Entrepreneurs
Golden Boy
Evan Hessel, 04.26.04

Oscar De La Hoya has found a new way to score knockouts--by promoting fights himself.

No one understands the economics of boxing better than Oscar de la Hoya. Commanding $20 million per fight, the seven-time world champ has hauled in at least $150 million since 1993, the year after he turned pro. But with three or four big fights left in him, De la Hoya, 31, needs to plan his retirement.

Two years ago he bought out a small promoter of fights and renamed it Golden Boy Promotions. Since then he has built a stable of 24 nationally ranked boxers--including himself. The first active world champion to promote other boxers, De la Hoya recruits hungry Hispanic fighters willing to train six hours a day, fight every two months and stay out of police reports. "We are providing fights that are competitive and entertaining," says De la Hoya, who, despite a few rough bouts, has kept his fashion-model looks. He predicts that he will net $56.5 million pretax this year on $120 million from ticket and television revenues. (De La Hoya's other fighters generate a fraction of that.)

Few athletes-turned-promoters have done well. Olympic gold medalist Dorothy Hamill struggled with the Ice Capades; NBA All-Star point guard Isiah Thomas did okay owning and managing the Toronto Raptors. But De la Hoya has a particular incentive to succeed. "Boxing right now is a disgrace," he says. Several pros and a manager admitted to the FBI that they conspired to throw fights against a heavyweight contender. Senator John McCain, the Arizona Republican, has called on the feds to clean up the sport.

Fans have registered their disgust. The most-watched title fights, all on pay-per-view, attract only 1.3 million enthusiasts--minuscule, compared with the 14.6 million U.S. households that watched Muhammad Ali outlast Joe Frazier on ABC in 1975. Average boxing viewership at ESPN2, the only English-language basic cable network with weekly boxing programming, fell 6.6% last year to 297,000 households, reports Nielsen Media Research.

De la Hoya hopes to spark interest by tapping into his roots. His 67th-floor office in downtown Los Angeles is just 10 miles from the East Los Angeles neighborhood where he first strapped on boxing gloves, at age 6, to spar with his older brother. Golden Boy is very much a family business: His father, Joel Sr., and cousin Adrian Pasten recruit and manage fighters; his sister, Cecilia, oversees ticketing. One conspicuous outsider is Chief Executive Richard Schaefer, a former managing director of UBS North America.

You can't win fans with family image alone. (De la Hoya has a couple of points against him on that score, anyway: a rape allegation, which he denied but which was settled out of court in 2001; and a $62.5 million suit in 2000 that alleged repeated violations of a restraining order filed by former Playboy Playmate Shanna Moakler, his former fiancée and the mother of his daughter. Schaefer says the suit is no longer pending.) Which is why De la Hoya scouts constantly for new talent. Recognizing that 41% of all televised boxing is on Spanish-language networks, he favors Hispanic nonheavyweights like himself. If a fighter piques his interest, he personally approves the contract, then passes the young gun to Eric Gomez, his best friend from elementary school and head matchmaker. "We guide their careers, decide who they're going to fight, what they're going to get paid," De la Hoya says.

All that helps with De la Hoya's budget. Unranked prospects appear in off-TV bouts in small arenas, hotels and casinos; for the bimonthly Battle in the Ballroom series at the Irvine Marriott hotel Golden Boy nets only about $10,000 per fight--on 1,400 tickets at $30 a pop--after paying the fighters; without these fights the young boxers would wait months for bouts. Once established as rising contenders, they're primed for national television. This year De la Hoya will promote eight televised events for Telefutura, Univision's high-flying Spanish-language sister network, supplying his own fighters, booking their opponents and renting the venue. A 2002 deal with HBO Latino will provide about $50,000 per monthly episode to promote two fights, along with ringside chatter by De la Hoya. That doesn't include the per-episode ticket sales of $120,000 or so and ads on the ring's canvas and posts, around $30,000. After paying the fighters, Golden Boy nets about $30,000 per show.

Just as important, the series introduces little-known prospects like 23-year-old super-bantamweight Daniel Ponce de Leon to the network's 12.2 million subscribing households. De la Hoya's dad signed the Mexican-born Ponce after watching him knock out 13 opponents in California and Mexico. In February De la Hoya pitted Ponce against Cesar Figueroa in San Diego on HBO Latino. (Ponce floored Figueroa in the sixth round with a series of devastating left hooks, extending his undefeated streak to 17 wins.) "I am proud to fight for a legend like Oscar," says Ponce.

In June Golden Boy will send its biggest moneymaker into the ring. De la Hoya will fight World Boxing Organization middleweight champ Felix Sturm at the MGM Grand in Las Vegas, part of a dual HBO pay-per-view event also featuring a showdown between Bernard (the Executioner) Hopkins and Robert Allen. Beating Sturm would give De la Hoya titles in six different weight classes, a world record. If De la Hoya and Hopkins, both heavily favored, win their respective bouts, they will fight in September for the middleweight crown and a combined $30 million purse. "De la Hoya-Hopkins will be one of the biggest fights ever," says Ross Greenburg, head of HBO Sports. "This is exactly what boxing needs."

Golden Boy will promote the fights with Las Vegas-based Top Rank Promotions, headed by De la Hoya's longtime promoter Bob Arum. If 2 million households buy the Hopkins-De la Hoya fight for $55, matching viewership for the 1997 Evander Holyfield-Mike Tyson bout, TV revenues will generate at least $100 million. The MGM Grand will pay the Golden Boy-Top Rank alliance about $20 million in site fees. Closed-circuit fees, foreign pay-per-view and ringside advertising will add another $14 million, Schaefer estimates.


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