Why Golden Boy Promotions Wanted Pacquiao-Mayweather In Los Angeles?

By Brent Matteo Alderson

Just this past weekend at the Timothy Bradley-Lamont Peterson, Pacquiao’s cutman, Miguel Diaz, commented, “Pacquiao doesn’t want to fight in Los Angeles and Mayweather doesn’t want to fight in Texas so we’ll see what happens.” And according to the most recent reports, it seem like the fight is going to land in Las Vegas, which makes sense since it is the site preferred by both fighters.

Why would Pacquiao and Mayweather have wanted to fight at the Staples Center in Los Angeles anyway? Yes the company, AEG, which owns the facility, offered a lucrative twenty million dollar site fee, but you have to look at the particulars of that offer to understand that the only people that would have benefited from the mega-bout taking place at the Staples Center are Golden Boy Promotions and AEG.

First off, Golden Boy Promotions has worked with AEG for a number of years and in the Spring of 2008 the world-wide facilities company bought share in De La Hoya’s promotional firm and the alliance has proved valuable to De La Hoya’s firm which regularly puts on shows at Club Nokia, another one of the company’s sites directly across from the Staple Center. They also staged Mosley-Margarito as well as Victor Ortiz’s war with Maidana this past June at Staples and De La Hoya fought Steve Forbes at the Home Depot Center, another one of company’s properties.

Without question the partnership has been more beneficial to De La Hoya’s firm because like HBO, AEG entered into the agreement, thinking that the company would be involved in major cross over promotions involving boxing’s number one superstar; De La Hoya himself.

Unfortunately for HBO and AEG, the Golden Boy’s involvement in the sport as a participant was unceremoniously cut short when he was dominated by Manny Pacquiao in December of 2008.

At the time of Golden Boy Promotion’s agreements with both HBO and AEG, Oscar was the sport’s only true cross over star and undoubtedly, both companies entered in to those lengthy agreements anticipating their future involvement in multi-million dollar mega-events.

The executives of both companies were aware that Oscar was at the end of his career, but besides his fight Bernard Hopkins in the fall of 2004, De La Hoya had never been dominated in the ring so the thinking was that he was going to beat Pacquiao, then have a summer of 2009 super fight with Mayweather. Then depending on the outcome, one or two more farewell fights. That forecast would have had De La Hoya fighting up until around the same time that Golden Boy Promotion’s contract with HBO expires.

Trust me, HBO didn’t give Golden Boy Promotions a slew of guaranteed dates to be funded by Time Warner because they like him. They liked the recognition and revenue that his bouts brought to the network.

This is a star driven multimedia society and HBO executive Ross Greenburg wanted the sport’s biggest star as did AEG.

People might think that major companies such as AEG and HBO wouldn’t have signed long term agreements with Golden Boy Promotions just to be involved with the final stage of Oscar’s career, but that’s the reality of it.

In the early nineties, Showtime, which is owned by Viacom signed a long term promotional agreement with Don King that made him the network’s sole promoter. Thus from 1991 until 1999 when Showtime distributed the first fight between Paulie Ayala and Johnny Tapia, King was Showtime’s only boxing promoter and the company was forced to buy whatever fights he provided. Just like HBO did with Golden Boy Promotions, Showtime conceded to these demands because King provided them with Mike Tyson; the sport’s biggest star.

So now Golden Boy Promotions has contracts with two of the sports-world’s power brokers in AEG and HBO and can’t really provide the services that the two companies expected to receive. Yes Golden Boy has staked a claim in the sport as one of its preeminent promoters, but at this point in time they don’t have any stars that can transcend the sport and generate the type of media attention and revenue that AEG and HBO anticipated when they entered into their agreements with Golden Boy.

Everybody can see the writing on the wall. Since Oscar’s retirement HBO has approached negotiations with Golden Boy Promotions from a different plateau and Golden Boy CEO Richard Schaefer has already expressed his frustrations about the recent lack of preferential treatment and complained about HBO not providing Shane Mosley or Bernard Hopkins with significant fights in a timely manner, especially since they were coming off two of the biggest wins of their respective careers. Now that De La Hoya is no longer a revue generating giant, HBO is going to treat Golden Boy Promotions accordingly and the Time Warmer owned company is going to ride out this contract with Golden Boy Promotions and then the promotional firm is going have to compete for dates just like everybody else because they won’t be able to use Oscar’s multi-million dollar pay per view extravaganzas as a leveraging tool.

I don’t know the the Quid Pro Quo specifics of the deal between AEG and Golden Boy Promotions, but you have to think that AEG is also dissatisfied with the situation. They signed on to be to be involved with a mega-star in a mega events and that’s not what they are getting.

That’s why Richard Schaefer was intent on using his position as a liaison between Top Rank and Floyd Mayweather to bring Pacquiao-Mayweather to Staples Center, so that he could provide AEG with the services that Gold Boy Promotions was supposed to deliver; mega-events with crossover appeal.

And AEG even stepped up and did their part and offered a 20 million dollar site fee, which is 7.5 million dollars more than the all time site fee record set by Lennox Lewis-Mike Tyson in 2002. Still a site fee is supposed to contribute to the total fight revenue which will directly contribute to the fighters’ purses, but because there is income tax in California, Pacquiao and Mayweather would have to pay 3.5 to 7 million dollars apiece in taxes. As a result you might as well deduct about ten million from AEG’s offer since that’s the amount that will be deducted from the Pacquiao and Mayweather. Why should Mayweather and Pacquiao lose significant personal income for the benefit of Golden Boy Promotions and AEG? They wouldn’t and that’s why representatives of both camps vocally rejected the Staples center as the site of the fight.

Source: fightfannation.com