moving forward we’ll be able to say that boxing is a sustainable event that we will be willing to promote on a regular basis.”

Follow Kats in Macau on Twitter at Twitter.com/JohnnyKats. Also, find coverage at this link and follow “Kats With the Dish” at Twitter.com/KatsWiththeDish.

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