HBO's Ross Greenburg Puts Kibosh on the Heavyweights... What about the rest?

by John Chavez

It'd seem as though the decision making process as the most powerful boxing television executive in the United States of America would be quite simple.

It would be based on buying the best most meaningful match-ups that your audience would appreciate at the correct price and disregard the rest.

This past week Ross Greenburg, president of HBO Sports stated that the premium network is no longer in the business of the heavyweight division unless it involves the highly anticipated bout between Wladimir or Vitali Klitschko and the UK's David Haye. This would tend to make sense as paying for any match-up in which the outcome is a foregone conclusion does nothing to add any intrigue amongst the loyal HBO subscribers that shell out $18.99 per month for their viewing "privileges".

Being that the Klitschko brothers generate multi-million dollar revenue streams in their native continent of Europe as they bludgeon their opponents into submission, it doesn't seem to phase them in proceeding with their careers overseas.

Fighters here in America are a different story.

U.S. based promoters rely on domestic television revenue, live gate revenue, and sponsorships to pay their prize-fighter's purses.

The television revenue usually comes in the form of a fee paid by premium networks, HBO or Showtime in order to broadcast the event. There are different tiers of fees paid by these outlets based on what series the boxing events will take place on. On HBO there is WCB (World Championship Boxing) and B.A.D. (Boxing After Dark), for Showtime there is Showtime Championship Boxing and Shobox. The amount of fees paid for the different tiers of events varies widely as usually events of the "Championship" variety garner well over one million dollars while the amount paid for B.A.D. and Shobox tend to reside at under $500,000. In Shobox's case, that figure is usually under $100,000.

The gap between what HBO & Showtime are willing to pay for boxing events and the amount shelled out by ESPN's Friday Night Fights is about as large as the gap between Michael Marley and the salad bar. The average amount paid by the ESPN series usually falls around the $25,000 range with ESPN retaining the rights to rebroadcast these events.

This is why it makes it virtually impossible for U.S. based promoters to showcase six-figure talent on outlets such as ESPN, Fox Sportsnet, or Telefutura.

There's always the much maligned Pay-Per-View route which has a built-in risk for promoters as there is no guarantee as to the amount of revenue generated by the outlet especially when HBO fails to put their stamp of approval on the event. However, even with what would be considered as "dismal" Pay-Per-View figures, the revenue generated by even the worst selling fight cards tend to generate more income than the paltry figures offered by ESPN.

Example: Antonio Margarito's comeback this past May would generate roughly 15,000 Pay-Per-View buys. It would be considered an absolute flop by most standards considering the low buy-rate but considering the price-tag, it would generate roughly $700,000 to $750,000 in total television revenue which would then be split by the cable and satellite distributors whom usually take about 55 percent for their services. This would leave about $325,000 on the table which could or could not generate a profit based on the production fees (usually totaling about $75,000-$100,000 for an independent producer), marketing costs(which can vary widely depending on the promoter), fighter purses, and traveling expenses. Nevertheless, the amount generated by even a dismal PPV as Margarito's comeback would offer significantly more money than had Top Rank decided to sell their broadcast rights to an outlet such as ESPN.

Back to HBO's Ross Greenburg.

He must realize that U.S. based boxing promoters have very little when it comes to negotiating power with the networks. The only real competition that the "Heart and Soul of Boxing" has to deal with is it's rival network in Showtime. Being that HBO's boxing budget towers over it's nemesis, it still has the flexibility to pick and choose it's spots as it pertains to the fights it decides to bid on and broadcast.

Promoter of junior welterweight champion, Gary Shaw recently stated that if HBO brought a lucrative offer to the table, he'd consider making the Timothy Bradley-Devon Alexander fight for early 2011.

My question is this... what if HBO brought an offer of $1.5 million to the table in order to purchase that fight?

Who is Gary Shaw to say that this offer is fair or not?

Most importantly... what alternatives and options are there for Mr. Shaw if he deems this as a low-ball figure?

Once again, there are the guys across the street in Showtime and there is the risky venture of an independent Pay-Per-View.

As the well-educated readers of "The Boxing Truth" understand, most U.S. based boxing promoters are not so keen on taking the necessary risks in order to pay their prize-fighters without the guaranteed money from the premium networks.

If I were Ross Greenburg, I'd make an offer that I felt superceded Showtime's potential offer by one cent and not a penny more.

Should Gary Shaw decide to balk at such an offer, I'd politely tell him that he's more than willing to shop the fight around to the next entity.

I'd do this very same thing for each and every fight I felt was important enough to broadcast on my network and continue to bid smartly on match-ups that would deliver in terms of excitement and competitiveness.

An example of a complete blunder on Ross Greenburg's part was purchasing the rights to the upcoming Timothy Bradley-Carlos Abregu fight. This fight should have received zero offers from HBO for any amount. Being that Bradley is only known amongst the most hardcore of boxing fanatics that subscribe to competitor, Showtime, there was absolutely no reason to pay for Bradley to grace the HBO airwaves without fighting a meaningful opponent.

Some might ask... well how are you supposed to build a fight between the rest of the 140-147 pound division and Timothy Bradley?

That's easy, actually put the "Desert Storm" in against them and see where the chips may fall.

Bradley is going into his fight with Abregu as a 10-1 favorite and rightfully so.

We've seen the same blunders having been made in the past by Greenburg when he decided to overpay for Chad Dawson to grace HBO by fighting over-matched veterans Antonio Tarver and Glenn Johnson in unwarranted rematches. (If you thought that Johnson had given him a run for his money the first time around then Dawson is definitely not a guy you should be overpaying for.)

Now that Ross has put his proverbial foot down as it pertains to the Klitschko's, hopefully he'll realize that he can do the same with each and every division in boxing.

If I were Ross Greenburg, I'd simplify the fight buying process and do the following:

1. Figure out my total fight buying budget for the fiscal year.
2. Divide it evenly between WCB and BAD cards in order to avoid down-time throughout the year as we're seeing right now in the summer. ($40 million budget = 24 WCB cards at $1.5 million each and 20 BAD cards at $200,000 each.)
3. Make a list of action-packed fights that would tie into one another tournament-style (even if it'd be unofficial.)
4. E-mail the list of fights to the Boxing Promoters Association and each of the members.

(I don't know what HBO's boxing budget is set at currently but it could be adjusted according to the total sum. Another option would be to chop the WCB cards down to 20 per year and allocate four special WCB's with a premium pay structure of $3 million per show while the rest garner $1.5 million.)

As the promoters agreed to sell the broadcast rights to HBO, I'd schedule them accordingly.

For those promoters that felt as though the offers were "low-ball" figures, I'd inform them that they'd be free to consider other offers from wherever they felt was better knowing that there is only Showtime and the independent Pay-Per-View.

If numerous promoters refused the payout structure, I'd simply begin discussions with the UFC once again and legitimately threaten to take my business to MMA or focus on allocating that budget in other sporting entities. We must remember, most of the UFC's Pay-Per-View purse payouts generally fall around the $1.5 million mark for the entire card. This is less than the $1.765 million paid for the debacle that was Paul Williams vs. Kermit Cintron.

It's as simple as that.

U.S. based promoters would cry but it wouldn't matter.

Change is absolutely necessary in the world of fight buying as it pertains to American boxing.

It's a complete bubble that could implode at anytime and the necessary measures must take place in order to stabilize and "right the ship".

Here's an example of a short list that I'd send out:

$1.5 million offer for a WCB slot
Humberto Soto vs. Anthony Peterson
Michael Katsidis vs. Marcos Maidana

$200,000 offer for a B.A.D. slot
Chris Arreola vs. Sam Peter
Sakio Bika vs. Librado Andrade

$1.5 million offer for a WCB slot
Yuriorkis Gamboa vs. Celestino Caballero
Nonito Donaire vs. Abner Mares

$200,000 offer for a B.A.D slot
Roman Martinez vs. Jorge Linares
Robert Guerrero vs. Miguel Acosta

$1.5 million offer for a WCB slot
Kelly Pavlik vs. Lucian Bute
Alfredo Angulo vs. Kermit Cintron II

$200,000 offer for a B.A.D slot
Winky Wright vs. David Lemiuex
Mike Jones vs. Alfonso Gomez

What's that you say? These fights are unrealistic based on the fighter's minimums and the various promoters that would be forced to work with one another to put these cards together?

That's fine... there's always Showtime, Pay-Per-View and HBO possibly starting to pick up UFC fights for a higher ratings figure at a lesser cost. Let the boxing promoters cry, bitch, whine, and moan... they can posture all they want.

The reality of the situation is that without HBO, most U.S. based boxing promoters would be bankrupt in the blink of an eye. With the heavy competition for television entertainment dollars and subscription fees with the likes of Netflix, Blockbuster, and the internet, it is not that far-fetched to see HBO pull the plug on boxing within the next few years. It's not something that I would like to see happen whatsoever but there needs to be drastic changes made as soon as possible.

Ross Greenburg must realize this and continue to stand-up to the bunny rabbit (boxing promoters) posturing against the bear (HBO)...


PS. Better yet, HBO should disregard their "lawyer-fight-picking-policy" and hire long-time, hall-of-fame match-maker and promoter Don "War-a-week" Chargin to pick and choose each and every fight that would take place on the network. The man knows his boxing and knows what the fans appreciate in terms of action-based matches.