"What We Know About Al Haymon": Part 5of 5 out now! (updated 3/25/16 at 12:34pm et)

[Newzz]

Thomas Hauser
What we know about Al Haymon: Part II
Thomas Hauser
March 22, 2016

THE RING’S Thomas Hauser in this special series sheds light on the powerful and mysterious boxing impresario Al Haymon and Premier Boxing Champions. Second of five parts.

Al Haymon’s college yearbook photo


Al Haymon’s first view of boxing was through the eyes of his older brother.

Bobby Haymon was a journeyman welterweight who fought from 1969 to 1978 and compiled a record of 20-8-1 (8 knockouts). In the last fight of his career, he was stopped in three rounds by a young prospect named Sugar Ray Leonard. Al is said to still be resentful over the way his brother was treated by the lords of boxing.

The first fighter Haymon managed was Vernon Forrest.

It’s a long way from those early days to where Haymon is today.

The cornerstone of Haymon’s empire in boxing was a relationship that evolved with HBO and, in particular, with Kery Davis (the network’s point person on boxing from the turn of the millennium until June 2013). Through Davis, Haymon received lucrative paydays for his fighters, sometimes against overmatched opponents. And equally important, HBO allowed Haymon to control the promotional process for many of these fights.

Haymon worked with a half dozen different promoters. But despite their involvement, he often dealt directly with HBO Sports President Ross Greenburg and Davis during contract negotiations while the promoter of record was limited to doing basic nuts-and-bolts work on the fight. Because of his relationship with HBO, Haymon rarely had to give a promoter long term contractual rights to any of his fighters. The promoter had little more than a handshake and Haymon’s word that he had a future with a particular fighter. That gave Haymon enormous leverage over promoters in terms of how income generated from each fight was split. Promoters put up with this arrangement because, over the years, HBO was remarkably generous when giving out dates and paying license fees for fights involving Haymon’s fighters.

“The big money in boxing is at the top,” says promoter Gary Shaw. “I stood in line like everyone else. Al would say, ‘You’re my guy on this fighter. No, you can’t have that one; someone else is my guy with him.’ Then Al would negotiate the deal with HBO and tell the promoter what the promoter was getting paid. And we bought into it because we needed the dates. Meanwhile, I wasn’t making money. Al kept telling me, ‘Next time, next time.’ And next time never came.”

Then Haymon settled on a favored promoter – Richard Schaefer of Golden Boy. And Floyd Mayweather, who was a Haymon client, became a superstar. That took things to a new level. Haymon leveraged his Mayweather power to exact further concessions from the premium cable television networks. And he was able to sign fighters from 135 to 154 pounds by telling them, “You’re in the Floyd Mayweather sweepstakes.”

But Haymon’s success wasn’t inextricably tied to Mayweather. He was building for a future after “Money” and kept the corporate entities that he controlled largely free of obligations to Floyd. Even today, most things Mayweather are separate and apart from the PBC brand.

The first indication that Haymon was planning to challenge the established order in boxing came when he began signing managerial and advisory contracts with a massive number of fighters. Ironically, when Haymon first aligned with Golden Boy and the promotional company was stepping up efforts to add to its own roster of fighters, Haymon had quipped, “Sometimes Richard and Oscar get that Pac-Man mentality where they have to gobble everything up.”

Now Haymon was gobbling everything up, an estimated 200 fighters. That was far beyond anything HBO and Showtime could accommodate.

Then Haymon’s master plan began to take shape.

On January 14, 2015, NBC announced that it had entered into an agreement providing for 20 Premier Boxing Champions telecasts in 2015 (five on NBC on Saturday nights, six on NBC on Saturday afternoons and nine in prime time on NBC Sports Network). But it wasn’t a traditional licensing-fee deal. Instead, Haymon was buying the time from the network, would be responsible for most costs associated with the telecasts and would recoup his expenditures as best he could by selling advertising himself.

On Jan. 22, a similar agreement with Spike was announced; only here, Spike was to cover approximately $350,000 in expenses in conjunction with each telecast.

The announcement of time buys on CBS (February 17), Bounce TV (March 2) and ESPN (March 18) followed.

The ESPN deal was a $16 million time buy that ran over a two-year period with Haymon having an option to extend the contract for another six months for an additional $4 million. The shows were to run in prime time on ESPN with at least two Saturday afternoon shows on ABC. ESPN would foot the bill for production.

The ESPN deal was particularly significant for two reasons. First, ESPN is a pipeline to the brain of virtually every sports fan in America. And second, it meant that the long-running ESPN2 “Friday Night Fights” series would end.

On Aug. 4, Fox Sports announced an agreement pursuant to which Premier Boxing Champions would be the exclusive boxing provider for Fox Sports 1. There were to be 21 Tuesday-night shows from Sept. 8 through June 28, 2016, with the shows being simulcast on Fox Deportes. On Oct. 18, 2015, Fox announced that there would be three prime time PBC telecasts on its broadcast network in 2016 (Jan. 23, March 12, and July 16).

At this point, Haymon had more networks than some promoters have fighters. And he’d established a sweetheart relationship with Showtime, which was continuing to pay substantial license fees for Haymon fights (although without PBC branding).

The time buys allowed Haymon to bypass normal media filters in delivering his boxing programming to the public. He no longer had to cajole network television executives into giving him dates. He had bought them.

Meanwhile, Haymon was also spending on other fronts.

On March 10, 2015, Warriors Boxing (a stand-in for Haymon) won a purse bid for the IBF 168-pound title fight between James DeGale and Andre Dirrell for a far-above-market bid of $3.1 million. That signaled PBC’s intention to control title bouts for its fighters whenever possible.

At the same time, Haymon reached out through an intermediary to make a two-year contract offer to Michael Buffer. The proposed deal would have been exclusive insofar as Buffer’s boxing work was concerned. The Hall of Fame ring announcer would attend approximately 24 Premier Boxing Champions shows per year, tape announcements for others and allow Haymon to use his “let’s get ready to rumble” trademark in conjunction with the promotion of PBC telecasts. In return, he would receive $1 million for the first year of the contract and $1.1 million for the second.

Then the offer was withdrawn. A source close to the situation says that the idea was nixed in deference to Showtime, which felt Buffer was too closely associated in the public mind with HBO and that the deal would marginalize Jimmy Lennon (Showtime’s own ring announcer).

Haymon signs fighters to an “Exclusive Management Agreement” that gives him the exclusive right to render services in securing the boxer’s participation in professional boxing matches, exhibitions, entertainment performances, personal appearances, endorsements and sponsorship opportunities that arise out of the fighter’s boxing career.

In return, Haymon is required to (a) use his “best efforts” to secure remunerative boxing matches for the boxer; (b) advise and counsel the boxer in the overall development of his career; (c) secure proper training facilities and equipment for the boxer; (d) publicize and promote the talents and abilities of the boxer in the media; and (e) attempt to secure commercial endorsements, personal appearances and entertainment opportunites for the boxer.

Haymon often charges 10 or 15 percent of a fighter’s purse for his services. That’s less than the standard manager’s share. Sometimes, he’ll pay an advance (or interest-free loan) to a fighter and only cut the fighter’s purse after the purse reaches a certain level. The advance (or loan) is paid back only when the purses reach a still-higher number.

Many of Haymon’s recent contracts purport to be for a five-year term with Haymon having the option to extend the contract for two more years if the fighter competes in a WBC, WBA, IBF or WBO world championship fight. The contract further provides that the term may be “additionally” extended if the fighter becomes one of the five highest-rated contenders for a championship sanctioned by the WBC, WBA, IBF or WBO. Another clause provides for one more two-year extension if the fighter “enters into a multifight agreement with any television network.” The contract concedes that some or all of these extensions can be invalidated if they’re found to be in violation of state or federal law.

Haymon is widely regarded as “pro-fighter.” His fighters are paid well, often above market value.

“Al puts his fighters first,” says Paulie Malignaggi. “No one puts the fighters first like Al. I don’t know a single fighter who’s unhappy with Al. I know I have no complaints with the way Al has treated me.”

As earlier noted, Haymon has approximately 200 boxers under contract. Fighters can be difficult to satisfy. No matter how good a job a manager or promoter does, there are complaints. But there have been virtually no complaints regarding Haymon’s stewardship from the fighters he controls.

“Acts want to be promoted properly,” Haymon told Ebony Men in 1994. “They want to be exposed to the masses. They want professional productions and proper presentation. I always focused on making sure the artists got what they needed and that they were satisfied and sufficiently taken care of to go out and represent to other artists that I had done a good job because that’s the best reference.”

“Everything that Al promised to me, he delivered,” Floyd Mayweather said last year.

Don King and 50 Cent each took runs at separating Mayweather from Haymon and failed.

“If I was one of Haymon’s fighters,” says a rival promoter, “I’d think he’s Santa Claus. I understand why the fighters love him.”

It’s nice that a capable businessman is representing the best interests of fighters. But it would be wrong to think that Haymon is Mother Teresa. The truth is more nuanced than that.

“I hear all the time that Al is an advocate for what’s best for fighters,” Greg Bishop of Sports Illustrated says. “What happened to Lamon Brewster stands in stark contrast to that.”

 

[Newzz]

On April 10, 2004, Brewster knocked out Wladimir Klitschko to become WBO heavyweight champion. His manager at the time was Sam Simon. Then Haymon came calling.

“Haymon wasn’t the power in boxing then that he would become,” Simon said several years ago. “But his modus operandi was pretty much the same. He sought Lamon out and told him, ‘Hey, brother. You look like you could use some good representation from someone who cares about you.’”

Before long, Brewster had left Simon. His initial contract with Haymon called for Alan Haymon Development Inc. to receive seven percent of the first $2 million of each purse and 5 percent thereafter.

Simon was independently wealthy. He had provided Brewster with a house to live in rent-free during the time that he was Lamon’s manager. And he intended to be supportive of Brewster when the fighter’s ring career was done.

On Haymon’s watch, Brewster suffered a detached retina in his left eye in the first round of an unsuccessful April 1, 2006, title defense against Sergei Liakhovich in Cleveland. But that doesn’t tell the whole story. Yes, Brewster suffered a detached retina during the fight. But his eye had been injured before the bout. He’d undergone laser eye surgery several weeks prior to the fight and the eye had continued to trouble him.

Boxers who compete in Ohio are required to have an opthalmic examination prior to the fight. “I have the form right in front of me,” Bernie Profato (executive director of the Ohio State Athletic Commission) told this writer five days after Brewster-Liakhovich.

The form revealed that, on March 24, 2006, Brewster was given an opthalmic examination by Dr. Thomas Anthony Baudo in Vero Beach, Florida. Baudo filled out a form entitled “Opthalmological Exam for Professional Boxer.” On that form, under a heading that read “specify abnormalities,” he wrote that Brewster had undergone surgery for a retinal tear and detachment but that his eye was now “stable.” Baudo also wrote, “Mr. Brewster understands the increased risk of RD (retinal damage) when boxing.”

In accordance with Ohio law, Brewster also underwent a general pre-fight physical examination prior to receiving his license. The “Physical Examination Report” for that exam included three questions under the heading “Eye History.” It asked if the applicant (1) had ever experienced blurred vision or (2) ever had a surgical procedure on his eyes or the tissue around his eyes other than simple sutures to the skin around the eyes. And it specifically asked (3) “Has applicant ever been informed by a physician that (he) had significant eye problems such as a retinal detachment, retinal tear, or dislocated lens.”

In each instance, the answer Brewster gave on this examination form was “no.” His history of retinal surgery was covered up.

Haymon, as noted in Part I of this series, is known for micromanaging. It strains credibility to believe that he wasn’t aware of Brewster’s eye problems. Yet one year later Haymon sent Brewster to Germany for his next bout, a rematch against Wladimir Klitschko on July 7, 2007, while Lamon was still on medical suspension in the United States. Two of Brewster’s sparring partners told Keith Idec of the New Jersey Herald News that, prior to fighting Klitschko, Brewster was having difficulty seeing out of his left eye.

Brewster lost every minute of the Klitschko rematch, which was stopped after six rounds. He ended his career as a punching bag for the likes of Gbenga Okoukon and Robert Helenius. He’s now in financial difficulty and legally blind in one eye.

As Haymon’s power has grown, his adversaries have alleged with increasing frequency that his conduct violates federal and state law. The first statute cited in that regard is often the Muhammad Ali Boxing Reform Act.

The Ali Act creates a firewall between managers and promoters. A manager is defined by the act as “a person who receives compensation for service as an agent or representative of a boxer.” A promoter is defined as “the person primarily responsible for organizing, promoting, and producing a professional boxing match.” The act makes it “unlawful for a manager (i) to have a direct or indirect financial interest in the promotion of a boxer; or (ii) to be employed or receive compensation or other benefits from a promoter, except for amounts received as consideration under the manager’s contract with the boxer.”

Haymon purports to be a manager. But he functions as the de facto promoter for virtually all of the shows on which his fighters appear. He negotiates with the television networks, selects most of the fighters who appear on the card, determines purses for the featured fighters and tells the promoter of record how much the promoter will be paid.

“I don’t know how much money was raised, I don’t know how much money was spent and I don’t care,” Leon Margules said of a recent PBC card for which he was the promoter of record. “That’s Al’s job.”

One can argue that the Ali Act was designed to protect fighters and, thus, Haymon’s blurring of the line between managing and promoting is inconsequential. Other legal issues are more problematic.

Haymon seems to be engaging in some of the same questionable practices as other managers and promoters.

For example; Keith Thurman’s purse as reported to the Florida State Athletic Commission in conjunction with his July 11, 2015, PBC fight against Luis Collazo was $1.5 million. But Thurman told Dan Rafael of ESPN.com that Haymon gave him a check for an additional $1.2 million.

The purses filed with the New Jersey State Athletic Control Board for the Aug. 15, 2015, PBC fight between Antonio Tarver and Steve Cunningham were listed as $250,000 for each fighter. But Tarver is said to have received a total of $500,000. And a source close to Cunningham says that the fighter was paid an additional $100,000 as an advance.

Haymon isn’t the first person in boxing to be mentioned in conjunction with differing sets of contracts and inaccurate filings with state athletic commissions. But if an inaccurate filing occurs, the tax consequences can be significant. And it might affect payments to third parties based on contract percentage splits.

The antitrust issues that surround Premier Boxing Champions are more consequential.

Talking about the American economy in 1960, John F. Kennedy declared, “A rising tide lifts all boats.” But the PBC tide is threatening to sink many of them.

Haymon’s time buys have changed boxing’s economic model and made it increasingly difficult for mid-level promoters to survive. They can develop a prospect to the point where he’s 12-0, and then there’s virtually nowhere they can go to get him on television. Even larger promoters like Main Events lack the resources to buy time on attractive platforms. In the United States, only HBO and Showtime are paying significant license fees for fights. And Showtime does business primarily with Haymon.

In sum, Haymon is changing the structure of the marketplace in a way that’s threatening to drive out competing promoters.

He has also been poaching fighters. Cameron Dunkin manages Terence Crawford. He has lost several fighters to Haymon, including Leo Santa Cruz and Mikey Garcia.

“It’s a constant battle to hold onto your fighters,” Dunkin says. “Haymon has his guys whispering in their ear, ‘Danny Garcia is making more money than you are because he’s with Al and you’re better than Danny Garcia. Al is flying his fighters around in a private jet.’ All I can tell my guys is, ‘Stay with me. If you do your job in the ring, I’ll get you on HBO. HBO isn’t going to disappear and Haymon might.’”

“Haymon is screwing up the marketplace,” Pat English (the attorney for Main Events) says. “That’s for sure.”

On July 1, 2015, Top Rank (Bob Arum’s promotional company) filed suit in the United States District Court for the Central District of California against Haymon, three companies controlled by Haymon, Waddell & Reed (which has supplied the venture capital for Haymon), and one of Waddel & Reed’s affiliated companies. The suit alleged violations of the Sherman Antitrust Act, Clayton Antitrust Act, Muhammad Ali Boxing Reform Act and various California state statutes.

An Oct. 16, 2015, court order dropped the Waddell & Reed defendants from the lawsuit and dismissed many of the claims against the Haymon defendants with leave to amend. On Jan. 6, 2015, the court ruled that Top Rank’s amended complaint was sufficient to survive a motion to dismiss and ordered that the litigation proceed to the discovery stage.

On May 5, 2015, Golden Boy and Bernard Hopkins filed a separate lawsuit, also in the United States District Court for the Central District of California, against Haymon, various companies that Haymon controls, Waddell & Reed and Ryan Caldwell (a former Waddell & Reed fund manager). In late-June 2015, Golden Boy dropped Waddell & Reed as a defendant in its lawsuit.

Counsel for Top Rank and Golden Boy have been coordinating their efforts.

Top Rank has served discovery demands on the Haymon defendants and close to a dozen other individuals and corporate entities including Waddell & Reed, Ryan Caldwell, Richard Schaefer and several local promoters that Haymon has been using to promote PBC events. Similar requests for discovery from the television networks that Haymon has been doing business with are expected shortly. To date, Top Rank’s discovery demands (and those of Golden Boy) have been met by a laundry list of objections with the apparent aim of delaying, if not outright obstructing, discovery.

A source close to Haymon says, “So far, Al is resisting discovery. But if discovery really goes forward, he’s going to go after every piece of paper that involves Top Rank’s relationship with Manny Pacquiao. Al takes pride in the fact that his representation of Mayweather is the antithesis of the way Arum has dealt with Pacquiao. And yes, I know that Arum is Pacquiao’s promoter, not his manager, so he has a different fiduciary duty. But that doesn’t relieve him of the obligation to give Pacquiao an honest accounting. And by the way, why should Michael Koncz (Pacquiao’s business advisor) get a free pass?”

This could get ugly.

Meanwhile, the reaction of many in boxing to the ghostlike presence of Al Haymon brings to mind words written by Hughes Mearns more than a century ago:

Yesterday upon the stair

I met a man who wasn’t there

He wasn’t there again today

I wish, I wish he’d go away



This is the second in a five-part series. Click here for Part I. Part III will be posted tomorrow.


What we know about Al Haymon: Part II - Ring TV

 

[patscorpio]

On April 10, 2004, Brewster knocked out Wladimir Klitschko to become WBO heavyweight champion. His manager at the time was Sam Simon. Then Haymon came calling.

“Haymon wasn’t the power in boxing then that he would become,” Simon said several years ago. “But his modus operandi was pretty much the same. He sought Lamon out and told him, ‘Hey, brother. You look like you could use some good representation from someone who cares about you.’”

Before long, Brewster had left Simon. His initial contract with Haymon called for Alan Haymon Development Inc. to receive seven percent of the first $2 million of each purse and 5 percent thereafter.

Simon was independently wealthy. He had provided Brewster with a house to live in rent-free during the time that he was Lamon’s manager. And he intended to be supportive of Brewster when the fighter’s ring career was done.

On Haymon’s watch, Brewster suffered a detached retina in his left eye in the first round of an unsuccessful April 1, 2006, title defense against Sergei Liakhovich in Cleveland. But that doesn’t tell the whole story. Yes, Brewster suffered a detached retina during the fight. But his eye had been injured before the bout. He’d undergone laser eye surgery several weeks prior to the fight and the eye had continued to trouble him.

Boxers who compete in Ohio are required to have an opthalmic examination prior to the fight. “I have the form right in front of me,” Bernie Profato (executive director of the Ohio State Athletic Commission) told this writer five days after Brewster-Liakhovich.

The form revealed that, on March 24, 2006, Brewster was given an opthalmic examination by Dr. Thomas Anthony Baudo in Vero Beach, Florida. Baudo filled out a form entitled “Opthalmological Exam for Professional Boxer.” On that form, under a heading that read “specify abnormalities,” he wrote that Brewster had undergone surgery for a retinal tear and detachment but that his eye was now “stable.” Baudo also wrote, “Mr. Brewster understands the increased risk of RD (retinal damage) when boxing.”

In accordance with Ohio law, Brewster also underwent a general pre-fight physical examination prior to receiving his license. The “Physical Examination Report” for that exam included three questions under the heading “Eye History.” It asked if the applicant (1) had ever experienced blurred vision or (2) ever had a surgical procedure on his eyes or the tissue around his eyes other than simple sutures to the skin around the eyes. And it specifically asked (3) “Has applicant ever been informed by a physician that (he) had significant eye problems such as a retinal detachment, retinal tear, or dislocated lens.”

In each instance, the answer Brewster gave on this examination form was “no.” His history of retinal surgery was covered up.

Haymon, as noted in Part I of this series, is known for micromanaging. It strains credibility to believe that he wasn’t aware of Brewster’s eye problems. Yet one year later Haymon sent Brewster to Germany for his next bout, a rematch against Wladimir Klitschko on July 7, 2007, while Lamon was still on medical suspension in the United States. Two of Brewster’s sparring partners told Keith Idec of the New Jersey Herald News that, prior to fighting Klitschko, Brewster was having difficulty seeing out of his left eye.

Brewster lost every minute of the Klitschko rematch, which was stopped after six rounds. He ended his career as a punching bag for the likes of Gbenga Okoukon and Robert Helenius. He’s now in financial difficulty and legally blind in one eye.

this whole situation was mentioned before on here...lamon and liakhovich ruined each other in a GOAT level Heavyweight title fight...sad situation

 

[L68]

cant wait to see what comes out of the discovery phase of the trial on both sides

 

[Cole Cash]

this nikka Hauser works for HBO tho, how is this not a conflict of interest?

 

[ChocolateGiddyUp]

So because Al micro manages his business its his fault Lamon Brewster fukked up his eye "on Haymons watch"

"Al Haymon is a micromanager its his fault Thurman got in a car accident...he shoulda been out there"

"Al Haymon knows errything about PBC but you telling me he didn't know about GRJ in the Sauna "

 

[Axum Ezana]

thought ive heard berto was the first fighter haymon managed...maybe im wrong.

 

[LinusCaldwell]

He is amazing...like the second coming of the messiah...

god bless you Newzz for this inspirational story....

Breh have you ever met him?

 

[King P]

thought ive heard berto was the first fighter haymon managed...maybe im wrong.

Nah, Vernon Forrest was his 1st client. It's been mentioned many times over the years

 

[Newzz]

THE RING’S Thomas Hauser in this special series sheds light on the powerful and mysterious boxing impresario Al Haymon and Premier Boxing Champions. Third of five parts.

The consensus is that Al Haymon is pro-fighter. Whether he’s pro-investor is a separate issue.

Haymon has gotten to where he is in boxing by making alliances with bankers. His first banker was HBO Sports. Showtime filled the void when that relationship ended. Now he has found venture capitalists who are willing to underwrite his plans on an extravagant scale.

Haymon believed that, unlike most sports, boxing can be transformed by a drop in the ocean of water that flows through the venture capital market every day. His plan is based on the premise that there’s a hidden audience for boxing that will watch fights on “free” television in numbers large enough to generate profitable ad sales. In furtherance of this idea, he pursued venture capital from myriad sources and got it from an asset management company called Waddell & Reed.

Bill King of Sports Business Journal began the process of publicly fleshing out the financial muscle behind Haymon’s plans with an analysis of Premier Boxing Champions that was posted on April 20, 2015.

“The struggle began with finding out who to contact in the first place,” King recalls. “You can’t just call Al. I went to the first PBC press conference in New York (on Jan. 14, 2015) which was for a show on NBC. There was a guy from Chicago who was listed as a PR contact so I emailed him. And Ryan Caldwell (of Waddell & Reed) was at the press conference so I started doing research on him.

“My pitch to them,” King explains, “was if PBC is going to be on network TV, we’re a vehicle for you to improve your credibility with network executives and advertisers. And we have a reputation for splitting things down the middle rather than taking sides. Finally, I was told, ‘Come to the first PBC event (in Las Vegas on March 7, 2015) and someone will talk with you.’ My request was to talk with Al but they said that was unlikely. And Al wouldn’t talk with me. All I got from him was a hello and a handshake to acknowledge that he knew who I was.

“I had to do a lot of digging to get the financials,” King continues. “There’s a lot more available now than there was then. Ryan Caldwell agreed to discuss the venture with me but declined to reveal financials.”

King based some of his research on quarterly filings with the Securities Exchange Commission made by an entity called the Ivy Asset Strategy Fund, which Caldwell co-managed for Waddell & Reed. The Ivy Asset Strategy Fund included among its holdings an investment designated as “Media Group Holdings LLC, Series H,” which King confirmed was with Haymon.

“Ivy Asset Strategy’s holdings list,” King wrote in Sports Business Journal, “included a $371.3 million investment in the company. A second Waddell fund, WRA Asset Strategy, listed an investment of $42.2 million. A third fund, Ivy Funds VIP Asset Strategy, showed holdings of $18.5 million. Together they invested $432 million. It is likely other funds run by Waddell also have invested, a source familiar with fund management said, although their positions likely would be smaller.”

King also revealed, “While Caldwell would not discuss funding specifically, he said that Waddell & Reed invested considerably more than Haymon requested in the initial business plan to build a brand and an audience, a proof-of-concept phase that would then enable him to cash in on the rights fees that continue to trend upward across sports.”

“Al said, ‘I think I can pull this off for X,’” Caldwell told King. “And I turned around and said, ‘Absolutely not. It’s X-plus or we don’t do it.’ You have to be capitalized for three to five years to do this, to weather the storm. Because in some regards you’re going to be the irrational player for a while. You’re turning the model completely upside down.” 



As noted in Part II of this series, Haymon is paying unusually large purses to fighters. That in and of itself is not a problem. HBO paid above-market license fees to promoters for years to lure fights away from ABC, CBS and NBC. George Steinbrenner paid above-market salaries to free agents to reestablish the New York Yankees dynasty. You spend money to make money.

That said, a conflict of interest seems to be built into Haymon’s methodology. He has a fiduciary duty to the fighters he manages to get them the most money possible. But he also has a fiduciary duty to his investors to cap expenses and maximize their return on investment. After all, this isn’t business as usual but it is business. The idea is to make money for the investors. And right now, Premier Boxing Champions appears to be hemorrhaging money, not making it.

Haymon assumed that income from Premier Boxing Champions telecasts would come initially from multiple sources, including advertising, ticket sales, sponsorships and license fees for foreign rights. His managerial fee is also believed to be part of the revenue stream for investors.

More importantly, Haymon predicted that, after the time buys end, television networks will pay significant license fees for PBC fights. At the moment, that prospect looks bleak.

On May 11, 1977, 48 million viewers watched Ken Norton defeat Duane Bobick in a fight televised by NBC. Four months later, Muhammad Ali triumped over Earnie Shavers in a bout seen by almost 100 million people. Those days are long gone. But even in today’s fractured digital environment, PBC’s ratings have been a disappointment.

PBC’s March 7, 2015, debut telecast on NBC headlined by Keith Thurman vs. Robert Guerrero averaged 3.37 million viewers. That’s a good number but it soon tapered off. When Deontay Wilder fought Johnann Duhaupas on NBC in prime time on Sept. 26, there were 2.18 million viewers. Sports Media Watch noted that this was the smallest audience for a prime-time boxing or MMA event on network television since 2008, a period that included 25 telecasts.

Carlos Acevedo of TheCruelestSport.com further analyzed the numbers and suggested, “Compare that to “American Ninja Warrior,” which aired on NBC two weeks earlier and drew over six million viewers.”

Ratings for Premier Boxing Champions telecasts on CBS, ESPN, Spike, Bounce and Fox have also disappointed. CBS has yet to match the 1.6 million average viewership that Adonis Stevenson vs. Sakio Bika engendered in its initial PBC telecast on April 4, 2015.

When Keith Thurman returned to the airwaves against Luis Collazo on July 11, 2015, to inaugurate PBC boxing on ESPN, the telecast averaged 799,000 viewers.

Spike’s first PBC telecast (Andre Berto vs Josesito Lopez on March 13, 2015) was also its highest-rated, drawing an average of 869,000 viewers. The eight PBC telecasts on Spike since then have fallen short of that mark, hitting bottom with Andrzej Fonfara vs. Nathan Cleverly (315,000 viewers) on Oct. 16. The Los Angeles Times reported that Spike’s PBC numbers were below the numbers for the same Friday-evening slot in 2014, when the network televised “Bellator” mixed martial arts and reruns of “Cops.”

The ratings for PBC telecasts on FoxSports1 have been mediocre, cratering with a Feb. 2, 2016, telecast that averaged 76,000 viewers.

Broadcast television networks and most cable channels are in the business of selling advertising. They contract for time buys when their marketing department says it can’t sell enough ads to make particular programming profitable. In a sense, the time buys are a substitute for bulk ad sales.

As noted by Bill King, the most logical way for Haymon to sell ad time across so many networks is to have one group coordinate the selling. That way, there aren’t six different networks competing against each other to sell the same product.

In that regard, King reported, “To approach the broader sports sponsorship community, PBC hired SJX Partners to create integrated packages that include spots during fights, branding on the ring, digital assets, tickets and hospitality; a package rare in boxing because it has been off advertiser-supported TV for so long. PBC also brought in Bruce Binkow, former chief operating officer of Golden Boy Promotions, to advise it on operational matters and maintain relationships with brands already in the sport.”

But it has been a hard sell.

 

[Newzz]

Sports seasons have expanded and are continuing to expand. The Super Bowl is now played in February. The World Series routinely extends into November. If the 2016 NBA Finals go the distance, the final game will be contested on June 19. And the TV calendar is filled with other high-profile events in sports like tennis and golf. That means there’s no time when boxing is alone on the stage. And advertisers have limited budgets.

It’s easy for TV networks to sell advertising for NFL programming. Ditto for other major sports and events like the Masters and Wimbledon. Advertising for boxing is a hard sell. Ratings are low. Many advertisers don’t want their product associated with the less savory aspects of the sport. And there’s another problem: In most sports, advertisers don’t have to worry about 2-minute knockouts. In boxing, at any moment – BOOM – the fight might end. This contingency makes boxing compelling programming for premium cable networks that are built on subscriptions but it’s a problem for networks that rely on advertising.

Haymon now has the burden of selling advertising for programming that advertisers have resisted for decades. On Feb. 3, 2016, the Los Angeles Times reported, “Television advertising tracking firm Kantar Media said (PBC) collected $12.5 million in total ad revenue from 27 fight telecasts from March through September (2015), an average of $462,963 per show”

That’s a low number.

Moreover, every successful sport sells tickets for its live events and makes good money from those sales. For PBC, on-site ticket sales seem to be an afterthought. PBC sometimes even loses money on the venue once the cost of opening the arena is set against ticket receipts.

“’PBC’ could stand for ‘Premier Boxing Comps,’” Steve Kim of Undisputed Champion Network wrote last year in commenting on Haymon’s practice of giving away tickets to paper the house and employing seat-filling services.

To that, promoter Gary Shaw adds, “They’ve given away so many free tickets to paper the house that it’s become increasingly hard for the rest of us to sell tickets because people are waiting for freebies.”

Meanwhile, the value of Waddell & Reed’s investment in Haymon’s boxing entities is shrinking.

Filings with the Securities Exchange Commission suggest that a total of $528,481,000 was made available to Haymon. As of Dec. 31, 2015, that investment was valued at $82,354,000 – a drop of 84 percent in investment value.

Richard Schaefer understands venture capital and boxing. Also, in the past, the former Swiss banker and one-time CEO of Golden Boy Enterprises worked closely with Haymon.

“I see the numbers,” Schaefer acknowledges. “People say, ‘Al has spent three hundred million dollars. Al has spent four hundred million dollars.’ But those numbers don’t mean the money has been spent. Those numbers are valuations of the assets. Assets can be valued in different ways. Assets can be written down for tax purposes. The value of a (non-monetary) asset like good will can change over time. Come on, four hundred million dollars? You can’t spend that kind of money, not even in boxing.”

In other words, the initial $528 million number could have included non-monetary assets such as fighter contracts and the value of the PBC brand. And the $82 million figure could reflect a downward evaluation of these non-monetary assets in addition to a lessening of cash on hand.

That said, the $82 million valuation as of Dec. 31 is presumed to be less than what Haymon has spent so far. There has been a significant cash burn. A war chest that was intended to underwrite PBC’s operation for three or four years has dramatically diminished. And there are no offsetting revenue streams in sight.

Meanwhile, as reported by the Wall Street Journal, Waddell & Reed has “hit a rough patch.” Investors have withdrawn billions of dollars from its funds and Waddell & Reed stock has dropped from a 12-month high of $51.23 to $25.79 a share as of March 17, 2016.

Top Rank CEO Bob Arum calls Premier Boxing Champions “boxing’s version of a Bernard Madoff Ponzi scheme” and has bemoaned the “fact” that “widows and orphans are losing their life savings in this horrible, horrible scheme.”

That characterization seems a bit extreme. Moreover, it’s likely that Haymon’s business plan warned investors that the venture was highly speculative and that they could lose all of their investment.

Still, if hundreds of millions of dollars disappear, not all of the investors will go quietly. An investors suit against Waddell & Reed and the Haymon entities at some point in the future is possible.

It’s not publicly known how Haymon is compensated by the companies under his control, nor is it clear whether any of the money being spent by the companies goes out to third parties and then comes back to him. Neither Haymon nor any of the companies under his control have stated publicly how he is compensated for his work.

The role of Ryan Caldwell, who left Waddell & Reed last year to join Haymon as chief operating officer of PBC and then departed from PBC soon after to form his own asset management company, is also subject to conjecture.

On Feb. 5, 2016, a New York lawyer named Jake Zamansky sent out a press release announcing that his law firm was “investigating the departure of Mr. Caldwell (from Waddell & Reed) and whether the Funds breached duties owed to shareholders.”

Zamansky sounds like a lawyer looking for a plaintiff for a possible class action lawsuit.

It’s not uncommon for an innovative entrepreneur to believe that the prevailing logic in an industry is wrong and should be challenged. Sometimes the entrepreneur is right in that thinking, is wildly successful under a new set of rules and makes hundreds of millions of dollars. And sometimes the entrepreneur fails.

Meanwhile, it’s worth considering the thoughts of one promoter who has been watching Haymon for years:

“I’m not an investment analyst but I know how to count. And so far, the numbers don’t add up. Forget about making a profit. I don’t think Haymon’s investors will get their money back. Everyone agrees that Al isn’t stupid. He’s very smart, a lot smarter than I am. So why is this happening? Follow the money.”



This is the third in a five-part series. Click here for Part I and Part II. Part IV will be posted tomorrow.


What we know about Al Haymon: Part III - Ring TV

 

[ℒℴѵℯJay ELECTUA]

thought ive heard berto was the first fighter haymon managed...maybe im wrong.

the first Haitian.

 

[patscorpio]

Thomas Hauser
What we know about Al Haymon: Part IV - Ring TV
Thomas Hauser
THE RING’S Thomas Hauser in this special series sheds light on the powerful and mysterious boxing impresario Al Haymon and Premier Boxing Champions. Fourth of five parts.

On May 20, 2015, NBC Sports Group chairman Mark Lazarus, CBS Sports President Sean McManus, Fox Sports President Eric Shank and ESPN President John Skipper discussed the future of broadcast sports in a forum moderated by Richard Deitsch of Sports Illustrated. During the Q&A portion of the program, Richard Sandomir of the New York Times asked, “For those of you who do and those of you who don’t associate with Al Haymon on the PBC, how do you think that strategy is going to play out in terms of building interest for boxing?”

Skipper’s answer was direct and to the point: “Last time I checked my XY-axis quadrant, it’s not in the right quadrant.”

Sports entities are valued as businesses in significant measure based on their television contracts. Right now, PBC’s television contracts are showing a lot of red ink. Al Haymon is demonstrating that it’s easier to spend money than it is to make it.

As noted earlier, Premier Boxing Champions was built on the premise that there’s a much broader audience for boxing than the people who watch it on HBO and Showtime. But so far, PBC has failed to find it. Whatever Haymon’s master plan was, it’s not working. As Bart Barry of 15rounds.com recently wrote, “Suddenly boxing is ubiquitous on free television, the last era’s Promised Land. And nobody cares.”

Why is PBC foundering?

For starters, as elaborated upon in Part I of this series, Haymon has created an environment in which there are few checks and balances on his power. That means, when he makes a mistake, it often goes uncorrected.

Seth Abraham, the architect of HBO Sports, put together a leadership team that included Ross Greenburg, Lou DiBella and Mark Taffet. There were occasions when Abraham thought one thing and they thought another.

“When that happened,” Abraham recalled several years ago, “I’d go into Bryant Park, sit down with a cup of cappucino, and ask myself, ‘Why do these very intelligent people have a view that’s different than mine?’ And often – not always, but often – I’d come around to their view.”

“Just because you’re the head of a department doesn’t mean that you have a monopoly on brains,” Abraham continued. “Sometimes you have a monopoly on shortsightedness and stupidity. Leadership is about consensus. If you’re the boss, everybody knows that you’re in charge and that you have the final vote. But you don’t effectively manage an organization by fiat or by ignoring the opinions of the people you’ve chosen to work with you.”

The scheduling of PBC’s fights has also been a problem. There’s no continuity. The date, time, and network for telecasts are often a mystery until late in the process. “Even boxing people don’t know when or where Al’s guys are fighting,” says promoter Gary Shaw.

Haymon’s attitude toward the media has further damaged his cause. He has an absolute right to not talk with the media. But his dismissive stance has been counterproductive.

“Most people in sports who don’t communicate with the press have someone who does it for them,” ESPN boxing writer Dan Rafael observes. “Al doesn’t. You can’t get basic facts from PBC, like what weight a fight will be at or how many rounds it will be until they get around to sending it out in some kind of press release. And forget about their communicating with you when you have questions about the larger picture.”

Richard Schaefer, who has been one of Haymon’s staunchest allies over the years, is in accord.

“I would have dealt more openly with the media,” Schaefer says. “A lot of people choose not to talk to the press. Kirk Kerkorian didn’t talk to the press. Jerry Perenchio doesn’t talk to the press. But they have someone who does it for them. If you don’t want to talk to the media and the rest of the outside world, that’s fine. But then you should have someone you trust do it for you.”

Then Schaefer points to another problem.

“I have great respect for Al,” the former Golden Boy Promotions CEO says. “He’s a friend of mine and I admire the way he cares about his fighters. But someone who can put together big TV deals is not necessarily a promoter. I would have promoted much more on site than Al has. He hasn’t done a lot of that and I think that’s one reason there hasn’t been more of a buzz for his fights.”

Al’s biggest problem isn’t that he’s acting like a promoter. … He’s making the fights that he wants to make rather than the fights that people want to see.

During the past year, Haymon has worked with a handful of promoters, Lou DiBella, Leon Margules, Yvon Michel, Tom Brown, Mike Battah and Marshall Kauffman among them.

“Because of the promotional situation,” Schaefer says, “there hasn’t been much continuity and it becomes harder to build the fighters. When Danny Garcia fights at Barclays Center, the promoter is Lou DiBella. Then he fights at Staples Center and the promoter is Tom Brown. Neither promoter feels that he has a long term interest in Danny. And who should the media call when they want to talk about Danny’s next fight? Lou DiBella? Tom Brown? It’s a problem.”

And there’s another problem.

“When you’re working with Al to promote a fight,” says a promoter who has worked with him, “he micromanages so much that you can’t do your job. And the secrecy kills you. You’re watching things unfold and you don’t know how they’re unfolding.”

Despite all the money that Haymon has spent on the production of PBC telecasts, that area too has been wanting. There have been some positive innovations. Haymon eliminated the mob that pours into the ring before and after fights. There are no people inside the ropes shouting, “You da man.” No sanctioning body officials draping T-shirts and phony belts over the combatants. No promoters, managers, commissioners or mistresses jockeying for position in front of the camera.

But many of the gimmicks that PBC experimented with to jazz up its telecasts have fallen flat. The “ref-cam” didn’t show viewers “what the referee sees” because it followed the referee’s forehead, not his eyes. The 36-still-camera-over-the-ring video rig that was supposed to give viewers a moving panoramic view of the action produced visuals that had the feel of a not-very-good video game from the 1980s.

Also, the announcing has been uneven with no continuity from show to show. And for the most part, as noted by Bart Barry, “PBC broadcasting crews have the journalistic integrity of Billy Mays pitching GatorBlade bug bazookas at 3 AM. Their commentary works more like a celebrity endorsement of a product than a description of what happens in the boxing ring. None of them offers commentary to invite even the softest inference of disloyalty to Al Haymon.”

In some respects, the May 2, 2015, megafight between Floyd Mayweather Jr. and Manny Pacquiao also undermined Premier Boxing Champions. There was no PBC branding during fight week. And PBC didn’t have a direct financial interest in the bout. But Haymon was counting on the fight to give his vision a boost. It was an important piece of the puzzle that he was putting together.

On the plus side, some powerful people and institutions made a lot of money off Mayweather-Pacquiao and feel beholden to Haymon. Also, Haymon had thousands of tickets and rooms at the MGM Grand that he could give to PBC investors, sponsors, television executives and fighters. And most important, Haymon could tell investors, “This fight is grossing a half billion dollars. We might be losing millions of dollars now. But stay the course and there will be paydays like this for us in the future.”

But there was a downside for Haymon in the way that Mayweather-Pacquiao unfolded. The fight soured a lot of people on boxing. Viewers felt suckered after buying the pay-per-view telecast and many people became aware for the first time that boxing’s poster boy had multiple criminal convictions on his record for physically abusing women. That made it more difficult for Haymon to attract advertisers for Premier Boxing Champions and, in some ways, left boxing less well off than before.

Haymon’s plans also hit a snag when he lost the ability to work with Schaefer and Golden Boy as the primary promotional vehicle for his fighters. Haymon appears to have coordinated with Schaefer in an effort to buy out Oscar De La Hoya and Golden Boy’s other major shareholders (AEG and the Brener family). But that plan fell apart when De La Hoya refused to sell. After buy-out negotiations failed, Schaefer resigned from Golden Boy. Then, on June 16, 2014, Golden Boy instituted an arbitration proceeding against him, claiming $50 million in damages. The suit was settled for an undisclosed amount and, per terms of the settlement, Schaefer was precluded from working with Haymon on boxing matters for an undisclosed period of time.

In 2015, Bruce Binkow, Raul Jaimes, Nicole Sparks, Armando Gaytan and Araceli Villegas (each of whom had worked previously with Schaefer at Golden Boy) formed a company called Integrated Sports Marketing LLC to coordinate sponsorships, foreign sales, on-site set-ups and drug testing for Haymon. None of them has Schaefer’s overall business expertise.

In the end though, the primary reason that Premier Boxing Champions has fallen short of expectations is the quality of the fights that Haymon has given the public.

The PBC telecasts have had every ingredient imaginable. … The only ingredient they haven’t thrown in is good fights.

One of the benefits that fight fans expected as PBC took shape was that Haymon’s control over an extensive fighter roster would guarantee good fights. The PBC website promises “today’s best and brightest stars in their toughest, most anticipated bouts.”

Brian Kweder, who ran ESPN’s boxing program as it transitioned to PBC, says, “Ending ‘Friday Night Fights’ was bittersweet. We’d had a long run and a loyal fan base. But ESPN is a top sports site and it didn’t compute that we had what was essentially minor league boxing.”

But to date, too many PBC fights have been minor league. Bart Barry puts the matter in perspective when he says, “The PBC telecasts have had every ingredient imaginable. Special ring-walk music, rotating cameras, monster display boards. It’s like they’re making a cake. Flour, sugar, butter, chocolate. Wait! Here’s a chili pepper. Let’s throw that in too. The only ingredient they haven’t thrown in is good fights.”

Looking at year one, the Premier Boxing Champions website lists 55 televised fight cards that were contested between March 7, 2015, and March 5, 2016. Virtually none of these were “must see viewing” or “water-cooler fights.” Some weren’t even credible match-ups.

Haymon has a well-deserved reputation for putting his favored fighters in soft. To be entertaining over the long run, boxing needs competitive fights. In that regard, one promoter associated with PBC notes, “Al’s biggest problem isn’t that he’s acting like a promoter. It’s that he’s not acting enough like a promoter. He has all the control and he’s protecting too many of his guys by putting them in easy. He’s making the fights that he wants to make rather than the fights that people want to see.”

Overall, Haymon’s PBC match-ups have been disappointing on paper and, where it counts most, in the ring.

Matchmaking isn’t rocket science. Fans were looking forward to Leo Santa Cruz vs. Abner Mares. It was the kind of fight that viewers once saw regularly on ‘Boxing After Dark’ when Lou DiBella was HBO’s boxing guru. And there have been other anticipated PBC match-ups. Danny Garcia vs. Lamont Peterson, Amir Khan vs. Chris Algeri and Adrien Broner vs. Shawn Porter come to mind. Sometimes an underdog surprises, as Krzysztof Glowacki did against Marco Huck.

But Haymon has diluted his own product. In Greg Bishop’s words, “He’s saturating the market with borderline unwatchable fights.”

Hall of Fame matchmaker Teddy Brenner once proclaimed, “Fights make fights.”

But on PBC, each fight seems like a one-off. There’s no continuity from show to show and no natural progression toward fights of greater importance. Viewers are consigned to watching what seems like the endless first round of what could have been an exciting tournament.

In sum, for all the money that Haymon has spent, he has delivered an ordinary product. And with multiple fight cards on television week after week, boxing fans have become more discriminating about what they watch. PBC fighters have had a lot of air time over the past year. By and large, they’ve failed to impress.

Years ago, I received an email from a reader. I’ll paraphrase what he wrote:

“I work in a marketing department. And one of the things I’ve learned is that you can package things and market them as good quality whether they are or not. You can sell perfume that smells bad. You can sell clothes that are ugly. The one thing you cannot sell is bad sports programming. Sports fans know whether they’re being entertained or not.”

Premier Boxing Champions isn’t entertaining the public. Certainly not the general public. Too many of its telecasts are like concert warm-up acts. If Al Haymon had promoted concerts that were of the same quality as his fights, he never would have become a giant in the music business.

This is the fourth in a five-part series. Click here for Part I, Part II and Part III. Part V will be posted tomorrow.

Hauser is a consultant for HBO Sports.

Thomas Hauser can be reached by email at thauser@rcn.com. His most recent book – A Hurting Sport – was published by the University of Arkansas Press. In 2004, the Boxing Writers Association of America honored Hauser with the Nat Fleischer Award for career excellence in boxing journalism.

 

[King P]

Yes, because HBO never puts their fighters in with easy touches and always gives us the fights we wanna see

 

[Ol’Otis]

sound like capitalism


al is beating cacs at their own game