SBJ/20101115/This Week's Issue

Boxing startup readies launch despite snags

The worldwide boxing startup that will blend aspects of the amateurs and pros in an unprecedented team format has encountered a series of early snags in the Americas, hampered by a compressed run-up that ran afoul of regulators in three U.S. states.

Still, organizers of the World Series of Boxing — a 75/25 venture between the sport’s International Olympic Committee-recognized international federation and sports marketing and media company IMG — say they will launch as planned in the coming week, buoyed by the sale of eight franchises in Europe and Asia, a presenting sponsorship with a Kazakh engineering and construction company, and TV rights deals for most of its teams east of the Atlantic.

Business has been slower in the Americas, where the WSB couldn’t find buyers for franchises in Los Angeles, Miami, Mexico City and Memphis, which were priced at $75,000 but also require at least $2.5 million a year each to cover expenses, including boxer salaries ranging from $25,000 to $60,000 each, plus living expenses, for a 15-man roster.

Rather than bag the Americas or sell teams to owners that might not be able to sustain losses, the WSB elected to fund those teams itself, budgeting about $11 million in expenses for the first year in the region. But it didn’t make that decision until July, didn’t hire a managing director until September and didn’t get rolling in its markets until last month, leaving a perilously short runway to a season scheduled to open in Mexico City on Friday night and in Miami on Nov. 23.

“I’d be lying if I said it wasn’t a challenging market, and a lot of it is self-inflicted, confirming things so late in the game,” said Eric Parthen, managing director of WSB Americas, who previously worked at the U.S. Olympic Committee and served as executive director of USA Boxing. “It has been a challenge, but it’s back on us now to prove that this is what we say it’s going to be. … We have to prove that. We feel optimistic that we can.”

This is no nickle-and-dime startup. The International Boxing Association (AIBA) governs 196 national federations and carries the juice to guarantee coveted spots in the 2012 Olympics to the five boxers who win their weight classes in the WSB. IMG lends TV and marketing expertise and credibility. The Los Angeles team will split its eight home matches between the AEG-operated Nokia Theatre and Club Nokia, adjacent to Staples Center. The Miami team will call AmericanAirlines Arena home.

Late last week, IMG was deep into negotiations for U.S. TV rights, but had not secured a deal.

WSB’s early struggles in the U.S. stem mostly from the fact that its product is a hybrid: a for-profit company paying boxers who will retain Olympic eligibility but fight in a format that looks much like pro boxing. Fighters won’t wear headgear or shirts. They will wear the lighter, eight-ounce gloves worn by pros, which deliver more damage. Bouts will be set for five rounds rather than three, with judges scoring on a 10-point must system that mirrors prize fighting. Along with a salary, living expenses and training expenses, boxers will earn $5,000 for each win.

Given that information, regulators denied the WSB amateur classification in all three U.S. states in which it has franchises — California, Florida and Tennessee — classifying its bouts as professional. That means the franchises must be licensed as promoters, the boxers must be licensed as pros and the matches, which originally were to be held under WSB rules, now must comply with the rules of the individual states. State commissions will supply officials and judges, rather than allowing the WSB to assign its own.

The Memphis franchise, the Force, found a quick alternative, moving its home bouts across the river to Mississippi, where a state commission representative said the group will consider sanctioning the bouts as amateur, pending an opinion from the state attorney general. But the Miami Gallos and Los Angeles Matadors were without an escape route. Both say they’re filing the required paperwork and paying the licensing fees necessary to get sanctioned as pros in time for their events.

“How the World Series of Boxing or USA Boxing determines Olympic eligibility is up to them, but they’re going to be classified as professionals in California,” said George Dodd, executive officer of the California State Athletic Commission. “I think the concept is good. But they went about this the wrong way. We didn’t have a clear picture of what was going on.”

Parthen and the operators of the Miami and Los Angeles franchises say they hope they can revisit the classification issues and shift more control into the hands of the WSB, but for now they’re moving forward as required by the commissions.

“We’re willing to work with them, but at this point we have to follow Florida law,” said Maureen Olson, deputy secretary of professional regulation in the Florida Department of Business and Professional Regulation, which oversees the boxing commission there. “If this new organization is going to find a home [in Florida], we believe there would need to be changes in either Florida law or [commission] rules. That’s possible, but not in such a short time frame provided on this one.”

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