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Fighting and the bottom line

By Tomer Chen | December 30, 2006

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By Tomer Chen 

Throughout the history of combat sports, there have been titanic clashes between two fighters which the public had demanded to face each other in order to be recognized as ‘the’ man. One of the earliest examples of such a superfight would be the 1860 John C. Heenan-Thomas Sayers bout which pitted an American superstar of the 1850s bare-knuckle Boxing era and Tom Sayers was the British icon. Their clash became legendary, the first truly international Heavyweight bout in the sport and was covered by numerous newspapers of the time (even though the sport was officially banned).

Of course, the primary motivator of fights like Heenan-Sayers was the desire to acquire as much money as possible by the fighters (and their backers). In addition, side bets were constantly being made, even at ringside for the fight (which in the case of Heenan-Sayers was literally in the middle of nowhere due to the fact that the fighters were considered committing battery & attempted murder against one another at the time, even if it was consensual). To put it bluntly, money has been the ultimate bottom line for fighters, managers, matchmakers & promoters throughout history. But what exactly constitutes a successfully booked and promoted event?

The first criteria often used to judge the success fight card is, of course, gross profit. A card drawing $3 million in gates may be a huge success at a (comparatively) smaller venue such as Madison Square Garden, whereas it may be a small success or even a failure in a larger venue such as the Pontiac Silverdome or the Tokyo Dome. When figuring out the ‘break even’ point for a promoter, they have to consider numerous variables: venue fees, broadcasting fees (if any), fighter purses, sanctioning body fees (if any), athletic commission fees (if any), employee fees and so forth. Even an impressive revenue figure such as $30 million may be countered with various expenses, plus taxes reducing the end bottom line to low numbers such as $2-3 million or even losses in some cases.

The money made at the gate was, for many years, the primary source of income for promoters. Up until the advent of radio, it was the only revenue promoters earned from the fight cards. And, given a venue, promoters had to decide how to allocate blocks of seats and set price ranges accordingly. If a promoter raised the overall price range too high, they risked getting a half filled venue, whereas if they charged too low, they risked going into the red. There have been, however, promoters in history who were masters of seat arrangement and getting the most money out of a town or city simply by price discriminating the ‘right way’. Two of the best examples would be the legendary George ‘Tex’ Rickard (who promoted the first few $1 million+ gates along with legendary Heavyweight champion Jack Dempsey) and ‘Uncle’ Mike Jacobs, the legendary promoter who controlled Madison Square Garden after Rickard’s passing and made many, many millions through promoting ‘The Brown Bomber’ Joe Louis.

Rickard, who became a legend in his own time by promoting the first $1 million gate in Jack Dempsey-Georges Carpentier, had a keen understanding of the promotional game. After being a sheriff and a gold miner, he began seeing the potential in money making in the newly reformed Boxing industry (with the Marquis of Queensbury implemented about a decade earlier). He was able to touch the market he was going to promote in and figure out (a) the general public’s interest in the fight (or how to get their interest, such as making Dempsey a slacker for not going to World War I and Carpentier a war hero to cover up the fact that Dempsey was the naturally bigger man than Carpentier) and (b) could (more often than not) accurately determine the willingness to pay of the fans for a fight. Unlike Jack ‘Doc’ Kearns (Dempsey’s legendary manager who went on to train several other great fights in Mickey Walker, Archie Moore & Joey Maxim later on in his career), who had bombed in his only semi-serious attempt at promoting a fight in the Jack Dempsey-Tommy Gibbons fight (to be infamously called as the ‘sacking of Shelby’ as the town of Shelby, Montana essentially went bankrupt trying to run the fight), Rickard understood the importance of (a) reasonable pricing when the opponent could not be promoted as being a ‘superior challenger’ and (b) understanding where the best places were to promote a fight in terms of access by the general public (Shelby was in the middle of nowhere) and good promotion by the local press (and perhaps also the national media).  

‘Uncle’ Mike Jacobs, on the other hand, was pretty much born into the ticket business. Since he was a young child, he had scalped tickets for boats, trains & operas. Jacobs met Rickard around 1904 by most reports and had been a ‘silent partner’ for many years, helping to fund Rickard’s fights so they could go through. After Rickard died in 1929, he took a brief leave from promoting until he formed the Twentieth Century Sporting Club with legendary sportswriter and playwright Damon Runyon and two others (Ed Frayne and Bill Farnsworth) and began to grow as a promoter, eventually getting his golden goose in ‘The Brown Bomber’ Joe Louis, arguably the greatest Heavyweight champion of all time (along with Muhammad Ali). Jacobs became legendary for two reasons: (a) being able to count houses by simply a quick glimpse (a trait that numerous Pro Wrestling legends such as Lou Thesz claimed to have) and (b) to (figuratively & literally) create seats out of thin air. An anecdote of Jacobs’ ingenuity as a promoter (which would likely lead to a nice prison sentence in today’s US) taken from Budd Schulberg’s “Ringside” book (which has a great biography of Jacobs) was when a state athletic commissioner thought he was looking at a much, much bigger venue than originally thought. The commissioner was correct as Jacobs’ had added several hundred chairs to the venue and then claimed the original capacity as his maximum, thus skimming off the top.

While live gates were the major money-making vehicle up until the advent of television, in the last 50 or so years, television and Pay-Per-View have presented two more facets for revenue for the promoter. Television, through the Nielsen ratings, is able to provide advertisement revenue to the promoter by virtue of the television station demanding a certain advertisement rate on an average viewership rating ratio (for example, $20,000 per rating point), a small part of which is somewhat given to the shows being run on the channel. The ratings points are also split into demographics, so if an advertiser is only interested in a certain demographic, the station can present the demographic ratings and charge on that rate as well. In addition, based on whether or not the station is cable and on based on their average ratings, a station may offer better or worse deals on the contracts (sometimes, the company that receives the time slot has to pay the station rather than receiving any revenue). Historically, many figures in Boxing have condemned the development of television as the ‘end of the gate era’ as many people who might have been willing to pay $50+ dollars to see Joe Louis fight could now see him live on television (although, there were blackouts over the years in the city that the fight was being hosted in to try and raise attendance at the live fights). Nonetheless, TV allowed for the expansion of the viewers of the bout and didn’t limit it to the arena or stadium that the fight was being held in.

Pay-Per-View is a similar technology in that it too relies on a rating system. However, unlike TV ratings, PPV buyrates are accrued from 0 and each buyrate constitutes a box which purchased the show for the price placed on it by the local provider. For example, a PPV that charges $30 per buy and gets 700,000 buys will have $21 million in revenue. It should be noted, however, that a significant portion of the revenue is kept by the PPV provider, so the people producing the PPV make less than the $21 million that was purchased. It is, however, the more preferred method of revenue generating between TV and PPV given that with PPV, so long as you breakeven with your initial fees to the broadcaster, you will make a profit whereas with TV you are expected to maintain a rating level in order to get the profits you’ve been getting or not to get kicked off TV. 

So, the first big question that pops up after discussing all the mediums that generates revenue for a fight sport is: how does the fighter draw? After all, just like the team sports such as the MLB, NFL, NHL, NBA and so forth develop the brand identity of both the league and the individual teams in order to draw in their crowds, the same must apply in the world of one on one combat. There are 3 generally regarding criteria that can make a fighter into a drawing card: (a) level of excitement, (b) personality (the ‘gift of gab’ in front of cameras) and (c) quality of wins.

The first component, level of excitement, is critical for the advancement of a fighter from being a potential contender to being a full contender (in most cases). A boxer who spends 12 rounds throwing jabs into an opponent’s face will (typically) face an uphill battle getting big fights for titles or with big name opponents for big money. The fight fans do not simply want a fighter who can get the “W”, former Heavyweight champion Joe Frazier once stated on ESPN Friday Night Fights, but one who will make their night memorable. While a technical fight may appease some of the more hardcore fans of the sport, it will be hard to sell a fight which will likely be a long 12 round jabfest between two boxers. Similarly, it is typically very difficult to sell an MMA fighter who takes down and holds opponents down for the duration of a fight (‘Lay and Pray’) or postures, throwing occasional shots on the outside. An Arturo Gatti, who is decked numerous times, has both eyes swollen and develops a crimson mask but still continues onward (and sometimes even turns the tables such as in the Gabriel Ruelas & Wilson Rodriguez fights) leaves a more powerful imprint in the minds of the fans than a ‘Winky’ Wright or Bernard Hopkins who will fight their fight and get the “W”, excitement be damned. Similarly, a Wanderlei Silva or Mirko ‘Cro Cop’ Filipovic will naturally be easier to market as a fighter due to their aggressive styles than a Ricardo Arona, irregardless of the talent level or nuances of Arona’s style versus theirs.

The second element is personality, which has always been present in combat sports (as well as being one of the focal points in the drawing ability of Pro Wrestling superstars). People will always remember Muhammad Ali’s legendary rants about upcoming opponents, starting with his KO predictions in his early days, to his darker taunts following his title win over Sonny Liston to his almost comical promos in the later part of his career. Similarly, Oscar De La Hoya’s personality of a humble Mexican-American who is fighting for the people (as well as his good looks and solid entertainment value in the ring) has made him the biggest drawing non Heavyweight of all time. People naturally want to be endeared to one party or the other in a contest and if neither seems to be exceptional in ‘bringing it’ in the ring (or both are crowd pleasing fighters), then personality becomes another element that the fans like to consider.

A variable that is not as significant to most casual fight fans (more so for the hardcore base) is the actual quality of wins by a fighter. A ‘Winky’ Wright, Bernard Hopkins or Floyd Mayweather Jr. would probably not appear on too many PPVs or TV main events (much less headline against big name opposition such as Felix Trinidad or Oscar De La Hoya) on their own style in the ring, which more often than not would cause a chorus of boos and a filing of people from the ringside area. However, these fighters have overcome that by taking on big name opponents and improving their own standing by virtue of (more than not) going over the big name opponents, getting a bit of a rub since people will affiliate them with the big name opponents they beat. Still, they more often than not need a true drawing card such as Trinidad, De La Hoya, Tyson, etc. to actually bring in big numbers.

Another viewpoint to examine is that of the matchmaker. The matchmaker (known as booker in Pro Wrestling) is the person responsible for creating the (hopefully) tantalizing match-ups that will fill out venues and attract viewers on TV or get people to shell out the cash to buy PPVs. Teddy Brenner, long time matchmaker for Madison Square Garden, had 2 criteria to determine whether or not he would personally approve matches: 1) Would he buy a ticket for the fight? and 2) Would the public in general appreciate the fight on one level or another? These two criteria, while seemingly simple, is a fascinating point: the matchmaker, more often than not, has not been seriously involved in the sports industry as a combatant and will not book a fight purely because he may appreciate the finer points of a technical style. Brenner may have appreciated technical Boxing to a certain extent, but as a non-fighter he knew what types of fights he liked and which he didn’t and brought his own fan appreciation to the table. In addition, however, he realized not all of his personal fighter-types would be appreciated by the end buyers and so just because he appreciated a solid Boxer with a good ranking, he would not match him up (at least in the main event or a position of serious drawing necessity).

A factor a matchmaker needs to consider is whether it is a good idea for a fighter to be booked in a (at least on paper) non-competitive or minimally competitive fight to ‘build him up’ or to try and sign him for a quality opponent. During the first fights of a fighter’s career, it may be important to give him confidence building bouts, but in that case, he should only be placed on the undercard or as a buffer ‘dead zone’ filler for the semi-main and main events (primarily for TV or PPV where a quick bout is needed to fill up the time slot so the show doesn’t end early). However, any good matchmaker should know that eventually you need to step up the prospect from ‘preparing’ to ‘contending’ and fighting guys who will fight back or give a competitive effort even in losing to expose the flaws of a fighter to be fine tuned before facing the top of the heap. A good number of fighters today are heavily protected as in recent years having a 0 in “L” column for 20-30 fights at least is supposed to bring in the big bucks. However, on the flip side, this means there are a good 20-30 prospects with fattened records of little to no value who suddenly get thrown in with a near world class or world class opponent due to their ‘spectacular’ record and are quickly thrashed, killing their image on national TV or PPV. The smart matchmaker will walk them, but make sure that they are exposed to various elements of the fight game (offensive, defensive, countering, surviving (if necessary), etc.) so that they become better fighters when they final step into the top tier and can make a real name for themselves instead of being a one-time jobber.

Finally, a matchmaker must consider the quality of the opposition that they place into the ring. Sometimes, the #1 and #2 opponents in a weight class will be the best opponents in terms of sense and the quality match up/drawing ability for the card. However, there are times when a lower ranked (or perhaps unranked) opponent with hype value would present itself for a bigger gate. Given that, in the end, matchmakers are in it for the money, it would be foolish to reject the matchup on the grounds that the opponent may get outclassed. The only time where it may get nixed is if the general public believes the underdog is so heavily outclassed that it’s not even worth watching, in which case it may get nixed because the hype cannot overcome the skepticism.

In addition, the good matchmaker knows how to build up to the main event, especially for PPV & TV fights. You need to warm up the crowd by starting the undercard with less-than-competitive fights that will often result in a quick KO (or submission in MMA). Then, you proceed with closer bouts as you approach the top and finally the main event should be presented as ‘the fight’ to wait for, which should be a war (even if on paper it looks like a mismatch). The psychological impact of building up to the big moment will bring the crowd and audience into swing and make the atmosphere all that better. Also, 1-2 good undercard fights will entice TV viewers to switch to the show or to buy the PPV more often than not (as there are few fighters who can command huge numbers on their own merits).

A final vantage point to this topic is that of the fight promoters. Promoters throughout history, from the aforementioned Rickard & Jacobs to current promotional icons Bob Arum & Don King in Boxing and Dana White (Zuffa) in MMA have needed several key traits to make big money fights: (a) storyline hype, (b) the gift of gab and (c) brand identification.

For promoters, having a story to go behind the fight allows for the battle between the fighters to become bigger than life. Whether it’s Georges Carpentier, the war hero, trying to take out that disgraceful slacker Heavyweight champion, Jack Dempsey or Bernard Hopkins trying to get redemption and glory by going up to challenge Antonio Tarver for his Light Heavyweight championship, the fans want to have a reason to see these two combatants taking each other own (besides rankings and money for them). A great promoter is one who understands how to spin natural dislike to make dollars just like the old Pro Wrestling philosophy of understanding that when a wrestler bleed, that meant money in the bank for the next match since the fans anticipated a brutal series. Joe Frazier and Muhammad Ali’s immense dislike and taunting of one another throughout their series escalated the end prize from Ali calling Frazier an ‘Uncle Tom’ and a traitor to his people leading to up to the ‘Fight of the Century’ at MSG to their verbal exchanges before the third and the final war in the ‘Thrilla in Manila’ that led Ali to final admit that Frazier was great (even in winning). It is these storylines that fundamentally keep the fans at bay, ready to shell out the cash if needed to attend the shows or buy the PPVs in order to see the next installment.

For promoters, the gift of gab is a tool that they must have ready at all times. Don King is probably the biggest proponent of this tool, giving legendary speeches about the ferocity of the fighters, the settings of the fights and even irrelevant topics to prop up the importance of the fight. The confidence that swells from a King, Arum, White and so forth projects the image that the fight itself will be a big festivity to celebrate and definitely worth the wait. If the promoter can promote the top 2-3 fights on the card, that will give them more time to space out the praise and not to sound excessively gushing about one particular bout.

Finally, the long term goal of promoters is to promote their organizational brand (Don King Productions, Top Rank, Main Events, UFC, PRIDE, etc.) so that people will buy the PPVs and watch the TV shows out of instinct from the name recognition rather than any attachment to a particular fighter. After all, while a fighter may be in the limelight for 10-15 years, the promoter intends to be in the limelight for 30+ years, making a nice chunk of change in the process. By producing big fights that fulfill the fan’s expectations, the promoters hope to gain their own fanbase. Of course, some questionable practices may come into play as well (such Don King’s options on a potential new champion for ‘his’ belts), which can also create bloating a limited interaction within a stable or by fighters who refuse to play the promoter’s games.

Finally, one element that, while memorable can be hell for all the aforementioned parties are upsets. An upset can potentially kill a huge fight or end a fighter’s career as a serious contender. One case where that nearly happened would be Joe Louis-Max Schmeling I. Louis was expected to wipe out the (apparently) shot Schmeling who was for the most part going downhill, but instead, he ended up taking a horrible beating for 12 rounds because of a flaw where he would drop his left hand, leaving himself open for a right hand counter. Schmeling, who essentially became ‘the man’ of the day, should by all accounts have been the #1 contender for James Braddock’s Heavyweight title that he won off Max Baer (who had beaten Schmeling years earlier), but ring and global politics prevented him from getting the shot (as Joe Gould, Braddock’s manager, was Jewish and not intention of filling Hitler’s coffers and he also was guaranteed 10% of all of Joe Louis’ future earnings for a decade). Nonetheless, the drawing power for Joe Louis dropped for a period and had to be carefully built up towards the title shot with Braddock (which didn’t draw as expected) and it was only after his demolition of Schmeling in the rematch that the old Louis drawing power had returned.

Overall, the bottom line from all aspects is pretty simple: the most money possible for as long as possible. If that means that a fighter will get a steady diet of less-than-great opponents for several years, so be it. If it means to fight the best available and try to win as much as possible (or give a great show at least), so be it. Even an Arturo Gatti, who has lost against virtually all the top opposition (and some less-than-great opposition) through his career has maintained near sellouts for several years at the Boardwalk Hall in Atlantic City, NJ. The reason is simple: even while losing, Gatti gives the fans their money’s worth more than a Floyd Mayweather Jr. can in winning 100 fights.

Topics: All Topics, Boxing, MMA, Tomer Chen | 2 Comments » | Permalink | Trackback |

2 Responses to “Fighting and the bottom line”

  1. Zach Arnold says:

    This is great, great writing. I cannot stress enough my appreciation for you being part of the site now.

  2. Agreed, great article. It’s unfortunate that the format of the internet means past the initial several day cycle this article won’t be easily accessible

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