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Is Golden Boy's business bad for boxing?
Oct. 26, 2006
By Michael Swann
Special to CBS SportsLine.com
A few weeks ago, Kathy Duva, the CEO of Main Events, said in this column that Oscar De La Hoya's Golden Boy Promotions (GBP) was the "Wal-Mart" of the boxing business. Duva said GBP was guilty of "poaching" talent nurtured by other promoters, upsetting the economic balance in the marketplace by using Oscar's considerable ring earnings to offset losses incurred by signing free-agent fighters to contracts that make impossible for a rival promoter to be competitive and still make a profit.
Duva was smarting from the loss of WBA lightweight title holder Juan Diaz after Main Events had spent five years building Diaz, only to be left with red ink on their investment when Golden Boy made a whopping offer they felt was economically unfeasible to match. As it turned out, Don King upped the ante and signed Diaz with an even higher offer, reportedly a $550,000 signing bonus and $400,000 to face unknown Fernando Angulo on the undercard of the Sergei Liakhovich-Shannon Briggs fight on Nov. 4.
Duva questioned Golden Boy's motives, saying, "When you're running your business with the intention of running your competitors out of business, it's a shame. Because when you succeed what do you have? You have Wal-Mart.
"Either Golden Boy, Oscar, becomes the single distributor of boxing to HBO, in which case HBO will have to pay whatever he tells them, or at some point the fighters will have nowhere to go and he'll tell them how much they're making, maybe both. If you want to get your fighter on HBO you're going to have to fight a Golden Boy fighter because they have all the dates. And HBO says no they don't, but they do."
Last Friday Golden Boy issued a press release announcing their signing of Diego Corrales. Before the day was over, it was learned that Corrales was still under contract to Gary Shaw for another fight, and Shaw intended to hold him to it.
Saturday, writer William Trillo penned a brilliant piece that appeared on Pound4pound.com headlined "Corrales Insider Questions Business Blunder By Golden Boy." The article reminded us of other premature GBP press releases, for example Juan Diaz, and pointed to the still unsettled Manny Pacquiao/Top Rank situation as further proof that, "This is not the first time Golden Boy has jumped the gun in an attempt to sign a so-called free agent."
Top Rank's Bob Arum is threatening legal action because he is Pacquiao's promoter for a fight with Erik Morales on Nov. 18, and language in that contract prohibits Manny from signing a promotional contract with anyone until after the fight. Pacquiao, who had been a free agent since leaving Shaw earlier this year, had signed a seven-fight contract with Golden Boy.
"Why would Golden Boy's Richard Schaefer and Oscar De La Hoya apparently take the word of Diego Corrales and his manager that he was a free agent without having their lawyers check with Shaw to make sure there is not a legal issue?" Trillo asks.
The article said a selling point to Corrales "was the pennies that Diego was making at Showtime and the real dollars he could earn at HBO," and concludes with the point that all of the fighters Shaw has lost recently will make their next appearance on HBO.
The bottom of the Golden Boy press release listed a contact person from their public relations department. In an attempt to get the Golden Boy side of the story, I began there. I asked if she knew Corrales was still under contract, aware of a lawsuit from Shaw, and did she not have a comment about the charge of "poaching fighters." While impressively congenial, she told me she just didn't know the answers to my questions, and referred me to Raul Jaimes, the VP of boxing operations for Golden Boy.
I was forwarded to what turned out to be voice mail. After leaving my message, my call was not returned, nor was it on several other attempts to reach him.
Shaw, for his part, said that he was unable to comment on Corrales except that, "He's still under contract."
Another promoter who spoke on condition of anonymity said this: "Any business has problems for anyone other than the person controlling the business if there's a dominant player in the business. Promoters have always failed to work together for the betterment of the business. They've worked for their personal betterment. In other mainstream sports they do better because the individuals do what's best for the sport. That's why we don't have sponsors.
"(Don) King and Arum were the dominant figures in the sport for many years. Now everybody sees an opportunity for the next generation. Golden Boy shows up and is quickly becoming the dominant player in the sport. I think that dominance is going to hurt the sport.
"You sign a guy, give him a whole bunch of money, and how do you get that money back? You take it from the other side. The fighter will pay for it.
"I don't understand Golden Boy's business. They have a large overhead. They're overpaying fighters to sign. They're taking in fighters as partners. Are they equity partners? Are these guys ever going to see anything on their investment if there was an investment?
"I kind of like Eric (Gomez, matchmaker), Raul (Jaimes), and I think Oscar's a decent guy, but Richard Schaefer, I think can be a dictator. Richard's the brains in that organization. Oscar's just a fighter.
"By the way, the networks are starting to see it a little bit. Originally HBO was all for Golden Boy and they're starting to pull back a little bit. They're starting to understand that, you see, the networks are competitors of the promoters, but the promoters don't realize this. If the promoters got together they could dictate what the networks pay for a fight instead of undercutting each other. The networks are now seeing that if Oscar dominates the business, Golden Boy can dictate to them what they get. They're starting to realize that they might have created a monster.
"Most people in the industry all feel the same way, I've talked to them. Everyone's in for survival so they know they have to deal with Golden Boy, so why criticize them publicly? (Richard Schaefer) is one of those guys who if you piss him off he'll tell you to "lose my number and I can live without you. He can be an arrogant (expletive deleted)."
Even Winky Wright, whose Winky Promotions is co-promoter with Golden Boy of the Wright-Ike Quartey fight on Dec. 2 in hometown Tampa at the St. Pete's Times Forum, is on board with Golden Boy, pictured on their website as one of their fighters. After months of rumors of projected opponents, Winky's friend Jeff Lacy returns on the undercard against an opponent to be announced, fighting under the Winky banner for now. (Not to veer too far off topic, but seriously, top ticket prices of $1,000 for this card are a bit stiff for Tampa, with no casino to subsidize the event.)
As for Diego "Chico" Corrales, you can't blame him or any fighter for following the money. Published reports indicate that Diego received a six-figure bonus and a multifight, multiyear deal. Still, you can't help but wonder how much value is going to be left for Golden Boy, if Corrales, thought to be an "old" 29, has to fulfill his contract with Shaw before joining GBP.
There had to be a better way. When Corrales was released from prison for beating his pregnant wife (now ex-wife) in 2003, Shaw promoted him for 10 fights and reinvented him from the ex-con wife-beater into the highly respected warrior and family man he is perceived as today. In fact, it is only because of this image that he received somewhat of a pass in the media recently for not making weight against Joel Casamayor. Corrales received a reduced purse after his faux pas, was fined $250,000 by the Nevada State Athletic Commission and shelled out a six-figure bonus to Casamayor to go through with the fight, but Shaw is the one who lost the $500,000 site fee from Mandalay Bay without penalty to Corrales.
But mostly Corrales should have considered Shaw's genuine concern for Diego's health in the canceled third bout with an overweight Jose Luis Castillo, taking a financial beating rather than pushing Corrales into a potentially dangerous fight.
To add insult to injury, the press release issued this statement from Corrales:
"At this point in my career, it is important that I can go into a fight knowing that the business outside is being taken care of. I wanted to be with a promoter who understands us fighters and who I can be with for the rest of my career."
Then Schaefer was quoted as saying, "I think it is important going into a fight that promoters are more active with the fighters and say 'Can you make this weight?' If you have a fighter who has trouble making weight, they shouldn't make the fight. Or the network shouldn't make the fight. To put all the blame on Diego is not really right."
Puh-lease -- are they saying that Shaw and/or Showtime are responsible for Corrales' failure to make weight? Nice spin, but Castillo didn't try to pin his failure on Bob Arum or Showtime.
It's not exactly a state secret that Golden Boy receives "Most Favored Nations" support from HBO. Kathy Duva was right on the mark with that one. Thinking ahead, I have to wonder if that status will change when Oscar retires and they lose boxing's last pay-per-view megastar, not to mention Bernard Hopkins, Marco Antonio Barrera and Shane Mosley, all at or soon to be at the end of their careers. (Question: What on earth is going to be the role for these guys when they go to work full time as executives at GBP?)
Well actually things might not change at all as long as Oscar can continue to deliver the biggest stars in the game. So maybe a loss today (such as last week's Mexican Glory) is just another long term investment toward being the dominant promotional company in the next generation. As long as they can control HBO, they can control boxing.
