Friday, November 4th 2011

Risk vs. Reward: Top Rank, Innovation, and Boxing

By Thomas Hauser

Special to TopRank.com

Editor’s Note: This is the second article in a series by Hauser in conjunction with the Nov 12 welterweight title fight between champ Manny Pacquiao and Juan Manuel Marquez. The first is available HERE.

The kick-off media tour for the November 12th mega-fight between Manny Pacquiao and Juan Manuel Marquez highlighted the international scope of the promotion.

It began in the Philippines with a September 3rd news conference at the Manila Hotel. Later that day, the fighters appeared at the Quirino Grandstand for a public rally that was attended by 70,000 people and televised live nationally by GMA 7. After stops in New York and Beverly Hills, the tour proceeded to Mexico City, where the fighters were greeted by an estimated 50,000 fans.

One day before the fight, the weigh-in will be televised live on HBO. The network has plans for a “Fight Day” telecast modeled on ESPN’s college football “Game Day” to be hosted by Jim Lampley in the lobby of the MGM Grand Hotel and Casino.

When the fighters enter the ring, their every move will be seen on a giant cylindrical LED video screen suspended above the canvas. From beginning to end, the evening will unfold in carefully-calibrated light amidst a cacophony of sound.

None of the above could have been foreseen when Bob Arum entered the boxing business forty-five years ago.

Arum got into boxing in 1966 as one of the participants in Main Bout, a company formed to promote Muhammad Ali’s fights. The other equity owners were Herbert Muhammad (Ali’s manager), John Ali (chief aide to Nation of Islam leader Elijah Muhammad), Mike Malitz (an expert in the area of closed-circuit telecasts), and football great Jim Brown (who put Arum together with the Ali camp). Their first promotion was Ali vs. George Chuvalo on March 29, 1966.

Top Rank (Arum’s current promotional company) was incorporated in the early 1970s. Since then, it has featured the likes of Ali, Joe Frazier, George Foreman, Larry Holmes, Sugar Ray Leonard, Marvin Hagler, Roberto Duran, Thomas Hearns, Oscar De La Hoya, Floyd Mayweather Jr, Carlos Monzon, Erik Morales, Miguel Cotto, and Pacquiao. During that time, Arum has applied solid business principles to the chaos of boxing. But equally important, he has been open to new ideas and new business models.

For more than four decades, Top Rank has been on the cutting edge of innovation in boxing. Some of its innovations were implemented out of necessity; others as a matter of choice. Here, in rough chronological order, is one writer’s list of the ten top innovations that Top Rank has brought to boxing.

(1) BOXING ON ESPN

When ESPN was launched in 1979, the Entertainment and Sports Programming Network was far from the colossus that it is today. “The programming was awful,” Arum recalls. “Replays of Australian rules football and nonsense like that.”

Then Barry Frank (an executive at IMG) suggested to ESPN president Chet Simmons that the network meet with Arum to discuss a weekly boxing series. Top Rank Boxing on ESPN began its run on April 10, 1980, and continued through 1995.

Arum regards the ESPN series as his greatest accomplishment. It was hugely important to boxing because it offered the sport an anchor to hold onto a fan base that had been dwindling since the demise of the Gillette Friday Night Fights and guaranteed regularly-scheduled programming, fifty-two weeks a year in a specific time slot. With its introduction, basic cable became a significant new tier for boxing.

(2) MARVELOUS MARVIN HAGLER TO HBO

Seth Abraham (former president of Time Warner Sports and the architect of HBO’s boxing program) says, “There’s no question in my mind that Bob is the most advanced thinker ever in the marriage of television and boxing.”

Abraham dealt with Arum for years. The cornerstone of their relationship was a 1981 contract that called for Hagler to appear three times on HBO. Those fights were contested against Fulgencio Obelmejias, Vito Antoufermo, and Mustafa Hamsho for a total license fee of $1,100,000. It was the first multi-fight contract ever for an elite fighter to appear on HBO.

Before that, Hagler had been primarily an afternoon fighter on ABC’s Wide World of Sports. The conventional wisdom was that moving him to a premium cable network would diminish his marketability. But HBO’s offer was so far above the prevailing market rate that Arum took the plunge. Moving Hagler to prime time on HBO also allowed Top Rank to raise tickets prices in the arena for Hagler’s fights.

Six years later, Arum brought Showtime into the boxing business when he sold rights to Hagler vs. John Mugabi to HBO’s chief premium cable rival.

“We wanted to do Hagler-Mugabi on closed-circuit,” Arum recalls. “But [HBO CEO] Michael Fuchs said no. So I made a deal for Showtime to do the closed-circuit production, and then Showtime showed the tape-delay a week later.”

The rest is history.

(3) CHAMPIONING THE LIGHTER WEIGHT CLASSES

Legendary matchmaker Teddy Brenner once observed, “There’s heavyweight boxing, and then there’s everything else.” But by the early 1980s, the number of good heavyweights was dwindling, and Don King had a stranglehold on the division. In response, Arum began to concentrate on developing major attractions in the lighter weight classes.

One can argue that it was a no-brainer to build around Sugar Ray Leonard, Marvin Hagler, Roberto Duran, and Thomas Hearns. Ditto for Aaron Pryor and Alexis Arguello. But Arum took 108-pound Michael Carbajal out of the 1988 Olympics and promoted him to a million-dollar purse in a 1994 match-up against Umberto Gonzalez.

The legacy of those fights is clear. Boxing’s two biggest stars today (Manny Pacquiao and Floyd Mayweather Jr) are “small” fighters.

(4) TARGETING THE HISPANIC MARKET

“I began to realize the potential in the Hispanic market in 1983,” Arum recalls. “That’s when we promoted Roberto Duran against Davey Moore at Madison Square Garden. We sold out and the place was a madhouse. But the Hispanic market in New York was mostly Puerto Rican and Caribbean-based. I didn’t understand its full potential until I moved to Las Vegas in 1986. Then I saw the power of the Mexican-American market; particularly on the west coast.”

Oscar De La Hoya was Arum’s wedge for breaking open the Hispanic-American market. When Oscar came out of the 1992 Olympics, he wasn’t embraced by Mexican-Americans as one of their own. Savvy marketing changed that. Next, Erik Morales became the first Mexican national signed by Top Rank to a longterm promotional contract. Then, in 1995, ESPN cancelled Top Rank Boxing and Arum reconstituted the series on Univision. Later, he established a beachhead in the Puerto Rican community with Miguel Cotto as his flagship fighter from the island.

(5) THE “CURIOSITY” FIGHTER

Arum knows how to tell a story. In the late-1990s, he took an obese white guy from Jasper, Alabama, and anointed him “King of the Four-Rounders.” Eric Esch (better known as “Butterbean”) subsequently knocked out Peter McNeeley in one round and went the distance with 52-year-old Larry Holmes. He’s still fighting at age 45 (albeit not for Arum) and weighed in for his last fight at 405 pounds.

Arum brought the world Mia St. John in boxing gloves and Muhammad Ali vs. Antonio Inoki (his imagination got the better of him on that one). He also sold the world on the possibilities inherent in a comeback by a “washed-up” overweight hamburger-eating heavyweight who hadn’t fought in ten years.

When George Foreman re-entered the ring in 1987, he was thought of in the same vein as Butterbean would be a decade later. His early opponents (Steve Zouski, Charles Hostetter, Bobby Crabtree, Tim Anderson, Rocky Sekorski, Tom Trimm, Guido Trane, et al) did little to dispel that notion. In 1991, Big George lost a unamimous decision to Evander Holyfield. That was supposed to be the end of the line. Except Foreman kept fighting and, in 1994, knocked out Michael Moorer to regain the heavyweight championship of the world.

 (6) CLOSED-CIRCUIT TELEVISION

Lester Malitz pioneered closed-circuit television in the 1940s.  Arum brought closed-circuit to a new level with the help of Lester’s son, Mike Malitz.

“I can’t take credit for the advances in technology,” Arum acknowledges. “That was crucial everything we did. In the old days – or the very old days, if you want to call them that – closed circuit was an iffy proposition. You had to transmit everything on telephone lines. The projectors in the theaters broke down. You could only show a fight in a limited number of locations because there wasn’t enough equipment. Then satellite transmission came in and everything changed.”

Top Rank was one of the first promoters to take full advantage of the advances in satellite transmission. Also, closed-circuit marketing was largely regional when Arum entered the business. He forged the idea of national tours, national advertising, and a unified whole.

(7) PAY-PER-VIEW

The 1991 fight between Evander Holyfield and George Foreman (co-promoted by Top Rank and Main Events) was the first fight ever on TVKO, which would evolve into HBO-PPV. Just as significantly, Arum has used pay-per-view niche marketing to build and control the destiny of his own fighters.

Rather than let his fighters sit on the sidelines due to a lack of available premium cable television dates, Arum promoted fights like Miguel Cotto vs. Paulie Malignaggi and Cotto against Gary Jennings as independent pay-per-view shows. Before that, he’d utilized small PPV shows to build fighters like Erik Morales.

The best example of Top Rank using niche pay-per-view to maintain its independence and build a fighter is the case of Julio Cesar Chavez Jr. HBO and Showtime didn’t want Chavez. ESPN couldn’t have cared less. Arum never said that Julio Jr was an elite fighter. But he thought that enough boxing fans wanted to see him in action to make him a substantial attraction. The results speak for themselves.

 (8) “BACK TO THE FUTURE” WITH STADIUM SITES

When Arum started in boxing decades ago, big fights were held in big city settings. Then site fees took over and casinos became the favored host for big fights.

In recent years, Top Rank has made an effort to bring boxing back to its roots by promoting big fights at sites like Yankee Stadium and Cowboys Stadium. In doing so, it has made venue a key marketing point in the storyline for the fight and encouraged the on-site presence of a broader fan demographic.

(9) THE NEW MEDIA

Top Rank was among the first major boxing promoters to understand the power of the Internet and treat Internet writers with the same respect as the print media. In recent years, it has embraced social media platforms like Twitter and Facebook and developed its own iPhone application.

Manny Pacquiao vs. Shane Mosley was the first mega-fight to be streamed live on the internet. In the not-too-distant future, Internet transmission of pay-per-view fights will revolutionize the economics of boxing.

(10) THE NEW BUSINESS MODEL

For decades, Top Rank was a boxing promotional company that promoted one fight at a time, one deal at a time. Arum’s staff consisted of a matchmaker, publicist, closed-circuit adviser, and secretary.

Now Top Rank is a media company with in-house production facilities and a fulltime staff of two dozen employees. When it promotes an independent pay-per-view show, an additional fifty people are on the payroll. This is part and parcel of a business built in significant part on longterm output deals with television networks around the globe.

Arum understands that the tribal nature of boxing is still important. He has taken the idea of Irish and Italian boxers fighting at Madison Square Garden in the 1940s and developed that theme on an international stage.

It’s a changing world and Top Rank has changed with it. But some things remain the same.

“I can do all the planning in the world,” Arum says. “We can come up with brilliant idea after brilliant idea at Top Rank. But it doesn’t mean a thing unless our fighters can fight.”

Thomas Hauser can be reached by email at thauser@rcn.com. His most recent book (Winks and Daggers: An Inside Look at Another Year in Boxing) was published last month by the University of Arkansas Press.

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