The Golden Acquisition of The Ring - Part 2

THE RING MAGAZINE SALE: ON THE ONE HAND........AND ON THE OTHER HAND

Part 2 -- On the Other Hand........ Click Here To Read Part 1

By Charles Jay

Photo © Craig Bennett/FightWireImages.com

For a brief moment, I was wondering whether it would have been appropriate to rename this two-part story "The Good, The Bad and The Oh-So Lovely."

But I've managed to contain myself. And so:

ON THE OTHER HAND............

What are the ramifications attached to the acquisition by a subsidiary of Golden Boy Companies (i.e., Oscar De La Hoya) of The Ring magazine? What does it really mean for the boxing world, and is there something potentially harmful about it?

Let's start by taking a look at the Muhammad Ali Boxing Reform Act, which was passed back in the year 2000. Right at the top, under the section called "Findings," you will find this:

"(4) The sanctioning organizations which have proliferated in the boxing industry have not established credible and objective criteria to rate professional boxers, and operate with virtually no industry or public oversight. Their ratings are susceptible to manipulation, have deprived boxers of fair opportunities for advancement, and have undermined public confidence in the integrity of the sport."

And underneath that,

  "(5) Open competition in the professional boxing industry has been significantly interfered with by restrictive and anti-competitive business practices of certain promoters and sanctioning bodies, to the detriment of the athletes and the ticket-buying public. Common practices of promoters and sanctioning organizations represent restraints of interstate trade in the United States."

These will become essential to the theme of our story as we proceed.

Obviously the question of a promoter controlling an organization that claims to issue impartial ratings and bestows championship belts is nothing that comes as a big surprise. Ethical questions are one thing. But is there anything illegal about it?

For enlightenment, we ask the following:

What is a sanctioning body?

Well, from Section 7 (a) the Ali Act:

"14) SANCTIONING ORGANIZATION- The term `sanctioning organization' means an organization that sanctions professional boxing matches in the United States--

`(A) between boxers who are residents of different States; or

`(B) that are advertised, otherwise promoted, or broadcast (including closed circuit television) in interstate commerce."

That is a broad definition, and would at the very least include anyone who touted a "world title" fight. Incidentally, there is nothing in there that requires that the sanctioning organization charge a fee to be categorized as such.

So what does it mean to sanction a fight? If something is advertised and introduced as a fight for the "Ring Magazine featherweight title" or something similar to that, does it not make Ring a sanctioning organization?

The Nevada State Athletic Commission is somewhat unique among administrative bodies in that it holds some regulatory authority over sanctioning organizations. Here is the definition from their regulations:

"NRS 467.01065  “Sanctioning organization” defined.  “Sanctioning organization” means an organization that sanctions professional contests of unarmed combat in this state."

That's an even simpler definition than what is laid out in the Ali Act, and also an inclusive one, according to Keith Kizer, the executive director of the Nevada State Athletic Commission.

"Well, if they sanction professional bouts, they would be sanctioning body," Kizer said. "Maybe not in a traditional form, but Ring would fall within the definition of a sanctioning body."

I would agree.

Remarkably, there doesn't appear to be anything in the Professional Boxing Safety Act or its successor, the Ali Act, that uses specific language to forbid a promoter from literally owning a sanctioning organization. In other words, a clause like the following doesn't exist:

"No entity that promotes or arranges for professional bouts, in any State, may own or control, in whole or in part, directly or indirectly, any sanctioning organization."

I don't know - it's entirely possible that whoever framed this law thought the notion was so outrageous and ridiculous that it was never even considered a possibility, and therefore it doesn't seem to have been contemplated.

But then we journey down to Section 5 (1)(c) of the Ali Act, where things get a little clearer - that is, if you read it carefully:

"(c)  SANCTIONING ORGANIZATIONS.--

        ``(1) PROHIBITION  ON RECEIPTS.--Except as provided in paragraph (2), no officer or employee of a sanctioning organization may receive any compensation, gift, or  benefit, directly or indirectly, from a promoter, boxer, or manager.

``(2) EXCEPTIONS.--Paragraph (1) does not apply  to--

            (B)  the receipt of a gift or benefit of de minimis value.''.

This is basically the same thing that is detailed in Section 6308 of the Professional Boxing Safety Act.

The exception referred to does not apply to Ring and its oneness with De La Hoya or Golden Boy, since, naturally, payments to oneself go from one's pocket to the other.

So what are the possible penalties? Well, according to Section 6309 of the PBSA - "Enforcement":

"TITLE 15 > CHAPTER 89 > § 6309

Any manager, promoter, matchmaker, and licensee who knowingly violates, or coerces or causes any other person to violate, any provision of this chapter, other than section 6307a (b),[1] 6307b, 6307c, 6307d, 6307e, 6307f, or 6307h of this title, shall, upon conviction, be imprisoned for not more than 1 year or fined not more than $20,000, or both."

And so we come to the realization that while it probably was not the specific thought the legislators had in mind, it would indeed be very difficult, if not impossible, for Ring to aspire to sanction, promote, advertise or announce any fights for the "Ring world championship belt" without violating that part of the law, since the officers and employees of this sanctioning organization are going to be paid by an entity that is both a boxer AND promoter.

Let's put it this way - if De La Hoya and Golden Boy were going to stretch so far as to try and spin a loophole out of this thing, they would look kind of ludicrous, even diabolical. But more importantly, you might get a much better idea of what their real intentions were. You might start asking yourself a logical question, which is "If people who purport to be operating above board, who claim to be guardians of boxing's best interests, have to search in desperation for a loophole around a conflict of interest that is prescribed by law in order to facilitate certain interests of theirs, they why SHOULDN'T I be highly suspicious of their objectives?"

I mention this because of some things that Richard Schaefer told Dan Rafael in a recent ESPN.com piece, particularly:

"If we do something wrong, we destroy The Ring value and the brand, and that means we made a pretty poor investment............We want to create value, we don't want to destroy value. When it comes to the rankings, we think that Ring magazine's are a very valuable platform, and rather than destroying it, we want to expand on it. If we wanted to influence them or the editorial process, we would destroy value and recognition.........We will take this iconic brand and give it the exposure and the love it deserves." De La Hoya essentially repeated this company line during a conference call this past Monday.

Hey - as you can tell if you read Part 1 of this thing, I don't have anything against branding. I think it makes for fascinating study. It's an important part of business. From a marketing standpoint, a strong brand can be a tremendous thing to use in selling boxing. And the Ring brand is one of the few that is deeply embedded into the fabric of boxing.

But if these guys are emphasizing the "brand" so much, where do you think they're going to stop? Don't you think they're going to try to extend it to the point where the Ring ratings and the Ring championships are the ones accepted as the industry standard in the minds of the general public and the media, above anything else? They've already got ESPN hooked into it. You can read plenty of pieces from pedestrian "journalists" trumpeting the Ring ratings (which have come, I might add, from a magazine that sold advertising to vendors in the boxing business, some of whom had an involvement with fighters). If they have been able to exercise a degree of persuasion over the unsophisticated media, there is no doubt in my mind they can do the same to the unsophisticated, unsuspecting fan. If they can't, it certainly won't be because they didn't throw enough money at it.

Do you follow what I'm saying?

One of the components of such branding activity obviously includes promoting fights (including the upcoming Ricky Hatton-Floyd Mayweather bout) for the "Ring championship." I get the sense that De La Hoya's company would rather control these titles than not control them, and, even if it's in the most subtle way, perhaps be in a position to coerce fighters to sign with Golden Boy in order to have a shot at those belts.

That's not based on hard evidence, because frankly, none has really had an opportunity to surface yet. It's from being in and around this game long enough to know how all the players think. And what the others are thinking right now is that since control means power, De La Hoya is trying to control the whole ball of wax, in this order - titles, networks, fighters. The backlash has already started to happen; at least two other promoters have told HBO that they will no longer negotiate deals on the basis of the network using the Ring ratings as a yardstick by which to measure the strength of a prospective matchup. This goes well beyond petty jealousy. These guys know that their business could be in jeopardy, because they understand how a rating can be "nudged" one way or the other. In fact, some of them have probably had personal experience with it. Regardless, an atmosphere like this is NEVER good for boxing. Just ask yourself, does this transaction make the atmosphere MORE or LESS competitive, and if it is indeed less, is it unfairly so? Then go from there.

And oh by the way, if you needed further confirmation of what these guys intend to do, here is a passage quoted from page 40 of the November 2007 issue of The Ring, in a short piece by editor Nigel Collins called "A Big Gust for the Winds of Change." While you read it, keep in mind that the deal between Ring and Golden Boy has been in the works for anywhere from one to three years, depending on which report you believe:

"The nefarious alphabet organizations took a direct hit when Bernard Hopkins and Winky Wright fought exclusively for The Ring belt. It must have been torture for WBC President Jose Sulaiman to sit ringside and hear Michael Buffer announce that the fight was for "The Ring magazine light heavyweight championship." And one can't help but wonder if Sulaiman also had to avert his eyes whenever The Ring logos Hopkins wore on his trunks crossed his line of vision. None of this would have been possible without the unqualified support of Hopkins and Golden Boy Promotions, two entities that refuse to be hogtied by the dictatorial demand of the leach-like sanctioning bodies.......If more fighters and promoters follow Hopkins' and Golden Boy's example, that wind will soon become the perfect storm to blow the alphabet organizations out of boxing."

Considering their purpose is to put the other sanctioning bodies out of business, there is little doubt that in every respect, Ring has to be looked upon as a competitor of theirs, and therefore, just like any other sanctioning body. As such, there is plenty of additional rationale (as if it didn't exist already) to subject them to the Ali Act.

Collins may in fact be telling a great deal of truth about the existing sanctioning bodies, but if there is an answer out there, it sure isn't going to come from this particular union, with promoters in fact owning the title belts.

Sorry, Nigel.

Oh yeah, in case you were angry about the situation from the start and have since become angrier, it should comfort you to know that by the time you read this, I will have begun contacting all the ABC-member commissions to give them an idea of what they're staring in the face.

It is not the least bit out of line to look upon De La Hoya and his company with the highest degree of skepticism here. And yes, there is ample cause for alarm.

You see, these guys could have just as easily stayed away from what they must have known was going to be a combustible situation, but there was simply too much power to be had. The bottom line - and something you just can't get away from if you're going to debate this without being disingenuous - is that if integrity was a principle that was truly at the forefront of this, Golden Boy wouldn't even have considered anything that could be seen as a conflict of interest. They wouldn't have gone near it.

But they not only considered it; not only went near it, they are all over it. For a reason. And even if they're as credible as they think they are, it IS still a conflict of interest.

Furthermore, if they do it the way they really want, it may constitute an illegal act. I don't want to see Oscar in prison stripes, in a picture that is NOT photo-shopped.

Do you?

That's the story, ON THE OTHER HAND.

Meanwhile, you're in luck, because I just decided there's going to be a Part 3. I might have to call this one "Look Ma, No Hands."

And that is oh so lovely indeed.