Floyd Mayweather paid $750,000 to get out of his contract in 2006, and it made him hundreds of millions

Story by Business Insider
Written by Tony Manfred
Photo by Getty Images

Floyd Mayweather Jr. stands to make well over $100 million in his fight with Manny Pacquiao.

To put that in perspective, Mayweather was the highest-paid athlete in the world in 2014 at $105 million. He's going to surpass that in a single night.

The reason Mayweather is far and away the highest-paid athlete on earth goes back to a decision he made in 2006.

For the first 10 years of his professional career Mayweather was a part of Bob Arum's stable of fighters at Top Rank promotion company. During that time he became the best pound-for-pound fighter in the world.

But in April of 2006 Mayweather turned down the highest purse of his career, $8 million to fight Antonio Margarito, and exercised a provision in his contract that let him become a free agent if he paid Top Rank $750,000.

Arum told ESPN's Dan Rafael at the time that before he left Mayweather had asked, among other things, for a $20 million guaranteed purse to fight Oscar De La Hoya.

"He wants $20 million for the De La Hoya fight? It's not there. Sometimes, my man, you gotta know when to hold 'em and when to fold 'em. We'll talk about things down the road," Arum said.

A year later, Mayweather made $25 million in a fight against De La Hoya that still holds the record for total pay per view buys.

After buying himself out of his Top Rank contract, Mayweather took unprecedented control over his career. Rather than getting paid a large guaranteed fee up front by a promotor like Top Rank — as is the norm across the sport — Mayweather stages his fights himself and takes a cut of the total revenue on the back end.

Greg Bishop described it like this for the New York Times in 2011:

"He earns a percentage of every ticket purchased, every pretzel consumed, every poster sold. He will earn from countries that paid for broadcasting rights and the theaters where the fight is shown.

"Mayweather, regarded as one of the best boxers in history, fights under a highly unusual financial structure, exchanging upfront risk for back-end profit while retaining total control."

After distributors and networks get their cut, Mayweather gets a bigger piece of the remaining revenue than anyone else in the sport.

Mayweather fought De La Hoya in 2007 and made $25 million. His earnings only grew from there, culminating in an $80 million payday for 2013's fight against Canelo Alvarez, which set the record for PPV revenue at $150 million. In that fight he made $41.5 million pursue, and then almost doubled that amount once PPV receipts came in.

Every move is designed to give him a larger piece of the pie. He left HBO and signed a more lucrative deal with Showtime in 2013. He got a Nevada promoter's license for his Mayweather Promotions company so he could stop co-promoting fights with Golden Boy in 2014.

Since Mayweather went pro in 1996 he has made over $400 million in career earnings, and the vast majority of it has come after he spent $750,000 to leave Top Rank in 2006.

Mayweather doesn't have a single endorsement, but he has been able to capitalize on his value to his sport more than any other athlete alive