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Richard Schaefer: We're Not The Sport Of Smoke-Filled Rooms

BY Michael Woods ON September 10, 2009
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In the last couple of years, I've noticed a practice employed by Golden Boy's Richard Schaefer and HBO's Mark Taffet that I didn't particularly care for. During press conferences, each would point to the stellar pay-per-view numbers put up by Golden Boy fighters, or non Golden Boy boxers on HBOPPVs , and I admit that it came off as boastful to me. Straight up front, I've not been a fan of the pay-per-view model in the sport, it being the least fan friendly arrangement for sports fans, who if they wish to keep track of the best and brightest in the sweet science, need to pony up hundreds and hundreds of dollars to tune in, via pay-per-view. As advertisers drifted further from the sport, turned off by rampant shenanigans perpetrated by shady promoters and inept judges, fans were forced to pick up the financial slack.

Great for you HBO guys, I thought to myself, that you tallied up 12.5 million buys and collected $634 in pay-per-view revenue from 2006-2008.

Whaddya want, Golden Boy, a medal, I grumbled under my breath, because Oscar notched 2.44 million buys when he met Floyd in 2007, and 1.25 million buys when he tangled with Pacquiao in 2008?

Granted, I'm a skeptic, tilting towards the cynical, which I'd argue is a pre-requisite for anyone desiring to be anything resembling a real journalist; one definition of news, you know, is stuff other people don't want you to know about, so one must be inclined to have a set of dubious eyes and ears if one wants to get beyond platitudes and press releases. But all in all, I just didn't see the point in trumpeting the gaudy pay-per-view numbers. Too much time and energy was being spent obsessing over revenue, and growth, not just in regards to the sport of boxing, but in all professional sports, and for that matter, all sectors of life. Must everything be commodified? Can we not enjoy the spectacle of the event, luxuriate in the dynamic displays of strength and will and skill in the squared circle, without digressing into debates and explorations of purses, and buy rates and such? Basically, like a prematurely cranky ranter yearning for the good old days, I wished for a return to the good old days. It turns out, one of those guys that I was taking inventory on, the Swiss banker turned fight promoter, Schaefer, was also yearning for a return to those good old days, to a degree.

In New York City on Wednesday, Schaefer and Taffet presided over a press conference to discuss the Sept. 19 Floyd Mayweather-Juan Manuel Marquez promotion, and yes, boast a little bit about the health of the boxing industry, vis a vis pay-per-view/box office revenue. As I chewed on a hard roll and sipped a Diet Coke at Brasserie 8 1/2 on 57th St., and heard Taffet talk about HBO Pay Per View's stellar run (2006-2008 included three of the four biggest years since HBO PPV began in 1991), and how PPV is now available in 75 million homes, versus 61 million in 2006, and how Mayweather has generated 4.5 million PPV buys and $237 million in revenue in his five PPV bouts, it dawned on me that there was and is a method to this maddening onslaught of bloated figures, and seemingly boastful citations. Schaefer and Taffet aren't tossing out these numbers as an exercise in self-aggrandizement, or to justify themselves as they angle for year-end bonuses from higher ups at Golden Boy (Oscar) and Time Warner (Jeff Bewkes ). No, they are there making a case for the health of the sport, and because this is the language they are quite comfortable with, they are building their case on a foundation of figures. And it further dawned on me, as I sipped on that soda, that Schaefer has been underestimated, to a large extent, in some circles. Sure, there have been fawning articles talking up the ex banker, and how he's helped De LaHoya grow his personal fortune into a budding and diversified empire of real estate, equities, media and entertainment.

But as I sat, chewed, and listened, it struck me that I don't think he's received enough credit, frankly, for landing advertisers, like Tecate and Southwest Airlines. Advertisers have shunned boxing in droves, afraid of being tainted by association by the red light district of sports. In-ring deaths, shady promoters constantly under indictment, manic brawlers misbehaving in felonious fashion, in and out of the ring--why, advertisers thought, should we entangle ourselves into that sordid sports swamp? Well, for starters, the backstories of so many pugilists, coming from humble beginnings, and excelling despite their origins, are compelling and are the definition of feel-good. Also, I don't have a stat handy, but I'd venture to say fight fans can go toe to toe in the beer consumption department with the fans of the Big Four,MLB , NFL, NBA and NHL. And, with the composition of the nation veering towards a Hispanic flavor, marketers of Hispanic-oriented goods and services should enjoy the bang for the buck when they buy into an Oscar De La Hoya, or now Juan Manuel Marquez promotion.

And I hit on a key element to Schaefer's rapid, for boxing, anyway, rise: Schaefer hasn't fallen pray to the old storyline that boxing can't draw advertisers. While just about every other promoter whines about how advertisers see boxing as a radioactive zombie sport, or don't even bother trying to secure big-time ad gets, Schaefer is working the phones, and taking the meetings, and hiring the personnel to make it happen. At Brasserie, Schaefer introduced the media--and ad buyers, and potential ad buyers, like the head of McDonald's sports marketing arm--to Golden Boy chief marketing officer, Bruce Binkow. ("Think of the activations they could do," he said to me later, of the McDonald's rep.) He detailed some of the promotions cooked up for the Sept. 19 show, and quite frankly, some of the terms he used, like "impressions" and "platforms" reeked to me of new media jibber-jabber, terms used by suits who are desperately trying to assess a different and somewhat barren landscape. The cynic in me says that. But as the editor of a boxing website, as a fan of the sport, as a believer in the entertainment value of high quality pugilism, I was on board. I was listening, and only fiddled with my BlackBerry about four times in an hour. Because Binkow, and Schaefer, and Taffett aren't just throwing around terms to justify their titles, and impress folks with their insidery lexicon. I've been in meetings with new media moguls who use a term that 95% of the people in the room have zero idea what the definition is, and then see everyone nodding their head as if they're all on board, as if the new media mogul just uttered the key to the kingdom of riches in the post advertising-revenue-driven world. When in fact, they are flying as blind as the rest of the poor pilots trying desperately to monetize what they've been giving away for ten years.

Nobody should think that I am doing any anointing here. Bob Arum and his Pacquiao/Cotto promotion should do better business than the Sept. 19 deal. Arum is 78, and he deserves immense props for his longevity, and work rate, which puts men half his age to utter shame. But here's what I see Schaefer doing that stands out to me, and puts him right there behind Arum, a half-step, as the top promoter in the game today: he is passing on some of that ad revenue to the fight fan, and working those partnerships to not only his companies', but also to the fans' advantage. You'll recall that for the De LaHoya-Mayweather fight, you could buy a 12 pack of Tecate  and you'd receive a coupon for $20 off the cost of the pay-per-view. This time around, Schaefer said, he wanted a fight fan to be able to make money on the pay-per-view: that is, if you take advantage of theTecate $25-off coupon (which you get if you buy as 12 pack) and the $30-off coupon good towards some specific brands of snacks, also from Tecate, you could be up $5 at the end of the night. (Maybe more, if you don't tell pals about the rebate scheme, and then charge them a cover charge!) Not bad execution, I'd say, in concept. Many to most folks are going to watch with a few friends, and would be purchasing beverages and snacks anyway, so it's not as though you are being asked to buy five gallons of paint thinner or whatever, to get your rebate.

Listen, I have no problem raking a guy over the coals if and when he screws up. I'm reiterating this point because I get a bit despondent at the dwindling of voices of dissent and critique, which has come about as the newspapers have dwindled and the space given to boxing has shrunk even more. (And some of those who still have a newspaper voice are loathe to do much more than cheerlead.) We've hammered Golden Boy before and as conscientious watchdogs for a sport which has a conspicuous lack thereof, save for the dwindling ranks of media willing to speak truth to power, we will again. But we also have to remember to be as copious with praise when it is warranted as we are with condemnation and critiques. Because presumably, all of you reading this piece, and all of us contributing to the website, like the sport, or at least aspects of it. Bottom line: rebates for fans whose wallets are thin as saltines are a good thing. It shows that Schaefer isn't intent on totally bleeding fight fans dry, that he gets it that we're in a recession, and that he sees the pay per view model doesn't do a good job in terms of growing the sport.

I chatted with Schaefer after he spoke at Brasserie, and offered praise on the rebates, the breadth and depth and inventiveness of the GB marketing and even the solid undercard, which has been a long-time pet peeve of mine. (Why load up pay-per-view with crappy steamroller specials, won-loss padding fights for your prospects, instead of packing a bunch of solid matchups, tossups, to reward your hardcore fans for their patronage? Why not take pride in your product, give people a good bang for their buck, so they are more likely to pony up next time around? Do you all really live by what some focus group tells you, that the PPV buyers are motivated almost totally by the main event, not at all by the undercard, and if yes, do you get it that such focus groups are wastes of time and money and harmful to your reputation?)

I asked Schaefer, in order to confirm my suspicion, why he puts on boastfests like this one, why he just trumpeted the massive buy rates and gloated over the oodles of revenue.

"We do it because I focus on bringing sponsors to the table," he explained. "If we don't have sponsors, we're never going to get back on network TV. Without that, I'm not saying growing is impossible, but it's very difficult." Sponsors, he said, are likely to come aboard if they see others before them having a successful experience partnering up with Golden Boy, and potential sponsors love the hard numbers which are easy to regurgitate to their higher ups. The media helps in spreading the good word, then.

Boxing on network, aka "free" TV--Schaefer was preaching to the choir there. Boxing back on free TV is such a needed component if we want to break out of our niche status. You have to pay up dearly if you want to see any boxing on TV, be it HBO, Showtime or ESPN--for basic cable--and the same isn't said for fans or fans to be of baseball, football, basketball and hockey. Schaefer is hoping that promoters will continue to work together, and offer fans clashes they call for, and that he can break down stubborn network programmers who have for too long adhered to the party line, that boxing is too vile, too tainted to show. "If we bring back boxing to network TV, I think we all win," he said.

Like a grower who burns out his field with the same crop which leaches the same nutrients for too many years in a row, promoters and programmers have burnt out the field of fight fans with their pay-per-view model. Only the most hardcore fan is going to plunk down the $40-55 to see a fight card, and that means casual fans, on-the-fence-sorts who might well take to the sport and embrace it if turned on to some exemplary action, haven't been romanced. Schaefer is in romance mode. He's studying if Twitter, and Facebook , and mobile ads, and in-store displays and events at stores like Home Depot bring new fans to the sweet science. He's actually acting like he's going to be in the sport for another 30 years, and is, here and there, giving back a few bucks, or leaving some on the table, to lure some non-graybeard fans to boxing.

The 47-year-old Schaefer was born in Switzerland and came to the US in 1988. The son of a banker, he rose to a senior position in the bank UBS, but after meeting and hitting it off with De La Hoya, a pal of his wife's nephew, he aligned with Oscar full time in 1999. He's not a charming cad like a Don King, a certified character who is often as entertaining as the matches he promotes; he doesn't possess the knack of an Arum to delight the media with a thoroughly charming and occasionally zestfully acidic anecdote culled from 40 years in the business. He still has much of the buttoned-down banker in him, though he can't dismissed as an all-out stuffed shirt, not if you've seen him chuckle at the times Bernard Hopkins has in public smothered him with love because of superior market returns stemming from wise Schaefer counsel.

Like the best politicians, he has found his stride in doing business with people he spars with; he and Arum have battled back and forth and insulted each other vehemently, but have in the last two years, been able to co-exist, and find common ground--that is to say, they put aside personal and stylistic differences to make money together. "Yes, we said mean things," Schaefer said. "But I learned from Bob Arum. And I did see the good, the bad, and the ugly. I talked to him the other day. I think he likes me, and I like him. I keep him young and he keeps me sharp."

I think a bunch of what Schaefer is doing can be instrumental for other promoters, both the established dealmakers and the next generation looking to get some market share moving forward, post Arum/King, even if that is in 2025 or so. Not believing the anti hype about boxing, not giving in to the negative connotations and myths and reputation, is a key. Schaefer really seems to believe in the goodness of the sport, and isn't afraid to extol boxing's virtues to partners, who can aid in spreading the good word about the martial art too often referred to as the red light district of sports. I plead guilty to that myself, that tendency to focus on downsides instead of searching a bit longer for the positive spin. (Though I'd argue that it's wholly necessary for fightwriters to stay skeptical, so they don't find themselves palling around with only the power players and mega-moneyed moguls, while ignoring the plight of the other 98%.) "Too often, we shoot ourselves in the foot," Schaefer said on the subject of nattering nabobs of negativism. "In other sports, you don't see the owners going at each other like we sometimes have," he said. "There's an amazing amount of negativity, and it's the fighters, promoters, the media."

That morning, Schaefer was making the rounds on TV; he went on Fox Business News to talk up the Mayweather-Marquez card, and came off as an atypical, in a good way, representative of the sport: "I want to show people that we're not anymore the sport of these smoke filled rooms."

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