Friday, May 04, 2007

Oscar De La Hoya vs. Floyd Mayweather Jr. – Let’s Get Ready for Business

The sport of boxing seemingly suffering in terms of marquee names and legitimate box office names this weekend will collectively hope and pray the biggest boxing match in years becomes a sports event that people will talk about for years to come. Badly in need of an infusion, slowly but surely losing whatever grip it had on any audience the sport of boxing is in desperate need of what had become the sports staple for many years “the mega fight”. Saturday night at the MGM Grand Hotel a boxing match that could generate more than $100 million in business is set to take place.

In what represents a classic example of the evolution of boxing, Saturday night’s event is being co-promoted by Bob Arum’s Top Rank (the long standing method for how boxing events where managed, either with Arum or Don King) and De La Hoya’s Golden Boy Promotions. Arum’s involvement is largely because of his relationship with Mayweather. Arum used to promote De La Hoya’s fights before Oscar decided to take the bold move and take control of his career.

The fight, which will cost $54.95 to watch (both in the United States and in Canada), is projected to not only highest the pay-per-view record of 1.99 million buys set by two heavyweight fights (Evander Holyfield-Mike Tyson in 1997 and Lennox Lewis-Tyson in 2002), but also the record of $112 million generated by Lewis-Tyson. The event will be available in 176 counties.

"Boxing is obviously on the ropes right now, and the old saying is that 'the fish rots from the head down,' " says David Carter, executive director of the University of Southern California Sports Business Institute in a USA Today report. "If you are not hitting on all cylinders in the heavyweight category, you don't have great branded fighters. And the credibility of the sport is strained by having multiple champions."

"It really has a downstream effect," Carter told the USA Today. "The only thing that mitigates that downward spiral is when you have a De La Hoya and Mayweather — both former Olympians who are well known — that are able to shore up that base.

"If you look at who the sport's branded guys are, if you can't advertise this fight, which ones can you really aggressively promote?"

Golden Boy Promotions organized a tour that included De La Hoya and Mayweather went on an 11-city promotional tour, several sponsors, including Tecate beer, Bally's, Dr. Pepper and Southwest Airlines. And HBO, whose pay-per-view arm will broadcast the fight, put together a four-part, reality-style series called 24/7 that has given viewers behind-the-scenes looks at the fighters' camps.

''We're promoting like no other promoter has ever promoted,'' De La Hoya said during a recent conference call. ``And we're bringing in something new to the table with the sponsors. I mean, it's incredible.''

De La Hoya's fight against Felix Trinidad in 1999 set a record for pay-per-view buys for a non-heavyweight bout (1.4 million).

“This is the way boxing should be promoted,” De La Hoya said in a Miami Herald report. “If Golden Boy Promotions was promoting the Trinidad fight with me, we would have easily done more than two million homes.”

The fight is no longer a fight, but an event that has captured a great deal of mainstream media attention. While mainstream media support may not be important to fight fans, mainstream media helped created the tremendous ‘buzz’ surrounding the fight, and the hype is what drives the pay-per-view buy rate.

“It feels like as big a buildup and promotion [for a nonheavyweight fight] in this sport in about 20 years,” said Ross Greenburg, president of HBO Sports in a Miami Herald report. “We've done all we can do to get the word out. Certainly, we've had some of the largest promotional tie-ins in boxing history.”

''I think there has been a lot of press beyond the marketing ploy,'' Greenburg said. “Every magazine is devoting major coverage to it. We're definitely seeing the scope of this fight transcend boxing.

“We're hitting the average sports fan now, and that's when you know you can crack big numbers on pay-per-view.”

''Everything else outside the ring, to take the fight to the public and to make sure the public knows about this fight is done,'' De La Hoya said. ``Everybody knows about this fight, and so now it's up to us to perform.''

One of the keys was the innovative marketing that helped drive the hype the two fighters agreed to be a part of a four-part HBO reality series, De La Hoya/Mayweather 24/7. The first three episodes used Using The Sopranos and Entourage as lead-ins hitting the key de demographic the boxing audience needs – males 18 to 34 years old, the key demographic group boxing had been losing to Mixed Marshall Arts in recent years.

HBO Sports spokesman Ray Stallone told USA Today the first three shows for the series averaged 1.2 million per episode and, "Exposed a lot of young viewers to Oscar and Floyd. That's what boxing needs."

Dallas-based sports marketing expert Larry Lundy agrees. "With boxing's waning interest, the HBO reality series is one of the best ideas to come along in a long time," Lundy says. "It's driving interest in the fight among casual fans that normally wouldn't be there."

"May 5 will bring a big opportunity for the sport and a big responsibility," says Richard Schaefer, CEO of De La Hoya's Golden Boy Promotions, which has teamed with HBO to deliver what can only be termed a knockout in how to effectively promote a boxing event. "We want this fight to go down as the night that saved boxing."

The 17,000-seat MGM Grand Garden Arena sold out in two hours, generating a Nevada-record live gate of $19 million and surpassing the $16.8 million for the second Lennox Lewis-Evander Holyfield heavyweight title fight in 1999 at Las Vegas' Thomas & Mack Center.

Schaefer according to a USA Today report played a key role in securing sponsors for the fight, companies that include Bally Total Fitness, Rockstar (energy drink), Cazadores (tequila), Starwood Hotels, Southwest Airlines, Tecate (Mexican beer) and 7-Eleven.

"We hope if we can give these sponsors a positive experience, aligning their brand with the sport, they will stay involved with boxing," says Schaefer, who was managing director of Swiss bank UBS before joining De La Hoya at Golden Boy.

"Most sports sponsorships today are very expensive, but boxing is so cheap for what you get. If we can convince the companies of that and show them we run a clean business, it's the best deal in sports."

Two weeks ago boxing biggest nemesis – the Ultimate Fighting Championship (UFC) offered a pay-per-view on Spike TV. UFC 70 (UFC designates each of their pay-per-views with a number) drew an audience of 2.8 million, drawing more men 18 to 34 that day than NASCAR and baseball on Fox and the NBA playoffs on ESPN. With reports and both HBO and ESPN are ready to become partners with UFC, the future of boxing as a viable sports property could be determined Saturday night.

Greenburg, president of HBO Sports, believes there's room for boxing and UFC, which he considers vastly different sports, but with the UFC poised to sign an agreement with HBO that gives HBO creative control of how UFC events will be packaged on offered on a pay-per-view basis it sounds like HBO and UFC events are about to become partners.

"The demographics are showing to be quite different, as well," Greenburg said in a USA Today report. Mixed martial arts "is attracting a much younger audience. I don't think there's competition between the two. Mixed martial arts and boxing is no different than the NFL competing with Major League Baseball."

Richard Sturm, president of MGM Grand Entertainment and Sports like Greenburg believes there’s room for both boxing and the UFC to succeed, but made it clear to the USA Today there’s nothing in Vegas quite like the magic of a mega boxing match.

"It has taken a life of its own," Sturm says. "Because people honestly believe either fighter can win, this fight has created such excitement that it seems everybody wants to be part of it. I have never received more phone calls for tickets in my life."

"A great fight is what'll make it successful," Sturm says. "You pray it's going to be an exciting fight, which is what the hype is about. There's always a concern that the audience gets what it came for. If it turns out to be the great fight we all want, I don't see why this wouldn't help future boxing events."

The formation of Golden Boy Promotions late in 2001 made De La Hoya, then 29, the first Hispanic to own a national boxing promotional firm and one of only a handful of boxers in history who have taken on promotional responsibilities while still active.

"Given the tremendous interest in boxing with the Hispanic communities and the strong growth of the Hispanic population in the United States, I felt it was time for a Hispanic to enter the boxing promotion business in a meaningful way," De La Hoya said. "I have been thinking for many years of ways to give something back to the sport, which has been so good to me and I came to the conclusion that a national boxing promotions business was the way to go."

"The focus, however, will not only be with Hispanics. My door will be open to fighters from all over the world who are looking to find a platform, which will allow them to grow and perform at their best. Our value proposition will be built on high ethical standards, total transparency and competence."

De La Hoya also announced on the day he formed Golden Boy Promotions (December 21, 2001) that he had acquired Roy Englebrecht Promotions, the longtime Orange County-based group owned by Englebrecht. Englebrecht retained an equity piece in the new company and serve as chief operating officer. Schaefer has served as CEO and Oscar De La Hoya is the president.

"I wanted to ensure that Golden Boy Promotions was addressing the entire universe of boxing shows from non-televised events in local neighborhoods to televised shows in exciting venues to premium cable shows to, ultimately, pay-per-view events," De La Hoya said. "I feel only by growing into the business from the bottom up can one truly build a strong promotional franchise. In the process, we will bring boxing back to the casual fan and strengthen the sport by providing shows for all tastes and budgets."

Unlike so many others who have tried but failed, if you listen to what Englebrecht and De La Hoya said more than six years ago, they have delivered on the vision they had for Golden Boy Promotions.

"I was overwhelmed with the vision that Oscar had for the future of boxing," Englebrecht, who promotes approximately 20 percent of all boxing shows held in California, said. "It is an honor for me to be included in this venture. We will develop a long-term business plan for Golden Boy Promotions that will cover all aspects of the business of boxing. We will be promoting at venues all over the country. We will scout, sign and train fighters. We will develop a strategy for each boxer that joins Golden Boy Promotions plotting out the proper pace and opponents, with the goal of putting them all in a position to fight for world championships."

“I am convinced that we have put together one of the best teams in boxing,” De La Hoya said. “Our expertise and name recognition in boxing, our business acumen combined with our high ethical standards will be the blueprint by which a boxing promotion business will be measured against in the 21st century. We have already received a tremendous interest from corporate sponsors, television and cable operators as well as many business executives, who would like to be involved with us.”

And as anyone with a business plan they wanted to implement Oscar offered this has Golden Boy Promotions “mission statement” Golden Boy Promotions strives to become the leading Boxing Promotional Company through integrity, honesty, hard work and determination. We want to offer promising young fighters a platform from which they can showcase their talents to a global audience and want to offer our viewers and fans high quality programming.

Golden Boy Promotions is committed to recruiting, developing and retaining the best and brightest young fighters to help achieve our mission.

Nicknamed the Golden Boy —De La Hoya won a gold medal for the United States Boxing Team at the Barcelona Olympic Games and is considered one of boxings all time greats. De La Hoya was Ring Magazine's "Fighter of the Year" in 1995 and Ring Magazine's best "Pound for Pound" fighter in the world in 1997. His fights throughout his entire career have generated a total of almost half a billion dollars in sales alone. He is also the only fighter in the history of boxing to win world titles in six weight classes.

During his amateur career, De La Hoya's record was 223-5 with 163 knockouts. He was the United States' top Olympic boxing hope when his mother was diagnosed with breast cancer. She died at age 35. On her death bed, he promised her that he would win an Olympic gold medal.

After winning an Olympic gold medal and earning the nickname “Golden Boy” De La Hoya partnered with Bob Arum earning close to a half billion dollars. De La Hoya left Arum in 2000 and a year formed Golden Boy Promotions. Other boxers (notably Sugar Ray Leonard) have tried and failed at creating boxing promotional companies, but after generating more than $80 million in business in 2006 and with Saturday’s fight expected to generate more than $100 million, De La Hoya appears poised to succeed where every other boxer has failed. Some believe Saturday’s fight will generate close to $150 million, with $30 million directly headed to the coffers of Golden Boy Promotions. If money was an issue for Golden Boy Promotions, once Saturday night’s fight ends De La Hoya and Golden Boy Promotions will have the necessary capital to seriously grow their business and challenge Bob Arum and Don King. Saturday night – “Lets get ready to Rumble and create a money making monster.” “Ultimately, I am fighting not just to secure my legacy or because I enjoy a challenge,” De La Hoya says. “I can use this as a vehicle to get the word out that Golden Boy is the company to make boxing respectable again. It works hand in hand.”

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: USA Today and the Miami Herald.

Labels: , , , , ,