It's Not Just the Economy, Stupid

It's Not Just the Economy, Stupid
By Steve Kim (Nov 5, 2008)

The word is that this weekend’s bout between Joe Calzaghe and Roy Jones at Madison Square Garden and the November 22nd contest between Ricky Hatton and Paulie Malignaggi at the MGM Grand in Las Vegas are struggling (to say the least) at the box office, as the expected influx of patrons from the UK simply has not materialized.

To paraphrase Paul Revere, "The British aren't coming!!! The British aren't coming!!!' (And neither is anybody else, it looks like).

In response, the newest mantra being sung in unison by those in the boxing business is to blame the economy. And it's certainly a factor, but as you dig deeper, you begin to realize that many of boxing's ills are self-inflicted wounds or man-made disasters.

Consider that ringside seats for Calzaghe-Jones were priced at $2,500 and Hatton-Malignaggi at $1,000. The thought process was that the British, with their strong economy, would look at these prices over here in the good ol' US of A as a discount versus our fading dollar. Well, as their currency, following in line with the rest of the world, took a pound-ing, those prices suddenly don't look so palpable. There are even rumors within the industry that Hatton, who made a killing on his tickets for his bout with Floyd Mayweather last December, has returned his tickets.

What's funny is that both of these events would most likely thrive in England/Europe, but were inexplicably placed in the United States. Calzaghe, after his disappointing showing in Las Vegas this past April against Bernard Hopkins (where money was actually rebated back to the host venue), should be facing Jones in Wales. The word is because of the insistence of HBO, it wound up in the Big Apple in exchange for '24/7' being produced. If there is a fight of the two that should've been in New York it was Hatton-Malignaggi, and the Garden seemed to be the logical fit. But because of Golden Boy Promotions’ corporate tie-ins with AEG (which owns venues all across the world, but not MSG), the fight ends up in the desert. It's worth mentioning that when the two co-headlined a doubleheader in Manchester, England back in May, a crowd of over 55,000 showed up at the City of Manchester Stadium in Hatton's hometown.

It hasn't helped that Calzaghe-Jones has no real promoter. In fact, Calzaghe and Jones themselves are the promoters of record for Saturday night. It's worth noting that their televised undercard is perhaps the worst in memory that did not involve Butterbean or Mia St. John. But then what did you expect when you don't have a real promoter involved running things?

The lesson here perhaps, is that HBO - which for years has facilitated the expunging of real promoters in favor of shell companies that bear the fighters’ names (in an effort, they feel, to cut out the often troublesome middleman) - should realize that real promoters are indeed a vital component of the business. They should perhaps make more of an effort to make sure that more than one promotional firm (the one with a silhouetted Golden Boy) can thrive.

Somewhere out there Frank Warren is chuckling to himself.

Speaking of which, rumors are running rampant that both HBO and Showtime are getting their boxing budgets slashed for the upcoming year. On the surface that may seem like a disaster. It says here that it's a step in the right direction – one that leads back to reality.

Why? And how, you ask?

Well, for years, as Ivy League-educated executives got hustled by fighters and their representatives for exclusive, guaranteed contracts, those said fighters (who are the biggest names in the sport) began to fight less and less. The contracts became semi-annual annuities on which to collect - oftentimes against non-descript opposition. There used to be a time when a boxer’s market value was determined by the amount of ticket revenue he generated. Nowadays, it's arbitrarily set by network executives, with their biases and whims.

The result is that activity for fighters is at an all-time low. Performing three times a year at the world-class level now makes you Henry Armstrong or Archie Moore. But beyond that - and perhaps more importantly - an unnatural and unrealistic market value has been established that, many times, keeps anticipated fights from becoming a reality as financial demands become exorbitant. Fighters who headline in 1,500 seat ballrooms (at half capacity) regularly make six-figure paydays nowadays. Hey, you can't knock the hustle; it's good if you can get it. But it has had a deleterious effect on the industry. At first this deal was like a never ending ATM machine. But after 25 years of this, fighters are now less active, less marketable, less recognizable and less popular than their predecessors, as there is less incentive for them to perform often.

It's not a popular thing to say, but the fact is that many fighters are, in fact, grossly overpaid. Yeah, I said it. If you can't get more than a couple of thousand fannies in the seats and do Nielsen ratings lower than Bob Gibson's ERA in 1968, do you really deserve a high six-figure payday?

As promoters - who are also to blame in all this - willingly gave up the shop to the premium networks, pricing out the traditional free networks that for years made household names out of a multitude of fighters, the game has now gotten down to its precious last few stars, ones that fight less and less to a dwindling audience (if you go by HBO's steadily declining ratings.)

It's not really that far-fetched to envision a future where you see fights taking place in television studios, devoid of a live audience, like you did with the southern wrestling circuit in the '80's.

As our country ushers in new leadership (for better or worse, we'll soon find out) maybe it's time for HBO to find a replacement for Ross 'Dubya' Greenburg and the rest of his administration, who have sunk this once proud franchise to all-time lows. As HBO has become more and more influential on the state of this business throughout the years, it's been said that as HBO goes, so goes the business. Well, in allowing the tail to wag the dog for so long, the dog is now foaming at the mouth and morbidly ill.

Now, if it's indeed true that HBO and Showtime will condense their schedules and have less shows, perhaps that will spur, for one, a better quality of fight that we will see on their airwaves, with the goal being quality over quantity. Instead of Kelly Pavlik-Gary Lockett being on HBO, we'll instead see Pavlik against Bernard Hopkins and so on. It's been said that if the networks pulled out of boxing that the sport couldn't survive. Certainly a lot of the supposed 'promoters' would go out of business as they subsist solely on the license fee of the networks, which is one of the major flaws currently, as there are too many television packagers and booking agents, and not enough real traditional promoters willing to put up their own money to finance a show and develop real, consistent attractions.

The sport doesn't need two dozen promoters who do nothing more than collect license fees and stick all their shows at an Indian casino, as they serve as conduits for the networks. Many within the boxing industry have collected this form of welfare for so long (and made a rather nice living off of it) that it seems that they have forgotten to actually work.

Let the strong - and competent - survive.

Now, the casinos which for years helped finance the sport in Las Vegas and Atlantic City are becoming tighter with their purse strings, as they themselves are feeling the effects of this economy.

Again, in the long run this can actually be a very good thing.

There was a time long ago that boxing thrived in major media markets such as Los Angeles, San Francisco, Chicago, New York and Philadelphia. Championship fights took place there on a regular basis, major daily newspapers covered boxing consistently and fanbases existed throughout the country. Now, after decades of the sport’s biggest events being held almost exclusively in casinos, boxing is now an afterthought in areas where there is not a large concentration of Latinos.

As these venues tighten their belts, maybe, just maybe, it creates the necessity to actually go out and develop local attractions and with that, establishing fanbases and realistic market values. Go back to the 'Four Kings' of Leonard, Duran, Hearns and Hagler - they all had regional backing that they could rely on. And with that, transcendent appeal to the masses. But when you see young fighters who have performed numerous times on nationally televised shows across the country - but never within a 50 mile radius of their hometown - you start thinking that perhaps boxing is on a road to perdition in that regard.

Will the re-establishing of local markets actually ever take place? Who knows. But this much is clear - the over-reliance on television and casino money the past three decades was boxing's version of recklessly borrowing against the future, but never saving for a rainy day. There was a time long ago if a fighter and promoter couldn't secure a spot on television, they would merely rent an arena, sell some tickets and make a few bucks as they stayed busy. They earned their cash; they didn't need credit.

There are actually a lot of similarities between the current economic crisis and boxing. An artificial market was created that had unrealistic numbers, with leadership that simply couldn't see the trees through the forest. Greed, hubris and a lack of foresight are the common denominators here. And perhaps boxing's version of Alan Greenspan continually lowering interest rates was boxing time and time again leaning on its same 300,000 diehards to purchase it's pay-per-views (as HBO squandered its budget for mismatches before running out of money by August). But alas, even that has come to an end it seems, as reportedly less than 200,000 Joe the Plumbers purchased the Hopkins-Pavlik pay-per-view on October 18th. Organizers of the event took heavy losses across the board.

But like our economy, there is help in the form of the Oscar Bailout, where the famed 'Golden Boy' puts on his annual blockbuster pay-per-view that does humongous numbers. But more than that, he has the ability to save the jobs of individuals who have otherwise made boxing irrelevant the other 364 days of the year.

It's interesting as you see the state of the business in this country and contrast it to foreign markets. Without nearly the amount of network interference and casino settings, Europe has a host of lucrative attractions like Arthur Abraham, Felix Sturm, the Klitschkos, Mikkel Kessler and Amir Khan, among others, that have been established by real promoters who still have them on over-the-air television and yet still fill arenas. Just a couple of weeks ago, Lucien Bute, a solid, if not spectacular fighter of Romanian descent, packed the Bell Centre in Montreal, Canada with 16,000 patrons who have followed his rise in that area. Fans still come out in flocks in Mexico and Puerto Rico.

Yes, the boxing business is actually thriving in many other foreign markets, believe it or not.

In America, it has met thy enemy - and it is itself.

For Questions or Comments
E-Mail Steve: k9kim@maxboxing.com

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