Mayweather-Pacquiao and the Role of Big Money

In a rarity, all was right in the boxing world on Friday as Floyd Mayweather and Manny Pacquiao finally agreed to fight after more than five years of on-and-off negotiations. And this was not an easy negotiation. HBO and Showtime, who have exclusive contracts with Pacquiao and Mayweather, respectively, only work together when compelled to do so. Promoter Bob Arum and power broker Al Haymon, bitter rivals and two of the shrewdest minds in the sport, sat on opposite sides of the table. Lingering animosity still characterized the relationship between Arum and his former fighter, Mayweather. Each boxer had a significant financial minimum, a reputational stake and other sources of ego to assuage. In the background of the negotiations was Team Mayweather's suspicions about Pacquiao and performance enhancing drugs, an issue they were so concerned about that settling a defamation suit didn't fully tamper down aspersions and accusations (although now the talk has shifted to veiled innuendo).

Mayweather-Pacquiao was never inevitable. Over the past 30 years, fighters have ignored huge financial opportunities for one reason or another. Marvin Hagler walked away from the sport after his disputed loss to Sugar Ray Leonard. Lennox Lewis also chose to retire instead of engaging in a lucrative second fight with Vitali Klitschko. Roy Jones and Bernard Hopkins talked themselves out of a rematch in their primes. Joe Calzaghe left the sport at the peak of his earning potential. Winky Wright could've put his great grandkids through college with the money that he turned down. Somehow, Oscar de la Hoya and Felix Trinidad left a second bout on the table. 

Boxing isn't always about fighters jumping at money. From Deontay Wilder, Keith Thurman and Peter Quillin rejecting career-high paydays to Juan Manuel Marquez going to Indonesia for short money instead of facing Pacquiao again, boxers consistently make decisions that are predicated on factors besides the almighty dollar. Vitali Klitschko could still be making millions boxing but he's helping Ukraine stabilize its democracy. David Haye is choosing to do whatever David Haye does, outside of fighting in the ring.

Purse splits ultimately weren't the main hindrance in getting boxing's ultimate dream matchup finalized. Mayweather-Pacquiao would have been the biggest paydays of the fighters' careers if it were made in 2009, 2010, 2012, 2014 or at any point along the negotiations. Other factors, like marketing plans and budgets, ticket disbursement, drug testing and rebroadcast rights played just as essential a role in this negotiation as the financial splits for the fighters did. 

In my estimation, the large forces of capitalism that exerted pressure on the fight to get made were essential in finalizing the negotiations. Yes, either fighter still could've walked away, but options were limited and BIG MONEY, the money behind Money Mayweather, for instance, was getting itchy. Ultimately, both fighters deserve praise for pulling the trigger. However, I believe that if the background elements all weren't aligned in seeing this matchup agreed to, then boxing's ultimate pageant would remain a pipe dream. 

Let's stick to what's widely reported. Showtime and CBS have Mayweather signed to a six-fight deal with a minimum guarantee of $32M per fight. Through the first four fights of the deal, Mayweather had one huge financial triumph (Alvarez) and three fights that failed to galvanize the larger sporting world (Guerrero and Maidana I and II). Over the duration of this deal, Showtime ceased to disseminate pay per view figures but it's been widely reported in the industry that the two Maidana fights underperformed at the box office. Coming into this year, CBS was still on the hook for $64M dollars without credible or compelling opponents for Mayweather; that's a lot of potential downside risk for a corporation. 

Similarly, Pacquiao has been guaranteed at least $20M per fight by Top Rank (Bob Arum's promotional company). HBO and Top Rank have seen Pacquiao's pay per view numbers plummet after his loss to Juan Manuel Marquez. His fights in Macau, China may have somehow turned a profit for Top Rank but they have helped to diminish Pacquiao's popularity in the U.S. market. Like Mayweather, Pacquiao also faced a dearth of quality potential – and available – opponents. Still owing Pacquiao at least three more fights, Top Rank couldn't afford to see its prized asset continue to depreciate. 

The third key player in the mix is boxing power broker Al Haymon, who, with significant financial muscle behind him, has brought boxing back to network television through large time buys on NBC and CBS. (Time buys are a term for an outside entity paying a network for programming time. The typical situation is the reverse, where a network pays for the right to broadcast content). Haymon, a key member of Mayweather's brain trust, needs boxing's profile to grow in the United States for his network deals to succeed. The attention that a Mayweather-Pacquiao fight could bestow upon the sport and his fighters in particular could be incalculable. Haymon has two years with NBC to provide certain ratings levels so that for the next deal, television rights for boxing can become a competitively bid process among the major networks, leading to significant profits for him and his backers. For Haymon, Mayweather-Pacquiao is a key ingredient to increasing boxing's exposure. 

Finally, HBO and Showtime needed this fight to happen to reassert their dominant positions within the sport. The premium cable networks are aware of the massive broadcasting changes in boxing. Instead of just squaring off against each other, soon they will have further competition from NBC, ESPN and potentially other players. HBO and Showtime have built up brands, cultivated subscriber bases and provided the central boxing narratives in the North American market for decades. Although an intense rivalry exists between the networks, for this fight, their interests align perfectly. This fight was paramount in maintaining their preeminent roles within boxing.

Ultimately, the forces around Mayweather and Pacquiao truly desired this fight to happen and for it to happen now. Huge corporations, the largest promoter in the U.S., a private-equity backed power broker and the constant drumbeat from the media and fight fans all helped to make this singular event possible. 

If Mayweather or Pacquiao were looking for external reasons or excuses for the fight to fall through, they were out of luck. There were no more promoters or drug testing or networks or managers to hide behind. If the fight didn't happen, blame would be placed solely on the fighters. 

It's certainly possible that it took more than five years for the needs of the fight's key stakeholders to align. Luckily, for the health, relevance and legacy of the sport, its two largest icons have agreed to battle, and at a point close to their respective primes. No matter what happens in the event, this is a significant win for boxing. The time was right on all sides. Ultimately, the 60-40 financial split for Mayweather was not what led to the deal being completed; it was the will of two boxers and the insistence of BIG MONEY – with millions to lose, investments to protect and opportunities to exploit – that finalized the fight. These are the reasons why Mayweather-Pacquiao is now a reality.

 

Adam Abramowitz is the head writer and founder of saturdaynightboxing.com.

He is also a member of the Transnational Boxing Rankings Board.
@snboxing on twitter, SN Boxing on Facebook

Contact Adam at saturdaynightboxing@hotmail.com

Pound-for-Pound Update 2-11-15

Mikey Garcia hasn't fought since January of 2014 and doesn't yet have his next fight scheduled. Given his inactivity, he has been removed from the Saturday Night Boxing pound-for-pound list. For Garcia's replacement in the  Rankings (he had previously been ranked at #19), I arrived at two candidates: Nicholas Walters, the featherweight titlist from Jamaica, and Donnie Nietes, the junior flyweight champ from the Philippines.  

 

Although Walters has the higher profile victory of the two, with his knockout win over Nonito Donaire, I believe that Nietes, who has also won a title at strawweight, has the stronger resume. Nietes is 10-0-1 in title fights and has made five defenses of his current light flyweight title.  His resume includes good wins over Pornsawan Porpramook, Moises Fuentes (he also had a draw with him) and Ramon Hirales. Walters has impressive wins against Donaire and Vic Darchinyan but in my estimation Darchinyan was already on the downside of his career when they met and he was well above his best weight class. Thus, Nietes enters the Rankings at #20.  The complete Saturday Night Boxing pound-for-pound list is below:

1. Floyd Mayweather
2. Roman Gonzalez
3. Wladimir Klitschko
4. Manny Pacquiao
5. Juan Manuel Marquez
6. Tim Bradley
7. Guillermo Rigondeaux
8. Carl Froch
9. Sergey Kovalev
10. Juan Estrada
11. Naoya Inoue
12. Adonis Stevenson
13. Miguel Cotto
14. Danny Garcia
15. Gennady Golovkin
16. Saul Alvarez
17. Takashi Uchiyama
18. Shinsuke Yamanaka
19. Terence Crawford
20. Donnie Nietes

Adam Abramowitz is the head writer and founder of saturdaynightboxing.com.
He is also a member of the Transnational Boxing Rankings Board.@snboxing on twitter

SN Boxing on Facebook

Contact Adam at saturdaynightboxing@hotmail.com

The Return of the Golden Boy

Things weren't going well for Oscar de la Hoya in the fall of 2013. Instead of being front-and-center promoting the Floyd Mayweather-Saul Alvarez fight, which was one of the biggest boxing pay per views of all time, de la Hoya was in rehab for at least the second time. Far removed from boxing's signature event of 2013, de la Hoya was busy trying to piece his life back together. After retiring from the sport, he had lost battles against several personal demons, which included drugs, alcohol, infidelity and boredom. In addition, it was during this low period where de la Hoya's business partner and family member through marriage, Richard Schaefer, tried to wrestle Golden Boy Promotions away from him.  

This is a good time to stop and remember who de la Hoya was as a fighter. An Olympic gold medalist, de la Hoya had a fiery competitiveness that was often overshadowed by his easy smile and gregarious demeanor. However, you don't get to be the top amateur in the world at your weight class by merely being a nice guy. Not only was de la Hoya a first-rate competitor, he also was highly ambitious; he wanted it all. In his pro career, de la Hoya actively sought the biggest challenges, taking on Hall of Fame talents like Felix Trinidad, Julio Cesar Chavez, Pernell Whitaker, Shane Mosley, Bernard Hopkins, Manny Pacquiao and Floyd Mayweather. Although de la Hoya didn't win all of these fights (or even a majority of them), his desire to test himself against boxing's best played a large role in becoming the sport's top draw.

 

Remember that de la Hoya was HBO's cash cow and he conceivably could have gone the Roy Jones route of fighter lesser talents for healthy and guaranteed paychecks. But de la Hoya didn't want that. He aspired to something much more – greatness.

 

During the back end of his career, de la Hoya established his promotional outfit, Golden Boy, and was determined to become a dominant player in the business of boxing. Again, this wasn't just another fighter setting up a promotional company as a tax dodge; de la Hoya truly wanted to be the best in another aspect of the sport.

 

De la Hoya and Schaefer proved to be a shrewd team at first. They negotiated a three-year output deal with HBO in return for de la Hoya fighting on a regular HBO broadcast, instead of pay per view. This deal engendered jealousy among other boxing promoters but Oscar had one significant advantage over his competitors: himself. He expertly leveraged his role in the sport to gain exposure for his nascent company. With three years’ worth of dates on the premier boxing network, Golden Boy had a fantastic platform to promote and expand its current stable.

 

The company, starting with de la Hoya, Mosley, Hopkins and Barrera as active fighters, branched out by signing younger stars and emerging talent. In time, Golden Boy developed and/or cultivated stars such as Victor Ortiz, Amir Khan, Marcos Maidana, Abner Mares, Saul Alvarez, Adrien Broner and many others. Eventually, Golden Boy created the largest stable of top boxers in North America.

 

Schaefer and de la Hoya wanted to dominate the sport. Signing an exclusive deal with Barclays Center in Brooklyn and expertly cultivating the white-hot Southern California boxing market, the company repeatedly flexed its muscles. Golden Boy was very successful in bringing in new sponsors to the sport and even set up a new boxing series on Fox Sports 1. Eventually, Golden Boy emerged as the de facto exclusive content provider for Showtime, after one its former attorneys, Stephen Espinoza, became the head of the network's sports division.

 

Throughout Golden Boy's rise, there was one major problem: it wasn't making money. Although the company was successful in extracting generous TV contracts for its events, Golden Boy had failed to build its fighters at the box office. With the exception of Saul Alvarez, Floyd Mayweather (who technically wasn't a Golden Boy fighter) and a few one-off events, the company wasn't able to connect with ticket-buying boxing fans. Known for papering its events with heavily discounted tickets and freebies, Golden Boy lacked the promotional savvy or experience to fill up arenas with paying customers. The company didn't consistently build up its stars in home markets. It had a weak ground crew and failed to build local buzz for its events (often, it subcontracted that function out, with varying success). More often, Golden Boy chased site fees from locations that often didn't align with the particular fighters on a given card.

 

As the company matured, De la Hoya functioned essentially as its figurehead, appearing at events and press conferences and giving interviews the week of big fights; however, Schaefer was the one doing the hard work and providing the company with direction. And as de la Hoya spent less time active in the company, Schaefer started to make some curious decisions, which eventually hindered Golden Boy's long-term viability.

 

The company had always been bedfellows with manager and power broker Al Haymon, who represented many of Golden Boy's fighters. Over time, Haymon's influence over the company continued to grow. Eventually, the company started placing a number of Haymon's fighters on its cards that didn't even have Golden Boy promotional contracts, for example, Gary Russell Jr., Andre Berto, Keith Thurman and others. This was not a case of Schaefer doing Haymon a favor by placing one of his fighters deep on an undercard to keep busy or finding an "opponent" for a slot. No, these boxers were becoming major stars in the sport. They were taking up slots on HBO and Showtime and yet they were not Golden Boy fighters. Essentially, Golden Boy was sacrificing its potential future profits to placate Haymon. In addition, Schaefer failed to renew the contracts of a number of Golden Boy fighters who were represented by Haymon, further reducing the assets of the company.

 

After exiting rehab in 2013, de la Hoya sought to reengage himself with the company and it’s clear that he didn't like what he had found. Major investors in Golden Boy, like AEG, were tired of sinking money into an unprofitable enterprise. In reviewing the finances of the company, de la Hoya and his supporters within Golden Boy were no longer pleased with Schaefer's stewardship. Golden Boy's supposed large stable of fighters was mere window dressing. Many of the presumed Golden Boy boxers were actually free agents or, in some cases, they never had official Golden Boy contracts.

 

De la Hoya and his supporters attempted to oust Schaefer, who had been a major stockholder in the enterprise. They filed an eight-figure lawsuit against him. Although the case never made it to court, there were lengthy, private negotiations centering on esoterica such as which fighters actually had valid contracts. Clearly, de la Hoya et al. believed that Schaefer violated his fiduciary responsibility as CEO by not maximizing revenues for the company. (Letting contracts lapse and refusing to work with Bob Arum to make big fights are just two obvious examples of this).

 

Eventually, a multi-million dollar settlement was agreed upon, which according to reports was paid for in part by Al Haymon and his backers. The upshot of the settlement was that Haymon took almost all of his fighters away from Golden Boy and Schaefer now had a shorter non-compete than his original contract stated. However, De la Hoya was able to keep the name and run the company as he saw fit. Golden Boy was left with only a few assets, such as Alvarez, Hopkins (more on him later), Khan, Leo Santa Cruz, Lucas Matthysse, some fighters under manager Frank Espinoza and a couple of young prospects.

 

Golden Boy reemerged from this wreckage as a much smaller company but one that was singularly Oscar's. Since the dissolution of his partnership with Schaefer, de la Hoya has gone about the business of the company with a renewed vigor. Firing Schaefer loyalists and buying out AEG, de la Hoya set out to create Golden Boy in more of his image: Golden Boy fighters would be matched tough and fight for glory, not paychecks against undermanned foes.

 

Like a missionary, de la Hoya has worked with zeal for his reconstituted company. In a great coup, he convinced Hopkins to side with him over Haymon and/or Schaefer and remain part of Golden Boy's ownership group. Hopkins' retention was an important symbol, suggesting that de la Hoya's vision for the company was viable. (If you can keep the notoriously prickly Hopkins on board, you might have something.) De la Hoya also reached out to his former promoter and enemy, Bob Arum, and agreed to make fights together. Although Sadam Ali-Luis Carlos Abregu and Jose Benavidez-Mauricio Herrera didn't exactly revolutionize the sport, it was a start.

 

De la Hoya also went looking for new boxing talent, signing 12 young fighters, mostly of Mexican or Mexican-American heritage, as well as middleweight slugger David Lemieux (although this contract is under dispute from Lemieux's prior promoter). That de la Hoya would spring for a fighter like Lemieux is very informative. Lemieux most likely isn't an elite guy but he makes great TV fights and wants to face the top guys.

 

Over the last month, de la Hoya and Haymon essentially traded two fighters. Golden Boy now has full rights to Lucas Matthysse, without Haymon's involvement, and de la Hoya let Haymon buy out Leo Santa Cruz's contract. Again, these two transactions highlight de la Hoya's philosophy for Golden Boy. Matthysse had been an isolated example of a Haymon fighter who was displeased with how he was being moved and whom he was fighting. Matthysse already had great fights against some of the best talents at 140 and yet he was still appearing on an Adrien Broner undercard against an overmatched opponent. The fighter wanted a rematch with Danny Garcia or a shot at Broner; instead, he was given Roberto Ortiz. Matthysse fits de la Hoya's description of what a top fighter should be – he may not win every fight but he will take on all comers and entertain.

 

Conversely, Leo Santa Cruz was deemed expendable by de la Hoya. Although the fighter had won two title belts and possessed a fan-friendly style, he, and his handlers (Haymon, for one), refused tough matchups. He turned down an opportunity to unify against fellow junior featherweight champ Scott Quigg and he also wouldn't fight Guillermo Rigondeaux, the top talent in the division.

 

Clearly, Golden Boy is in a transitional period. Alvarez is its only pay per view attraction and a number of its other well-known fighters are either on their way out (Hopkins) or still have Haymon on their team (Khan). Golden Boy's next generation of boxers is relatively untested and still several fights away from the higher levels of the sport.

 

But let's give credit to Oscar for making some very tough and ballsy decisions. He could have succumbed to the Haymonization of boxing, where top fighters get in the ring infrequently often against inferior competition. Golden Boy could have remained one of Haymon's "front" promoters, eliciting a fee for putting on events but getting a much smaller percentage of the actual profits. However, this wasn't Oscar's desire. He wanted to build and develop fighters in his image, always accepting challenges and wanting to face the best. Oscar also repaired the company's relationship with HBO. Golden Boy had been previously banished from the network in 2013 but after returning Saul Alvarez to HBO, Golden Boy is back in good standing. De la Hoya can now negotiate with both sides of the boxing premium network street.

 

For Oscar, boxing is still about the competition and the glory. By all accounts, he has enough money to live comfortably for the rest of his life. However, the sport and all of its rewards still call to him. It's unclear how Golden Boy will look in another two years. Hopefully Oscar can stay on the straight and narrow path but with addicts it's always a challenge. For now, de la Hoya has done the sport and himself a world of good. His pride, both in his personal accomplishments and in his business, has led him to extricate himself from several tumultuous chapters in his life. It would have been easy for de la Hoya to relinquish control of his company or succumb to drugs and booze but he has chosen a tougher and nobler path. Yes, de la Hoya may not win all of his current battles. Golden Boy might never become the company that Oscar envisioned. Maybe Haymon's new enterprise will swallow up the existing North American boxing model. But de la Hoya is a fighter at heart. He still has that competitive fire and desire for greatness. Since exiting rehab, his resolve and resiliency in the face of such trying circumstances have been admirable. He deserves our praise.

Adam Abramowitz is the head writer and founder of saturdaynightboxing.com.
He is also a member of the Transnational Boxing Rankings Board.
@snboxing on twitter

SN Boxing on Facebook

Contact Adam at saturdaynightboxing@hotmail.com