In case you haven't heard, Oscar de la Hoya recently made comments regarding his desire to see boxing headed under one promotional banner. The end result, he claimed, would be the best fighters fighting each other with further exposure of the sport on the main stage of HBO. De la Hoya made comparisons to organizations like the UFC and MLB. Better for boxing, right?
Not surprisingly, other promoters in the business were up in arms, calling his wishes everything from "silly" to being in violation of anti-trust laws.
I'm surprised, however, that nowhere was it explicitly stated what De la Hoya's true motive is:
Make more money by paying fighters less!
Let me explain. In terms of profit margins as a percentage, there is no more profitable major sports organization in the world than the UFC. It is the only sports promotion who has star athletes that can fill arenas and get a million pay-per-view buys and yet, they still get paid peanuts. Why? Because the UFC has a virtual monopoly on the sport. The UFC has 90% of the talent and exposure, so for athletes interested in "making it" in MMA, all roads lead to the UFC. Consequently, since the UFC knows any athlete with any serious interest in the sport will do virtually anything to compete under their banner, they can pay them virtually nothing and get away with it.
Oscar de la Hoya tried to throw the MLB and NBA into the same mix, but that's a fallacy. Whereas the UFC sets the rules and does the promotions, the MLB and NBA's obligations are really simply to set the rules. The team owners are the ones who run the real promotions. Even though the Lakers and Celtics operate under the same NBA governing body, the team owners are the ones spending money on the players to sell tickets and make a profit. Because there is competition among team owners, their athletes will get paid a lot, as team owners will in essence try to outbid each other for players, weighing potential profit against the risk for a potential loss based on the athlete's potential draw.
But imagine if Jerry Buss owned ALL of the basketball teams that played under the NBA. Why would he need to pay his players, even his stars, $10 million a year? Most talented basketball players with any serious interest would still be willing to play for $100,000 a year instead of $10 million simply because they'd have virtually no other alternative if they're looking to play the sport they love or maximize their earning potential. This is basically the business model the UFC has right now. With no other MMA promotions out there with nearly the level of competition or exposure, they can pay their best athletes hardly anything since they know their athletes would be willing to do anything to compete under their banner.
Look at boxing and the UFC's top draws, Floyd Mayweather and Brock Lesnar, respectively. Both bring in around the same PPV numbers, but while Floyd was paid $40 million for his last fight, Brock made only $500,000. That's 1/80th the salary Floyd received after bringing in about the same revenues. No wonder they call Floyd "Money" and BrockÂ…wellÂ…"Brock."
So in De la Hoya's perfect world, with him taking Dana White's role and Golden Boy becoming the sole major boxing promotion in the world, he would only have to pay Floyd a tiny fraction of what he makes now in order to keep him under the Golden Boy banner. Imagine if Floyd was only paid $500,000 in his last fight against Mosley instead of the $40 million he pocketed. That's an additional $39,500,000 in Golden Boy's hands. Now do you see why Oscar wants Golden Boy to operate like the UFC? There is no single bigger expense under a major boxing promotion than the fighters' purse, and with that compromised to the degree the UFC has theirs, a boxing promoter could virtually print money hand over foot compared to traditional business model.
What does this mean to the boxing community? Well, for starters, let's disregard the other promoters' fake outrage. They all operate like any other business and hope to eliminate the competition and have as much market share as possible. And whether they admit to it or not, they would love to see their company in the same position the UFC is in.
But if you're a professional fighter or a boxing fan, and actually think Oscar has a chance of achieving his motives – BE AFRAID! BE VERY AFRAID!
While it is true that you'll likely more often see the best fighting the best, if boxing had only one serious promotional company, you can be certain that even the best fighters would be getting paid peanuts, or about on par with what UFC fighters make. And since MMA is establishing itself as a more popular sport than boxing, love it or hate it, you can be sure that athletes wishing to get into combat sports will naturally drift toward MMA since no longer would there be a much bigger purse potential in boxing, as there is today. The end result is a severely watered down talent pool in boxing and a devolution of the sport. And would you really want to watch boxing if a guy with the talent of your typical Friday Night Fights undercard was holding all the belts and headlining a $50 HBO pay-per-view? In other words – boxing inheriting the UFC business model likely would be a death knell on the sport.
If this puts the fear in you, don't fret too much. It's highly unlikely Oscar's dream will ever occur. The sport is mature enough so that there's enough competition between promoters and broadcasters to ever allow a virtual monopoly to occur. Even if one promotion goes under, there are enough significant and established others out there to prevent any single company from acquiring all the talent. If Bob Arum croaked and his last will and testament called for the dissolution of Top Rank - Don King, Gary Shaw, Lou DiBella, and the rest of the big boys would all be there to make enough attractive offers to avoid a max exodus toward one single banner.
So if you're a fighter or fight fan jealous of all the hoopla the UFC has created during these same years boxing seems to have almost fallen off the map, just be thankful for what you still have. And if you're a promoter thinking you can copy the same success the UFC has – think again. The sport is far too mature to ever let one promotion take complete control and reap the financial advantages. Guess you'll have to make your bucks the old fashioned way – paying fighters what they're worth and putting on smart promotions.